Can a Colorado lawyer use a medical-legal consulting firm on a contingent or modified contingent fee basis in a malpractice or personal injury case?

Plain-English summary

Opinion 77 (adopted March 19, 1988) addressed the propriety of using medical-legal consulting firms in medical malpractice and personal injury cases on a contingent or modified contingent fee basis. The firms typically charged a fixed fee for an initial case evaluation and then, if the case was deemed meritorious, a percentage of the plaintiff's gross recovery (commonly 20 percent or more) for additional services such as medical research, records analysis, help with discovery and depositions, and locating expert witnesses. The Committee declined to resolve factual disputes but concluded that such arrangements pose several risks under the Code of Professional Responsibility.

First, on the fee: under DR 2-106, a lawyer may not charge a clearly excessive fee. The Committee observed that plaintiff's counsel typically took at least 30 percent on a contingent fee, so if the consultant took at least 20 percent and neither fee reduced the other, the client could be left with at most half the recovery, less expenses. Because the consultant performed services the lawyer customarily provides, the lawyer's otherwise-reasonable contingent fee could become unreasonable in light of the lawyer's reduced services. Second, on paying witnesses: DR 7-109(C) bars a lawyer from paying or acquiescing in compensation to a witness contingent on the content of testimony or the outcome. Although the contracts stated the experts were not paid contingently, the experts were paid through the consultant, might be regularly used by and dependent on the consultant, and might know the consultant worked on a contingent basis; the Committee concluded the arrangement could be construed as contingent witness payment, and that a lawyer could not avoid responsibility by pointing to the contract being between the consultant and the plaintiff (DR 1-102(A)(2) bars circumventing a rule through another).

Third, on conflicts and independence: some contracts barred plaintiff's counsel from using the consultant's experts in other cases without written permission, which the Committee concluded could restrict the lawyer's other clients and create a conflict under DR 5-105 and Canon 5. The consultant's retained authority over expert selection, the plaintiff's commitment to pay a percentage before knowing the experts or their opinions, and the practical difficulty of using outside experts after agreeing to pay the consultant could all erode the lawyer's independent professional judgment in advising on settlement or selecting experts. The Committee concluded that whether a violation occurs depends on all the facts and circumstances, but that the arrangements carry substantial risks of violating the Code.

Currency note

This opinion was issued in 1988 under the former Colorado Code of Professional Responsibility, before the Colorado Rules of Professional Conduct took effect on January 1, 1993, and before Colorado's 2008 revisions to those rules. 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. The modern analogs are Rule 1.5 (fees), Rule 3.4(b) (paying witnesses), Rule 5.4(c) (independent professional judgment), and Rule 1.7 (conflicts).

Common questions

Q: Could a Colorado lawyer use a medical-legal consulting firm paid by contingent fee?

A: The opinion concluded it was not categorically prohibited but carried substantial risk. Whether the lawyer violated the Code by recommending, participating in, or acquiescing in such an arrangement depended on all the facts, with risks in four areas: the lawyer's fee, witness payment, conflicts with other clients, and independence.

Q: Why was the lawyer's contingent fee a concern if the consultant was separate?

A: The opinion concluded that because the consultant performed services the lawyer customarily provides, the lawyer's services were reduced; an otherwise-reasonable contingent fee could then become clearly excessive under DR 2-106, especially where the lawyer's and consultant's percentages combined to leave the client about half the recovery.

Q: Did paying the experts through the consultant raise a problem?

A: The opinion concluded it could. Even though the contracts said the experts were not paid contingently, the experts were paid through the consultant and might be dependent on it and aware of its contingent arrangement, so the setup could be construed as paying a witness contingent on testimony or outcome in violation of DR 7-109(C), and the lawyer could not escape that through the consultant (DR 1-102(A)(2)).

Q: What was the conflict-of-interest concern?

A: The opinion concluded that a contract clause barring the lawyer from using the consultant's experts in other matters without permission could restrict the lawyer's future clients and create a conflict under DR 5-105, and that the consultant's control over expert selection could erode the lawyer's independent professional judgment under Canon 5.

Background and rules framework

The opinion interpreted the then-governing Colorado Code of Professional Responsibility: DR 2-106 (no clearly excessive fee), DR 7-109(C) (no compensation to a witness contingent on testimony or outcome), DR 5-105 (declining or discontinuing employment that adversely affects independent judgment), DR 1-102(A)(2) (no circumventing a rule through another's acts), and Canon 5 with EC 5-1 (independent professional judgment). It relied on ABA Formal Opinion 87-354 (1987). The modern analogs are Model Rule 1.5 (fees), Model Rule 3.4(b) (paying witnesses), Model Rule 5.4(c) (no third-party interference with professional judgment), and Model Rule 1.7 (conflicts).

Citations and references

Rules of Professional Conduct:

• Colo. Code of Professional Responsibility DR 2-106, DR 7-109(C), DR 5-105, DR 1-102(A)(2); Canon 5, EC 5-1 (governing rules at issuance)
• Colo. RPC 1.5 / Model Rule 1.5 (fees; current analog)
• Colo. RPC 3.4(b) / Model Rule 3.4 (paying witnesses)
• Colo. RPC 5.4(c) / Model Rule 5.4 (independent professional judgment)
• Colo. RPC 1.7 / Model Rule 1.7 (conflicts of interest)

Other opinions cited:

• ABA Formal Op. 87-354 (1987): use of medical-legal consulting firms and contingent compensation of experts

See also

• ISBA Op. 86-03: Payment of Expert Witness Contingent on Outcome
• ABA Formal Op. 96-402: Payments to Occurrence Witnesses
• CBA Formal Op. 103: Compensating a Non-Expert Witness

Source

• Landing page: https://www.cobar.org/ethicsopinions
• Original PDF: https://www.cobar.org/Portals/COBAR/repository/ethicsOpinions/FormalEthicsOpinion_77_2011.pdf