LACBA 1993-01-25

When a California sole practitioner begins using additional attorneys (employees, contract lawyers, or outside firms) on a client matter, when is disclosure required, and when does Rule 2-200's written consent requirement for fee division apply?

Short answer: The opinion concluded that disclosure of additional attorneys may be required under Rule 3-500 depending on the circumstances, including whether responsibility is changing, the new attorney is doing a significant portion of the work, staffing differs from what was represented or from the client's reasonable expectation, or the change increases cost. The opinion further concluded that where the additional attorney is not a partner, employee, or shareholder of the firm and the client's fee is divided with that attorney, Rule 2-200(A)'s written-disclosure and written-consent requirements apply.

Disclaimer: Advisory only. Not binding precedent.

About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official ethics opinion. The original opinion (linked at the bottom of this page, or PDF in the sidebar) is the authoritative source for any reliance.

View original ethics opinion (PDF)

LACBA Ethics Opinion 473: Disclosure of Additional Attorneys; Fee Division

Short answer: Under former California Rules 1-100(B)(4), 2-200(A), and 3-500 and Business and Professions Code sections 6068(m) and 6148 as analyzed in 1993, the committee concluded that whether use of additional attorneys requires disclosure under Rule 3-500 turns on the circumstances; relevant factors include changes in oversight responsibility, performance of a significant portion of the work by the new attorney, deviation from what was represented to the client or from the client's reasonable expectation, and increases in cost. Where the additional attorney is not a partner, employee, or shareholder of the original firm and the client's fee will be divided, Rule 2-200(A)'s written-disclosure and written-consent requirements apply.

Disclaimer: This is an advisory ethics opinion. Advisory opinions are not binding; they interpret the Los Angeles County Bar Association's view of California's rules of professional conduct and are persuasive authority. This summary is for research purposes only and is not legal advice. Verify current rules before acting on any specific guidance.

About this page: The plain-English summary and Q&A below were written by Ezel based on the official opinion. We do not reproduce the opinion text on this page; follow the linked source for the official text, which controls.

Currency note

This opinion was issued in 1993, before California's November 1, 2018 adoption of the renumbered Rules of Professional Conduct. Former Rule 3-500 corresponds to current Rule 1.4; former Rule 2-200 corresponds to current Rule 1.5.1 (fee divisions between lawyers); former Rule 1-100(B)(4)'s "associate" definition is now in current Rule 1.0.1(c). 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.

View original opinion

Plain-English summary

The committee considered a sole practitioner whose increased caseload required assistance from additional attorneys. The attorney asked about disclosure responsibilities and whether they varied based on whether the additional attorneys were full-time professional staff, part-time employees with their own practice, independent contractors, or an outside law firm.

The committee identified Rule 3-500 and section 6068(m) as requiring the attorney to keep the client reasonably informed about significant developments. The committee identified that whether use of another attorney constitutes a significant development depends on the circumstances; relevant factors (any one sufficient) include: (i) change in responsibility for overseeing the matter; (ii) the new attorney's performance of a significant portion or aspect of the work; (iii) staffing changes from what was specifically represented to the client; (iv) staffing different from the client's reasonable expectation; or (v) increases in cost for the work performed. The committee identified the listed factors as illustrative rather than exhaustive (utilization of a less experienced attorney may also require disclosure depending on the significance of the work). Disclosure should generally be made before any change unless there is no reasonable opportunity.

Citing Severson, Werson, Berke & Melchior v. Bolinger, the committee identified that the responsibility to make clients understand billing procedures and rates includes that agreed-upon rates cannot be changed without notification (Business and Professions Code section 6148).

The committee identified the client's choice of counsel as basic to the representation. Where the attorney knows or should know that the client expects only a specific attorney or group will work on the matter, use of others will often be a significant development requiring disclosure under Rule 3-500. The committee identified the attorney's responsibility to be reasonably aware of client expectations, which can be discharged through a standard written retainer or through disclosure before or during representation. Under section 6148, matters where total fees and expenses will reasonably exceed $1,000 and the client is not a corporation generally require a written agreement setting forth (among other things) the hourly rates of attorneys working on the matter.

