May a Vermont collection agency employ a salaried lawyer to litigate creditor claims while retaining the agency's contingent collection fee?
Apply this to your situation
This page answers the general question as of 1984. Ask about yours and see what the current Vermont Rules of Professional Conduct say for your facts, with citations.
Plain-English summary
A for-profit collection company solicited creditor accounts and employed a Vermont lawyer on salary. If the company could not collect through mail and telephone efforts, the lawyer filed suit for the creditors. Settlement and recovery funds went into the company's account, from which it deducted a contingent collection fee.
The committee found the company was offering legal services it could not itself provide, and the lawyer's salaried participation aided unauthorized practice under former DR 3-101(A). The arrangement also fell outside the organization categories permitted by former DR 2-103(D). The committee identified legal-fee sharing with a nonlawyer as another problem, but declined to address the separate conflict and client-fund questions posed in the request after finding those threshold violations.
Currency note
This opinion was issued in 1984 under Vermont's former Code of Professional Responsibility. The Vermont Supreme Court's rules history states that the Rules of Professional Conduct applied to lawyer conduct after September 1, 1999. Later amendments or opinions may have changed the analysis. Treat this opinion as historical context and verify current rules before relying on it.
Common questions
Q: Did paying the lawyer a salary cure the agency arrangement?
A: No. The committee found the salaried lawyer still aided the agency in supplying legal services to its creditor customers.
Q: Did the opinion decide the handling of settlement funds?
A: No. The committee expressly did not reach the client-fund and conflict questions after finding violations of other former rules.
Background and rules framework
The opinion applied former DR 3-101(A) and DR 2-103(D) to a for-profit agency's provision and promotion of a lawyer's services. It cited earlier ABA collection-agency opinions with similar concerns.
Citations and references
Rules of Professional Conduct:
- Vermont Code of Professional Responsibility DR 3-101(A) and DR 2-103(D)
Other opinions cited:
- ABA Formal Opinions 35, 188, 225, and 294
- ABA Informal Opinion C-735
See also
- Vermont Ethics Op. 97-04: Collection agency for fees
- Vermont Ethics Op. 80-10: Out-of-state lawyer clerk
Source
- Landing page: Vermont Bar Association collecting opinions
- Original PDF: Opinion 84-03
- Vermont Supreme Court rules history, “These rules apply to lawyer conduct after September 1, 1999.”
What do the rules say today, for your facts?
This opinion is from 1984. Ezel checks the current Vermont Rules of Professional Conduct against your situation and cites the rules it relies on.
Opens in Ezel Pro.
- Checks the law as it stands today, not only this page
- Cites every source it relies on, so you can verify it
- Chat, drafting and research in one workspace