Sometimes the lawyer you want cannot be available to take you case outright. Perhaps he’s available only free to oversee the case, but he’s either he’s too busy to take it outright, or, he’s not admitted to practice law in the state where your dispute exits. So then what? One option is to hire both lawyers: the one you know and like, plus another lawyer as “local counsel.” The focus of this page is: how does the sharing of fees work?
Hourly Fees
Let’s say you’re defending a lawsuit, and therefore you pay your lawyers by the hours. There, the division of fees among lawyers is simple: each of your lawyers bills you what he charges on your case. To some extent, you’re paying more than you should, because the lawyers serving as your local counsel should be able to do all the work, but it might make you feel at ease to have two lawyers involved. It gets more complicated, however, when you pay your lawyers on a contingency basis.
Contingency Fee Representation and Fee Sharing
Lawyers charging you a contingency fees typically cap your total fee at a certain amount, such as 1/3 of the recovery for a personal injury case, for example. And, if you hire multiple lawyers in that case, they will typically share the 1/3 fee without charging you any more, meaning, you can get two (or three or more) lawyers for the price of one. But there exist two potential draw backs.
First, a lawyer sharing his fee will not put the same priority on your case as she would, if she were keeping all the fees. Yes, lawyers prioritize “big cases,” but your case just shrank in size by 50% for the lawyer who suddenly must share his fee equally with another lawyer.
Secondly, when it comes time to settle your case — or divide up the results of a high verdict in your favor — time is important: the earlier you can get your money, the sooner you can start earning interest on it. But what if there’s a dispute between the attorneys you hire regarding fees? Any dispute between the lawyers can potentially hold up your receipt of your net recovery.
Instances When One Lawyer May Never Share Fees With Another Lawyer
Rule 5.4 of the Rules of Professional Conduct prohibits the sharing of legal fees with a non-lawyer. Thus, what if one of your lawyers lets his bar admission lapse — due to an administrative reasons such as the failure to obtain continuing legal education credits or for something more serious? In that case, your other lawyer may not share fees with him.
Additionally, Rule 1.5(e) provides:
(e) A lawyer shall not divide a fee for legal services with another lawyer who is not in the same firm unless:
(1) the client is advised of and does not object to the participation of all the lawyers involved, and
(2) the total fee of the lawyers is not illegal or clearly excessive for all legal services they rendered the client.
Additionally, your lawyer may not share her fee with a lawyer who is under a legal or ethical impediment to representing the client. See ABA Informal Opinion 1088 (1968); New Jersey Opinion 549 (1984). This is how the PA’s attorney disciplinary board prevents an attorney from continuing to earn legal fees after disbarment or suspension. But this informal “rule” is open to interpretation.
Philadelphia Bar Association // Opinion 93-3 // Share Fees
At least one bar association in PA sees things differently from the American Bar Association’s evaluation:
[I]t is the opinion of this Committee that there is no ethical impediment for the attorney to pay the referral fee to the referring attorney in accordance with the terms of the contract. It is irrelevant whether or not the referring attorney is convicted, not convicted, disbarred, or sanctioned but not disbarred.
Conclusion About Lawyers Who Share Fees
In PA, you can “Look up” a lawyer on the disciplinary board’s website. Click here. But that won’t reveal pending investigations that haven’t yet been made public. The key here — as with many things in life — is to use your best judgment. When hiring any lawyer — or two or more of them — rely on your gut. Is the person I’m hiring someone I can trust? Or, does this lawyer seem “shady”? If you have reservations early on, it’s probably a sign from the universe that you should go a different direction and not let that person share fees with your other lawyer, if you want to avoid issues.
Let’s Get Started!
Contact a Pittsburgh counselor at law at our firm for any litigation claim or defense in Western PA. In fact, if you have general counsel already, no problem! We’ll be happy to serve as local counsel and enter into a fee sharing agreement that makes sense and comports to law.
412.342.0992
