Have Questions? Contact Us.
Since its inception, NYCLA has been at the forefront of most legal debates in the country. We have provided legal education for more than 40 years.
ETHICS OPINION 463-1958
NUMBER 463
QUESTION.
Joint opinion o£ the Committees on Professional Ethics of The Association of the Bar of the City of New York and the New York County Lawyers’ Association on the subject of the division of fees and association with lay representatives licensed by New York State Workmen’s Compensation Board.
Under New York statutes, qualified laymen may be licensed to represent self-insurers or claimants before the Workmen’s Compensation Board, The following questions are posed, having to do with the proper relationship between lawyers and such laymen (who are known as “licensed representatives”):
“1. May an attorney employ a licensed representative on a salary basis, or a per case basis, or percentage of fee allowed basis to appear for him and try cases before the Workmen’s Compensation Board?
“2. May an attorney be employed by a licensed representative on a salary basis, or a fixed fee per case basis, or a percentage of the fee received as counsel for a licensed representative?
“3. May an attorney forward workmen’s compensation cases to a licensed representative and receive a forwarding fee from such licensed representative?
“4. May an attorney receive a third party negligence case forwarded to him by a licensed representative?
“5. May an attorney be employed by a layman to represent an insurance company in the trial of compensation cases on a salary basis, a fee per case basis or a percentage of the charge made by the layman to the insurance company for the trial of such cases when the layman represents an insurance company but is not a full time employee of the insurance company and is not licensed by the Board?”
ANSWER.
Canons 27, 34, 35 and 47 are involved.
Question 1. A lawyer may employ a lay licensed representative on a salary basis to appear for him and try cases before the Workmen’s Compensation Board as long as the layman resticts his activities to those which may lawfully be undertaken by him. In fairness to the client the lawyer must disclose the fact that he is retaining a layman to try the client’s case. Moreover, the lawyer must assume responsibility for the layman’s conduct of the action. Under similar circumstances it would be proper for a lawyer to employ a licensed representative on a non- contingent per case basis.
It is clearly improper for a lawyer to employ a licensed representative on a percentage of fee basis. Canon 34 clearly prohibits division of fees with laymen. See also Opinion 48 of the American Bar Association and Section 276 of the New York Penal Law.
Question 2. A lawyer may not on any basis be retained by a layman to represent a client of the latter. In the situation involved the layman would be acting as an intermediary between the lawyer and the ultimate “client”. This would constitute violation of the clear proscription of Canon 35. A fortiori, a lawyer could not enter into such an arrangement with a layman on a fee-splitting basis because of Canon 34, discussed above under Question 1. It should also be noted that the arrangements posed in this question might well be objectionable under Canon 27, which prohibits lawyers from using laymen and others to tout business for them.
Question 3. It is not improper for a lawyer to forward a case to a licensed representative if he does so with the knowledge and consent of the client. It would not be proper for the lawyer to receive a forwarding fee or any other payment from the licensed representative in connection with the forwarded case. See Canon 34.
Question 4. A lawyer may not recieve a third-party negligence case sent to him by a licensed representative if any payment is made to the licensed representative in connection with the sending of the case to the lawyer. However, it is proper for a lawyer to accept a case sent to him by a licensed representative provided the client consents and the lawyer establishes a personal relationship with the client free of control by the licensed representative and no payment is made to the licensed representative in connection with the sending of the case to the lawyer. See Canons 34 and 35 and Section 276 of the New York Penal Law.
Question 5. This question as stated involves the interposition of a lay intermediary between, the lawyer and the client in violation of Canon 35. Gee also Canon 47.
Dated: January 23, 1958, New York