Can a lawyer be disciplined for refusing to pay a forwarding fee to a collection agency that referred a claim?

Plain-English summary

A member pointed to Section 22 of the Additional Rules Governing the Conduct of Attorneys in Florida, whose second paragraph said nothing in the rule should be construed as prohibiting the division of fees with a forwarder of business, whether the forwarder was an attorney or a reputable collection agency. The facts: a collection agency referred a claim to an attorney, who collected it after suit, paid the client, sent a check to the agency as forwarder, and then stopped payment on the ground that he could not ethically pay a layman a fee. The question was whether he could be disciplined.

The committee's opinion was that an attorney cannot be subjected to disciplinary proceedings for refusing to pay a forwarding fee to a collection agency, because the applicable Canons prohibit payment of a forwarding fee to a layman. It added that the attorney might be subjected to civil liability by virtue of his apparent agreement to pay the fee, but that civil exposure was not a matter of concern to the committee. The committee referred to ABA Opinion 294 and expressed the belief that the second paragraph of Rule 22 should be eliminated or amended.

Currency note

This opinion was issued in 1962, before The Florida Bar's adoption of the 2006 revisions to the Rules of Professional Conduct. The opinion applied former Canon 34 of the Canons of Professional Ethics and Additional Rule 22; the division of fees with a nonlawyer is now governed by Rule 4-5.4 of the Rules Regulating The Florida Bar (Model Rule 5.4). The rule the inquiry relied on (the second paragraph of Additional Rule 22) is no longer in force, and subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against the current rules before relying on any specific requirement mentioned here.

Common questions

Q: Could a lawyer be disciplined for not paying a collection agency that forwarded a case?

A: No. The committee concluded the lawyer could not be subjected to disciplinary proceedings, because the Canons prohibited paying a forwarding fee to a layman in the first place.

Q: Did that mean the lawyer had no exposure at all?

A: Not necessarily. The committee said the lawyer might face civil liability on his apparent agreement to pay the fee, but it treated that as a civil matter outside the committee's concern.

Q: What did the committee think of the rule that seemed to allow the fee?

A: It expressed the belief that the second paragraph of Additional Rule 22, which appeared to permit dividing fees with a collection-agency forwarder, should be eliminated or amended.

Background and rules framework

The opinion turned on former Canon 34 of the Canons of Professional Ethics, on the division of fees, read against the second paragraph of Additional Rule 22. The committee read the Canons to prohibit paying a forwarding fee to a layman. The division of legal fees with a nonlawyer is now governed by Rule 4-5.4 of the Rules Regulating The Florida Bar (Model Rule 5.4).

Citations and references

Rules of Professional Conduct:

• Canon 34 [Canons of Professional Ethics; see current Rule 4-5.4]
• Additional Rule 22 (Additional Rules Governing the Conduct of Attorneys in Florida)

Other opinions cited:

• ABA Formal Opinion 294 (June 21, 1958)

See also

No sibling opinions yet indexed.

Source

• Landing page: https://www.floridabar.org/etopinions/etopinion-62-18/
• Original PDF: https://www-media.floridabar.org/uploads/2017/04/FL-Bar-Ethics-Op-62-18-1.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

FLORIDA BAR ETHICS OPINION
OPINION 62-18
August 29, 1962
Advisory ethics opinions are not binding.
A lawyer should not be subject to disciplinary proceedings for refusal to pay a forwarding fee to a collection agency.
Canons: Additional Rule 22, Canon 34
Opinion: ABA 294
Chairman Holcomb stated the opinion of the committee:
A member of The Florida Bar calls our attention to the Additional Rules Governing the Conduct of Attorneys in Florida, Section 22, second paragraph, reading: "But nothing contained in this rule shall be construed as prohibiting the division of fees with a forwarder of business whether such forwarder be an attorney or a reputable collection agency."
He states that a collection agency referred a claim to an attorney, who collected the claim after suit, paid the client, sent a check to the collection agency as forwarder and then stopped payment on the grounds that he could not ethically pay a layman a fee. The question is whether under these circumstances he can be disciplined.
It is our opinion that an attorney cannot be subject to disciplinary proceedings for refusing to pay a forwarding fee to a collection agency inasmuch as the applicable Canons prohibit payment of a forwarding fee to a layman. It may be that the attorney would be subjected to civil liability by virtue of his apparent agreement to pay a forwarding fee, but that is not a matter of concern to this Committee.
We do not know under what conditions the claim was forwarded and would refer to ABA Opinion 294 adopted June 21, 1958, appearing in the American Bar Journal of April, 1962 at page 383.
It is our belief that the second paragraph of Rule 22 should be eliminated or amended.