Chicago Legal Malpractice Lawyer Blog
The ARDC has asserted a problematic claim against a lawyer who split a fee with another lawyer who did some of the work on the matter. I believe that the claim represents a misreading of the text of Rule 1.5(e).
First, I will quote the complaint:
“COUNT I
(Improper division of fees)
1. On or about March 11, 2010, Respondent entered into an agreement with Lavanda Aldridge (“Lavanda”) whereby Respondent would represent Lavanda’s son, Charley Aldridge (“Aldridge”), in drafting and prosecuting a petition for a federal writ of habeas corpus. Lavanda paid Respondent a flat fee of $5,000.
2. Respondent subsequently entered into an agreement with attorney Susan Burger (“Burger”) in which Burger would be responsible for the drafting of the habeas corpus petition, and Respondent would be responsible for prosecution of the petition in court. Respondent paid Burger $2,500 of the $5,000 fee Respondent had received from Lavanda.
3. At no time did Respondent inform Aldridge of the fee-splitting arrangement with Burger, and Aldridge never agreed to the fee-splitting arrangement, in writing or otherwise.
4. By reason of the conduct described above, Respondent has engaged in the following misconduct:
a. entering into an arrangement for, charging, or collecting a division of a fee between lawyers who are not in the same firm without the clients written agreement, by conduct including dividing Aldridge’s $5,000 fee with Attorney Susan Burger without Aldridge’s knowledge or written consent, in violation of Rule 1.5(e) of the Illinois Rules of Professional Conduct (2010).”
To summarize: the lawyer received $5,000 from the client to draft a petition for habeas corpus. Rather than write the petition himself, he paid $2,500 to another lawyer to do the work. The ARDC characterizes this action as improper fee splitting. The problem is that this practice is very common in the world of solo practitioners. A lawyer is hired to do a case. He then pays another lawyer to help him write the brief. If the lawyer pays on an hourly basis, there is no problem. Here, because the lawyer simply split the fee (he gave $2,500 to someone who would do the writing), he has violated the Rule in the view of the ARDC.
What does the Rule say?
Rule 1.5(e) provides as follows:
(e) A division of a fee between lawyers who are not in the same firm may be made only if:
(1) the division is in proportion to the services performed by each lawyer, or if the primary service performed by one lawyer is the referral of the client to another lawyer and each lawyer assumes joint financial responsibility for the representation;
(2) the client agrees to the arrangement, including the share each lawyer will receive, and the agreement is confirmed in writing; and
(3) the total fee is reasonable.
Rule 1.5(e) regulates referral fees – where one lawyer refers a case to another lawyer – and any other arrangement whereby two lawyers agree to share a fee. The client must consent to the fee. Here, the ARDC has overreached and has attacked every solo practitioner in Illinois who sometimes uses another lawyer to help him or her with their work. In the future, to avoid this type of frivolous prosecution, lawyers need to add a sentence like this to their engagement letters:
“Client agrees and understands that Attorney may retain the services of other attorneys on a contract basis to assist him in the preparation of this matter for trial. Attorney retains full professional responsibility for this matter even if another lawyer assists him with the preparation of this case for trial.”
The respondent in this matter made an error by agreeing to a 50/50 split with the lawyer who was going to write the brief. An agreement to pay the writer on an hourly basis would have avoided this poorly conceived prosecution. The prosecution is poorly conceived because it discourages lawyers from getting help to get their work done. It puts red tape in the way of client service and wastes time. (I am not making any comment on the rest of the complaint).
Edward X. Clinton, Jr.