LEO: Law Firm — “Of Counsel” Arrangement, LE Op. 945

 

    Law Firm — “Of Counsel” Arrangement Between Firms.

 

    June 10, 1987

 

    Two separate and independent law firms have reached an agreement whereby the two will become “of counsel” to each other. The two firms practice entirely different areas of law and the agreement provides that the association between the two would be “complementary.” The letterhead of the respective firms will list the other firm as “of counsel” by firm name only without listing individual attorneys. Work would be referred between the two firms; in some instances both firms will perform work, in other instances only one firm will perform the work. In either situation, the referring firm will be entitled to a fee of 10% of the gross billings of the firm actually doing the work, regardless of whether or not the referring firm actually did any work. For all matters referred, both firms will assume responsibility to the client for the specific work referred. The client will not be asked for consent to referral of work since both firms would be considered the same firm. The client will also not be informed of the 10% fee arrangement between the two firms. In addition, each firm will be independently liable for its own separate work for which the other firm is not called in.

 

    It is improper, given the above, for each firm to list the other firm's name on its letterhead as “of counsel.”

 

    It is also improper for the two firms to permit a 10% origination fee. The committee, by this opinion, retracts the statement of LE Op. 442 which indicates that DR:2-105(D) is not applicable to associates and those listed as “of counsel.”

 

    [DR:2-102(A), DR:2-105(D) LE Op. 442]

 

    Committee Opinion June 10, 1987

 

    CROSS REFERENCES

 

    See also LE Op. 1293, and LE Op. 1380

 

LEO: Law Firm -, LE Op. 945 (1987)