Can a law firm forward a missing-heir search to a non-lawyer locating company and share in that company's contingent fee?

Plain-English summary

A Texas law firm represented a client who held property belonging to a person who had disappeared several years earlier. A Chicago concern advertised that it specialized in searching for missing heirs, legatees, and owners of property, that searches were made at its own cost without expense to forwarders, that its compensation was fixed by a contingent fee agreement with the person located, and that "We cooperate with attorneys on an ethical basis." The firm asked whether it would be proper under the Texas Canons to forward this business to the Chicago concern and share in its contingent fee if the person were located.

The opinion noted the forwarding letter stated that, so far as known, the Chicago concern were not lawyers, and the Committee based its opinion on that premise. The Committee was of the opinion that any such sharing of the fee would violate Canon 31, which expressly prohibits a division of fees except with other lawyers, based on a division of service or responsibility, or with a forwarding attorney. The vote was 8-1.

Currency note

This opinion was issued in 1953, under the former Texas Canons of Ethics, which the Texas Disciplinary Rules of Professional Conduct replaced effective January 1, 1990. Subsequent rule amendments or later opinions may have changed the analysis; the sharing of legal fees with non-lawyers is now addressed by ABA Model Rule 5.4. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Could the firm share the locating company's contingent fee?

A: No. The Committee found that sharing a fee with a non-lawyer concern violates Canon 31, which limits fee division to other lawyers or a forwarding attorney (8-1).

Q: Did the Chicago firm's claim of "cooperat[ing] with attorneys on an ethical basis" change the result?

A: No. The opinion rested on the premise that the concern was not made up of lawyers, which placed any fee sharing outside what Canon 31 permitted.

Background and rules framework

The opinion interprets former Texas Canon 31 (division of fees), applied to a proposed fee split between a law firm and a non-lawyer locating company. The modern analog is ABA Model Rule 5.4 (professional independence of a lawyer; sharing fees with non-lawyers).

Citations and references

Rules of Professional Conduct:

• MR 5.4 (professional independence; sharing fees with non-lawyers), as the modern analog
• Texas Canon 31 (division of fees)

See also

• TX Ethics Op. 293: Splitting Executor Commission
• TX Ethics Op. 238: Forwarding Fee to an Out-of-State Lawyer
• TX Ethics Op. 128: Lawyer on an Accounting Firm's Staff

Source

• Landing page: https://www.legalethicstexas.com/resources/opinions/opinion-63/
• Original PDF: https://tcle-web.s3.amazonaws.com/public/documents/Opinion_63.pdf

Original opinion text

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

QUESTION PRESENTED

A firm of Texas lawyers represents a client who holds property belonging to a person who disappeared several years ago. A Chicago concern advertises that it specializes in searching for missing heirs, legatees, owners of property, etc. They further state that such searches are made at their own cost, without expense to forwarders, and that their compensation is fixed by a contingent fee agreement with the person located. They further state in their advertisement "We cooperate with attorneys on an ethical basis."
The Texas law firm desires to know if it would be proper, under the Texas Canons of Ethics, to forward this business to the Chicago firm, and to share in their contingent fee in the event the person is located.

18 Baylor L. Rev. 223 (1966)

DIVISION OF FEES
A law firm representing a client who holds property belonging to a person who disappeared several years ago, may not forward this business to a missing persons lay firm and share in their contingent fee in the event the person is located.

Canon 31.

In the letter forwarding this matter to Texas attorneys it was stated:

"So far as we know . . . are not lawyers" and this opinion is based upon the premise that the Chicago concern is not lawyers. The committee is of the Opinion that any such sharing of the fee would be in violation of Canon 31, which expressly prohibits a division of fees except with other lawyers, based upon a division of service or responsibility, or with a forwarding attorney. (8-1)

Tex. Comm. On Professional Ethics, Op. 63 (1953)