Principles Of Professional Conduct – Dividing Fees With Other Lawyers
Complicated issues may arise when attorneys from different firms must divide or split fees from clients. Rule of Professional Conduct 1.5.1 applies to fee divisions among lawyers in California. However, a successor attorney and prior attorney are not bound by the fee-division rules outlined in Rule 1.5.1 as this rule solely addresses situations where two lawyers from different firms handle a case concurrently.
The Model Rules of Professional Conduct define a division of a fee as “a single billing to a client covering the fee of two or more lawyers who are not in the same firm.”
California Rule of Professional Conduct 1.5.1 states that lawyers who are not in the same law firm may not divide a fee for legal services unless the lawyers put their agreement to divide the fee in writing and the client has consented, also in writing, either at the time the lawyers enter into the agreement to divide the fee or as soon thereafter as reasonably practicable, after full written disclosure to the client.
The disclosure must give notice of the fact that more than one attorney will engage in a division of fees, the identity of these attorneys, and the terms of the fee division. Another requirement is that the total fee charged by all lawyers is not increased solely because of the agreement to divide fees. This rule does not apply to a division of fees pursuant to a court order. The writing requirements may be satisfied by one or more writings.
If a client in any contingency case replaces his or her attorney with a lawyer from a different firm and ultimately prevails, then especially complicated financial and ethical considerations arise. In this case, an attorney terminated without cause may be entitled to a fee for services rendered prior to his or her dismissal as counsel.
The key point is that attorneys may not expose clients to the risk of paying a fee twice – one to present counsel and one to former counsel. Formal Opinion 487 of the American Bar Association (ABA) states “A client cannot be exposed to more than one contingent fee when switching attorneys, given that … each counsel did not perform all of the services required to achieve the result.”
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