The Code of Professional Conduct provides that every lawyer has a duty to their clients to provide full disclosure when it comes to fees and financial dealings (section 3.6-1 commentary ). Because of that duty, lawyers are prohibited from accepting any of the following compensation related to professional employment from someone other than a client:
The exception to this rule is where the lawyer fully discloses to the client the compensation and gets the consent of the client (section 3.6-1 commentary ). Where a lawyer is being paid by a legal aid agency, borrower or personal representative, the rule is modified – in those cases, consent is required of the person that is paying. Further, section 3.6-7 of the Code of Professional Conduct prohibits lawyers from
The rules speak more specifically to these principles. Lawyers are prohibited under rule 8.12(1) from providing to or receiving from a real estate broker, agent or intermediary any financial or other reward for directing or receiving clients to or from the real estate broker, agent or intermediary. Rule 8.12(2) specifically notes that lawyers shall not provide or receive any reward, financial or otherwise, from a title insurer, agent or intermediary for directing or accepting clients to or from the title insurer, agent or intermediary. Lastly, rule 8.09(2) forbids lawyers from giving or authorizing any person to give anything of value to a person for recommending a lawyer’s services. Discount coupons violate these rules and are not permitted.
Lawyers must be careful where, for example, a title insurer pays a fee to the lawyer for work done. In that case, the lawyer is acting in a joint retainer for both the client and the title insurer. As such, rules with respect to joint retainers and consents apply (see section 3.4-5 of the Code of Professional Conduct). The payment from the title insurer is considered a fee for legal services and not a commission so the requirements for disclosure and consent found above will apply.
Reasonable Fees and Disbursements: section 3.6-1 (Code of Professional Conduct)
Division of Fees and Referral Fees: section 3.6-7 (Code of Professional Conduct)
Sharing of Fees: rule 8.12 (Law Society Rules)
Prohibited Activities: rule 8.09(2) (Law Society Rules)
Joint Retainers: sections 3.4-5 to 3.4-9 (Code of Professional Conduct)
(Posted: June 12, 2020)