Opinion Number 555
This inquiry concerns my possible representation through a corporation daily organized under the laws of a nearby state and engaged in adjusting small claims arising cut of collections and alleged injury and/or malpractice instances, not insurance matters, and for me to become their “of counsel” in New York City.
I was approached by an executive of this adjusting corporation in order to be retained to handle numerous of their clients in litigation stages. They have the contract with various chiropractors, doctors, technicians, etc. and wish legal representation for suits.
Under the circumstances, I thought it proper to inquire of your office whether I must obtain retainers directly from each and every client, or a blanket contractual retainer from the corporation, or both.
The instant inquiry involves Canon 35, which precludes the intervention of intermediaries between a lawyer and his client.
On the assumption that the inquiry relates to a collection agency, it is the Committee’s opinion that the answer is controlled by opinions on Professional Ethics of the Association of the Bar of the City of New York Nos. 568 and 731, although the contents of opinion No. 562 should also be borne in mind.
On the basis of those opinions, it would not appear to be necessary for the lawyer involved to obtain retainers directly from each and every client, provided that the collection agency has been expressly authorized by the client to employ an attorney to institute legal proceedings and to receive from the attorney moneys collected as a result there of, less his attorney’s fees, or to defend legal proceedings.
It should be expressly noted that the collection agency may not fix the attorney’s fees except with the client’s approval, for it would then be in a position, as noted in opinion 562, to exploit the attorney’s professional services for its own profit.
October 26, 1967