LEO: Corporations - Fees - Division of Fees  LE Op. 844

 

Corporations - Fees - Division of Fees Among Related Law Firms.

 

September 2, 1986

 

A group of law firms desires to incorporate for the principal purpose of

making the specialized expertise and experience of the attorneys in each

member firm available to the attorneys in all member firms. The committee

finds no ethical problem with regard to the formation of the group or any

related potential activities such as seminars, employment of an executive

director, computer capacity common to all, common stationery and a central

office. The only potential problems foreseen by the committee are with

regard to conflicts and division of fees. The committee opines that, as

long as all clients of the group are aware of all the members and full

disclosure is made to the client, any potential problems may be resolved.

 

The fee-sharing arrangement will be one whereby a member of the group may

refer a matter to another attorney in a different area. Fees will be

shared by the "referring" and "working" attorney. Disciplinary Rule 2-105(

D) [ DR:2-105] does not appear to require proportionment provided that

the client consents to the employment of additional counsel, both

attorneys expressly assume responsibility to the client, and the terms of

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

consents thereto.

 

In addition to dividing fees between the "referring" and "working"

attorneys, it is proposed that dues equal to five percent of the fee be

paid to the corporation, which five percent is to defer some of the

expenses of the operation of the entity itself. Disciplinary Rule 2-102(B) [

 DR:2-102] prohibits an attorney from compensating a person or

organization from recommending or securing employment by a client.

Provided there is compliance with the disciplinary rules set forth under

Canon 2, the Committee finds no problem with the proposed five percent

division. Further, if specific dues are charged for specific services and

any payments made to the entity by the members are dues rather than a

division of legal fees, then there is no division of legal fees with a

nonlawyer as contemplated under Canon 3. [ DR:2-102(B) and DR:2-105(D)]

 

Committee Opinion September 2, 1986

 

CROSS REFERENCES

 

See also LE Op. 1130.