Can an Illinois lawyer take a case where a non-lawyer business pays the fee and steers the client to the lawyer?
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This page answers the general question as of 1994. Ezel answers yours: whether it's allowed on your facts, under the current Illinois Rules of Professional Conduct, with citations.
Plain-English summary
The Committee considered two arrangements. In the first, an out-of-state, non-lawyer estate-beneficiary search business locates unknown heirs, signs them to a contingent assignment of part of the recovery, and asks an Illinois lawyer to represent the heir. In the second, a non-lawyer securities arbitration firm represents brokerage customers in NYSE and NASD proceedings (where federal regulation permits non-lawyer representation), takes a contingent fee, and asks an Illinois lawyer to handle the customer's matter on an hourly basis.
The opinion concluded that a lawyer may be asked by, and paid by, a third party to perform legal services for a client, but the lawyer must be satisfied that the third party has authority to retain the lawyer, because an attorney-client relationship is created with the person served. Under Rule 5.4(c), the lawyer must not let the person who recommends, employs, or pays the lawyer direct or regulate the lawyer's professional judgment.
The opinion concluded that in the estate-search scenario the lawyer must check that the search business's own activities do not amount to the practice of law; if they do, the lawyer would be assisting a non-lawyer in the unauthorized practice of law in violation of Rule 5.5(b). For the securities arbitration firm, by contrast, the opinion concluded that because federal regulation preempts state law and authorizes non-lawyer representation in those proceedings, the firm's conduct could not be treated as unauthorized practice. On fees, the opinion concluded that contingent fees are permitted under Rule 1.5(c), but the lawyer may not share or divide the legal fee with the non-lawyer firm (Rule 5.4(a)) or form a partnership with it for the practice of law (Rule 5.4(b)); a separate fee agreement directly between the lawyer and the client, hourly or contingent, that does not modify the non-lawyer's fee, is proper. It also concluded that referral of the matter is permissible only if the lawyer gives nothing of value for the recommendation (Rule 7.2(b)) and the third party's solicitation does not violate Rule 7.3.
Currency note
This opinion was issued in 1994, before Illinois adopted the 2010 Illinois Rules of Professional Conduct. The ISBA Board of Governors affirmed the opinion in January 2010 as generally consistent with the 2010 Rules (referring to Rules 1.5(c), 5.4(a)-(c), 5.5(a), 7.2(b), and 7.3), while noting the specific standards referenced may differ from the 2010 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 or requirement mentioned here.
Common questions
Q: Can a non-lawyer business pay an Illinois lawyer to represent the business's customer?
A: The opinion concluded this is permissible if the business is authorized to retain the lawyer and does not direct the lawyer's judgment, citing Rule 5.4(c); the lawyer's client is the customer, not the business.
Q: Can the lawyer split the fee with the non-lawyer firm that brought in the case?
A: No. The opinion concluded that while contingent fees are allowed under Rule 1.5(c), sharing legal fees with a non-lawyer is prohibited by Rule 5.4(a), and a fee-driven partnership with the non-lawyer would violate Rule 5.4(b).
Q: Does representing the customer of a non-lawyer arbitration firm assist the unauthorized practice of law?
A: The opinion concluded it does not where federal regulation authorizes the non-lawyer firm's representation (as in NYSE/NASD proceedings), because federal preemption removes it from state unauthorized-practice rules; but in the estate-search scenario the lawyer must verify the business is not itself practicing law, or risk violating Rule 5.5(b).
Background and rules framework
The opinion interpreted Rule 5.4 (professional independence: a lawyer may not let a payor direct the lawyer's judgment under 5.4(c), share fees with a non-lawyer under 5.4(a), or form a law-practice partnership with a non-lawyer under 5.4(b); Model Rule 5.4), Rule 5.5 (assisting the unauthorized practice of law; Model Rule 5.5), Rule 1.5(c) (contingent fees; Model Rule 1.5), and Rules 7.2(b) and 7.3 (recommendation of, and solicitation by third parties for, the lawyer; Model Rules 7.2 and 7.3).
Citations and references
Rules of Professional Conduct:
- Model Rule 5.4 (professional independence) / Illinois Rule 5.4(a), (b), (c)
- Model Rule 5.5 (unauthorized practice) / Illinois Rule 5.5(b)
- Model Rule 1.5 (fees) / Illinois Rule 1.5(c)
- Model Rule 7.2 / Illinois Rule 7.2(b); Model Rule 7.3 / Illinois Rule 7.3
Other opinions cited:
- ISBA Opinion No. 87-2: authority of purported agent to retain a lawyer
- ISBA Opinion No. 91-3: same admonition reiterated
- ISBA Opinion No. 89-17: payor may not direct the lawyer's judgment
See also
- ISBA Ethics Op. 97-04: Fee for Referring Clients to Nonlawyer Professionals
- ISBA Ethics Op. 15-04: Sharing Court-Awarded Fees With a Referral Source
- ISBA Ethics Op. 23-03: Fee for Referring a Client to an Investment Adviser
Source
- Landing page: https://www.isba.org/ethics/opinions/9311
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