90 N.J.L.J. 49
January 26, 1967
Collections for New York Attorney
A New York attorney has requested a New Jersey attorney to
effect collections on promissory notes held by a New York
corporation or its New Jersey subsidiary engaged in the business of
lending money on a secured basis. The New Jersey attorney would
continue his individual practice and would be retained on a salary
basis for this individual client, remitting all sums collected to
his New York correspondent.
The notes to be sued upon contain a clause that if the contract is placed in the hands of an attorney, the maker would become liable for attorney's fees of 20 percent on the first $500.00 and 10 percent on the excess thereof.
Inquiry has been made whether this arrangement is proper. Canons of Professional Ethics, Canon 34 provides that: No division of fees for legal services is proper except with another lawyer, based upon a division of service or responsibility.
In A.B.A. Comm. on Professional Ethics and Grievances, Opinion
157 (1936), it was held that:
... it is improper for the attorney to accept less for his services than is awarded and paid to the client as attorney's fees; otherwise stated, the attorney cannot properly divide with his client the amount awarded by the court as attorney's fees.