October 16, 2020

The Supreme Court of the State of New York Appellate Division: Second Judicial Department (“New York Appellate Court”) stated in its Decision & Order dated September 16, 2020: “The plaintiff commenced this action to recover attorneys’ fees from the defendant law firm for a client referral made by the plaintiff’s decedent, George Moss, who was an attorney … The defendant established its prima face entitlement to judgment as a matter of law by submitting evidence that there was no written agreement between George Moss and the defendant to share fees in the underlying medical malpractice case. Furthermore, even assuming that there was a fee-sharing agreement in place, an attorney who seeks a share of the fee pursuant to such an agreement must have contributed some work, labor, or service toward the earning of the fee … Here, the record establishes that George Moss’s role was merely that of a finder, who referred the plaintiff in the underlying action to the defendant. In order to be entitled to a portion of the fee, more is required of the forwarding attorney than the mere recommendation of a lawyer (see Nicholson v Nason & Cohen, P.C., 192 AD2d 473). The plaintiff failed to raise a triable issue of fact in opposition.”

Source Moss v. Gurfein Douglas, LLP.

In the Nicholson case, the New York appellate court had held: “We agree with the IAS Court that plaintiff’s association with defendant did not amount to an “Of Counsel” relationship, and thus find it unnecessary to decide whether the prohibition against fee-splitting found in Code of Professional Responsibility DR 2-107 ( 22 NYCRR 1200.12) applies to such a relationship. Under DR 2-107 (A) (2) ( 22 NYCRR 1200.12 [a] [2]), unassociated lawyers may share in a fee if, among other things, “[t]he division is in proportion to the services performed by each lawyer or, by a writing given to the client, each lawyer assumes joint responsibility for the representation.” Neither option avails plaintiff, who admittedly gave no such writing to any of the clients, and whose work, the record establishes, was merely that of a finder, searching for potential clients and conducting non-investigative interviews. While a fee-splitting agreement will be enforced where the attorney seeking a share “performed some work, labor or services which contributed toward the earning of the fee” there being no requirement that compensation be in proportion to the amount of work actually performed … more is required of the forwarding attorney than the mere recommendation of a lawyer … Given the important policy goals underlying DR 2-107 and the well-established right of States to regulate the legal profession, … we think this is a reasonable restriction on the right to contract. We have considered plaintiff’s other contentions and find them to be without merit.”

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