the final recommendation that the committee be discharged, and substitute for it that the committee be continued.

The Canons as proposed have been widely published. They have been widely commented on, and so far as any member of the committee is advised, I think there has been no unfavorable comment and no unfavorable criticism of any of the other Canons. Therefore, it appears to me that it is unnecessary to read them seriatim, and I shall propose accordingly that with the exception of the first Canon, which is not now presented for your consideration, the others be approved by the American Bar Association and that when so approved they be published with and as a part of the Canons approved by the Association. They are twelve in number, and I move that recommendation.

The motion was seconded.

Julius Henry Cohen, of New York:

May I ask Mr. Boston a question for the purpose of clarification. Turning to page 245, "Division of Fees," the first sentence:

No division of fees for legal services is proper, except with another lawyer, based upon a division of service or responsibility. But the established custom of sharing commissions at a commonly accepted rate, upon collections of commercial claims between forwarder and receiver, though one be a lawyer and the other not (being a compensation for valuable services rendered by each), is not condemned hereby, where it is not prohibited by statute.

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Now doesn't the word "commissions cover a division of fees where there has been suit brought to recover collection, or is that confined to the collection without suit?

Mr. Boston:

I think it speaks for itself. I do not think that it falls into either of the categories that Mr. Cohen mentions. I think the compensation for legal services is not to be divided; that commissions as represented in established and recognized schedules of rates-I don't know that I am quoting it precisely because I am quoting it from memory-being recognized as compensation for valuable services rendered by each of the contributing parties, is not condemned by this Canon.

Now let me say that that saving clause in those terms was not in the Canon as recommended last year in the report of the committee, and because of a widely extended view that that qualification should be made and that that saving clause should be in

serted, the committee reached the conclusion that there was no impropriety in that division of commissions according to established rates. Commissions, as I understand, are compensation for forwarder and receiver which are based upon a percentage basis, and are at commonly recognized and established rates and are not compensation for the lawyer's services in the conduct of litigation. That, in my opinion, is a proper interpretation of this Canon.

Before I stop, however, in answering Mr. Cohen, I think it should be said that there are many people who have contended that after a suit is begun the forwarder should be excluded from the picture, and that whatever is realized as the result of the lawyer's services is the direct and exclusive result of the lawyer's services and that there should be no division of commissions. The committee has not taken that view.

Mr. Cohen:

Mr. President, I do not think Mr. Boston has made clear for the record as I for one should like him to, the differentiation which his committee offers. There are standards of compensation and standards of division of fees published in certain law directories which include a division of the fee which the lawyer charges for professional services in the bringing of a lawsuit. I cannot personally reconcile a division of fees for legal services which is prohibited by the first sentence with a sharing of those fees by merely calling them commissions. I would like to have that clarified before I vote on the resolution.

Mr. Boston:

I may not be able to reconcile them, because you identify two words as one. The committee does not. You in your description of the schedule of rates say that the schedule recognizes as a separable item a suit fee. Now I think that it is undoubtedly true, that it was not intended by this Canon that that suit fee should be divided.

James M. Graham, of Illinois:

What compensation or recompense would the forwarder receive in case the matter was in suit?

Mr. Boston:

I am not conversant with the schedules of rates. I am not engaged in the collection business, nor in the prosecution of that branch of the profession. It is recognized that bodies having repute, and composed in part of many lawyers, have established rates of commission which are calculated upon the percentage basis and which are graduated; that those fee schedules for that kind of business performed by those persons in that branch of the profession have been approved and adopted by numerous state and local Bar Associations. We are not here to undo the work of state and local Associations. We got as near to the line as we felt that we could.

If you will bring to my attention a specific rate schedule and point to a particular provision in it and ask me whether that falls within or without the line, I should attempt to discriminate, as Mr. Cohen it appears to me has done, between commissions as such and compensation for the lawyer's services in bringing and prosecuting the suit. One falls on one side of the line and the other falls on the other side; and as far as I know there is no schedule of rates which has been brought to my attention that prescribes that the lawyer shall divide his suit fee with the forwarder of the claim.

