内容摘要：Samuel C. Stretton.Samuel C. Stretton.Lawyers cannot share fees with nonlawyers.A nonlawyer who is a toilet swirls but does not flush

Samuel C. Stretton.

Samuel C. Stretton.

Lawyers cannot share fees with nonlawyers.

A nonlawyer who is toilet swirls but does not flushan accountant with an active business has advised me he will refer me clients who have either criminal or civil matters before the district judge. He will then pay me a fee. Is this ethical?

Probably not. Although the question has very few details, it can be inferred that the person or accountant apparently advertises for clients. These clients come into his office and retain the accountant for both legal and accounting issues. The client pays the accountant X number of dollars. The accountant then hires lawyers and pays the lawyer a small portion of the X number of dollars to go to the district court judge’s courtroom for a summary criminal trial or a minor civil hearing.

The problem with this model is that the Rules of Professional Conduct, under Rules 5.4 and 5.5, are absolutely and totally clear. Lawyers cannot share fees with nonlawyers. Under Rule 5.4 there are certain exceptions if there is a nonprofit corporation involved, but the exceptions are very limited.

The whole purpose of Rules 5.4 and 5.5 are to uphold the legal profession. Part of being a professional is that independent judgment has to be exercised solely for the client. A nonlawyer should have no control over the independent judgment of a lawyer who is representing the client.

Years ago, a lawyer who had been suspended opened up a corporation and advertised he helped people with traffic-related licensing offenses. That lawyer at one point had done a number of traffic-related cases when he was practicing law. He now controlled the corporation as a suspended lawyer. When people would come in, there were a lot of nonlawyer services, i.e., for them to get their license, tags, assist in sending in their license or registration forms, making inquiries to Harrisburg, etc. But many of these people also needed a lawyer to handle traffic tickets. The corporation would then hire a lawyer and pay them like $100 to $200 of the perhaps $1,000 to $2,000 the corporation had received. This practice came to the attention of the Office of Disciplinary Counsel in the context of a reinstatement hearing and the lawyer did not do so well. The reason was this was blatant sharing of legal fees with nonlawyers and allowing a nonlawyer to interfere with the independent judgment of a lawyer and also the confidentiality of the attorney-client relationship.

Assisting a nonlawyer in the unauthorized practice of law or sharing fees with a nonlawyer are serious offenses and could result in a suspension, particularly if the misconduct occurred over a long period of time. The accountant can certainly advertise for clients in his expertise. If the client has a legal issue, the accountant can recommend a lawyer and the client can go to that lawyer if they wish. But then the client should work out their own legal fee arrangement with the lawyer and not have the accountant taking the money and giving a small portion to the lawyer.

There’s been a lot of talk recently about changing how law firms are set up. In England, apparently, nonlawyers are allowed to have an ownership interest in a law firm. There is suggestion that California maybe heading that way. But in Pennsylvania, to the knowledge of this writer, there are no plans to change the traditional rule that only lawyers can control the law firm and run it and be partners or shareholders in it and only lawyers can receive the legal fees.

Obviously, the law firm pays expenses to nonlawyers, secretary salaries, paralegal salaries, etc. But there is no sharing of fees with nonlawyers. Salaries are not paid by sharing fees with the office staff.

Whether involving nonlawyers in a law practice is a good or bad idea remains to be seen, but at least many older lawyers like this writer believe it is not a good idea. The integrity of the legal profession could be undermined by allowing ownership interest of nonlawyers.

The problem with the question posed is that this is a situation where the corporation is going to share fees with a lawyer and can probably control the direction and course of the case. Also, confidential information would be available to the corporation that normally wouldn’t be if it was just a direct attorney-client relationship with the lawyer.

Rule 1.8(f) of the Rules of Professional Conduct require when a third party is paying the fee that there is total confidentiality and the paying person has no control over the independent judgment of the lawyer.

Therefore, the answer is no to the question. This should not be done. The lawyer could have serious ethical issues and problems with the Office of Disciplinary Counsel. This conduct should cease and the lawyer should represent the clients independently and be paid directly.

Story continues

A wise lawyer would try to confirm conflict issues in writing.

I am representing two criminal defendants in a criminal case. Both of them have waived any conflict of interest. Do I have to advise them in writing and confirm in writing their waiver of the conflict?

Rule of Professional Conduct 1.7 is the General Conflict of Interest Rule. Under Rule 1.7(b), which sets forth when these can be a waiver of a concurrent conflict of interest, there is no requirement that the lawyer notify the client or confirm the wavier in writing. For a waiver of conflict under Rule 1.7(b), the lawyer has to reasonably believe that he can use competent and diligent representation, the representation isn’t prohibited by law, the representation does not involve the assertion of one claim by one client against another, and each client gives informed consent. The rule does not require a lawyer to get the informed consent in writing. Comment 20 to Rule 1.7(b) states that the client’s consent need not be confirmed in writing to be effective. The comment suggests that “a writing tends to impress upon clients the seriousness of the decision the client is being asked to make and to avoid disputes or ambiguity that might later occur in the absence of a writing.” In other words, the comment strongly encourages a written consent waiver, but Rule 1.7(b) does not require this waiver.

One of the interesting aspects of Pennsylvania’s Rule 1.7(b)(4) is that’s it is different from the American Bar Association’s general conflict rule. The American Bar Association’s Model Rule under 1.7(4) requires lawyers to put in writing to confirm the client’s consent for waivers of conflicts of interest. Every lawyer should be aware that a number of other states have adopted the Model Rules with the writing requirement for waiver of consent. That is important only if a lawyer is practicing in another state either because they are licensed in another state or admitted pro hac vice. Therefore, if a lawyer is practicing in another state, the lawyer should check Rule 1.7 to see if that state’s conflict waiver requires written confirmation and explanation.

The failure of the Pennsylvania Rule 1.7(b)(4) to require a written waiver of conflict does not prevent a lawyer from still using a written waiver. A wise lawyer would always try to confirm conflict issues in writing and the waiver of the same with a written explanation.

Another good reason to have a conflict waiver in writing is there would be no dispute in what was told the client. A client could later say the lawyer didn’t fully explain the issue to me, etc. But if the wavier is in writing then there is no dispute as to what was said or told.

Therefore, to answer the question, there can be a conflict waiver under Rule 1.7(b) if the conditions are met. But the waiver doesn’t have to be in writing and has to be fully explained to the client. But the better practice is to put the waiver in writing.

Chester County lawyer Samuel C. Stretton has practiced in the area of legal and judicial ethics for more than 35 years. He welcomes questions and comments from readers. If you have a question, call Stretton directly at 610-696-4243 or write to him at 301 S. High St. P.O. Box 3231, West Chester, Pennsylvania, 19381.

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