Can a lawyer take a case on a contingent fee when the client has already retained a non-testifying expert who is paid a percentage of the recovery?
NY State Bar Ethics Opinion 875: Contingent Fee With a Non-Testifying Expert
Short answer: A lawyer may ethically agree to a contingent fee even though the client has already separately retained a non-testifying expert who is also paid a percentage of the recovery, because the lawyer is not sharing legal fees with the expert and the attorney-client relationship remains direct.
Disclaimer: This is an advisory ethics opinion. Advisory opinions are not binding; they interpret the New York State Bar Association'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.
Plain-English summary
An out-of-state lawyer asked a New York lawyer to serve as co-counsel in a New York case. The client had already signed a contract with a non-testifying expert providing that the expert would be paid a percentage of the recovery, and the out-of-state lawyer had a separate one-third contingent retainer. The committee assumed the New York lawyer's fee would also be contingent and, combined with the out-of-state lawyer's fee, would not exceed one-third of the recovery. It asked whether the New York lawyer could ethically take the case on a contingent fee given the client's pre-existing contingent contract with the expert (paragraphs 1 through 4).
The committee held the situation does not implicate Rule 5.4(a), which bars sharing legal fees with a non-lawyer. Because the New York lawyer is retained by the client after the client separately contracted with the expert and the other lawyer, there is no fee-splitting with a non-lawyer and no concern about the lawyer's professional independence or duty of loyalty; the lawyer's relationship with the client remains direct and is not compromised by external influences (paragraphs 5 through 7).
The committee distinguished N.Y. State 698 (1998), which found it improper for a lawyer to accept a medical-malpractice referral on a contingent basis from a "medicolegal consulting service" also paid contingently, because of the potential influence of the consultant on the lawyer and the risk that the combined contingent fees could be excessive under Rule 1.5(a). Here, by contrast, there was no risk of confusion about the respective responsibilities of the lawyer and the expert: the New York lawyer is separately engaged, and the attorney-client relationship is defined by the engagement letter. The committee also distinguished N.Y. State 727 (2000), which involved a lawyer effectively splitting a contingent fee with a referring accounting firm. It concluded there is no ethical barrier to the contingent fee arrangement on these facts (paragraphs 8 through 11).
In practice
The opinion holds that, under Rules 1.5(a) and 5.4(a) as they stood at the time, a lawyer may take a contingent fee even though the client has separately retained a non-testifying expert who is paid a percentage of the recovery, because the lawyer is not sharing fees with the expert and the client relationship stays direct. The committee tied the result to the facts it was given and flagged the conditions that would change it: there was no indication the expert procured the engagement, no indication the lawyer reduced his fee to fund a matching contingent fee to the expert as a disguised referral payment, and the assumed combined legal fees did not exceed one-third. Where an expert or consultant influences the lawyer or the combined fees become excessive, the committee's contrasting opinions (N.Y. State 698 and 727) would govern.
Common questions
Q: My client already pays an expert a percentage of the recovery. Can I still take the case on contingency?
A: Yes. The committee held there is no ethical barrier, because the lawyer is not sharing legal fees with the expert and the client relationship remains direct (paragraphs 6, 11).
Q: Isn't an expert paid a percentage of the recovery a Rule 5.4 fee-sharing problem?
A: Not on these facts. The committee held Rule 5.4(a) is not implicated because the lawyer is not sharing the lawyer's legal fees with the expert; the client contracted separately with the expert (paragraph 7).
Q: When would this kind of arrangement become improper?
A: The committee distinguished cases where a consultant referred the matter and influenced the lawyer, or where combined contingent fees risked being excessive under Rule 1.5(a), or where the lawyer effectively split the legal fee with a referrer (N.Y. State 698 and 727) (paragraphs 8, 10).
Background and rules framework
The opinion interprets New York Rule 5.4(a) (sharing legal fees with a non-lawyer) and Rule 1.5(a) (the bar on excessive fees), corresponding to ABA Model Rules 5.4 and 1.5. The analysis turns on whether the expert's contingent payment is the lawyer sharing legal fees (it is not here) and whether the combined fees risk being excessive.
Citations and references
Rules of Professional Conduct:
- MR 5.4 / NY Rule 5.4(a): sharing legal fees with a non-lawyer
- MR 1.5 / NY Rule 1.5(a): no excessive or illegal fee
Other opinions cited:
- N.Y. State 698 (1998): improper to accept a contingent referral from a contingently paid medicolegal consulting service
- N.Y. State 727 (2000): a lawyer effectively splitting a contingent fee with a referring accounting firm is improper
See also
- NY State Bar Ethics Op. 880: Prohibition of Contingent Fees in Criminal Matters
- NY State Bar Ethics Op. 889: Sharing Legal Fees and Forming a Partnership With a Non-Lawyer
- NY State Bar Ethics Op. 885: Business Relationship With a Non-Attorney
Source
- Landing page: https://nysba.org/ethics-opinion-875/