Can a lawyer who takes a pro bono case for a nonprofit organization turn over the court-awarded attorney's fees to that organization without violating the bars on fee-sharing with nonlawyers or paying for referrals?
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This page answers the general question as of 1993. Ezel answers yours: whether it's allowed on your facts, under the current rules of professional conduct in your state, with citations.
Plain-English summary
The committee addressed two situations: a "cooperating lawyer" who takes a referred pro bono case and turns over (voluntarily or by prior agreement) the court-awarded fees to the sponsoring organization, and a staff lawyer employed by the organization who must remit such fees as a condition of employment. It concluded there is no ethical impropriety in sharing court-awarded fees with a sponsoring nonprofit pro bono organization in either situation, whether the fees are split or turned over in full.
On Rule 5.4(a), the committee reasoned that the purpose of the fee-sharing bar is to protect the lawyer's professional independence from lay interference. It found that purpose not implicated here, because the entity is nonprofit and the fee is court-awarded rather than paid by the client, so the economic incentives that drive lay interference are minimal. It pointed to Rule 5.4(d), which limits its lay-participation bar to organizations "organized to practice law for a profit," as recognizing that nonprofit settings present little danger; Rule 5.4(c), which bars a payer from directing the lawyer's judgment, directly addresses any residual concern. The committee distinguished a for-profit entity sponsoring litigation for a share of contingent fees, where both sides are profit-motivated, and it noted the well-settled constitutional law (United Mine Workers, NAACP v. Button) allowing nonprofits to employ staff lawyers and collect fee awards.
On Rule 7.2(c), the committee concluded that turning over a court-awarded fee is not "giv[ing] anything of value to a person for recommending the lawyer's services," because where the lawyer surrenders the entire fee there is no financial quid pro quo, and because a court has already reviewed the fee's reasonableness, satisfying the policy against excessive fees. The committee added that lawyers entering such arrangements should disclose them to the client. A dissent argued that Rule 5.4(a)'s text ("shall not share legal fees with a nonlawyer") is clear and admits only its three stated exceptions.
Currency note
This opinion was issued in 1993, before the American Bar Association's adoption of the 2002 (Ethics 2000) revisions to the Model Rules of Professional Conduct, which renumbered the advertising and referral provisions (now Rule 7.2(b)). Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.
Common questions
Q: Can a pro bono lawyer give the court-awarded fees to the nonprofit that sponsored the case?
A: Yes. The committee concluded that sharing or turning over court-awarded fees to a sponsoring nonprofit pro bono organization does not violate Rule 5.4(a) or Rule 7.2(c).
Q: Does it matter whether the lawyer is a staff attorney or an outside cooperating lawyer?
A: No. The committee found no basis to treat the two differently, because in both the nonprofit setting and court-awarded fee remove the economic incentives that the fee-sharing rule guards against.
Q: Is turning over the fee a prohibited payment for a referral?
A: No. The committee said surrendering a court-awarded fee is not giving value for a recommendation, and that judicial review of the fee already addresses the concern about excessive fees behind Rule 7.2(c).
Q: Does this also cover for-profit litigation funders?
A: No. The committee expressly limited its conclusion to nonprofit organizations and court-awarded fees, distinguishing a for-profit entity that sponsors litigation for a share of contingent fees.
Background and rules framework
The opinion interpreted Model Rule 5.4 (professional independence; subsection (a) on sharing fees with nonlawyers, (c) on payer direction, and (d)'s for-profit limitation) and Rule 7.2(c) (the bar on giving value for recommending the lawyer's services). It noted that Rule 1.2(a) (client's authority over objectives) and Rule 1.7 (conflicts) independently address lay interference. Because the ABA interprets the Model Rules directly, there is no state-rule analogue.
Citations and references
Rules of Professional Conduct:
- MR 5.4 (professional independence of a lawyer; sharing fees with nonlawyers)
- MR 7.2 (advertising; bar on paying for recommendations)
- MR 1.2 (scope of representation; client's authority over objectives)
- MR 1.7 (conflict of interest)
Cases:
- United Mine Workers v. Illinois State Bar Ass'n, 389 U.S. 217 (1967), nonprofits may employ staff lawyers
- NAACP v. Button, 371 U.S. 415 (1963), constitutional protection for nonprofit-sponsored litigation
Other opinions cited:
- ABA Formal Op. 88-356 (1988): a firm may pay a temporary-lawyer placement agency a percentage of the fee for the lawyer's work
See also
- ABA Formal Op. 464: Fee division with a firm that shares fees with nonlawyers
- ABA Formal Op. 475: Safeguarding fees subject to division
- ABA Formal Op. 474: Referral fees and conflicts of interest
Source
- Landing page: ABA Formal Ethics Opinions index
- Original PDF: 93-374.pdf
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