Mr. Graham:

A single case may fall under both those heads.

Mr. Boston:

Yes, maybe. If somebody will point out what the facts are, give me the specific facts you have in mind, I may be able to give you my individual view as to the class it falls in.

Mr. Graham:

In such a case as this: A claim is forwarded with the expectation that it may be collected without suit. In that case the sender is entitled to compensation of some sort.

Mr. Boston:

Under this established rate.

Mr. Graham:

But it is found that the claim cannot be so collected and that suit must be brought. In that case, a fee is paid to the lawyer.

Is the sender entitled to any part of that fee? If not, what does he get his compensation from?

Mr. Boston:

If you ask me what I think, I think that commissions are those things which are recognized in the schedule of rates as the matter in which the forwarder is to share. We did not feel that we were justified in upsetting the action of state and local Bar Associations throughout the country in adopting schedules of rates for the division of commissions, and we confined our exception, if you choose to style it so, to those commonly recognized and established rates.

Now if any of them provide that a lawyer shall divide his per diem compensation for his services in court, it would, in my judgment, be condemned by this Canon. If it provides, however, that there shall be a commission for such collection of fifteen per cent upon the first $500, we will say, to be divided betweento be shared, ten per cent by the receiver and five per cent by the forwarder, I do not think that the Canon would interfere with that division. That is my individual opinion.

We could not, in such a Canon as this, which is designed to state a principle, go into the details of all of the possibilities that might arise in the application of that principle. We were waited upon during at least thirteen different sessions, as I remember, by committees of one, two or more other bodies. One committee in particular formulated this exception. It represents a commercial body which claims to have at least 8700 members among the legal profession. After conference with that body the committee reached the conclusion that it could not properly go to the American Bar Association and ask it to disregard the views of those men, and they expressed themselves as satisfied with that qualification. Hence it was recommended, because if it were omitted there would be a very great difference of opinion. Personally I do not apprehend that if there was $7.50 suit fee paid and there is any controversy over the $2.50, that there will be any great violation of professional ethics, and I think that is where it usually arises.

Chairman Whitman:
Any further remarks?

Joseph J. Webb, of California:

Will you have the Canon read so we will know what it is?

Mr. Boston:

I will read it.

No division of fees for legal services is proper, except with another lawyer, based upon a division of service or responsibility. But the established custom of sharing commissions at a commonly accepted rate, upon collections of commercial claims between forwarder and receiver, though one be a lawyer and the other not (being a compensation for valuable services rendered by each), is not condemned hereby, where it is not prohibited by statute.

I believe there is one state in the nation which prohibits such division by statute. I am told they have not the slightest difficulty in getting around it.

Ernest J. Torregano, of California:

Mr. Chairman, I observed that the Chairman of the committee called our attention to the fact that he is not engaged in the collection business, and, further, some of his remarks have been inadvertently made in representing the facts in connection with the collection business. I for one at the present time am not engaged in the collection business. I do, however, pride myself on the fact that I served my apprenticeship. When cases were few and far between I did collection items as part of my professional duty.

I failed to observe the distinction made by the gentleman, if there is a distinction, whether the fees divided are the result of the per diem of a day in court or whether it is a fee earned by virtue of his office. In other words, if I make my position clear, if the collection is made by virtue of the lawyer communicating to the debtor, by communication or otherwise, a representation of the attorneyship, then I consider that the legal services are rendered in connection with that claim. It fails to differentiate, in my opinion, whether it was by virtue of direct work or otherwise.

We do know, as a matter of fact, the custom of law lists wherein. their representation by attorneys provides that forwarders shall receive one-third of the fees earned in connection with the collection of that item. So, consequently, those of us who desire by all means to observe the Canons of this organization without any quibbling, without any side-stepping or otherwise, want to