Legal Ethics

Legal fees can be shared with lawyers who split fees with nonlawyers, ABA ethics opinion says

ABA model ethics rules generally bar lawyers from sharing fees with nonlawyers. So can a lawyer working in a jurisdiction that has adopted the ABA Model Rules of Professional Conduct share fees with lawyers who aren’t bound by the no-fee-sharing restriction?

In some cases, the answer is yes, according to an ABA ethics opinion. “Where there is a single billing to a client in such situations,” says Formal Opinion 464, “a lawyer subject to the Model Rules may divide a legal fee with a lawyer or law firm in the other jurisdiction, even if the other lawyer or law firm might eventually distribute some portion of the fee to a nonlawyer, provided that there is no interference with the lawyer’s independent professional judgment.” An ABA press release links to the opinion (PDF) by the ABA Standing Committee on Ethics and Professional Responsibility.

A contrary conclusion would “unreasonably impair the ability of lawyers to work alongside lawyers in firms that may be best suited to serve a particular client or resolve a particular matter,” the ethics opinion says.

Among the jurisdictions that permit fee-sharing with nonlawyers are Washington, D.C., and the United Kingdom.

The ABA Commission on Ethics 20/20 referred the fee-sharing issue to the standing committee rather than ask the ABA House of Delegates to approve a revised comment to the Model Rules allowing such a practice. Past ABA Journal coverage indicated it was “a potential hot-button issue for some members of the House.”

Prior coverage:

ABA Journal: “Closing Act: Ethics 20/20 Proposals Crack Open the Door for Foreign Lawyers”

ABA Journal: “Ethics 20/20 Recommends Helping Foreign Lawyers to Practice in US, Sidesteps Nonlawyer Ownership”

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