LEO: Fees - Domestic Relations: Attorney LE Op. 1188

 

Fees - Domestic Relations: Attorney Participating in Increasing

Another Attorney's Fees.

 

January 26, 1989

 

You advised that A and B are engaged in divorce proceedings and are

represented by separate counsel. Upon accepting employment, B's attorney

agreed to a fee in the amount of $1,500, which B's attorney asked for in

the property settlement on behalf of his client. The parties agreed to

discuss the property settlement agreement, which was heavily slanted

toward A. Upon the arrival of B and her attorney at A's lawyer's office,

they were given a draft of the property settlement wherein the attorney's

fees had been increased to $2,500. Later, B learned from her attorney that

A was attempting to make B's attorney's compensation more in line with

that which A was paying his own attorneys.

 

You wish to know whether it is ethically permissible for an attorney to

participate in making such an increase and whether B's attorney may accept

the fee.

 

The Committee believes the appropriate and controlling disciplinary rules

relative to your inquiry are DR:2-105(A), (B) and (D) and DR:5-106(A).

The rules provide that a lawyer's fee shall be reasonable and adequately

explained to the client. The basis for the rate of a lawyer's fee shall be

furnished upon the request of the client, and a division of fees between

lawyers who are not employed by the same firm may be made only if: (1) the

client consents to the employment of additional counsel; (2) both

attorneys expressly assume responsibility to the client; and (3) the terms

of the division of the fee are disclosed to the client and the client

consents thereto. (See DR:2-105(A), (B) and (D)) An attorney shall not,

except with the consent of his client and after the full and adequate

disclosure, accept compensation or anything of value related to his

representation or his employment by his client from a third party. (See

DR:5-106(A))

 

The Committee believes that an attorney may not take part in making an

increase in any fee without first obtaining the consent of the client.

Certainly, where there has been prior agreement between a client and his

attorney on the amount of fees and such fees are reflected in the property

settlement agreement, it would be improper for the attorney to acquiesce

to the proposed increase made by opposing counsel or his client. This is

not a situation involving the additional employment of counsel where the

client may have consented to the increase in the fees. A lawyer is

prohibited from accepting any portion of a fee from a third party, nor any

fees which the client disputes. (See DR:9-102(A)(2)) Ethical

Consideration 5-22 [ EC:5-22] provides in part that if a lawyer is

compensated from a source other than his client, he may feel a sense of

responsibility to some one other than his client. Furthermore, the

Committee would direct your attention to Goldfarb v. Virginia State Bar,

421 U.S. 773 (1975), in which the United States Supreme Court held than an

attorney or members of the legal profession adopting a rigid price such as

a minimum fee for a specific contemplated legal service is a form of price

fixing which is a violation of 1 of the Sherman Act prohibiting

anticompetitive conduct by lawyers.

 

The Committee would opine that it is improper for an attorney to

participate in or agree to an increase of his fees as proposed by opposing

counsel when he previously entered into a fee agreement with his client,

and the client has not consented to the increase in fees. It is unethical

for an attorney to accept or retain any fees proposed by a third party

where the client has not consented to the proposed fees and acceptance of

the same will have compromised his client's position. It is improper to

accept any fees if it is the lawyer's intention to accept direct

compensation from one other than his client.

 

Committee Opinion January 26, 1989