Do solo lawyers who share office space but are not a firm have to follow the fee-splitting rules when they divide a fee?

Plain-English summary

The Board considered a group of nine lawyers who share an office and cooperate on litigation but are not organized as a partnership or firm, each using separate letterhead, and who divide fees by the proportion of work performed. The first question was whether they are in the "same firm." Using the Rule 1.0(c) definition of "firm" (lawyers in a partnership, professional corporation, sole proprietorship, or other association authorized to practice law), the Board concluded that an informal affiliation of solo practitioners who share office space is not a firm, while an of-counsel relationship is treated as the same firm. So these lawyers must comply with Prof. Cond. R. 1.5(e) when dividing a fee.

On the conditions, the Board set out the four requirements of Rule 1.5(e): the division is in proportion to services performed or the lawyer assumes joint responsibility and agrees to be available to consult with the client; the client consents in writing; a written closing statement is signed by the client and each lawyer; and the total fee is reasonable. The Board recommended that each lawyer and client keep a copy of the completed signed document and noted R.C. 4705.15 (written fee agreements in contingent cases). It made clear that a lawyer who assumes joint responsibility, rather than performing services, is still subject to the signing requirement.

On the third question, the Board held that each lawyer in the shared-fee arrangement who does not maintain professional liability insurance in the minimum amounts must give the client the written notice required by Prof. Cond. R. 1.4(c), signed by both the client and the lawyer, and that this applies even to a lawyer who only assumes joint responsibility. The opinion withdrew Advisory Opinions 91-05 and 2003-3.

In practice

The opinion holds that, under the Ohio rules as they stood at the time, lawyers practicing in association but not in a firm relationship are not in the "same firm" under Rule 1.0(c), so a fee division among them must satisfy Prof. Cond. R. 1.5(e): proportional services or joint responsibility, the client's written consent, a written statement signed by the client and each lawyer, and a reasonable total fee. Per the opinion, a lawyer who assumes joint responsibility rather than performing services is still bound by the signing requirement, and each such lawyer who lacks the required malpractice insurance must give the client the Rule 1.4(c) written notice.

Common questions

Q: Are lawyers who just share office space considered one firm for fee-splitting?

A: The opinion concluded no; an informal affiliation of solo practitioners sharing office space is not a "firm" under Prof. Cond. R. 1.0(c), so Rule 1.5(e) governs any fee division among them.

Q: What does Rule 1.5(e) require to divide a fee between lawyers not in the same firm?

A: The opinion concluded the division must be proportional to services or by joint responsibility, the client must consent in writing, the client and each lawyer must sign a written closing statement, and the total fee must be reasonable.

Q: Does a lawyer who only assumes joint responsibility have to sign the fee agreement?

A: The opinion concluded yes; even a lawyer who assumes joint responsibility rather than performing services must sign the written agreement with the client.

Q: Who must give the client malpractice-insurance notice in a shared-fee arrangement?

A: The opinion concluded each lawyer in the arrangement who lacks the required professional liability insurance must give the client the written notice under Prof. Cond. R. 1.4(c), including a lawyer who only assumes joint responsibility.

Background and rules framework

The opinion interprets Ohio Prof. Cond. R. 1.5 (fees), in particular the 1.5(e) conditions on dividing a fee between lawyers not in the same firm and the 1.5(c)(1) written-contingent-fee requirement, together with the definition of "firm" in Rule 1.0(c) and the malpractice-insurance disclosure duty in Rule 1.4(c) (Model Rules 1.5, 1.0, 1.4). It also references R.C. 4705.15 on written contingent-fee agreements.

Citations and references

Rules of Professional Conduct:

• Ohio Prof. Cond. R. 1.5 (fees), incl. 1.5(c)(1), 1.5(e), 1.5(e)(2) (Model Rule 1.5)
• Ohio Prof. Cond. R. 1.0(c) (definition of "firm") (Model Rule 1.0)
• Ohio Prof. Cond. R. 1.4(c) (notice of lack of professional liability insurance) (Model Rule 1.4)

Statutes:

• R.C. 4705.15 (written fee agreement in contingent cases)

Other opinions cited:

• Ohio BPC Adv. Op. 91-9: informal affiliation of solo practitioners is not a firm

See also

• Ohio BPC Op. 1991-005: Lawyers in Association Not the Same Firm; Fee Division (withdrawn by this opinion)
• Ohio BPC Op. 2003-003: Fee Division by Assuming Responsibility; Written Agreement (withdrawn by this opinion)
• Ohio BPC Op. 1988-026: Fee Division Where Responsibility Is Assumed

Source

• Landing page: https://ohioadvop.org/advisory-opinion-index/
• Original PDF: https://www.ohioadvop.org/wp-content/uploads/2017/04/Op_16-011.pdf

Original opinion text

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

OHIO BOARD OF PROFESSIONAL CONDUCT
OPINION 2016-11
Issued December 9, 2016

Division of Fees By Lawyers Not in the Same Firm

Syllabus of Opinion:

Lawyers who practice in association with each other, but not in a partnership, of counsel, or other permissible legal arrangement are not considered lawyers in the "same firm" for purposes of the division of fees under Prof.Cond.R. 1.5(e). Lawyers who informally practice in association with each other must comply with the restrictions contained in Prof.Cond.R. 1.5(e) when dividing fees.

Lawyers may divide fees in proportion to the services performed or by assuming joint responsibility for the matter. When lawyers who are not in the same firm agree to a division of legal fees, a written contingent fee agreement signed by the lawyers and the client under Prof.Cond.R. 1.5(c)(1) and the client’s written consent to the division of fees under Prof.Cond.R. 1.5(e)(2) are required.

