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ABA issues guidance on Model Rule dealing with sharing of fees with nonlawyers

CHICAGO, Aug. 20, 2013 — The American Bar Association Standing Committee on Ethics and Professional Responsibility has issued a formal opinion that allows lawyers and law firms in certain situations to divide fees with other firms practicing in jurisdictions that permit sharing of legal fees with nonlawyers.

Formal Opinion 464 seeks to clarify Model Rule 5.4(a), which provides generally that “a lawyer or law firm shall not share legal fees with a nonlawyer” with limited exemptions. Some jurisdictions, such as the District of Columbia, permit “an individual nonlawyer who performs professional services which assist the organization in providing legal services to clients” to hold a financial interest in a law firm.

The new opinion states that a division of a legal fee by a lawyer or law firm in a jurisdiction that follows Model Rule 5.4(a) with a lawyer or law firm in another jurisdiction that permits the sharing of legal fees with nonlawyers does not violate 5.4(a) simply because a nonlawyer might ultimately receive some portion of the fee under applicable law.

The ABA Standing Committee on Ethics and Professional Responsibility periodically issues ethics opinions to guide lawyers, courts and the public in interpreting and applying ABA model ethics rules to specific issues of legal practice, client-lawyer relationships and judicial behavior.

Formal Opinion 464 and other ABA ethics opinions are available on the ABA Center for Professional Responsibility website.

With nearly 400,000 members, the American Bar Association is one of the largest voluntary professional membership organizations in the world. As the national voice of the legal profession, the ABA works to improve the administration of justice, promotes programs that assist lawyers and judges in their work, accredits law schools, provides continuing legal education, and works to build public understanding around the world of the importance of the rule of law. To review our privacy statement, click here. Follow the latest ABA news at www.abanow.org and on Twitter @ABANews.

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