Informal Opinion Number: 950270

QUESTION: Attorney represents a collection agency. The agency will refer matters to Attorney for collection through litigation. The agency will refer the matter directly, rather than the creditor hiring Attorney. The agency will require Attorney to pay the agency a set fee on each matter for administrative expenses. May Attorney pay this fee? ANSWER: The agreement which Attorney has submitted raises several concerns under the Rules of Professional Conduct. First, the fee would be either a prohibited referral fee under Rule 4-7.2(c) or improper fee splitting with a non-attorney under Rule 4-5.4(a). The other concerns raised cannot be fully addressed without information about disclosures, waivers and arrangements with the creditor, the actual client. The arrangement described causes concerns under Rule 4-1.6 related to confidentiality and under Rule 4-1.7(b) related to potential conflicts of interest. Additionally, this arrangement raises the concern that Attorney would be violating Rule 4-5.5 assisting the unauthorized practice of law by this company. Attorney may wish to study State ex rel. McKittrick v. C.S. Dudley & Co., Inc., 102 S.W.2d 895 (Mo. 1937). That case involved a collections company in a situation which appears similar to the situation of the collection agency in the opinion request.

Informal Opinions are ethics advisory opinions issued by the Office of Legal Ethics Counsel to members of the Bar about Rule 4 (Rules of Professional Conduct), Rule 5 (Complaints and Proceedings Thereon), and Rule 6 (Fees to Practice Law) pursuant to Missouri Supreme Court Rule 5.30(c). Written summaries of select Informal Opinions are published for informational purposes as determined by the Advisory Committee of the Supreme Court of Missouri pursuant to Rule 5.30(c). Informal opinion summaries are advisory in nature and are not binding. These opinions are published as an educational service and do not constitute legal advice.

To request an Informal Opinion, please visit: https://mo-legal-ethics.org/for lawyers/requesting-an-informal-advisory-opinion/.

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