Can a lawyer enter a contingent fee agreement that pays a third-party consultant a referral or finder's fee?
Apply this to your situation
This page answers the general question as of 1991. Ask about yours and see what the current Washington Rules of Professional Conduct say for your facts, with citations.
Plain-English summary
A lawyer asked about a contingent fee agreement with a third-party consultant. The committee was of the opinion that the proposed transaction would be improper under RPC 5.4.
The committee's reason was that the agreement would provide for a referral or finder's fee, which RPC 5.4 does not permit between a lawyer and a nonlawyer.
Currency note
This opinion was issued in 1991, before the 2006 revisions to the Washington Rules of Professional Conduct. 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 Treat this page as historical context, not current guidance.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 pay a third-party consultant a referral or finder's fee out of a contingent recovery?
A: No. The committee was of the opinion that the proposed transaction would be improper under RPC 5.4 because the agreement would provide for a referral or finder's fee.
Q: What made the arrangement improper?
A: The committee identified the referral or finder's fee feature of the agreement as the problem under RPC 5.4.
Background and rules framework
The opinion applied RPC 5.4, Washington's rule on the professional independence of a lawyer, which corresponds to ABA Model Rule 5.4 and restricts the sharing of legal fees with nonlawyers. The committee treated the referral or finder's fee to the third-party consultant as falling within that restriction.
Citations and references
Rules of Professional Conduct:
- ABA Model Rule 5.4 (professional independence; sharing fees with nonlawyers)
- Washington RPC 5.4
See also
- ABA Formal Op. 474: Referral Fees and Conflicts
- ABA Formal Op. 464: Fee Division Across Jurisdictions
Source
- Landing page: https://ao.wsba.org/print.aspx?ID=525
Original opinion text
Reproduced from the official source for research purposes. The linked source is authoritative.
Advisory Opinion: 1445
Year Issued: 1991
RPC(s): RPC 5.4
Subject: Contingent fee agreement with third party consultant; referral or finders fee
The Committee reviewed your inquiry concerning a contingent fee agreement with a third-party consultant. The Committee is of the opinion that the proposed transaction would be improper under RPC 5.4 because the agreement would provide for a referral or finders fee.
What do the rules say today, for your facts?
This opinion is from 1991. Ezel checks the current Washington Rules of Professional Conduct against your situation and cites the rules it relies on.
Opens in Ezel Pro.
- Checks the law as it stands today, not only this page
- Cites every source it relies on, so you can verify it
- Chat, drafting and research in one workspace