Bank of America’s Ethically-Questionable Legal Fee Arrangement
Bank of America is trying to set up fee arrangements with various law firms that would give the bank a credit on its legal fees for sending customers to those law firms. Some observers say that such a situation is unethical, and that it is “a kickback and a form of pay to play for the law firms.” What is unusual, notes CorpCounsel.com, is “the bank appears to be asking for a credit on its own legal fees based on the business it sends.
The agreement Bank of America is sending to various firms outlines the terms of the fee arrangement, and contains a sentence that says the firm “confirms that these fee arrangements are ethical.” Ethics professor Geoffrey Hazard notes that “the agreement seems to violate the American Bar Association’s rules of professional conduct.”
The legal ethics experts consulted (including Lawyerist’s own Eric Cooperstein) all agreed that the ethical implications are too nebulous, and that there remains the problem of whether in actuality the bank is selling client business to the law firms with which it contracts.