The committee identified that the mere fact the attorney was a sole practitioner at engagement does not, by itself, mean the client expected the attorney to be the sole provider. However, if the client communicated such an understanding or the circumstances reasonably should have made the attorney aware of it, use of another attorney would be a significant development requiring disclosure. Subcontracting an entire matter to other counsel would also be a significant development requiring disclosure.

On fee division, the committee identified that Rule 2-200(A) applies where the additional attorney is not a partner, associate, or shareholder of the firm and the client's fee is divided. Rule 2-200(A) requires: (1) the client's written consent after full written disclosure that a fee division will be made and of its terms; and (2) the total fee charged by all lawyers is not increased solely by the division and is not unconscionable (Rule 4-200).

The committee identified that the use of "employee" attorneys (full or part time) does not trigger Rule 2-200(A) because such employees are "associates" under Rule 1-100(B)(4). The committee identified Rule 2-200's inapplicability where the outside attorney's compensation satisfies three criteria (citing LACBA Formal Opinion 470): (1) amount paid is not bargained for or based on the client's fee; (2) the outside attorney has no expectation of a percentage fee; and (3) the fee is compensation for work performed and is paid whether or not the engaged attorney is paid by the client.

The committee identified that where part-time employees with their own practice, contract lawyers, or outside firms are used, there must be an adequate mechanism for clearing conflicts and adequate measures to protect client confidences. The committee expressed no opinion on whether an independent contractor is an "employee" for Rule 2-200(A) purposes.

Common questions

Q: When a California sole practitioner begins using additional attorneys, must the lawyer disclose this to the client?

A: Per the opinion, it depends on the circumstances. The committee identified five non-exhaustive factors that may trigger disclosure: change in oversight, performance of a significant portion of the work, deviation from representations, deviation from client expectations, or cost increase.

Q: Does adding an in-firm employee attorney trigger Rule 2-200?

A: Per the opinion, no. The committee identified employee attorneys (full or part time) as "associates" under Rule 1-100(B)(4); Rule 2-200(A) governs fee divisions only with attorneys outside the firm.

Q: When the lawyer pays an outside attorney, when does Rule 2-200(A) apply?

A: Per the opinion, Rule 2-200(A) applies when the client's fee is divided with the outside attorney. The committee identified three criteria (citing LACBA Opinion 470) for payment that does not trigger Rule 2-200(A): the amount is not bargained for or based on the client's fee, the outside attorney has no expectation of a percentage, and the fee is paid whether or not the engaging attorney is paid.

Q: Must conflicts and confidentiality be addressed when part-time, contract, or outside lawyers are used?

A: Per the opinion, yes. The committee identified the need for adequate conflict-clearing mechanisms and confidentiality protections.

Q: Are independent contractors "employees" for Rule 2-200(A)?

A: Per the opinion, the committee expressed no opinion on that question.

Background and rules framework

The opinion interprets former California Rules of Professional Conduct 1-100(B)(4) (definition of "associate"), 2-200(A) (fee division with non-firm lawyers), and 3-500 (duty to keep client informed), with Business and Professions Code sections 6068(m) (same) and 6148 (written fee agreement requirements). The committee anchored its disclosure analysis in Severson, Werson, Berke & Melchior v. Bolinger and its three-factor Rule 2-200 inapplicability framework in LACBA Formal Opinion 470.

Citations and references

Rules of Professional Conduct (former):

California Rule 1-100(B)(4) (associate definition)
California Rule 2-200(A) (fee division)
California Rule 3-500 (duty to communicate)

Statutes:

California Business and Professions Code sections 6068(m), 6148

Cases:

Severson, Werson, Berke & Melchior v. Bolinger, 235 Cal.App.3d 1569 (1991), no unilateral rate changes

Other opinions cited:

LACBA Formal Opinions 457 (1989), 467 (1992), 470 (1992)

Source

Landing page: https://lacba.org/?pg=ethics-opinions
Original PDF: https://lacba.org/docDownload/2010970