Can a lawyer pay a non-testifying consultant partly on a contingent-fee basis without violating the ban on fee-splitting with nonlawyers?

Plain-English summary

The inquiry concerned a lawyer anticipating a class action lawsuit involving complex health-care issues who wanted to engage a consultant on a part-hourly and part-contingent fee basis. The consultant would not testify, and the consultant's fee was calculated not as a percentage of the lawyer's fee or of the recovery but as a higher hourly rate contingent on the success of the lawsuit. The question was whether this would violate the rule prohibiting fee splitting.

The committee concluded that the arrangement does not violate the prohibition against a lawyer sharing legal fees, with two conditions. First, the contingent portion may not be paid out of the lawyer's contingent fee. Second, the amount that is contingent on success must be set forth in a written contingent fee agreement that specifies whether it is to be deducted before or after calculation of the lawyer's contingent fee.

Currency note

This opinion was issued in 1999, 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 Treat this page as historical context, not current guidance.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 RPC 5.4 (professional independence of a lawyer, including the bar on sharing legal fees with a nonlawyer) was carried into the 2006 revisions with changes, so verify the current rule text before relying on it.

Common questions

Q: Can a lawyer pay a non-testifying consultant a fee that is partly contingent on winning?

A: Yes. The committee concluded such an arrangement does not violate the prohibition on sharing legal fees, subject to two conditions.

Q: What conditions did the committee attach?

A: The contingent portion may not be paid out of the lawyer's contingent fee, and the contingent amount must be set forth in a written contingent fee agreement specifying whether it is deducted before or after the lawyer's contingent fee.

Q: Did it matter that the consultant would not testify?

A: The committee framed the arrangement as one in which a forensic consultant who will not testify is engaged on an hourly rate, part of which is contingent on success, and concluded that arrangement does not amount to prohibited fee sharing.

Background and rules framework

The opinion applied Washington RPC 5.4 (professional independence of a lawyer), corresponding to ABA Model Rule 5.4, which bars a lawyer from sharing legal fees with a nonlawyer. The committee distinguished a permissible consulting fee, even one partly contingent on success, from a prohibited division of the lawyer's legal fee, keying the distinction to whether the contingent amount comes out of the lawyer's contingent fee and to written documentation of the arrangement.

Citations and references

Rules of Professional Conduct:

• ABA Model Rule 5.4 (professional independence of a lawyer; sharing fees with a nonlawyer); Washington RPC 5.4

See also

• WA Ethics Op. 1270: Nonlawyer Consultant Venture
• WA Ethics Op. 1332: Fee Split With a Collection Agency
• WSBA Ethics Op. 1211: Fee Splits With a Service Center

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=1071

Original opinion text

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

Advisory Opinion: 1878
Year Issued: 1999
RPC(s): RPC 5.4
Subject: Division of fees with nonlawyer; lawyer paying consulting expert partly on contingent fee basis

The inquiry concerns whether a lawyer who anticipates bringing a class action lawsuit involving complex issues of health care may engage a consultant on a part hourly and part contingent fee basis without violating the RPC prohibiting fee splitting, where the consultant will not testify in the matter and the consultant’s fee is calculated not as a percentage of the lawyer’s fee or of the recovery but rather at a higher hourly rate contingent on success of the lawsuit.

An arrangement, in a class action, whereby a forensic consultant who will not testify in a matter and who is engaged by a lawyer on an hourly rate, a portion of which, will be paid contingent on success, does not violate the RPC prohibition against a lawyer sharing legal fees as long as it is not paid out of the lawyer’s contingent fee and, provided further, that the amount that is contingent on success is set forth in a written contingent fee agreement that specifies whether it is to be deducted before or after calculation of the lawyer’s contingent fee.