Can a New York lawyer in a malpractice case recommend a medicolegal consulting service paid on a contingent fee and guarantee that fee?

Plain-English summary

A medicolegal consulting service offered to help plaintiffs' lawyers in medical malpractice suits with medical issues and the selection of expert witnesses. Its contract was with the client, not the lawyer, and called for fixed fees and disbursements paid in advance to the service and the experts, plus a 20% contingent fee to the service, payable from the gross recovery before costs, the payment of which the lawyer had to guarantee. The committee was asked whether a lawyer could properly recommend the service or guarantee the contingent fee. It noted that whether the arrangement was valid (including questions of champerty and of what is a proper disbursement) raised legal questions beyond its jurisdiction, and addressed only the Code.

Reviewing ABA Informal Op. 1375 (1976) and New York City 81-25 and 81-26 (1982), the committee accepted that nothing in the Code bars a lawyer from recommending that a client contract with a layperson on a contingent fee basis, provided the layperson does not engage in the unauthorized practice of law (DR 3-101), the lawyer does not share legal fees with the layperson (DR 3-102(A)), and the contingent fee is not payment for the layperson's testimony (DR 7-109(C)). The lawyer must retain full control of the litigation and may not abdicate ultimate professional responsibility (EC 5-21), and must exercise reasonable control over the service's expenses.

The committee concluded, however, that a lawyer's duty of competent representation (Canon 6; DR 6-101) includes selecting and working with expert witnesses, so a lawyer may not, at added cost to the client, shift to a consulting service work the lawyer is already obligated to perform for the normal contingent fee (also citing DR 2-107(A)(3) on reasonable total fees and DR 7-101(A)(2) on carrying out the engagement). It held it improper, absent special circumstances, to shift lawyer work to the service unless, without fee splitting, the client's total contingent fee obligation to the lawyer and the service would not exceed the statutory maximum under Judiciary Law section 474-a(2). A lawyer may recommend, and guarantee payment for, a reasonable contingent fee for work not normally performed by lawyers, with reasonableness depending on the circumstances. The question was answered, conditionally, in the negative.

Currency note

This opinion was issued in 1985, before New York replaced the Code of Professional Responsibility with the Rules of Professional Conduct in 2009 (competence now appears at Rule 1.1, fees at Rule 1.5, and the bar on sharing fees with nonlawyers at Rule 5.4). The cited Judiciary Law contingent-fee limits and Appellate Division rules may since have changed. 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.

Common questions

Q: Could the lawyer recommend a contingent-fee medicolegal service and guarantee the fee?

A: Only within limits. The committee held a lawyer may recommend and guarantee a reasonable contingent fee for work lawyers do not normally do, but not for work the lawyer is already obligated to perform for the ordinary contingent fee.

Q: Why was shifting expert-selection work to the service improper?

A: The committee held that selecting and working with experts is part of competent representation (DR 6-101), so paying a service an added contingent fee to do it imposes a duplicate charge on the client for what the lawyer already owes.

Q: What conditions had to be met for any such arrangement?

A: No fee splitting with the layperson (DR 3-102(A)), no unauthorized practice (DR 3-101), no contingent payment for the layperson's testimony (DR 7-109(C)), the lawyer retaining full control of the case (EC 5-21), and the client's total contingent obligation not exceeding the statutory maximum.

Background and rules framework

The opinion read the competence duty (Canon 6; DR 6-101) together with the fee rules (DR 2-106(A); DR 2-107(A)(3)), the bar on aiding unauthorized practice and sharing fees with nonlawyers (DR 3-101; DR 3-102(A)), the limit on financial assistance to a client (DR 5-103(B)), and the bar on contingent payment for testimony (DR 7-109(C)). The closest current Model Rule analogues are Rule 1.1 (competence), Rule 1.5 (fees), and Rule 5.4 (professional independence; sharing fees with nonlawyers).

Citations and references

Rules of Professional Conduct:

• MR 1.1 (competence)
• MR 1.5 (fees)
• MR 5.4 (sharing fees with nonlawyers)
• NY DR 2-106(A); DR 2-107(A)(3); DR 3-101; DR 3-102(A); DR 5-103(B); DR 6-101; DR 7-109(C)

Statutes:

• Judiciary Law section 474-a (contingent-fee limits in medical, dental, and podiatric malpractice)

Other opinions cited:

• ABA Informal Op. 1375 (1976): Code conditions for recommending a contingent-fee layperson service
• N.Y. City 81-25 and 81-26 (1982): use of such a service permissible if otherwise lawful and supervision is preserved
• N.Y. County 663 (1985): identified the legal questions and 22 NYCRR section 603.7(e)

See also

• NY State Bar Op. 565: Third-party solicitation and dividing fees with nonlawyers
• NY State Bar Op. 590: Serving on a lawyer referral committee
• NY State Bar Op. 601: Payment from an opposing party in settlement

Source

• Landing page: https://nysba.org/opinion-572/