Ethics Opinion No. 55
Adopted June 23, 1933
The Board is in receipt of the following request for an advisory opinion:
“We request an advisory opinion from the Board of Governors on the following state of facts. The Union Labor Organization of railway employees through its national office maintains a bureau for the purpose of investigating the cause and nature of all injuries to railway employees who happen to be members of the organization. These investigations are made honestly and impartially and statements are taken from witnesses and this data is preserved for the injured man in the event litigation should be had, very much in the same manner as the claim department for the railway compiles data for the use of the railway company in the event of litigation following an accident. The United States is divided into regions and in each region counsel is designated as regional counsel of this organization. These regional counsel agree that they will advise with the injured employees and in all cases try to effect an equitable settlement without litigation and without charge to the injured employee, but in the event of litigation they are to charge the injured employee a contingent fee of fifteen per cent of the net amount recovered and the national bureau charges five per cent of the net amount recovered for obtaining legal and competent evidence for use in the trial. This charge is made only in the event of litigation. We request the opinion of the board as to whether or not attorneys acting as regional counsel are violating the rules of the bar by being a party to this kind of an agreement.”
The Board is of the opinion that the attorneys acting as regional counsel would be proceeding in violation of Rule of Professional Conduct No. 37, which provides:
“The professional services of a lawyer should not be controlled or-exploited by any lay agency, personal or corporate, which intervenes between client and lawyer. A lawyer’s responsibilities and qualifications are individual. … A lawyer may accept appointment from any organization, such as an association, club or trade organization, to render legal service in any manner in which the organization, as an entity, is interested, but this employment should not include the rendering of legal services to the members of such an organization in respect to their individual affairs.”
The fact that services rendered in effecting settlements are given gratuitously does not alter the situation.
The proposed plan cannot be approved for a further reason. A member of the bar should not place himself in a position where his personal interests might conflict with that of his client. In the situation presented where the member of the bar is not entitled to compensation in the event a settlement is effectuated and where some compensation, arising from future litigation, may be expected, the member of the bar subconsciously may be controlled by his personal interests. A member of the bar should not place himself in such position because it would tend to bring reproach upon the profession.