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ETHICS OPINION 700-1994 TOPIC: REFERRALS
NEW YORK COUNTY LAWYERS’ ASSOCIATION
Committee on Professional Ethics
QUESTION NO. 700
TOPIC: REFERRALS
DIGEST: LAW FIRM MAY, IF REQUESTED BY ITS CLIENT, REFER COUNSEL TO DRIVER OF A CAR INVOLVED IN AN ACCIDENT TO BRING PRODUCTS LIABILITY CLAIM, WHILE CONTINUING TO REPRESENT THE PASSENGER, IF THE LAW FIRM COMPLETELY DISASSOCIATES ITSELF FROM THE DRIVER’S CLAIM, THE REFERRAL WILL NOT ADVERSELY AFFECT THE PASSENGER’S INTERESTS OR THE LAW FIRM’S ABILITY TO ZEALOUSLY REPRESENT THE PASSENGER, THE LAW FIRM FULLY DISCLOSES THE RELEVANT FACTS AND CIRCUMSTANCES TO BOTH PARTIES AND RECEIVES THE CONSENT OF THE PASSENGER, THE DRIVER IS NOT REPRESENTED BY A LAWYER, AND THE LAW FIRM RECEIVES NO FEE OR ANYTHING OF VALUE FOR THE REFERRAL AND DOES NOT SHARE IN THE LEGAL FEES FROM THE DRIVER’S CLAIM.
CODE: DR 1-102(A)(2) and (4), 2-103(B), 2-107, 5-105(A) and (B), 7-101(A)(3), 7-104(A)(1) and (2); EC 5-15 and 7-1; Canons 5 and 9.
QUESTION:
The inquiring law firm represents the passenger of a car involved in a single-car accident who is suing the driver to recover for his injuries. The driver of the car is seeking counsel to represent her in a product liability claim against the automobile manufacturer. The passenger has asked the law firm to recommend counsel to the driver for the product liability claim. The law firm would completely disassociate itself from the driver’s product liability action and would receive no fee for the referral. May the law firm refer the driver to legal counsel under these circumstances?
OPINION:
Representing both the driver and the passenger involved in a car accident ordinarily violates the prohibition in DR 5-105 of the Lawyer’s Code of Professional Responsibility (the “Code”) against representing conflicting interests. N.Y. County 651 (1976). However, the law firm’s mere act of referring the driver to another law firm at the request of the passenger solely for representation in the products liability claim, while continuing to represent the passenger in the personal injury claim against the driver, would not violate DR 5-105 provided that the referring firm is completely disassociated from the driver’s claim against the manufacturer.
The foregoing notwithstanding, there may be circumstances where such a referral would be inappropriate. The law firm must consider whether, despite the theoretically distinct nature of the different claims involved, such claims may not in practice be separate, and that it may be impossible for the law firm to disassociate itself from the products liability claim. So long as the lawyer is not representing the driver, the relationship of the passenger’s claim against the driver and the driver’s claim against the manufacturer would not bar the referral, but it would heighten the concerns expressed in this opinion.
The referral might give rise to the appearance of impropriety, see Canon 9 of the Code, and the referring law firm must ensure that it exercises its duty “to represent the client zealously within the bounds of the law,” and that it not intentionally “prejudice or damage the client during the course of the professional relationship.” EC 7-1 and DR 7-101(A)(3). A client, particularly one who is involved in an unfriendly litigation or transaction, may consider a referral to the opposing party objectionable, and the client’s directions should be followed regardless of an attorney’s own opinion as to the propriety of the referral. Since the law firm has been requested to make the referral by its client, such circumstances do not exist in this case.
In this regard, the law firm may be required to make specific disclosures prior to making the referral. In New York County 640 (1974), this Committee held that referral of counsel to the other party in the context of a prenuptial agreement or a real estate sale may affect an attorney’s exercise of its independent professional judgment on behalf of a client, see Canon 5 of the Code, but would not be in violation of the Code if the attorney disclosed “the facts and circumstances of his friendship and past transactions with the other attorney” to both parties. DR 5-101 of the Code expressly prohibits representation if an attorney’s professional judgment “will be or reasonably may be affected by” his or her “personal interests,” except with the consent of the client after full disclosure. The referring law firm should therefore disclose to the passenger any facts which could affect, or may appear to affect, its ability to represent its client zealously or exercise independent professional judgment, and must refrain from making the referral unless the client consents to the. referral after full disclosure by the law firm of all of the relevant facts and circumstances.
DR 7-104(A)(1) of the Code prohibits the law firm from communicating or causing another to communicate on the subject of the representation with a party the law firm knows to be represented by counsel in that matter, unless it obtains the consent of such lawyer. DR 1-102(A)(2) prohibits the law firm from circumventing a Disciplinary Rule through actions of another. Thus, if the driver already is represented by a lawyer, it would be inappropriate for the law firm either directly, or indirectly through its client, to provide a referral without first obtaining the consent of the driver’s lawyer.
Furthermore, DR 7-104(A)(2) of the Code prohibits a lawyer from giving “advice to a person who is not represented by a lawyer, other than the advice to secure counsel, if the interests of such person are or have a reasonable possibility of being in conflict with the interests of the lawyer’s client.” Any legal advice or communications by the law firm to the driver, other than the referral, would be inappropriate since the driver and the passenger have “differing interests” within the meaning of the Code. See Definitions.
Lastly, DR 2-103(B) of the Code states that a lawyer “shall not compensate or give anything of value to a person or organization to recommend or obtain employment by a client, or as a reward for having made a recommendation resulting in employment by a client.” Because a lawyer may not assist another lawyer in violating a disciplinary rule, see DR 1-102(A)(4), the law firm may not accept anything of value in return for referring another lawyer.
Likewise, DR 2-107 of the Code prohibits the division of fees among unaffiliated lawyers unless such “division is in proportion to the services performed by each lawyer or, by a writing given to the client, each lawyer assumes joint responsibility for the representation.” EC 5-15 and DR 5-105(A) and (B) prohibit the law firm from performing services for the driver or assuming joint responsibility for her representation, since it would result in the representation of two clients in a litigation with differing interests. See N.Y. County 691 (1992). Therefore, the law firm could not share any legal fees arising from the representation of the driver.
CONCLUSION:
The law firm may recommend legal counsel to the driver of the car solely for representation in the products liability claim, while continuing to represent the passenger in the personal injury claim against the driver, if requested to do so by the passenger, provided that the law firm (1) completely disassociates itself from the driver’s claim against the manufacturer, (2) is satisfied that the referral will not adversely affect the client’s interests or the law firm’s ability to zealously represent the passenger, (3) has fully disclosed the relevant facts and circumstances to both parties and has received the consent of the passenger, (4) has determined that the driver is not already represented by a lawyer, (5) receives no fee or anything of value for the referral, and (6) does not share in the legal fees arising from the products liability claim.
June 14, 1994