Legal Ethics Opinion #1581
Conflict of Interest - Avoiding Influence By Others
Than the Client: Lawyer Receiving Fee, from Company, for
Having Referred Clients Who Hold Commercial Paper.
You have presented a hypothetical situation in which a
company, operated by nonlawyers, wishes to buy notes and other
forms of commercial paper which are secured by real estate.
The company proposes to offer lawyers a fee/commission for
referring clients that hold such paper.
You have asked the committee to opine whether, under the
facts of the inquiry, a lawyer's referral of a client, and
acceptance of a fee/commission, is unethical. You also ask
whether the propriety would be impacted by the lawyer's
disclosure of the fee/commission to the client.
The appropriate and controlling Disciplinary Rule related to
your inquiry is DR:5-106(A) (2), which states that except
with the consent of his client after full and adequate
disclosure under the circumstances, a lawyer shall not accept
from one other than his client anything of value related to
his representation of or his employment by his client. See
also DR:5-101(A) (absent full disclosure to and consent from
the client, a lawyer may not accept employment if the exercise
of his professional judgment on behalf of the client may lie
affected by the lawyer's own financial, business, property, or
personal interests).
The committee is of the opinion that the situation described
is analogous to an attorney's receipt of a portion of his
client's real estate agent's commission. See LE Op. 209 The
committee further believes that the commission is a nonlegal
fee. Thus, the committee opines that it would not be improper
for the attorney to make such a referral, and accept such a
fee, provided there is full disclosure to, and consent from,
the client and further provided that the attorney does not
advise the client with respect to the transaction with the
third party.
Committee Opinion
February 8, 1994
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