Ohio Board Advisory Opinion Op 90-022

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 90-22
October 12, 1990
[CPR Opinion-provides advice under the Ohio Code of Professional Responsibility which is superseded by the Ohio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.]
[Not current-subsequent rule amendments to DR 2-101, eff. Jan. 1, 1993 and Aug. 16, 1993; DR 2-103, eff. Jul. 1,
1996.]
SYLLABUS: A lawyer may represent a grantor of a trust, and at the same time, receive a portion
of his fee from the third party trustee bank after the client has knowledge of the entire transaction
and consents to such a fee arrangement.
OPINION: We have before us your request for an opinion concerning the propriety of an attorney
informing his clients of a bank's small trust program and receiving his fee for advice in connection
with the administration of the trust, a percentage of the trustee fee that the grantor (client) pays the
bank. The bank, it is contemplated, would remit a percentage amount directly to the lawyer. The
bank now markets such a small trust program and it wishes to provide and help pay for such a
lawyer assisted option when the grantor (client) chooses it.
In your request letter you pose these questions:
1. Is it ethically proper to inform my clients of the availability of the bank's small
trust program?
2. Is it ethically proper to agree with my client that the amount of compensation
and fee agreed to between lawyer and client can be paid directly to the lawyer,
upon the client's instructions, from the bank that is managing the client's trust?
If the establishment and operation of such a small trust program comes within the legal and ethical
guidelines discussed herein, an attorney may inform his clients of any such service offered by the
bank. There are a number of ethical concerns that would define and limit the attorney's role in such
a program. An attorney is not permitted to authorize the bank to recommend the use of his services
to those persons who are without legal counsel but who may receive solicitations or marketing
information directly from the bank. DR 2-103(C). The bank is not an organization recognized
under DR 2-103 (D) that may operate a lawyer referral service. In a similar vein, the lawyer could
not agree to share his fees with the bank (a non-lawyer) without violating DR 3-102 (A).

Op. 90-22 2
A more serious question arises in considering whether the lawyer's relationship with the bank may
impair his independent, professional judgment. The lawyer must in consultation with his client (the
grantor under a trust agreement) come to the conclusion that participation in the bank's small trust
program is of benefit to the client and that the lawyer has independent, professional judgment and
legal advice to offer the client that is not available from the bank or its trust department. DR 5-101
(A) requires the lawyer in this situation to disclose fully to the client the role of the bank and his
own financial and personal interest in the payment of this fee by the bank.
Your second question involving the payment of attorney's fees by the bank to the lawyer by the
means of returning a portion of the percentage fee it charges the client-grantor raises certain ethical
problems.
DR 5-107 (A) and (B) provide as follows:
A. Except with the consent of his client after full disclosure, a lawyer shall not:
1. accept compensation for his legal services from one other than his client,
2. accept from one other than his client anything of value related to his
representation of or his employment by his client.
B. A lawyer shall not permit a person who recommends, employs, or pays him
to render legal services for another to direct or regulate his professional
judgment in rendering such legal services.
The Disciplinary Rules set forth above reveal a two-fold concern. First, prohibited conflicts of
interest may arise when fees are paid to a lawyer by a third party whose interest may be adverse to
the client's. Secondly, the receipt of a fee from a third party may undermine the independence of
the attorney's advice and counsel or affect the advice he renders to his client during the course of
representation. These concerns are not treated lightly by the original Canons of Professional
Ethics, the current Code of Professional Responsibility, or the ABA Model Rules of Professional
Conduct.

Op. 90-22 3
In ABA Committee on Ethics and Professional Responsibility, Formal Opinion 196 (1939), the
Committee examined the relationship between a lawyer and his client for title examination when
such attorney retained one-fourth of the fee for abstract examination. Apparently the arrangement
was carried out without the knowledge or consent of the client. The Opinion states that such an
arrangement is improper unless it comes about with the full knowledge and consent of the client.
In ABA Committee on Ethics and Professional Responsibility, Formal Opinion No. 304 (1962), the
ABA again examined an attorney who received a commission for recommending or selling title
insurance without full disclosure to the client. The Committee rendered the following opinion:
A lawyer who receives a commission (whether delayed or not) from a
title insurance company or guaranty fund for recommending or
selling the insurance to his client, or for work done for the client or
the company, without either fully disclosing to the client his financial
interest in the transaction, or crediting the client's bill with the
amount thus received, is guilty of unethical conduct. Such conduct
would be a direct violation of Canon 38.
The small trust program that you have outlined in your question will remit to the lawyer a percent
of its service fee that the client incurs. The client's selection of the bank's services as trustee will
often occur only because of the attorney's advice that such management services are important to
the client as grantor of the trust. It is imperative that the lawyer inform the client in advance that
his fee will be paid by the bank. The client must give his consent, with knowledge of the entire
transaction, before an attorney can ethically continue his representation. Then during the course of
the advice the attorney renders to the client-grantor, he must take care that his professional advice
is not clouded in any respect by the bank. There can be no interference with the relationship
between attorney and client.
In conclusion, it is our opinion that only when these conditions are satisfied can the attorney
ethically agree to receive all or part of his fee from the bank managing the client's trust.
This advisory opinion expressly does not treat related issues of public communication, marketing
and advertising of the small trust program (DR 2-101(A)) or any questions relating to the
unauthorized practice of law (DR 3-101) by the bank or any of its personnel. This is an informal,
non-binding advisory opinion based upon the facts presented and limited to questions arising
under the Code of Professional Responsibility.