Ohio Board Advisory Opinion Op 97-005

The Supreme Court of Ohio
BOARD OF COMMISSIONERS ON GRIEVANCES AND DISCIPLINE
41 SOUTH HIGH STREET-SUITE 3370, COLUMBUS, OH 43215-6105
(614) 644-5800 FAX: (614) 644-5804
OFFICE OF SECRETARY
OPINION 97-5
Issued October 10, 1997
[CPR Opinion-provides advice under the Ohio Code of Professional Responsibility which is superseded
by the Ohio Rules of Professional Conduct, eff. 2/1/2007.]
SYLLABUS: It is improper for attorneys to form an ancillary business to serve small
and medium sized businesses by conducting negotiations of legal fees between each
business and its retained counsel. By conducting negotiations of legal fees through the
ancillary business, the attorneys would be improperly attempting to exert influence upon
the attorneys retained by the businesses and would be interfering with existing fee
contracts between attorneys and clients.
OPINION: This opinion addresses whether it is ethically proper for attorneys to form an
ancillary business to serve small and medium-sized businesses by negotiating legal fees
on their behalf with the attorneys who already represent the businesses in legal matters.
Upon forming the ancillary business, the attorneys would advertise the legal fee
negotiation services to small and medium sized businesses. If hired, they would contact
the attorneys representing the businesses and would conduct legal fee negotiations. The
attorneys would not solicit or accept legal work from the businesses served.
Is it proper for attorneys to form an ancillary business to serve small and
medium sized businesses by conducting negotiations of legal fees between
each business and its retained counsel?
Legal fees are established as a matter of agreement between each lawyer and client. A fee
agreement sets forth the details of the compensation, the services to be rendered, the
identity of the client, and the client’s responsibilities toward payment. See ABA/BNA
Lawyers’ Manual on Professional Conduct 41:101 (2/19/97). In reaching such
agreement, the lawyer and the client gain a mutual understanding regarding the scope of
the attorney-client relationship.
The underlying ethical requirement of all fee agreements is that attorney fees must be
reasonable. Under DR 2-106 (A) “[a] lawyer shall not enter into an agreement for,
charge, or collect an illegal or excessive fee.” Under DR 2-106(B) “[a] fee is clearly
excessive when, after a review of the facts, a lawyer of ordinary prudence would be left
with a definite and firm conviction that the fee is in excess of a reasonable fee.” Factors
to be considered in determining reasonableness are listed within the rule.
An attorney must not only determine how much is reasonable to charge a business client,
but also how to charge. Hourly billing is the traditional method of billing, but there are
other methods such as blended hourly rates, contingent or modified contingent rates,

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fixed fees, and unit billing. These alternate methods of billing are of emerging interest to
cost-conscious clients.
The terms of a proposed fee agreement should be explained to each client. This duty is
expressed in Ethical Consideration 2-18: “A lawyer should be mindful that many persons
[businesses] who desire to employ him [her] may have had little or no experience with fee
charges of lawyers, and for this reason he [she] should explain fully to such persons
[businesses] the reasons for the particular fee arrangement he [she] proposes.”
This Board has already advised in Opinion 94-7 that Ohio attorneys may form ancillary
businesses to provide law-related services. “Attorneys who operate such law-related
businesses must do so in a manner consistent with the Ohio Code of Professional
Responsibility. The ancillary business must not engage in activities that would be
prohibited as unauthorized practice of law.” See Ohio SupCt, Bd of Comm’rs on Griev &
Disc, Op. 94-7 (1994).
Now, the Board must determine whether an attorney comports with the Ohio Code of
Professional Responsibility by forming an ancillary business to conduct negotiations of
legal fees between a business and its retained counsel. Does an attorney who forms an
ancillary business to negotiate legal fees on behalf of small and medium sized businesses
become an improper intermediary between the business clients and their attorneys?
The applicable rule is DR 5-107. Under the broad rubric of DR 5-107, an attorney has a
duty of “Avoiding Influence By Others Than The Client.” Ethical Consideration 5-1
supports this mandate: “The professional judgment of a lawyer should be exercised,
within the bounds of the law, solely for the benefit of his [her] client and free of
compromising influences and loyalties. Neither his [her] personal interests, the interests
of other clients, nor the desires of third persons should be permitted to dilute his [her]
loyalty to his [her] client.”
While the stated purpose of assisting small and medium-sized businesses in decreasing
their legal fees may be laudable, the attorney’s proposed method of forming and using an
ancillary business to directly negotiate legal fees between an attorney and client is
objectionable under the above cited rule. The attorneys who form the ancillary business
to conduct the fee negotiations would be improperly attempting to exert influence upon
the attorneys who represent the businesses and would be interfering with a fee contract
between attorneys and clients.
Through the negotiation of fees for another, the ancillary business becomes an improper
intermediary in an attorney-client relationship. In conducting negotiations of a legal fee,
the ancillary business becomes directly involved in the businesses’ legal matters. This is
so, for such frank and thorough negotiation of legal fees would require candid discussion
of the subject matter of the representation. The ancillary business would be involved in
decisions regarding the fee agreement that would be inappropriate for a non-lawyer to
make on behalf of another. In its efforts to decrease the legal fee, the ancillary business
would be attempting to influence the professional judgment of the lawyer as to the

Op. 97-5 3
reasonableness of the existing fee. The ancillary business becomes a third party
interfering with an existing fee contract between an attorney and client.
In conclusion, this Board advises that it is improper for attorneys to form an ancillary
business to serve small and medium sized businesses by conducting negotiations of legal
fees between each business and its retained counsel. By conducting negotiations of legal
fees through the ancillary business, the attorneys would be improperly attempting to exert
influence upon the attorneys retained by the businesses and would be interfering with
existing fee contracts between attorneys and clients.
The advice within this opinion is not to be construed as prohibiting attorneys from
forming ancillary businesses to provide other consulting services to small and medium-
sized businesses. See Ohio Sup Ct, Bd of Comm’rs on Griev & Disc, Op. 94-7 (1994).
Advisory Opinions of the Board of Commissioners on Grievances and Discipline are
informal, nonbinding opinions in response to prospective or hypothetical questions
regarding the application of the Supreme Court Rules for the Government of the
Bar of Ohio, the Supreme Court Rules for the Government of the Judiciary, the
Code of Professional Responsibility, the Code of Judicial Conduct, and the
Attorney’s Oath of Office.