ABA Opinion on Fee Splitting Across Jurisdictions: Lawyers Dividing Fees & Lawyer Sharing with Nonlawyers

Lawyers practicing in jurisdictions that have adopted the Model Rules may work with lawyers and law firms practicing in jurisdictions that permit fee sharing with nonlawyers.  ABA Formal Opinion 464, issued on August 19, provides that when lawyers engage in these sorts of arrangements and there is a single billing to a client, lawyers working in states that have adopted the Model Rules may divide the legal fee with lawyers and law firms that may eventually distribute those funds to nonlawyers, so long as there is no interference with the lawyer’s independent professional judgment.

Model Rules 1.5(e) and 5.4(a) generally discuss fee sharing and provide that lawyers from different firms may divide a fee if a number of conditions are met; however, lawyers may not share fees with nonlawyers unless the fee sharing arrangement falls into a specific exception.  In contrast, places like the District of Columbia and the United Kingdom allow for nonlawyers who perform professional services within a firm to share fees with lawyers.  Under Formal Opinion 464, lawyers practicing in these two different types of jurisdictions can now arrange to share fees, but lawyers must keep in mind their obligation to maintain professional independence when making these arrangements.

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