ETHICS OPINION 272-1929

ETHICS OPINION 272

NUMBER 272

Question. In the opinion of the Committee, is it professionally improper for one member of a law partnership to act as a receiver, by appointment of a judge or court, and for another member of his firm to act as the receiver’s attorney, and for the two to divide between them as partnership earnings or otherwise the aggregate compensation received by both.

Answer, The Committee is divided in its views; some members have approved the following answer:

While the Committee believes that the appointment by a receiver of his partner as his counsel should be discouraged, nevertheless in view of the recognition of the propriety of such practice by the courts, such appointments cannot be regarded as improper. And inasmuch as the formation of law partnerships is recognized as proper, there is in the opinion of the Committee no impropriety in a partner distributing his compensation as partnership earnings whether earned as receiver or counsel, but the Court should be fully advised of the partnership, prior to the appointment of counsel, and of the proposed division before fixing compensation.

Other members approve of the following answer;

In the opinion of the Committee, the respective duties of the receiver and of his counsel to the estate are such that neither should have a pecuniary interest in the compensation of the other there from; hence it is improper that they should share the same as partnership earnings or otherwise. Both receiver and counsel should observe the principle that a fiduciary may not place himself in a position where his personal interest may in any manner conflict with his official duties.