May an unsupervised nonlawyer prepare and settle insurance claims for a lawyer and be paid according to the recovery?

Plain-English summary

The proposed nonlawyer contractor would independently prepare and negotiate insurance claims, obtain records and statements, and suggest settlement values. Compensation would depend on the amount recovered.

The opinion rejects the arrangement. It says Rule 4-5.3 does not permit the nonlawyer to work without the lawyer’s supervision, and Rule 4-5.4 prohibits paying the nonlawyer based on recovery as fee sharing. The question also cites Rules 4-5.5 and 4-1.5.

In practice

The opinion rejects both independent, unsupervised work and recovery-based compensation for the proposed claims assistant.

Common questions

Q: May the nonlawyer work independently on the claims?

A: No. The opinion applies Rule 4-5.3 to bar work without lawyer supervision.

Q: May payment depend on the settlement amount?

A: No. The opinion calls recovery-based compensation prohibited fee sharing under Rule 4-5.4.

Q: What tasks were proposed?

A: The nonlawyer would collect records, take statements, correspond and negotiate, and recommend settlement values.

Background and rules framework

The question invokes Rules 4-5.5 and 4-1.5. The answer rejects the arrangement under the supervision requirement in Rule 4-5.3 and the fee-sharing prohibition in Rule 4-5.4.

Citations and references

Missouri Rules of Professional Conduct:

• Rule 4-5.5
• Rule 4-1.5
• Rule 4-5.3
• Rule 4-5.4

See also

• Missouri Informal Op. 2010-0029: Percentage Rent
• Missouri Informal Op. 2022-06: Nonlawyer Firm Partner

Source

• Landing page: https://mo-legal-ethics.org/informal-opinion/20060069/

Original opinion text

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

QUESTION: A non-attorney with experience in the insurance field inquired of Attorney as to the legality of using experience and training to assist attorneys with preparing and settling insurance claims in the State of Missouri. The non-attorney would be acting independently, rather than under Attorney’s control and supervision. The non-attorney would handle case preparation, including taking statements, obtaining medical records, correspondence regarding the case, and negotiation with insurers and others. The non-attorney would provide attorney with a recommended settlement value. The compensation schedule would be based on the amount of recovery. Would this violate Rule 4–5.5? If not, does the contractual arrangement constitute an impermissible splitting of attorney’s fee under Rule 4–1.5?

ANSWER: The arrangement, as described, would not be permissible. It would not be permissible under Rule 4–5.3 for the non-attorney to act without supervision by Attorney. Second, a compensation schedule based on the amount of the recovery would constitute fee sharing with a non-attorney, which is prohibited by Rule 4–5.4.