Opinion #320 – 12/18/1973 (52-73)
conflict of interests, client consent, disclosure, legal fees, non-legal fees, newspapers and news media, real estate, rebate, title company
Topic: Title company discount; attorney retention
Digest: Attorney may not retain title company discount without crediting client unless the client expressly consents to such retention after full disclosure
Code: DR 5-107(A)(1); DR 5-107(A)(2)
May an attorney retain the discount received from title companies without giving his client credit for the amount of the discount?
It is improper for an attorney to retain the discount received from title companies without giving his client credit for the amount of the discount unless the client expressly consents. DR 5-107 provides in pertinent part:”(A) Except with the consent of his client after full disclosure, a lawyer shall not:”(1) Accept compensation for his legal services from one other than his client.”(2) Accept from one other than his client any thing of value related to his representation of or his employment by his client.”Unless the conditions stated in this Disciplinary Rule are fully complied with by the attorney; i.e., full disclosure to the client and the client’s express consent obtained, retention of the title company discount by the attorney without crediting the client is improper. See, N.Y. State 107 (1969); N.Y. State 107(a) (1969); ABA 304 (1962); ABA 331 (1972); N.Y. City 862 (1964). Additionally, 5 Scott on Trusts. Sec. 502 (3d ed. 1967) provides that an agent who makes a profit in connection with transactions conducted by him on behalf of his principal is under a duty to give such profit to the principal, unless it is otherwise agreed between them. See also, Drinker, Legal Ethics 97 (1953).