Lawyer-Lender Fee Deals An Ethics Breach, NYC Bar Says (Law360)
Law360, August 8, 2018
Lawyer-Lender Fee Deals An Ethics Breach, NYC Bar Says
“Lawyer-lender financing deals in which repayments by attorneys are pegged directly to legal fees violate the ethics ban on sharing fees with nonlawyers, according to a recent opinion from the New York City Bar Association. Focusing on contingency-like deals between attorneys and third-party lenders, the bar’s Professional Ethics Committee said July 30 the fee-split rule in New York and elsewhere has generally been applied to any arrangement in which payments to nonlawyers are based on how much the lawyer was paid. That principle has been reflected in a series of New York state and city ethics opinions going back to the early 1980s that found lawyers looking to pay percentages of fees to marketers, landlords or the like would run afoul of Rule 5.4, the bar said.”
