Can a law firm pay nonlawyer consultants a share of a success fee that flows through the firm from the client?
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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
Opinion 233 (adopted January 26, 1993) addressed a D.C. firm that represented clients in international-construction disputes and worked closely with a consulting firm of engineers and other nonlawyer experts. The firm usually retained the consultants at hourly rates and charged its own work hourly with a "success payment" on a favorable result. The firm wanted to agree that the consulting company would also share in the firm's success fees, in any given case only with the client's prior knowledge and consent, and asked whether that was prohibited fee-sharing under Rule 5.4(a) and, if so, whether it fit the Rule 5.4(b) exception.
The committee did not reach the Rule 5.4(b) question, because it concluded that so long as the client is fully informed and gives prior consent, the payment of a success fee by the client to the firm and, through the firm, to the consulting firm does not constitute fee-sharing prohibited by Rule 5.4(a). The committee observed that the D.C. version of Rule 5.4 takes a more liberal approach than the ABA Model Rule, closer to the Kutak Commission proposal, reflecting the integral role nonlawyer experts have come to play in modern practice.
The committee rested on three propositions it treated as incontestable: nothing in the rules would bar a direct arrangement between the client and the consulting firm for a success fee; lawyers commonly retain and pay outside consultants and pass the charge to clients as an expense, which no one regards as "sharing" a fee; and Comment [8] to Rule 3.4 permits paying expert witnesses contingent fees so long as they are not based on a percentage of the recovery. On that basis it concluded that the consultants' portion passing through the firm was a formality of no consequence under Rule 5.4, because in substance the transaction was between the client and the consulting firm. The committee added that where a consultant would testify as an expert, the contingent fee could not be based on a percentage of the recovery.
Currency note
This opinion was issued in 1993, before the District of Columbia's adoption of the 2007 revisions to the 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: Could a law firm pay nonlawyer consultants part of a success fee?
A: Yes, with client consent. The committee concluded that where the client is fully informed and consents in advance, a success fee paid to both the firm and a nonlawyer consulting firm it retained does not violate Rule 5.4.
Q: Did it matter that the consultants' share passed through the law firm?
A: No. The committee concluded the money passing through the firm was a formality of no consequence under Rule 5.4, because in substance the payment was between the client and the consulting firm.
Q: Why was this not prohibited fee-sharing with a nonlawyer?
A: The committee reasoned that the client could pay the consulting firm a success fee directly, and that lawyers routinely pass consultant charges to clients as an expense; the arrangement was the same in substance, so it was not "sharing" of a legal fee under Rule 5.4(a).
Q: Could a consultant who testifies as an expert share in the success fee?
A: Only within limits. The committee noted that while the D.C. rules permit contingent fees to expert witnesses, Comment [8] to Rule 3.4 bars basing such a fee on a percentage of the recovery.
Background and rules framework
The opinion interpreted D.C. Rule 5.4, the rule on a lawyer's professional independence, which generally bars sharing legal fees with a nonlawyer. The committee explained that the D.C. version is more liberal than the ABA Model Rule, reflecting the Kutak Commission's recognition of nonlawyer experts in modern practice, and includes in Rule 5.4(a)(4) and 5.4(b) an exception permitting fee-sharing in organizations in which nonlawyers hold an interest, subject to safeguards. Because it found no proscribed sharing, the committee did not decide whether the arrangement could qualify under Rule 5.4(b). It also relied on Comment [8] to Rule 3.4 on contingent fees for expert witnesses.
Citations and references
Rules of Professional Conduct:
- D.C. RPC 5.4 / Model Rule 5.4 (professional independence; sharing fees with nonlawyers)
- D.C. RPC 3.4, Comment [8] / Model Rule 3.4 (contingent fees to expert witnesses)
Other opinions cited:
- D.C. Opinion No. 146: the rationale for the bans on fee-sharing and partnerships with nonlawyers
- D.C. Opinion No. 93 (1980): recognizing the increasing role of nonlawyers in law practice
See also
- DC Ethics Op. 322: Nonlawyer Compensation From Case Profits
- DC Ethics Op. 351: Sharing Legal Fees With Clients
- DC Ethics Op. 304: Outsourcing Human Resources to an Employee-Management Company
Source
- Landing page: https://www.dcbar.org/for-lawyers/legal-ethics/ethics-opinions-210-present/ethics-opinion-233
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