May 1965

DIVISION OF FEES—REFERRAL FEE—It is unethical for an attorney, who is executor of an estate, to accept a fee for employing a law firm to represent the estate.

Canon 31.


May a practicing attorney, who is serving as independent executor of an estate, accept, from a law firm employed by him and the devisees to defend a contest of the will, a division of the fee paid by the executor and devisees to the firm for handling and settling the will contest case, or a "referral" fee for forwarding the case to the firm?


Canon 31 prohibits division of fees between attorneys unless based upon a division of services or responsibilities. Canon 35 prohibits acceptance of compensation or rebates by an attorney without the knowledge and consent of his client after full disclosure.

Presumably, the executor was compensated, or not compensated, for his services as executor in accordance with the terms of the will and the law. In employing a law firm to defend the will, he acted in his capacity as executor, not as an attorney under Canon 31. Division of attorney’s fees is authorized only between attorneys acting in their capacity as attorneys, and then only on the basis of legal services and legal responsibilities; and the sharing of "forwarding" fees is applicable only to liquidated commercial claims. Both the law firm and the attorney-executor would violate Canon 31 by payment and acceptance of any fee for "referral" or any division of the firm’s fee. (8-0.)

(Canon 35 would not be applicable unless the attorney-executor acted in his capacity as attorney.)