Can a lawyer split worker's compensation fees with a lay practitioner who is statutorily authorized to appear before the agency?

Plain-English summary

Opinion E-84-4 addressed a lawyer who handles worker's compensation cases with the aid of a layperson authorized under Wis. Stat. sec. 102.17(1)(c) to appear before DILHR hearing examiners. The lay practitioner acts independently and is not the lawyer's employee; both are named on client retainer agreements, and either may perform any of the work, including drafting and filing documents and attending hearings and appeals. Where DILHR awards attorney's fees to the lawyer without apportionment, the question was whether the lawyer may ethically divide those fees with the lay practitioner.

The committee concluded it would be improper. The former Code provided that an attorney may not share fees with a nonlawyer (SCR 20.19). Following ABA Informal Opinion 1241, the committee reasoned that forbidding a division of fees between a lawyer and an authorized lay agent does not unduly hamper or interfere with the agent's permitted activities before the agency, so the prohibition applies. Citing New York County Lawyers' Association opinions, the committee noted that a lawyer may employ a licensed layperson who represents worker's compensation claimants on a salary basis, but not on a percentage-of-fee basis. The committee added that, in such an arrangement, the lawyer should take care that the provisions on recommendation of professional employment (SCR 20.09(2)) are not violated.

Currency note

This opinion was issued in 1984, before Wisconsin's July 1, 2007 adoption of the revised Rules of Professional Conduct for Attorneys (the state's Ethics 2000 update), and it analyzes conduct under the former Code. Fee sharing with nonlawyers is now analyzed under SCR 20:5.4 / Model Rule 5.4. 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 Treat this page as historical context, not current guidance.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 lawyer split worker's compensation fees with a lay practitioner who appears before the agency?

A: No. The committee concluded dividing legal fees with the lay practitioner is improper under the bar on sharing fees with a nonlawyer (SCR 20.19).

Q: Can the lay practitioner be paid at all?

A: The committee noted a lawyer may employ such a licensed layperson on a salary basis, but not on a percentage-of-fee basis.

Q: Does it matter that the lay practitioner is statutorily authorized to appear before the agency?

A: No. The committee concluded prohibiting the fee division does not unduly hamper the agent's permitted activities, so the prohibition still applies.

Background and rules framework

The opinion interpreted the former Code's bar on sharing fees with a nonlawyer (SCR 20.19) and its provision on recommendation of professional employment (SCR 20.09(2)). Fee sharing with nonlawyers is now addressed by SCR 20:5.4 / Model Rule 5.4.

Citations and references

Rules of Professional Conduct:

• Wis. SCR 20.19 / Model Rule 5.4 (fee sharing with a nonlawyer) (former Code provision)
• Wis. SCR 20.09(2) (recommendation of professional employment) (former Code provision)

Statutes:

• Wis. Stat. sec. 102.17(1)(c) (1981-82)

Other opinions cited:

• ABA Informal Opinion 1241 (Feb. 27, 1973)
• New York County Lawyers' Association Opinions 463 and 833

See also

• WI Ethics Op. E-84-17: Payment for Referrals From an Insurance Company Subsidiary
• WI Ethics Op. E-86-19: Court Reporter as Full-Time Law Firm Employee
• WI Ethics Op. E-95-3: Paralegal Attending a Real Estate Closing

Source

• Landing page: https://www.wisbar.org/formembers/ethics/pages/formal-opinions.aspx
• Original PDF: https://www.wisbar.org/formembers/ethics/Ethics%20Opinions/E-84-4.pdf