May I Share a Legal Fee on a Matter on Which I Otherwise Would Have a Conflict?

ABAThe ABA Standing Committee on Ethics and Professional Responsibility on April 21, 2016, issued a formal opinion addressing whether a lawyer may share a legal fee on a matter when the lawyer otherwise would have a disqualifying conflict of interest. See ABA Formal Op. 474 (Apr. 21, 2016) (“Referral Fees and Conflict of Interest”).

The answer under the ABA Model Rules was not certain. Model Rule 1.5(e) permits fee sharing either in proportion to the services performed by each lawyer, or otherwise if “each lawyer assumes joint responsibility for the representation.” See ABA Model Rule 1.5(e)(1). Unfortunately, the rules do not define the term “joint responsibility.” As a result, uncertainty existed as to whether a lawyer sharing a fee under Rule 1.5(e) actually “represented” the client and, thus, whether the conflicts-of-interest rules applied.

Clarifying this uncertainty, the committee opined that “[i]mplicit in the terms of the fee division allowed by Rule 1.5(e) is the concept that the referring lawyer who divides a legal fee has undertaken representation of the client.” See ABA Formal Op. 474 at 3. As a result of this implicit “representation,” the conflicts rules do apply to each fee-sharing lawyer. Said the committee:

Unless a client gives informed consent confirmed in writing, a lawyer may not accept a fee when the lawyer has a conflict of interest that prohibits the lawyer from either performing legal services in connection with or assuming joint responsibility for the matter.

Id. at 7.

Although this answer holds true under the Louisiana Rules of Professional Conduct, Louisiana’s standards have never been uncertain. Louisiana Rule 1.5(e)(1) permits fee sharing among lawyers in different firms only when “the client agrees in writing to the representation by all of the lawyers involved.” See La. Rules of Prof’l Conduct R. 1.5(e)(1) (emphasis added). Because each fee-sharing lawyer must represent the client, each lawyer owes the client all of the duties attendant a traditional lawyer-client relationship—including the duty of loyalty.