The Florida Bar
www.floridabar.org
PROFESSIONAL ETHICS OF THE FLORIDA BAR

OPINION 60-26
February 7, 1961

Subject to full disclosure to and written consent by his client, and the condition that the lawyer is not abusing the confidence which the client places in him, a lawyer may recommend that a client invest in a certain way even though the lawyer receives a “referral fee” from the institution for making such a recommendation. This recommendation is proper only after the lawyer has made a complete investigation before giving such advice and feels it to be sound.

Note: This opinion was modified by opinion 70-13, which adds the requirement that the client receive the benefit of the referral fee or that the attorney credit the client with the fee against the attorney's fees.

Canons: 6, 11, 32, 38

Chairman Holcomb stated the opinion of the committee:

A member of The Florida Bar submits an inquiry concerning an offer made by a savings institution to pay attorneys a referral fee for recommending investment of clients' funds in that institution. The matter has been submitted to the Committee, and we find as follows:

Under Canon 38, a lawyer should accept no compensation, commissions, rebates or other advantages from others without the knowledge and consent of his client after full disclosure.

Canon 11 provides: “A lawyer should refrain from any action whereby for his personal benefit or gain he abuses or takes advantage of the confidence reposed in him by his client....”

Canon 32 provides for the lawyer's duty in its last analysis, and is too long to quote here.

Under the circumstances, the Committee does not disapprove of the payment of a fee by an institution to a lawyer for recommending investment of his client's funds in that institution provided the lawyer first satisfies himself by an independent investigation that the investment is a proper one under all of the circumstances, and provided he first makes a full disclosure to his client of all of the facts, including the fact of a prospective payment of a fee to him by the firm with whom the funds are placed and secures his client's consent in writing to such payment.

This opinion is not to be construed as approving investment of funds in the particular institution making the offer involved herein, but is a general one applying to all investments of funds.

[Revised: 08-24-2011]