ETHICS OPINION 296
NUMBER 296 1932
Question. In the opinion of the Committee, may a lawyer with professional propriety accept professional employment from a firm of engineering contractors who have procured from property owners contingent contracts to look after their interests in property adjoining a projected subway, and to employ legal counsel in procuring compensation for damage to their property resulting from the construction. The firm offers such employment to the lawyer upon a contingent basis amounting to one-half of the percentage which the firm is to receive under its contract with the property owners, for any amount which the lawyer may collect by settlement or suit.
The firm is itself, under its employment by the property owners, required to generally supervise for the property owners, for the protection of their property, the work of the subway contractors adjoining their premises, to avoid injury as far as can be, and, in case of injury, to procure from the latter repairs of the damage, or to adjust the compensation therefor, upon a basis of contingent reward to the firm. No action is to be brought unless the firm fails in its effort. And the firm’s contract with the property owners includes a provision that their contingent percentage is to include counsel fees.
Answer. In the opinion of the Committee a lawyer may not with professional propriety accept the employment outlined in the question. The arrangement is in substance one whereby the engineering firm as an independent contractor undertakes to furnish the services of a lawyer where such services seem to the engineering firm necessary and desirable, and to pay the lawyer’s fee out of the engineering firm’s contingent compensation. Such an arrangement, in the opinion of the Committee, involves the control and exploitation of the lawyer’s professional services by a lay intermediary in contravention of Canon 35 of the Canons of Professional Ethics of the American Bar Association (see also Opinions 47, II; 125; 220; 286), and tends to destroy the personal and fiduciary relation of attorney and client between the lawyer and the property owner.