Can a lawyer take a share of a nonlawyer estate planning firm's client fees for reviewing the firm's trusts?

Plain-English summary

The lawyer asked about employment with a nonlawyer estate planning firm, where the lawyer would receive a portion of the fees the firm's clients paid for the lawyer's services in reviewing trusts. The committee concluded that RPC 5.4(a) prohibits a lawyer from sharing legal fees with a nonlawyer except in limited circumstances that did not apply, so the proposed fee-splitting arrangement would violate RPC 5.4(a). It added that the arrangement may also affect the lawyer's exercise of professional independence and judgment in violation of RPC 5.4(c).

On whether the company or an out-of-state attorney not licensed in Washington would be engaging in the unauthorized practice of law, the committee said whether the conduct constitutes the practice of law is a legal question it does not pass on, but that assuming it is the unauthorized practice of law, the lawyer would appear to be assisting that unauthorized practice by participating. On what changes could bring the process into compliance, the committee said it could not advise because the lawyer had not specified the contemplated conduct.

Currency note

This opinion was issued in 1997, 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 Treat this page as historical context, not current guidance.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. Washington's cited rules correspond to ABA Model Rules 5.4 (professional independence of a lawyer) and 5.5 (unauthorized practice of law).

Common questions

Q: Can the lawyer share in the estate planning firm's fees for reviewing trusts?

A: No. The committee concluded the proposed fee-splitting arrangement violates RPC 5.4(a), which prohibits sharing legal fees with a nonlawyer outside limited exceptions that did not apply.

Q: Does the arrangement raise any other rule problem?

A: The committee said it may also affect the lawyer's exercise of professional independence and judgment in violation of RPC 5.4(c).

Q: Could the lawyer be assisting unauthorized practice?

A: The committee declined to decide whether the conduct is the practice of law, but said that assuming it is unauthorized practice, the lawyer would appear to be assisting it by participating.

Q: Did the committee suggest a compliant version of the arrangement?

A: No. The committee said it could not advise on changes because the lawyer had not specified the contemplated conduct.

Background and rules framework

The opinion applied RPC 5.4(a) and 5.4(c) (the bar on sharing legal fees with a nonlawyer and the protection of professional independence, corresponding to ABA Model Rule 5.4) and RPC 5.5 (assisting unauthorized practice, corresponding to ABA Model Rule 5.5) to a lawyer's proposed employment with a nonlawyer estate planning firm. The committee kept the underlying practice-of-law question open as a legal determination while resolving the fee-sharing question directly against the arrangement.

Citations and references

Rules of Professional Conduct:

• ABA Model Rule 5.4 (professional independence of a lawyer); Washington RPC 5.4(a), 5.4(c)
• ABA Model Rule 5.5 (unauthorized practice of law); Washington RPC 5.5

See also

• WA Ethics Op. 1730: Preferred-Provider Fee Sharing
• WA Ethics Op. 1716: Giving Part of a Fee to Charity
• WSBA Ethics Op. 1165: Aiding Unauthorized Practice

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=816

Original opinion text

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

Advisory Opinion: 1747
Year Issued: 1997
RPC(s): RPC 5.4; 5.5
Subject: Division of fees with nonlawyer; employment by nonlawyer estate planning firm

I have been instructed by the Rules of Professional Conduct Committee to respond to your ethics inquiry regarding employment with a nonlawyer estate planning firm as follows:

Question 1: Does your involvement in this business transaction, which involves receipt of a portion of the fees paid by the estate planning firm's clients for your services in reviewing the trusts, violate any Rules of Professional Conduct?

Response: RPC 5.4(a) prohibits a lawyer from sharing legal fees with a nonlawyer except under certain limited circumstances that do not apply herein. Therefore, the proposed fee splitting arrangement will violate RPC 5.4(a). This arrangement may also affect your exercise of professional independence and judgment in violation of RPC 5.4(c).

Question 2: Would the company or the out of state attorney not licensed to practice in Washington be engaging in the unauthorized practice of law?

Response: The question of whether this conduct constitutes the practice of law is a legal question. The committee does not pass on legal questions. However, assuming that it is the unauthorized practice of law, you would appear to be assisting the unauthorized practice of law by participating in this arrangement.

Question 3: If the answers to the first two questions [are] "yes", what changes could be made in the process to comply with the Rules?

Response: Because you have not specified your contemplated conduct, the committee cannot provide advice on this question.