When a lawyer takes over a deceased lawyer's cases, may the lawyer pay the deceased lawyer's estate a share of the fee, and how may fees be split if the case is referred to a third attorney?
NY State Bar Ethics Opinion 1128: Fee division with a deceased lawyer's estate
Short answer: A lawyer who completes the unfinished business of a deceased lawyer may pay the deceased lawyer's estate only the portion of the total fee that fairly represents the legal services the deceased actually rendered; if the deceased did no work, paying the estate would be an improper referral fee and an improper fee split with a nonlawyer. If the lawyer instead refers a matter to a third attorney, the two may divide the fee under Rule 1.5(g).
Disclaimer: This is an advisory ethics opinion. Advisory opinions are not binding; they interpret the New York Rules of Professional Conduct and are persuasive authority. This summary is for research purposes only and is not legal advice. Verify current rules before acting on any specific guidance.
About this page: The plain-English summary and Q&A below were written by Ezel based on the official opinion. We do not reproduce the opinion text on this page; follow the linked source for the official text, which controls.
Plain-English summary
A lawyer died after telling his secretary, on his deathbed, that he wanted three personal injury cases referred to the inquirer. There was no fee-sharing agreement between the two lawyers. The clients contacted the inquirer, who is deciding whether to take the matters. In one case (Matter A) the deceased had done real work (a preliminary investigation, the police report, some medical records, notes), but had not filed suit; in the other two the inquirer does not yet know what, if anything, the deceased had done. The inquirer asks whether he may pay the estate a referral fee, and how fees work if he instead refers a matter onward.
The committee starts from Rule 7.2(a), which bars paying anyone to recommend or obtain employment, and Rule 5.4(a), which bars sharing legal fees with a nonlawyer. Rule 1.5(g), which permits fee division between unaffiliated lawyers, does not help here: there was no agreement, and in any event the estate is a nonlawyer, so 1.5(g) does not reach it. The relevant exception is Rule 5.4(a)(2), which lets a lawyer who completes a deceased lawyer's unfinished business pay the estate the portion of total compensation that fairly represents the services the deceased rendered. Citing Professor Simon and Cohen v. Grainer, Tesoriero & Bell, 81 N.Y.2d 655 (1993), the committee reads this to allow either a proportionate share of a contingent fee at the conclusion of the matter or a quantum meruit payment.
Applied to the facts: in Matter A the inquirer may pay the estate for the services the deceased actually performed. In Matters B and C, if the deceased performed no legal services, the inquirer may not pay the estate anything; doing so would be an improper referral fee under Rule 7.2(a) and an improper fee split with a nonlawyer under Rule 5.4(a). The committee expressly declines to decide whether merely signing and filing a retainer (and thereby assuming liability) counts as "services rendered." If the inquirer instead refers a matter to a third attorney, they may split the fee if they satisfy Rule 1.5(g): the division is proportionate or the lawyers assume joint responsibility in a writing to the client, the client agrees in writing after disclosure of each lawyer's share, and the total fee is not excessive. Any further sharing by the third attorney with the estate is governed by the same Rule 5.4(a)(2) analysis.
In practice
Under this opinion, a New York lawyer who takes over a deceased lawyer's case may compensate the estate, but only to the extent of legal work the deceased actually did, paid either as a proportionate share of the eventual fee or as quantum meruit. Paying the estate for cases on which the deceased performed no services is an improper referral fee (Rule 7.2(a)) and an improper fee split with a nonlawyer (Rule 5.4(a)). The committee did not decide whether signing and filing a retainer alone is enough "service" to support payment. Where the lawyer refers a matter to a different attorney instead, the two may divide the fee if they meet Rule 1.5(g)'s proportionate-or-joint-responsibility, written-client-consent, and not-excessive requirements; a 1.5(g)-compliant split is not an improper referral fee.
Common questions
Q: Can a lawyer pay a deceased lawyer's estate a referral fee for sending over a case?
A: Not as a pure referral fee. The lawyer may pay the estate only the portion of the fee that fairly represents legal services the deceased actually performed; if the deceased did no work, the payment is an improper referral fee under Rule 7.2(a) and an improper fee split with a nonlawyer under Rule 5.4(a) (Opinion 1128 ¶¶ 9-10).
Q: How is the estate's share of a contingent fee calculated?
A: As the portion of the total compensation that fairly represents the deceased's services, payable at the end of the matter, or as a quantum meruit amount that can be fixed earlier (¶¶ 8-9).
Q: If the case is referred to a third attorney instead, can the original lawyer share in the fee?
A: Yes, if they comply with Rule 1.5(g): a proportionate split or written joint responsibility, the client's written agreement after disclosure of each lawyer's share, and a total fee that is not excessive (¶¶ 11-12).
Q: Does signing the retainer count as a "service" the estate can be paid for?
A: The committee did not decide. It expressly declined to say whether merely executing and filing a retainer, and thereby assuming liability, is "services rendered" under Rule 5.4(a)(2) (¶ 10).
Background and rules framework
The opinion applies Rule 7.2(a) (Model Rule 7.2) barring payment for recommendations, Rule 5.4(a) (Model Rule 5.4) barring fee sharing with nonlawyers and its subsection (a)(2) exception for paying a deceased lawyer's estate, and Rule 1.5(g) (Model Rule 1.5) governing fee division between lawyers not in the same firm.
Citations and references
Rules of Professional Conduct:
- New York Rule 7.2(a) (Model Rule 7.2): no payment to recommend or obtain employment
- New York Rule 5.4(a), (a)(2) (Model Rule 5.4): fee sharing with nonlawyers; deceased-lawyer exception
- New York Rule 1.5(g) (Model Rule 1.5): division of fees between unaffiliated lawyers
Cases:
- Cohen v. Grainer, Tesoriero & Bell, 81 N.Y.2d 655 (1993): quantum meruit when a client changes lawyers mid-contingency
Other opinions cited:
- N.Y. State 745 (2001): "joint responsibility" entails more than financial accountability
See also
- NY State Bar Op. 1159: Fee sharing with a deceased lawyer's estate
- NY State Bar Op. 1133: Custodian of files contacting a prior lawyer's clients
- NY State Bar Op. 1131: Paying a for-profit lead generation service
Source
- Landing page: https://nysba.org/ethics-opinion-1128/