Committee on Professional Ethics






DIGEST: An attorney appointed as a fiduciary by a court may share compensation or fees with partners and associates in the same law firm once they have been awarded.


CODE: DR 2-107(A).


QUESTION: May a lawyer appointed to a fiduciary position by & court share the fees from the appointment with the lawyer’s partners and associates?


OPINION: There are many situations in which an attorney may be appointed by a court as a fiduciary pursuant to specific provisions of a statute. In New York, for example, a guardian ad litem may be appointed to represent the interests of persons under disability. See N.Y. Surr. Ct. Proc. Act § 403 (McKinney 1983). A person appointed as a guardian ad litem must be an attorney admitted to practice in New York. Id. at § 404(1). Other fiduciary appointments are not limited to attorneys. A bankruptcy trustee, for example, need not be an attorney to qualify for appointment. See 11 U.S.C. § 321.


In the usual case, the compensation of the fiduciary is also governed by statute. See, e.g. N.Y. Surr. Ct. Proc. Act § 405 (McKinney 1983)(compensation of guardian ad litem); 11 U.S.C. § 326 (compensation of bankruptcy trustee). If the appointed fiduciary is a lawyer, any fees awarded will be regarded as legal fees. This is true even if the fiduciary need not have been a lawyer to qualify, and even if the compensation or fees paid are not deemed “legal fees” under the relevant statute. See, e.g. N.Y. State 584 (1987); N.Y. State 557 (1984).


It has long been held that public policy does not permit a public officer to assign fees before they are earned, Re Wrothington, 141 N.Y. 9, 35 N.E. 929 (1894) or a fiduciary to assign fees before they are allowed or awarded by a court of competent jurisdiction, Re Macy’s Will, 53 N.Y.S.2d 362 (Surr. Ct. 1945). Nevertheless, once such fees have been earned or awarded, the fiduciary is free to dispose of them in his or her discretion, including disposition pursuant to a partnership agreement.


There are no ethical constraints that would prohibit a lawyer from sharing fiduciary fees with lawyers in the same firm. DR 2-107(A) permits a lawyer to “divide a fee for legal services” with “a partner in or associate of the lawyer’s law firm or law office”. The fact that the fee under consideration is subject to court approval and may indicate the court’s evaluation of the quality of the services performed by the appointed fiduciary does not, in our judgment, affect the lawyer’s right to dispose of fiduciary fees that have been awarded.


CONCLUSION: For the foregoing reasons the question is answered in the affirmative.

October 23, 1989

In answering questions this Committee acts by virtue of the following provision of the By-laws of the Association, Article 54, Section 3:


“This Committee shall have power, when consulted, to advise inquirers respecting questions of proper professional conduct, reporting its action to the Board of Directors from time to time.”


It is understood that this Committee acts on specific questions submitted ex parte and in its answers bases its opinion on such facts only as are set forth in the question.