ETHICS OPINION 633-1974 DIVISION OF LEGAL FEES: PAYMENT BY PARTNERSHIP TO ESTATE OF DECEASED PARTNER

NUMBER 633

QUESTION.

 

Is it proper for a law firm to make a payment to the estate of a deceased partner based on fees of the partnership earned during a reasonable period after the partner’s death when there was no pre-existing agreement among the partners providing for such payment? If so, what measure should be used for the determination of the permissible amount of such payment?

 

ANSWER.

 

The Code of Professional Responsibility provides that the “pecuniary value of the interest of a deceased lawyer in his firm” may be paid to his estate or to specified persons such as his widow or heirs. EC 3-8; also see, ABA 327(1971) and N.Y. State 281 (1973) and opinions cited.

 

The manner of determining such “pecuniary value” is not defined in the Code. It is the opinion of the Committee that an agreement between a law firm and the estate of a deceased partner such as is proposed does not violate the Code, Any reasonable amount of such fees agreed upon by the parties which reflects the deceased attorney’s interest in the firm and payment of which continues over a reasonable period of time after his death would be proper.

 

DR 3-102, which establishes exceptions to the general rule against fee-splitting with a non-lawyer, does not prohibit such an arrangement.

 

The agreement to which reference is made in subdivision (A)(1) of DR 3-102 may be either an express agreement with the lawyer made before death or one made thereafter on behalf of his estate.

 

September 23, 1974.