Ezel / Ethics Opinions / SBAND

May a law firm pay a nonlawyer electronic exchange fees capped at ten percent of case fees?

Short answer The committee treated the described replication payments as apparent referral and fee-sharing payments rather than ordinary expenses. To that extent, Rule 5.4(a) prohibited them.
Bar
SBAND
Issued
October 31, 1996
Source
View Original PDF

Apply this to your situation

This page answers the general question as of 1996. Ask about yours and see what the current North Dakota Rules of Professional Conduct say for your facts, with citations.

How much weight this carries: Under North Dakota Rule for Lawyer Discipline 1.2(B), a lawyer who acts in good faith and in reasonable reliance on a written opinion of the association's ethics committee is not subject to sanction for the conduct the opinion addresses. Source.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official ethics opinion. The original opinion (linked on this page as a PDF) is the authoritative source for any reliance.
View original ethics opinion (PDF)

Plain-English summary

A nonlawyer company offered an electronic channel for insurers and law firms to exchange case information. The firm would pay per replication, capped at ten percent of case legal fees, plus a fee for exclusive status in North Dakota.

The committee looked beyond the billing label to the payments’ purpose. It said the cap, exclusive territory, likely referrals, and the firm’s decision not to bill clients for the charges indicated payment for access and referrals. Its conclusion was expressly conditional on the payments constituting fee sharing rather than ordinary expenses.

Currency note

This opinion was issued in 1996, before North Dakota's 2006 revisions to its Rules of Professional Conduct. The later North Dakota Opinion 06-05 states: “On August 1, 2006, material changes to N.D.R. Prof. Conduct 1.10(a) will take effect.” 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 Treat this page as historical context, not current guidance.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.

Common questions

Q: Did the committee accept the label “replication fee” as decisive?

A: No. It evaluated the purpose and structure of the payments.

Q: What rule did the committee apply?

A: It said Rule 5.4(a) prohibited the payments to the extent they were nonlawyer referral and fee-sharing payments.

Background and rules framework

The opinion discusses North Dakota Rules 5.4(a), 1.8(e)(1) in addressing the stated request.

Citations and references

Rules of Professional Conduct:

  • North Dakota Rule 5.4(a).
  • North Dakota Rule 1.8(e)(1).

See also

Source

Original opinion text

Full opinion text unavailable from the official source; see the linked source above for the complete text.

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