Judiciary Law § 491[1] prohibits any person, partnership, or corporation from sharing an attorney's fee in consideration of having placed in the attorney's hands a claim or demand of any kind. Pursuant to § 491[2], a violation is punishable as a misdemeanor. Here, under the purported fee-sharing agreement, the plaintiffs would provide the defendant attorneys with proprietary information regarding potential clients, investigate claims, interview potential plaintiffs, and otherwise assist with litigation. In exchange, the defendant attorneys would pay the plaintiffs 20% of their fee for each case. This agreement is illegal and unenforceable. The plaintiffs are not entitled to equitable relief, since the contract was criminal in nature and not merely prohibited by statute.
Ballan v Sirota, NY Slip Op 05014 (2d Dep't July 5, 2018)
Here is the decision.
