ETH 2019-10
Opinion No. 2019-10
Withdraws Adv. Op. 2000-1
Ohio Ethics Opinion
Board of Professional Conduct
October 4, 2019
RICHARD A. DOVE DIRECTOR
D.
ALLAN ASBURY SENIOR COUNSEL
KRISTI
R. MCANAUL COUNSEL
HON.
JOHN W. WISE CHAIR
Lawyer
Acceptance of Referral Fees from Financial Services
Group
SYLLABUS:
A lawyer is prohibited from accepting a referral fee from a
financial services group for referring clients in need of
financial services. A lawyer involved in a business
relationship and referral fee agreement with a financial
services group acquires a pecuniary interest adverse to the
client. A material limitation conflict is present when a
lawyer enters into a business relationship and referral fee
agreement with a financial services group due to the personal
interest of the lawyer in earning a referral fee. Full
disclosure and consent of the client does not resolve a
conflict of interest arising from a referral fee agreement
between a lawyer and a financial services group.
QUESTION
PRESENTED: May a lawyer accept a fee from a
financial services group for referring clients in need of
financial services?
APPLICABLE
RULES: Prof.Cond.R. 2.1, 1.7, 1.8, 5.4.
OPINION
HON.
JOHN W. WISE CHAIR.
Financial
services groups are approaching Ohio lawyers and offering to
enter into business relationships based on the referral of
clients in need of financial services. The groups typically
offer clients financial services through investment planners,
investment advisors, and money managers and may offer
insurance services or accounting services through affiliated
specialists or firms. Upon referral, the financial services
group initiates a meeting with the client and lawyer. The
lawyer reviews and approves the plan or product before it is
offered to the client. The lawyer offers the client legal
advice about the plan and product. The lawyer receives a fee
for each client referred. The financial services group and
the lawyer negotiate the fee in advance of the referral. The
fee may be a one-time fee per referral, a one-time fee based
on how much of the product the client buys, a percentage of
the returns realized for the client, or a...
