How can a surviving law partner divide fees on pending files with the estate of a deceased partner when their agreement is silent on work in progress?

Plain-English summary

Two lawyers, A and B, formed an unincorporated partnership recorded in a memorandum of understanding. A died. The memorandum did not say how A's estate would be compensated for work in progress. B believed that revenue from time charged to files before A's death would be prorated to A's estate under the memorandum, and asked how to handle revenue generated by B's own work after A's death on files the partnership held.

The opinion frames the question under Rule 5.4(a), which prohibits a lawyer or law firm from sharing legal fees with a non-lawyer, subject to limited exceptions (including payments to a deceased lawyer's estate under a firm agreement, and purchase of a deceased lawyer's practice under Rule 1.17). It reviews the prior Canon 34 framework and ABA Informal Opinion No. 509, which held that dividing fees with a deceased partner's estate for work done after death would improperly share fees with a non-lawyer, while allowing latitude to value the portion of the work the old firm did before the death.

The opinion concludes that because there was no agreement covering this situation, Rule 5.4 permits B to compensate A's estate only from a division attributable to cases the partnership worked on, on a quantum meruit basis. It does not permit sharing fees the surviving partner earned after A's death.

In practice

Under this opinion, a surviving partner cannot pay a deceased partner's estate a share of fees the surviving partner earns after the death unless an agreement of the kind Rule 5.4(a)(1) contemplates was in place. Where the partnership agreement is silent, the estate's compensation is limited to the value of the partnership's pre-death work on those files, measured by quantum meruit. The opinion applies Rule 5.4(a) and its exceptions to the facts and identifies the absence of an agreement as the controlling factor.

Common questions

Q: Can I split fees with my deceased partner's estate if our agreement never mentioned work in progress?

A: The opinion holds that without an agreement, Rule 5.4(a) bars sharing the fees, and the estate may be paid only on a quantum meruit basis for work the partnership did before the partner's death.

Q: Does Rule 5.4 ever allow paying a deceased lawyer's estate?

A: Yes. The opinion quotes Rule 5.4(a)(1), which permits an agreement to pay money over a reasonable period after a lawyer's death to the lawyer's estate, and Rule 5.4(a)(2), which permits paying the estate the purchase price for the practice under Rule 1.17.

Q: How is the estate's share measured when there is no agreement?

A: On a quantum meruit basis, limited to the cases the partnership worked on, reflecting the value of the work done before the partner's death.

Background and rules framework

The opinion applies Mississippi Rule of Professional Conduct 5.4(a) (a lawyer or law firm shall not share legal fees with a non-lawyer except as enumerated; Model Rule 5.4), including the exception for post-death payments to a lawyer's estate and the cross-reference to Rule 1.17 (sale of a law practice; Model Rule 1.17). It traces the rule back to former Canon 34 and ABA Informal Opinion No. 509, which it follows in treating a deceased partner's estate as a non-lawyer for fee-sharing purposes.

Citations and references

Rules of Professional Conduct:

• MR 5.4 / MS RPC 5.4(a) (sharing legal fees with a non-lawyer; exceptions)
• MR 1.17 / MS RPC 1.17 (sale of a law practice)

Other opinions cited:

• ABA Informal Opinion No. 509: dividing fees with a deceased partner's estate for post-death work improperly shares fees with a non-lawyer

See also

• MS Bar Ethics Op. 91: Contingent-Fee Sharing With a Medical Consultant

Source

• Landing page: https://www.msbar.org/ethics-discipline/ethics-opinions/formal-opinions/81/
• Original PDF: https://www.msbar.org/media/1093/et_op_81-amended.pdf

Original opinion text

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

ETHICS OPINION NO. 81

OF THE MISSISSIPPI BAR

RENDERED March 25, 1983

AMENDED April 06, 2013

INDEPENDENCE OF LAWYER - FEES - Division of fees with deceased partner's estate

The following factual situation is submitted to the Committee for consideration:

A and B formed an unincorporated partnership and signified same by memorandum of understanding. A died. The memorandum did not address the issue of how the estate would be compensated for work in progress. B is under the impression that revenue generated by the time charged to files prior to the death of A will be prorated to A's estate as per the memorandum. How does B deal with the revenue generated by the time expended by B from the point of A's death in files that were in the offices of A and B prior to the time A died?

Previously, Canon 34 governed the division of fees for legal services - No division of fees for legal services is proper, except with another lawyer, based upon a division of service or responsibility.

Based upon this Canon, Informal Opinion No. 509, ABA, was drafted. The facts of that opinion involved a partnership which existed under the name of A, B, and C. Members of the firm were A, B, D and E. Because A did not devote all his time to the partnership work, he was compensated by negotiation at the end of every year. The other members of the firm were compensated on a percentage basis. B died and A and E formed a new partnership with D practicing law in his own name. The partnership agreement of the old firm requires a division of all fees ultimately collected for all business entrusted to the old partnership at the time of B's death, including fees for professional services rendered by D or by the firm of A and E subsequent to B's death. The Committee determined that a division of fees with the estate of B would violate the Canon because the parties would divide fees for work done subsequent to B's death with B's estate, a non-lawyer. The Committee encouraged considerable latitude in determining what portion of the total charge for completion of unfinished work of the old firm was attributable to work done by the old firm on matters prior to B's death. It was pointed out that no fixed rule could be laid down for this and that the circumstances of each case would be controlling.

Presently, we operate under the guidance of Rule 5.4(a) of the Mississippi Rules of Professional Conduct (MRPC) which provides:

A lawyer or law firm shall not share legal fees with a non-lawyer except that:

(1) an agreement by a lawyer with a lawyer's firm, partner or associate may provide for the payment of money, over a reasonable period of time after the lawyer's death, to the lawyer's estate or to one of more specified persons;

(2) a lawyer who purchases the practice of a law of a deceased, disabled or disappeared lawyer may pursuant to the provisions of Rule 1.17, pay to the estate or other representative of that lawyer the agreed-upon purchase price . . . .

It is the opinion of the Committee that since there was not agreement Rule 5.4, MRPC, requires the Committee to find that in the present factual situation, B may not compensate A's estate with any division of fees other than from cases chat the partnership worked on with compensation on a quantum meruit basis.