Can a lawyer advise and litigate for a corporation that buys personal injury claims and bills the lawyer hourly while the corporation controls settlement?

Plain-English summary

A lawyer described a corporation that would enter contingent-fee agreements with prospective personal injury plaintiffs, authorizing the corporation to settle or litigate the claims. The lawyer would advise the corporation during negotiations and, if necessary, litigate the case, representing the corporation as an assignee of the plaintiff, and would bill the corporation on an hourly basis.

The committee was of the unanimous opinion that the proposed arrangement would be a gross violation of RPC 5.5(b) and RPC 5.4(b). RPC 5.5(b) bars assisting a nonlawyer in the unauthorized practice of law, and RPC 5.4(b) bars forming a partnership with a nonlawyer if any of the partnership's activities consist of the practice of law.

Currency note

This opinion was issued in 1993, before the Washington State Bar Association's adoption of the 2006 revisions to the 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 Treat this page as historical context, not current guidance.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 corporation take contingent-fee assignments of injury claims and hire a lawyer to handle them?

A: The committee said a lawyer's participation in that arrangement, representing the corporation as assignee while the corporation controlled settlement and litigation, would be a gross violation of RPC 5.5(b) and RPC 5.4(b).

Q: Which rules did the committee find the arrangement violated?

A: RPC 5.5(b), which bars assisting a nonlawyer in the unauthorized practice of law, and RPC 5.4(b), which bars partnering with a nonlawyer where any of the activities consist of practicing law.

Background and rules framework

The opinion applied RPC 5.4(b) and RPC 5.5(b) (corresponding to ABA Model Rules 5.4 and 5.5). The committee read the corporation's control of contingent-fee injury claims, with the lawyer engaged to advise and litigate them, as the corporation engaging in the practice of law through the lawyer, which both rules forbid.

Citations and references

Rules of Professional Conduct:

• ABA Model Rule 5.4 (professional independence; nonlawyer association); Washington RPC 5.4(b)
• ABA Model Rule 5.5 (unauthorized practice of law); Washington RPC 5.5(b)

See also

• WA Ethics Op. 1518: Referral Fee Tied to a Donation Promise
• WA Ethics Op. 1511: Fee Split With a Lawyer Referral Service

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=595

Original opinion text

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

Advisory Opinion: 1516
Year Issued: 1993
RPC(s): RPC 5.4(b); 5.5(b)
Subject: Assisting unauthorized practice of law; division of fees with nonlawyer

[A corporation enters into contingent fee agreements with prospective personal injury plaintiffs, which authorize the corporation to settle or litigate the claim. The inquiring lawyer would advise the corporation during negotiations and if necessary, litigate the case, representing the corporation as an assignee of the plaintiff. The lawyer would bill the corporation on an hourly basis.] The Committee was of the unanimous opinion that your proposed arrangement with [the corporation] would be a gross violation of RPC 5.5 (b) and RPC 5.4 (b).