Can a law firm pay a non-lawyer for valuable help with litigation, such as locating an expert witness, without violating the fee-splitting rule?
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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 Alabama Rules of Professional Conduct, with citations.
Plain-English summary
A law firm asked whether it could pay a non-lawyer $100,000 for valuable services rendered in connection with shareholder litigation in Delaware involving Shell Oil Company. The non-lawyer, formerly executive director of a shareholders' committee, had advised the firm on appraisal valuation and, importantly, had helped find and secure an oil-and-gas analyst as an expert witness whose testimony proved crucial to the favorable result. He had also, at an earlier point, recommended to several shareholders that they contact the firm to engage it. The firm framed the proposed payment as analogous to paying for expert testimony or other non-lawyer services rendered to lawyers in preparing and trying a case.
The Disciplinary Commission answered that Rule 5.4 prohibits a lawyer from splitting a legal fee with a non-lawyer, but a lawyer may pay a non-lawyer for services rendered to the lawyer, and may not under any circumstances compensate a non-lawyer, from any source, for soliciting or referring clients. The opinion explained that Rule 5.4 (and its predecessor DR 3-102(A)) protects the lawyer's professional independence of judgment, prevents lay control of the lawyer driven by the layperson's own profit, and discourages the unauthorized practice of law. Quoting ABA Informal Opinion 86-1519, it noted that while a lawyer may employ a non-lawyer to provide services, payment may not be based on a percentage of the lawyer's fee, which would be impermissible fee sharing.
Applying those principles, the Commission found that the concerns behind the rule (lay control and unauthorized practice) were not present, so the non-lawyer could be compensated for services rendered during and before the litigation. The opinion cautioned, however, that because the non-lawyer had earlier recommended that several shareholders contact and engage the firm, care should be exercised to ensure that no part of the compensation could in any way be attributed to those recommendations.
Currency note
This opinion was issued in 1993, before the 2002 Ethics 2000 revisions to the ABA Model Rules of Professional Conduct and Alabama's subsequent amendments to its Rules of Professional Conduct. 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 law firm pay a non-lawyer for help with a case, like finding an expert witness?
A: Per the opinion, yes; a lawyer may pay a non-lawyer for services rendered to the lawyer, and the firm could compensate the non-lawyer for advice and assistance in obtaining a qualified expert.
Q: Can the payment be a percentage of the lawyer's fee?
A: No. The opinion, quoting ABA Informal Opinion 86-1519, noted that payment based on a percentage of the lawyer's fee is long considered impermissible fee sharing under Rule 5.4.
Q: Can the firm pay the non-lawyer for having recommended that clients hire the firm?
A: No. The opinion concluded a lawyer may not compensate a non-lawyer for soliciting or referring clients, and cautioned that no part of the payment may be attributable to the non-lawyer's earlier recommendations to shareholders.
Background and rules framework
The opinion interprets Rule 5.4 of the Alabama Rules of Professional Conduct (Model Rule 5.4, professional independence; no sharing of legal fees with a non-lawyer) and its predecessor DR 3-102(A), together with the bar on paying for client referrals reflected in Rule 7.2. It relies on ABA Informal Opinion 86-1519 and cited disciplinary decisions distinguishing payment for genuine services from payment for referrals.
Citations and references
Rules of Professional Conduct:
- Model Rule 5.4 / Ala. R. Prof. C. 5.4 (no sharing of legal fees with a non-lawyer)
- Model Rule 7.2 / Ala. R. Prof. C. 7.2 (no payment for recommending the lawyer's services)
Cases:
- Gassman v. State Bar of California, 553 P.2d 1147 (Cal. 1976) (preventing lay control driven by the layperson's profit)
- Florida State Bar v. Sagrans, 388 So. 2d 1040 (Fla. 1980) (discipline for paying a chiropractor for referred cases)
Other opinions cited:
- ABA Informal Opinion 86-1519 (Apr. 19, 1986): non-lawyer services may be paid for, but not as a percentage of the fee
- ABA Formal Opinion 48 (1931): percentage payment is impermissible fee sharing
See also
- AL Ethics Op. 1993-23: bankrolling a referral-front firm
- AL Ethics Op. 1992-13: fee splitting with a nonlawyer
- AL Ethics Op. 1994-03: collection agency fee splitting
- RI EAP Op. 2013-01: A Paralegal's Bonus Tied to Fees Generated by Cases the Paralegal Helps Settle Is an Impermissible Fee-Sharing Arrangement Under Rule 5.4(a)
Source
- Landing page: https://www.alabar.org/office-of-general-counsel/formal-opinions/1993-20/
- Original PDF: https://www.alabar.org/assets/2019/02/RO-93-20.pdf
Original opinion text
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