Can lawyers pay a nonlawyer expert witness a contingent fee carved out of the lawyers' own contingent fee?

Plain-English summary

The City of A sued several oil companies for damages from pollution of its water supply and employed firms B and C as attorneys under a written contingent-fee contract, with the city to advance court costs and the expenses of water tests and analysis. To prepare and present the case, B and C found it necessary to engage X, a pollution expert and engineer. The city had no funds to pay X a cash fee; X was willing to work for a contingent fee, but the city insisted that X's fee be paid out of the lawyers' contingent fee rather than the city's recovery. X had been a stranger to the city officials and to B and C when they were employed and the suit filed, and was not consulted until after filing. The inquiry asked whether B and C could contract to pay X's contingent fee out of their own, or whether the city could employ X on a contingent fee deducted from the lawyers' contingent fee.

The Board answered, "for obvious reasons," in two parts. First, it would not be proper for the attorneys to contract with the engineer, agreeing to pay him a contingent fee out of the lawyers' contingent fee. Second, it would likewise be improper for the city to employ the engineer on a contingent-fee basis with that fee deducted from the lawyers' contingent fee.

Currency note

This opinion was issued in 1934, decades before Oklahoma replaced its original Rules of Professional Conduct (patterned on the ABA Canons of Professional Ethics) with the Oklahoma Rules of Professional Conduct (adopted 1988) and the later Ethics 2000 revisions. Contingent fees, sharing fees with nonlawyers, and compensation of expert witnesses are governed today by separate provisions of the current Oklahoma Rules of Professional Conduct. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific principle mentioned here.

Common questions

Q: Could the lawyers agree to pay the expert engineer out of their own contingent fee?

A: No. The Board concluded it would not be proper for the attorneys to contract to pay the engineer a contingent fee out of the lawyers' contingent fee.

Q: Could the city instead hire the engineer on a contingent fee taken from the lawyers' fee?

A: No. The Board concluded that arrangement would likewise be improper.

Q: Did the opinion cite a specific rule?

A: No. The Board stated its conclusions "for obvious reasons" without citing a numbered rule of professional conduct.

Background and rules framework

The opinion did not cite a numbered Rule of Professional Conduct. It addressed two routes for giving a nonlawyer expert a stake in the lawyers' contingent fee, both tied to the outcome of the litigation, and disapproved each without elaborating its reasoning beyond "obvious reasons."

Citations and references

Rules of Professional Conduct:

• The opinion does not cite a numbered Rule of Professional Conduct.

See also

• Okla. Bar Ethics Op. 26: Contingent Fee, Deducting Costs Before the Fifty-Percent Split
• Okla. Bar Ethics Op. 55: Lawyer as Regional Counsel for a Union Injury-Claims Bureau
• Okla. Bar Ethics Op. 41: Contingent Fee in Divorce Cases Void Against Public Policy

Source

• Landing page: https://www.okbar.org/ethics/ethics-opinion-no-69/

Original opinion text

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

Adopted April 27, 1934

The Board is in receipt of the following inquiry:

"The City of A has filed suit against a number of defendant oil companies for the recovery of damages for pollution of its source of water supply and has employed firms B and C, attorneys, to prosecute said case, and has entered into a written contract with the said attorneys, which contract provides that the attorneys shall receive a contingent fee for their services in said case, and further provides that the city shall pay and advance the necessary court costs and the expenses of obtaining water tests and analysis. The attorneys B and C have found it advisable and necessary, in order to properly prepare said case and to present same to the court and jury, to secure the services of X, a pollution expert and engineer. The city is without funds with which to hire X on a cash fee basis. X is willing to work for a contingent fee, but said city is insisting that said fee be paid out of the contingent fee to be received by B and C, the attorneys in the case, and not out of the money to be received by said city, and said city is willing for X's services to be obtained on the above conditions. X was a total stranger to the city officials and to B and C at the time of their employment by said city and at the time said suit was filed and was not consulted by B and C until after the filing of said suit. Would it be proper for B and C, the attorneys in the case, to enter into a contract with X, the pollution engineer whereby the contingent fee of X shall be paid out of the contingent fee of B and C?

or

Would it be proper for the city A to employ X upon a contingent fee basis and for B and C to authorize said city to pay contingent fee of X out of any contingent fee that might be due B and C in said case?"

In response:

For obvious reasons the Board is of the opinion:

First: That it would not be proper for the attorneys to contract with the engineer, agreeing to pay him a contingent fee out of the contingent fee of the lawyers.

Second: That, likewise, it would not be proper for the city to employ the engineer on a contingent fee basis, the amount of the contingent fee to be deducted from the amount of the contingent fee of the lawyers employed by the city.