When is an 'of counsel' lawyer treated as part of the firm so the fee-division rules don't apply?

Plain-English summary

The committee addressed two inquiries about dividing fees between an "of counsel" lawyer and a firm. In the first, a former partner had scaled back but continued to practice through the firm and nowhere else; he asked whether the fee-division rules applied to his compensation. In the second, a firm asked whether the fee-division rules governed when it referred a personal injury case to an "of counsel" lawyer who had an independent practice and spent only some time at the firm's office.

The committee traced how "of counsel" had expanded from designating a semi-retired former member to including a lawyer with a close, continuing relationship with a firm in a capacity other than partner or associate, while remaining more than a mere referral arrangement. Finding no prior formal opinion of the committee on whether an "of counsel" lawyer is a firm member for fee-division purposes, the committee looked to other jurisdictions, many of which had concluded that fee-splitting with an "of counsel" lawyer is limited by the jurisdiction's fee-division rules.

Agreeing with District of Columbia Opinions 151 and 197, the committee held that an attorney is in the "same firm" to which the attorney is "of counsel" only if the attorney is "of counsel" in the traditional sense, affiliated with and practicing through that one firm exclusively. It noted the Florida Supreme Court's intent to regulate fee divisions in contingent-fee personal injury matters, including the requirement of circuit court authorization for divisions other than the 25%/75% split (Rule 4-1.5(f)(4)(D)(iii)). The committee therefore concluded the fee-division rules did not apply to the former partner who worked exclusively through the firm, but did govern the referral of a personal injury matter to the "of counsel" lawyer who maintained an outside practice (Rule 4-1.5(g) and (f)(4)(D)(iii)).

Currency note

This opinion was issued in 1995, before The Florida Bar's adoption of the 2006 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 Treat this page as historical context, not current guidance.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: Is an "of counsel" lawyer part of the firm for fee-division purposes?

A: Under this opinion, only if the lawyer is "of counsel" in the traditional sense, practicing through that one firm exclusively.

Q: Do the fee-division rules apply when a firm refers a case to an "of counsel" lawyer with an outside practice?

A: Per the opinion, yes; that referral is governed by the fee-division rules in Rule 4-1.5(g) and (f)(4)(D)(iii).

Q: What did the opinion say about contingent-fee personal injury divisions?

A: The committee noted the Florida Supreme Court requires circuit court authorization for dividing such a fee other than 25% to the secondary attorney and 75% to the primary attorney (Rule 4-1.5(f)(4)(D)(iii)).

Background and rules framework

The opinion applied the Florida fee-division rules for lawyers not in the same firm, Rule 4-1.5(g) and Rule 4-1.5(f)(4)(D)(iii) (division of contingent fees in personal injury matters; Model Rule 1.5), and the established meaning of the "of counsel" designation.

Citations and references

Rules of Professional Conduct:

• Model Rule 1.5 / Fla. Rule 4-1.5(g) (division of fees between lawyers not in the same firm)
• Fla. Rule 4-1.5(f)(4)(D)(iii) (division of contingent fees in personal injury matters)

Other opinions cited:

• Fla. Ethics Ops. 71-49, 72-29, 75-41; ABA Formal Opinion 90-357; Arizona Opinion 86-3; California Opinion 1986-88; District of Columbia Opinions 151 and 197; New Jersey Opinion 476; Maryland Opinion 87-37

See also

• FL Bar Ethics Op. 00-1: Keeping a Retired Partner's Name in the Firm Name
• FL Bar Ethics Op. 17-1: Fee Division With a Nonlawyer-Owned Out-of-State Firm
• Ohio Bd. Prof. Conduct Op. 2008-001: "Of Counsel" Relationship

Source

• Landing page: https://www.floridabar.org/etopinions/etopinion-94-7/
• Original PDF: https://www-media.floridabar.org/uploads/2017/04/FL-Bar-Ethics-Op-94-7.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

FLORIDA BAR ETHICS OPINION
OPINION 94-7
April 30, 1995
Advisory ethics opinions are not binding.
An attorney who is "of counsel" to a law firm is considered to be a member of that firm for purposes of the fee-division rules only if that attorney practices through that firm exclusively.
RPC: 4-1.5(f)(4)(D)(iii); 4-1.5(g)
Opinions: 71-49, 72-29, 75-41; ABA Formal 90-357, Arizona 86-3; California 1986-88; District of Columbia 151 and 197; New Jersey 476; Maryland 87-37

The Professional Ethics Committee has been asked to address two inquiries concerning the division of fees between an "of counsel" attorney and a law firm:

1. A former partner in a law firm is "of counsel" to the firm. The attorney has scaled back his practice, but will continue to practice through the firm. The attorney will not practice law at any other firm. The attorney requests an opinion whether the fee division rules apply to his compensation from the firm.

2. A law firm has inquired whether the fee division rules govern the division of fees between the law firm and an attorney who is "of counsel" when the firm refers a personal injury case to the "of counsel" lawyer. The "of counsel" attorney has an independent practice, although the attorney spends some time working out of the inquiring firm's office. This attorney too requests an opinion concerning the applicability of the fee division rules in this situation.

Traditionally the term "of counsel" was used to designate a semi-retired lawyer who was formerly a regular member of the law firm. Opinion 72-29. The permissible use of the term has since been expanded to include a lawyer who maintains a close, continuing relationship with a law firm in a capacity other than that of a partner or an associate. Opinions 71-49; 75-41; ABA Formal Opinion 90-357. Nevertheless, the relationship must be more than a mere referral arrangement. Opinion 72-29.

No existing formal opinions of this committee discuss whether an attorney who is "of counsel" to a firm is considered to be a member of the firm for purposes of the fee division rules. A number of other jurisdictions have considered this issue, however, and many have concluded that fee-splitting with an "of counsel" lawyer is limited by that jurisdiction's fee division rules. See, e.g., Arizona Opinion 86-3; California Opinion 1986-88; District of Columbia Opinions 151 and 197; New Jersey Opinion 476; Maryland Opinion 87-37.

District of Columbia opinions 151 and 197 conclude that rules governing the division of fees between attorneys in different firms apply unless the "of counsel" attorney functions as a member of the firm and does not have another practice. We agree that, for the purposes of the fee division rules, an attorney is in the "same firm" to which the attorney is "of counsel" only if the attorney is "of counsel" in the traditional sense -- that is, only if the attorney is affiliated with and practices through that one firm exclusively.

Our conclusion finds support in the fact that the Supreme Court of Florida has clearly indicated its intention to regulate fee-division practices in contingent fee personal injury-type matters. The Court has declared that, even in true co-counsel situations, circuit court authorization must be obtained if the fee is to be divided in a manner other than 25% (to secondary attorney) - 75% (to primary attorney). Rule 4-1.5(f)(4)(D)(iii).

Therefore, we conclude that the fee division rules do not apply to the former law partner who continues to work exclusively at the law firm in an "of counsel" capacity. The referral of a personal injury matter to the "of counsel" attorney who continues a practice outside the firm, however, is governed by the fee division rules set forth in subdivisions (g) and (f)(4)(D)(iii) of Rule 4-1.5.