Is an Unethical Agreement to Share Fees with a Nonlawyer Enforceable?

The West Virginia Supreme Court recently considered whether a nonlawyer who worked with a lawyer on toxic tort cases could “share the benefits half/half, 50/50.” See Rich v. Simoni, No. 14-0998, 2015 BL 102314 (W. Va. Apr. 10, 2015). More particularly, the court considered this certified question from a federal court: “Are the West Virginia Rules of Professional Conduct statements of public policy with the force of law equal to that given to statutes enacted by the West Virginia State Legislature?” In answering the question in the affirmative, the court held as follows:

we now hold that Rule 5.4 of the West Virginia Rules of Professional Conduct, which proscribes the sharing of fees between lawyers or law firms and nonlawyers, is an explicit judicial declaration of West Virginia public policy with the force and effect of law. Accordingly, a fee-sharing agreement between a lawyer or a law firm and a non-lawyer that violates the provisions of Rule 5.4 of the West Virginia Rules of Professional Conduct is void as against public policy and wholly unenforceable.

This should also be true in Louisiana. The Louisiana Rules of Professional Conduct contain “imperative” rules that private parties cannot contravene by agreement. The Rules unquestionably have the “full force and effect of substantive law.” See, e.g., Dazet Mortgage Solutions LLC v. Faia, No. 12-CA-486 2013 WL 1442558, at *2 (La. App. Ct. 5th Cir. Apr. 10, 2013); Succession of Parham, 755 So. 2d 265, 270 (La. Ct. App. 1st Cir. 1999); In re Huddleston, 655 So. 2d 416, 422 (La. Ct. App. 5th Cir. 1995); Soderquist v. Kramer, 595 So. 2d 825, 829 (La. Ct. App. 2d Cir. 1992). Moreover, the Louisiana Supreme Court enacted these rules and gave them the full force of substantive law “in the interests of the public, the courts, and the legal profession.” Chittenden v. State Farm Mut. Auto. Ins. Co., 788 So. 2d 1140, 1149 (La. 2001) (emphasis added) (citing Succession of Wallace, 574 So. 2d 348 (La. 1991)). For these reasons, one Louisiana court has expressly held that a fee-sharing contract with a nonlawyer made in violation of Louisiana Rule of Professional Conduct 5.4 is null and void. See “We the People” Paralegal Servs., LLC v. Watley, 766 So. 2d 744 (La. Ct. App. 2d Cir. 2000) (holding that a fee-sharing agreement with a paralegal services firm was null and void, but remanding to allow the firm to state a cause of action for unjust enrichment).


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