Can a lawyer's client hire a non-testifying medical consulting firm on a contingent fee to help prepare the medical side of a malpractice case?

Plain-English summary

The inquiring attorney represented a client in a medical malpractice suit who could not afford to pay medical experts, being heavily in debt from medical expenses, even though expert medical testimony was essential to the case. A medical consulting firm offered to obtain the expert witnesses, prepare the medical issues for depositions, trial, and cross-examination, and assist the attorney, all on a contingent fee basis payable by the client; the medical experts the consulting firm located would themselves be paid a reasonable fee plus expenses regardless of outcome, and the consulting firm itself would not testify. The contingent fee agreement between the client and the consulting firm was completely independent of the contingent fee agreement between the client and the attorney, and the client was unable to retain a medical consultant on any non-contingent basis.

The opinion adopted ABA Informal Opinion 1375, which states that nothing in the Code of Professional Responsibility bars a lawyer from recommending that a client contract with a layperson on a contingent fee basis, so long as the layperson does not engage in the unauthorized practice of law (DR 3-101(A)), the lawyer does not share legal fees with the layperson (DR 3-102(A)(1)(3)), and the contingent fee is not payable for the layperson's testimony (DR 7-109(C)(1)(3)). The opinion further explained that a lawyer recommending such an arrangement must at all times retain full control of the litigation entrusted to the lawyer by the client and may not abdicate to another the lawyer's ultimate professional responsibility for evaluating the case or the course to follow (EC 5-21), and that the lawyer owes the client a corresponding duty to exercise reasonable control over expenses so that neither unauthorized expenses nor expenses of dubious value are incurred. The opinion cautioned that it would be unethical for a lawyer to sign the consulting firm's assignment if the arrangement were in fact a subterfuge for fee-splitting between the lawyer and a layperson. On the facts presented, assumed true, the opinion found no impropriety in the attorney continuing to participate in the case, subject to those conditions and limitations.

Currency note

This opinion was issued in 1985, before Tennessee's adoption of the 2003 Rules of Professional Conduct, which replaced the former Code of Professional Responsibility. 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: Can a client hire a medical consulting firm on a contingent fee to assist with a malpractice case?

A: The opinion found no impropriety where the consultant's contingent fee contract with the client was completely independent of the attorney's own fee agreement, the consultant would not testify, and the conditions discussed below were met.

Q: Does the lawyer have to share legal fees with the consulting firm under this kind of arrangement?

A: No, and doing so would be improper; the opinion required that the lawyer not share legal fees with the layperson or agency under DR 3-102(A)(1)(3), and warned it would be unethical for the lawyer to sign an assignment that made the arrangement a subterfuge for fee-splitting.

Q: Who retains control of the case strategy when a contingent-fee consultant is helping prepare the medical issues?

A: The lawyer must retain full control of the litigation at all times and may not abdicate the ultimate professional responsibility for evaluating the case or the course to be followed, per EC 5-21, while also exercising reasonable control over expenses incurred.

Background and rules framework

The opinion construed Tennessee's then-current DR 3-101(A) (aiding unauthorized practice of law), DR 3-102(A)(1)(3) (fee-splitting with a nonlawyer), DR 7-109(C)(1)(3) (contingent fees for witness testimony), and EC 5-21 (the lawyer's duty to retain control of litigation), adopting ABA Informal Opinion 1375's framework. The modern correlates for the fee-sharing and unauthorized-practice concerns at issue are Model Rule 5.4 (professional independence of a lawyer; fee-sharing with nonlawyers) and Model Rule 5.5 (unauthorized practice of law), cited here as navigational cross-references rather than rules the opinion itself applied.

Citations and references

Other opinions cited:

• ABA Informal Opinion 1375 (lawyer recommending a client's contingent-fee contract with a layperson)

See also

• DC Ethics Op. 233: Payment of "Success Fees" to Nonlawyer Consultants
• AL Ethics Op. 1983-77: Payment to an Investigator for Locating Witnesses and Documents
• AL Ethics Op. 1997-02: Attorney May Pay an Expert Witness a Reasonable and Customary Fee

Source

• Landing page: https://www.tbpr.org/ethic_opinions/85-f-101

Original opinion text

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

85-F-101 - Medical Consultant on contingent fee

BOARD OF PROFESSIONAL RESPONSIBILITY OF THE SUPREME COURT OF TENNESSEE

FORMAL ETHICS OPINION 85-F-101

Inquiry is made concerning the propriety of an attorney participating in a case after his client contracts on a contingency fee basis with a medical consultant to evaluate the medical aspects of the case and assist the attorney in preparing the medical issues involved in the case, including preparing for depositions, trial, cross examinations and locating appropriate medical expert witness to testify on behalf of the client.

The inquiring attorney represents the client in a medical malpractice suit. The use of expert medical testimony is essential. The client has no money to pay such experts being heavily in debt due to medical expenses. A medical consulting firm has offered its services on a contingent fee basis. The medical expert witnesses would be obtained by the consulting firm. The medical expert witness would be paid a reasonable fee plus expenses by the client regardless of the outcome of the case.

The contingency fee agreement between the client and the consulting firm is completely independent and separate and apart from the contingency fee agreement between the client and the attorney.

The client is unable to employ a medical consultant on a non-contingency fee basis and the services of the medical consultant are absolutely essential to the client's case of action. The

medical consultant will not testify in the case.

Informal Opinion 1375 of the American Bar Association Committee on Ethics and Professional Responsibility states in part as follows, which is adopted and incorporated in this opinion, to-wit:

Nothing in the Code of Professional Responsibility proscribes a lawyer from recommending that a client contract with a lay person on a contingent fee basis so long as: (1) the lay person or agency is not to engage in the unauthorized practice of law, DR 3-101(A); (2) the lawyer does not share legal fees with the lay person, or agency, DR 3-102(A)(1)(3); and (3) the contingent fee is not payable for the testimony of the lay person or agency, DR 7-109(C)(1)(3).

However, a lawyer who recommends such an arrangement to a client must at all times retain full control of the litigation which has been entrusted to him by the client and may not abdicate to another his ultimate professional responsibility for evaluating the case or the course to be followed, EC 5-21. In addition, under such an arrangement the lawyer obviously owes a corresponding duty to the client to exercise reasonable control over expenses incurred--so that neither expenses unauthorized by the lawyer or client nor those of dubious value to the client's cause are expended---.

It would be unethical for a lawyer to sign the assignment which is part of the contract--if, in fact the arrangement were made subterfuge for fee-splitting between a lawyer and layperson.

It appears from the facts stated herein, which are assumed to be true, that there is no impropriety in the attorney participating in the case subject to the conditions and limitations stated herein above.

This 16th day of December, 1985.

ETHICS COMMITTEE:

Henry H. Hancock

Edwin C. Townsend

W. J. Flippin

APPROVED AND ADOPTED BY THE BOARD