LEO: Conflict of Interests/Referral of Client LE Op. 473
Conflict of Interests/Referral of Client to Finance Company; Law Firm Pledging Receivables.
September 20, 1982
It is not ethically improper for an attorney to refer a client to a finance company to obtain funds for the payment of the attorney's fees. If the attorney has a relationship with the finance company, however, the attorney must disclose that relationship prior to making the referral. [See DR:5-101 and DR:5-105.]
An attorney may not ethically refer the debtor of a creditor whom the attorney represents to any finance company since the attorney would not be in a position to give independent legal advice to the debtor. [See DR:7-103.]
It is not improper for a law firm to pledge its receivables in order to secure a bank line of credit.
Committee Opinion September 20, 1982
See also LE Op. 834
LEO: Conflict of Interests/Referral of Client, LE Op. 473 (1982)