In a matrimonial case, may a wife pay her lawyer's fee up front and then be reimbursed out of the counsel fee the court later orders the husband to pay?

Plain-English summary

The Committee was asked whether two related matrimonial fee practices were ethical. The inquirer believed they were unethical and violated Canons 28, 29, 32, 34, 35, and 38 of the Canons of Professional Ethics. The Committee disagreed. It observed that the fixing, collecting, and dividing of fees had been the subject of many opinions and decisions but that each case must be judged on its own facts. It cited Wise, Legal Ethics 132 (1966), for the proposition that there are situations where a lawyer may properly be paid, or by law or court order must be paid, by someone other than the client, and that in some instances sanctioned by law or the court the lawyer may pay over to the client enough to reimburse expenses actually incurred, with care taken that there is a proper legal basis for paying part of a fee to a layman.

In the second question, a wife signed a note with a relative for, say, $1,500, used that money to pay the attorney his $1,500 fee, the attorney then obtained an order directing the husband to pay a $1,500 counsel fee, and as the husband paid, the attorney endorsed the checks to the wife, who endorsed them to the relative. The Committee found this basically the same as the first question, the only difference being the method of reimbursement and the interjection of a relative as the lender, which was not a substantive change.

Assuming the absence of collusion among the litigants and full disclosure of the fee arrangement when application is made for allowance of counsel fees, the Committee's answer was the same for both: the practice is not unethical. It added that the attorney should have nothing to do with arranging the loan to pay his fee, and that it would be advisable for the order to provide to whom the counsel fee (or any portion) is to be paid and, if payments are to be made to the client, to indicate that they are a reimbursement for the fee already paid.

Currency note

This opinion was issued in December 1967, before New Jersey's September 13, 1971 adoption of the Disciplinary Rules (Code of Professional Responsibility), and well before the 1984 Rules of Professional Conduct and all later revisions. It applied the Canons of Professional Ethics on fees and construed R.R. 4:55-7(a) as it then stood; the matrimonial counsel-fee rule and the fee rules have since been revised, with fees now governed by RPC 1.5. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific requirement mentioned here.

Common questions

Q: Can the wife front her lawyer's fee and recover it from the husband's court-ordered counsel fee?

A: Yes, on these facts. The Committee held the arrangement ethical absent collusion and with full disclosure of the fee arrangement when counsel fees are sought.

Q: Does using a relative's loan to pay the fee change the answer?

A: No. The Committee treated that as the same arrangement, but said the lawyer should have nothing to do with arranging the loan.

Q: What should the court order say?

A: The Committee advised the order specify to whom the counsel fee is paid and, if any payment goes to the client, indicate that it is a reimbursement for the fee already paid.

Background and rules framework

The opinion treats the matrimonial counsel-fee award as one of the recognized situations in which a lawyer may be paid through a court order and may pass a reimbursement to the client, so long as there is a proper legal basis, no collusion, and full disclosure to the court. The governing standard was the Canons on fees, read with R.R. 4:55-7(a). Fees are now governed by RPC 1.5.

Citations and references

Court rules:

• R.R. 4:55-7(a) (as amended August 13, 1964): counsel-fee applications in matrimonial matters

Other authorities:

• Canons of Professional Ethics, Canons 28, 29, 32, 34, 35, 38
• Wise, Legal Ethics 132 (1966); Drinker, Legal Ethics 181 (1953)

See also

• NJ ACPE Op. 119: Borrower's Payment of the Lender's Legal Fees
• NJ ACPE Op. 131: Reconciliation Conference With the Unrepresented Spouse

Source

• Landing page: https://law.justia.com/cases/new-jersey/advisory-committee-on-professional-ethics/2004/acp121-1.html

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative. The mirror's text of the first question's opening is truncated; the available text is reproduced verbatim.

90 N.J.L.J. 849
December 28, 1967

OPINION 121

Matrimonial Fees - Reimbursing Client

We have been asked to advise whether the practice of fee charging posed in the following two questions, is ethical:

Moreover, the amendment of R.R. 4:55-7(a) on August 13, 1964, which requires the applicant for counsel fees in a matrimonial matter to state how much she has paid or agreed to pay to her attorney for legal services, was intended to give the court latitude to determine whether the awarded counsel fee should belong to the attorney or should be reimbursed to the party in such an action... .

The inquirer expresses the belief that the practice is unethical and violates portions of the Canons of Professional Ethics, Canons 28, 29, 32, 34, 35 and 38. We think not. The fixing, collecting and dividing of fees have been the subject matter of a number of opinions and decisions by many committees on professional ethics throughout the country but each case must be judged by the facts peculiar to it. The recent publication by Wise, Legal Ethics 132 (1966) states:

There are a number of situations in which a lawyer may properly be paid, or, by law or court order, must be paid, by another than the client. In all of these situations the lawyer must retain the full amount, except that in some instances where sanctioned by law, or the court, the lawyer may pay over to the client enough to reimburse the client for expenses actually incurred in the matter. Each such situation must depend on its own facts and care should be taken that there is a proper legal basis for the payment of part of any legal fee to a layman.

See also Drinker, Legal Ethics 181 (1953).

A wife in a matrimonial action retains a lawyer on the following basis: The wife signs a note with a relative for a sum of money, for example $1,500. With this money she pays the attorney his fee of $1,500. The attorney then obtains an order in which the husband is ordered to pay a $1,500 counsel fee. As the husband pays the attorney under the order, the attorney endorses the checks to the wife, who then endorses the checks to the relative.

The foregoing inquiry is basically the same as Question 1. The only difference is the method of reimbursement and the interjection of a relative as the person lending the litigant money to pay the fee but this is not a substantive change. Thus, assuming the absence of collusion on the part of the litigants and full disclosure of the fee arrangement when application is made to the court for allowance of counsel fees our answer is the same as our answer to Question 1. The attorney, however, should have nothing to do with arranging the loan for the payment of his fee and we suggest that it would be advisable for the order to provide to whom the counsel fee or any portion thereof is to be paid and, if payments are to be made to the client, the order should indicate that it is a reimbursement for the fee or portion thereof already paid.