BAR ASSOCIATION OF NASSAU COUNTY
COMMITTEE ON PROFESSIONAL ETHICS
Opinion No. 1996-4
(Inquiry No. )
(a) Advertising of legal services pursuant to a directory of attorneys prepared by a non-profit organization; (b) Fee splitting arrangement between non-profit organization and such attorneys.
(a) Provided that certain restrictions are adhered to, advertising in the form of a directory is permissible conduct. (b) An attorney may not split a legal fee with a non-lawyer for any legal work even where the non-lawyer is a not-for-profit organization. Payments for advertising on a percentage basis in the manner presented in this inquiry constitutes such an impermissible fee split.
A not-for-profit organization prepares an organizational directory of professionals and retailers, including some attorneys, who provide goods and services. The directory is provided to members of the organization. When the members patronize the professionals, such professionals donate a set percentage of the fees received from the members to the organization.
May attorneys advertise by way of an organizational directory prepared by another individual or entity? Additionally, may an attorney properly compensate an advertising organization for advertising based on a percentage of fees paid from the clients of such advertising organization to the attorneys?
The proposed conduct with respect to the offering of services through an organizational directory is permissible conduct. However, the proposed conduct entails fee- splitting, which is ethically impermissible.
(a) Attorney Advertising
The first issue raised by the proposed conduct involves attorney advertising. The general rule is that an attorney may advertise on behalf of himself or his law firm provided that the requirements of Canon 2 and the DR thereunder are complied with.
Provided that the directory of participants prepared by the organization at issue in this inquiry complies with the above mentioned requirements, the advertising component of the conduct is permissible.
(b) Fee splitting
The proposed conduct involves the creation and distribution of a directory of professionals and retailers, including attorneys, by a not-for-profit organization, for the purpose of providing goods and services to members of that organization. Attorneys listed in the directory donate to the organization a set percentage of any fees received in connection with legal services provided to the members.
As presented, the proposed conduct constitutes a division of a legal fee with a non-lawyer which is absolutely prohibited by DR 3-102. DR 3-102 prohibits a lawyer or law firm from sharing legal fees with a non-lawyer except in certain narrowly defined situations, such as the payment of legal fees to a lawyer’s estate following the lawyer’s death or the inclusion of non-lawyer employees in a retirement plan where such plan is based in whole or in part on a profit sharing arrangement. No exception for the division of legal fees with a non-lawyer entity is mentioned in DR 3-102 merely by virtue of such entity’s status as not–for-profit. See generally, opinion W89-34 (Inquiry 0240, dated October 25, 1989) ; Opinion # 38/87 (Inquiry #98, dated October 1, 19137) Opinion #84-1 (dated January 5, 1984).
(Approved by Executive Committee on 2/13/96; Approved by Full Committee on 2/28/96)