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                                         90 N.J.L.J. 49
                                        January 26, 1967


Appointed by the New Jersey Supreme Court


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.

An intermediary, namely the New York attorney should not be used as a subterfuge to circumvent this holding.
    It is our opinion, therefore, that it would be improper to accept the retainer on the suggested basis.

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