Can a lawyer in a financial service center pay the center based on the lawyer's fees, or must the payment be independent of fees?
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This page answers the general question as of 1988. Ezel answers yours: whether it's allowed on your facts, under the current rules of professional conduct in your state, with citations.
Plain-English summary
The inquiry concerned a lawyer who maintains an independent practice of law within a financial service center, and several hypothetical fee arrangements between the lawyer and the service center. In the first three, the lawyer paid the service center an amount that varied with the fees the lawyer generated (a percentage over a base, or rent based on the lawyer's fees). In the last two, the payment structure did not tie the lawyer's compensation to the lawyer's fees.
The committee was of the opinion that the first three proposals would be prohibited by RPC 5.4(a) because they would each constitute fee splitting, since each involved a payment to the service center by the lawyer based on the fees paid to the lawyer. The committee was of the opinion that the last two proposals would be permissible so long as the amount paid to the lawyer is not tied to the amount of fees obtained by the lawyer.
Currency note
This opinion was issued in 1988, before the 2006 revisions to the Washington Rules of Professional Conduct. The rule then numbered RPC 5.4(a), barring a lawyer from sharing legal fees with a nonlawyer, corresponds to Model Rule 5.4(a) and has since been amended. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule or requirement mentioned here.
Common questions
Q: Can a lawyer pay a nonlawyer service center a share of the lawyer's fees?
A: Per the opinion, no. The committee was of the opinion that arrangements where the lawyer pays the service center an amount based on the fees the lawyer earns constitute fee splitting prohibited by RPC 5.4(a).
Q: What fee-center arrangements did the committee treat as permissible?
A: The committee was of the opinion that the arrangements were permissible so long as the amount paid to the lawyer is not tied to the amount of fees the lawyer obtains.
Q: What is the line the committee drew?
A: The committee drew the line at whether payments track the lawyer's fees. Payments to the center that vary with the lawyer's fees are prohibited fee splitting; compensation to the lawyer that is independent of the lawyer's fees is permissible.
Background and rules framework
The opinion applies the rule then numbered Washington RPC 5.4(a), corresponding to Model Rule 5.4(a), which bars a lawyer from sharing legal fees with a nonlawyer. The committee evaluated five proposed arrangements and made the result turn on a single factor: whether the money moving between the lawyer and the nonlawyer service center varied with the lawyer's fees. Fee-linked payments were prohibited splitting; fee-independent payments were not.
Citations and references
Rules of Professional Conduct:
- Washington RPC 5.4(a) (sharing legal fees with a nonlawyer), corresponding to Model Rule 5.4(a).
See also
- WSBA Ethics Op. 1184: a corporation billing clients for a salaried lawyer's legal work
- WSBA Ethics Op. 1132: a lawyer working through a nonlawyer mediation service
- WSBA Ethics Op. 1143: a salaried lawyer at a nonprofit that bills members for legal services
Source
- Landing page: https://ao.wsba.org/print.aspx?ID=291
Original opinion text
Reproduced from the official source for research purposes. The linked source is authoritative.
Advisory Opinion: 1211
Year Issued: 1988
RPC(s): RPC 5.4(a)
Subject: Division of fees with nonlawyer
The Committee considered your inquiry concerning the conduct of a lawyer who maintains an independent practice of law within a financial service center. You proposed several hypothetical fee arrangements between the lawyer and the service center. [1. The lawyer is paid a base amount per month and pays the service center a percentage of fees generated over the base amount; 2. The lawyer is paid a base amount, and the rent paid to the service center is based upon fees generated by the lawyer; 3. The lawyer is paid a base amount for providing monthly consultation fees to the service center's clients and the lawyer is not required to pay rent unless the attorney receives a certain amount of fees. The rent then fluctuates based on the fees received by the lawyer; 4. The same as 3, but the rent is not based on fees generated by the lawyer; 5. The lawyer pays the service center a set amount each month for rent on an increasing amount, the service center provides a base payment to the lawyer for providing services to the center's clients, and the lawyer keeps all fees received.]
The Committee was of the opinion that the first three proposed by you would be prohibited by RPC 5.4(a) because they would each constitute fee splitting since it involved a payment to the service center by the lawyer based upon the fees paid to the lawyer. The Committee was of the opinion that the last two proposals would be permissible so long as the amount paid the lawyer is not tied to the amount of fees obtained by the lawyer.
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