ABA Opinion Approves Fee Sharing with Lawyer in Another Jurisdiction Even Though Nonlawyer May Own Part of Firm There

United States Map with One FlagABA Formal Opinion 464 (Aug. 19, 2013) considered whether a lawyer in, for example, Louisiana, could share legal fees with a lawyer in, for example, the District of Columbia even though the District allows a nonlawyer to own a law firm. The obvious concern is that such fee sharing would, through a roundabout way, be fee sharing with a nonlawyer in violation of Model Rule 5.4(a) (which is substantively identical—at least on this issue—to Louisiana Rule 5.4(a)). The ABA committee, however, was unfazed:

In summary, a division of a legal fee by a lawyer or law firm in a Model Rules jurisdiction with a lawyer or law firm in another jurisdiction that permits the sharing of legal fees with nonlawyers does not violate Model Rule 5.4(a) simply because a nonlawyer could ultimately receive some portion of the fee under the applicable law of the other jurisdiction.

Id. The committee reached this sensible conclusion because of (1) the low risk of a nonlawyer in one jurisdiction actually influencing the professional judgment of a lawyer in another; (2) the inability of the lawyer in the more restrictive jurisdiction to understand and police the bookkepping practices of a distant firm; and (3) the impairment of client interests in retaining competent counsel in both jurisdictions.

Significantly, however, the committee noted that “[l]awyers must continue to comply with the requirement of Model Rule 5.4(c) to maintain professional independence.” Id.

It is unclear whether Louisiana would follow suit. Unfortunately, Louisiana has been ultra-restrictive with regard to nonlawyers working with lawyers.

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