Can a lawyer who collects a contractual attorney fee in a mortgage foreclosure keep part of it and remit the balance to the client?

Plain-English summary

A bar member asked whether he could agree to a particular arrangement with a client. In foreclosing a mortgage that provided for an attorney fee (generally ten percent of the mortgage amount), the client wanted the lawyer to keep two-thirds of the attorney fee as his entire fee in the case and to remit the remaining one-third to the client.

The Board of Governors concluded that the proposed arrangement would violate Rule 36 of the Rules of Professional Conduct, which provided that no division of fees for legal services is proper except with another lawyer based on a division of services or responsibility. The Board further concluded that the arrangement would constitute a violation of Cause Nine of the Causes for Disbarment, Suspension, or Other Disciplinary Action, which treated dividing or agreeing to divide fees for legal services with anyone other than another attorney entitled to practice law as a sufficient cause for discipline.

Currency note

This opinion was issued in 1936, decades before Oklahoma replaced its original Rules of Professional Conduct (patterned on the ABA Canons of Professional Ethics) with the Oklahoma Rules of Professional Conduct (adopted 1988) and the later Ethics 2000 revisions. The rule number cited here, Rule 36, belongs to that superseded canon-era code and does not correspond to the current Oklahoma Rules of Professional Conduct. Subsequent rule amendments and later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Can a lawyer share a contractual attorney fee with the client who hired him?

A: The opinion concluded no. The Board held that remitting part of the foreclosure attorney fee to the client was a division of fees with a non-lawyer, prohibited by Rule 36.

Q: What discipline did the arrangement expose the lawyer to?

A: The opinion concluded the arrangement was a violation of Cause Nine of the Causes for Disbarment, Suspension, or Other Disciplinary Action, which treated dividing fees with anyone other than a licensed attorney as a sufficient cause for discipline.

Background and rules framework

The opinion applied Rule 36 of the then-current Oklahoma Rules of Professional Conduct, which permitted division of fees for legal services only with another lawyer based on a division of services or responsibility, together with Cause Nine of the Causes for Disbarment, Suspension, or Other Disciplinary Action. Rule 36 was drawn from the ABA Canons of Professional Ethics in force at the time. The prohibition on sharing fees with non-lawyers corresponds in current practice to the rule on fee division with nonlawyers, though the opinion predates the Model Rules and made no such citation.

Citations and references

Rules of Professional Conduct:

• Rule 36 (1929 Oklahoma Rules of Professional Conduct): no division of fees for legal services is proper except with another lawyer based on a division of services or responsibility.

Other authority:

• Cause Nine of the Causes for Disbarment, Suspension, or Other Disciplinary Action (dividing fees with anyone other than a licensed attorney)

See also

• ABA Formal Op. 464: Fee Division Across Jurisdictions
• CA Op. 1975-34: Splitting Probate Fees After Dissolution
• ABA Formal Op. 95-392: Sharing Fees With Employer

Source

• Landing page: https://www.okbar.org/ethics/ethics-opinion-no-6/

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Adopted September 25, 1936

The Board of Governors of The State Bar of Oklahoma is requested to express its opinion in answer to the following inquiry from a member of the State Bar:

"Please advise me whether or not the following arrangement would contravene any of the rules of professional conduct: "Suppose a client should want me to foreclose a mortgage containing the usual provision for attorneys fee, generally ten per cent of the amount of the mortgage. The client wants me to retain two-thirds of the attorney fee, said two-thirds being my entire fee in the case and remit to him the balance, or one-third of the fee allowed and collected."

It is the opinion of the Board of Governors that the arrangement proposed in the letter would constitute a violation of Rule 36 of the Rules of Professional Conduct which provides: "No division of fees for legal services is proper, except with another lawyer, based upon a division of services or responsibility." The Board of Governors is also of the opinion that the proposed arrangement would constitute a violation of Cause Nine of the Causes for Disbarment, Suspension or other Disciplinary Action. See causes for Disbarment, etc., which provides: "That the following shall be considered sufficient causes for disbarment or suspension of or for the imposition of other disciplinary measures upon a person who has been admitted to the practice of law in the State of Oklahoma, … "(9) That he has divided or agreed to divide fees for legal services with anyone other than another attorney entitled to practice law."