Could a lawyer pay a nonprofit service program a percentage of fees and allow it to inspect client billing records?

Plain-English summary

A lawyer considered a nonprofit program coordinating community services. Participants would pay a percentage of all fees, let the program inspect books and records, and use it as billing agent.

The opinion found the percentage payment violated Rule 4-5.4(a)'s fee-splitting ban, while a flat charge for billing services was allowed. It said inspection of books and records raised Rule 4-1.6 confidentiality problems unless clients consented in advance after full advice on advantages and disadvantages.

Currency note

This 1995 opinion predates Missouri's 2007 amendments to its Rules of Professional Conduct. An official reference note identifies July 1, 2007 amendments to Rules 4-1.9 and 4-1.10. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context and verify current rules before relying on it.

Common questions

Q: Could the nonprofit receive a percentage of legal fees?

A: No. The opinion said Rule 4-5.4(a) prohibited it.

Q: Could it receive a flat billing fee?

A: Yes, for billing services.

Q: What was needed for records access?

A: Advance client consent after full advice about the advantages and disadvantages.

Background and rules framework

The opinion applied Missouri Rule 4-5.4(a) to program compensation and Rule 4-1.6 to access to client-related records.

Citations and references

Rules of Professional Conduct:

• Missouri Rule 4-5.4(a)
• Missouri Rule 4-1.6

See also

• Missouri Informal Op. 950043: Nonprofit referral-service fee
• Missouri Informal Op. 950152: Collections staff fee incentive

Source

• Landing page: https://mo-legal-ethics.org/informal-opinion/950008/

Original opinion text

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

QUESTION: Attorney wishes to participate in a not for profit program which coordinates support services for a specific segment of the community. Attorney has concerns about some aspects of the program. The program calls for the provider of services to pay a percentage fee of all fees received to the program. The program would have a right to review the provider´s books and records to determine compliance with the program. The program would serve as the billing agent. ANSWER: The percentage fee would violate Rule 4–5.4(a) which prohibits fee splitting. The lawyer could pay a flat fee for the billing services but not a percentage fee. The provision of the program regarding access to the books and records creates problems under Rule 4–1.6 unless the client consents in advance after being fully advised of the advantages and disadvantages.