Each lawyer in a shared fee arrangement must give notice to the client as required by Prof.Cond.R. 1.4(c), if the lawyer does not maintain professional responsibility insurance in the amounts specified in the rule, or if the lawyer’s insurance has been terminated.

This nonbinding advisory opinion is issued by the Ohio Board of Professional Conduct in response to a prospective or hypothetical question regarding the application of ethics rules applicable to Ohio judges and lawyers. The Ohio Board of Professional Conduct is solely responsible for the content of this advisory opinion, and the advice contained in this opinion does not reflect and should not be construed as reflecting the opinion of the Supreme Court of Ohio. Questions regarding this advisory opinion should be directed to the staff of the Ohio Board of Professional Conduct.
OHIO BOARD OF PROFESSIONAL CONDUCT
65 SOUTH FRONT STREET, 5TH FLOOR, COLUMBUS, OH 43215-3431 Telephone: 614.387.9370 Fax: 614.387.9379 www.supremecourt.ohio.gov/boards/boc

PAUL M. DE MARCO
RICHARD A. DOVE
CHAIR
DIRECTOR
WILLIAM J. NOVAK
D. ALLAN ASBURY
VICE- CHAIR
SENIOR COUNSEL
HEIDI WAGNER DORN
COUNSEL

OPINION 2016-11
Issued December 9, 2016
Withdraws Opinions 91-05, 2003-3

Division of Fees By Lawyers Not in the Same Firm

SYLLABUS: Lawyers who practice in association with each other, but not in a partnership, of counsel, or other permissible legal arrangement are not considered lawyers in the "same firm" for purposes of the division of fees under Prof.Cond.R. 1.5(e).
Lawyers who informally practice in association with each other must comply with the restrictions contained in Prof.Cond.R. 1.5(e) when dividing fees.

Lawyers may divide fees in proportion to the services performed or by assuming joint responsibility for the matter. When lawyers who are not in the same firm agree to a division of legal fees, a written contingent fee agreement signed by the lawyers and the client under Prof.Cond.R. 1.5(c)(1) and the client’s written consent to the division of fees under Prof.Cond.R. 1.5(e)(2) are required.

Each lawyer in a shared fee arrangement must give notice to the client as required by Prof.Cond.R. 1.4(c), if the lawyer does not maintain professional responsibility insurance in the amounts specified in the rule, or if the lawyer’s insurance has been terminated.

QUESTIONS PRESENTED1:

(1) Whether lawyers who practice in association with each other, but not in a partnership, of counsel, or other permissible legal relationship, would be considered lawyers in the "same firm" for purposes of the division of fees.

1
The questions presented in this advisory opinion are the same or substantially similar to the questions presented in Adv.Op. 91-05 and Adv.Op. 2000-4.
Op. 2016-11
2

(2) Whether lawyers not in the same firm agree to division of legal fees based upon shared responsibility, rather than on a proportion of services performed, are both required to sign a written agreement with the client.

(3) Whether each lawyer in an arrangement to divide fees is required to provide written notice of the lack of professional malpractice insurance.

APPLICABLE RULES: Prof.Cond.R. 1.0, 1.4, and 1.5.

OPINION: The requester is one of a group of nine attorneys who are not in a partnership or organized as a law firm, but who collectively operate an office in which each lawyer uses separate letterhead. The lawyers cooperate and assist each other in litigation matters and share fees based upon the proportion of work performed by each lawyer. Each client is advised of and introduced to all lawyers in the group who may be assisting in the case.

Prof.Cond.R. 1.5(e) expressly permits the division of a fee in a single billing between two lawyers not in the same firm, subject to certain conditions. The term “firm” is defined as “a lawyer or lawyers in a law partnership, professional corporation, sole proprietorship, or other association authorized to practice law...” Prof.Cond.R. 1.0(c). A firm is different from an informal affiliation of solo practitioners who share office space or have agreed to share certain aspects of a law office. Adv.Op. 91-9. The practice arrangement described by the requesting attorney is not a firm as defined by Prof.Cond.R. 1.0(c), but an arrangement with lawyers separate from that of a firm. An “of counsel” relationship between a lawyer and a law firm is considered the “same firm.”

Fees can be divided by lawyers not in the same firm only if four conditions are satisfied: 1) the division of fees is in proportion to the services performed by each lawyer or the lawyer assumes joint responsibility for the representation and agrees to be available for consultation with the client; 2) the client has given his or her written consent; 3) a written closing statement is signed by the client and each lawyer; and 4) the total fee is reasonable. Prof.Cond.R. 1.5(e). The Board recommends that each lawyer and client retain a copy of the completed document signed by all parties. See also R.C. 4705.15 (written fee agreement in contingent cases.)
Op. 2016-11
3

A lawyer who does not maintain the required level of professional liability insurance must disclose this information and provide written notice to the client pursuant to Prof.Cond.R. 1.4(c). Consequently, each lawyer in a shared fee arrangement who does not maintain professional liability insurance in the minimum amounts provided in the rule must provide notice to the client. The notice must be signed by both the client and the lawyer. Even if a lawyer assumes joint responsibility for the representation, rather than performing legal services, the lawyer is subject to the notice requirement.

CONCLUSION: Lawyers who practice in association with other lawyers, but not in a partnership, of-counsel or other legal relationship, are not considered lawyers within the “same firm” and therefore must fully comply with the restrictions regarding division of fees contained within Prof.Cond.R. 1.5(e). Lawyers who agree to assume responsibility for the representation, or divide fees in proportion to the services rendered, must all sign the written fee agreement with the client and obtain the written consent of the client. If a lawyer dividing fees does not maintain malpractice insurance in the amounts specified in Prof.Cond.R. 1.4(c), the lawyer must provide the requisite written notice to the client.