Scope of Rule 1.5(e)

Fee Division Between Firms

Scope of Rule 1.5(e)

Rule 1.5(e) opens with a sentence that fixes both its reach and its posture: a division of a fee between lawyers who are not in the same firm "may be made only if" the listed conditions are met.¹ The words "not in the same firm" mark where the rule begins to operate, so the first question in any fee-division problem is where the firm lines fall. The words "only if" turn the division into a permission with conditions attached, so the second question is whether every condition is met.

Lawyers within one firm may divide fees among themselves on any basis they choose, without consulting the client and without implicating the disciplinary rules.² A rainmaker may obtain a matter from a client, delegate every part of the legal work to other lawyers in the firm, and still receive a substantial share of the fee. Rule 1.5(e) does not reach that arrangement.

The analysis changes when the lawyers practice at different firms. If two lawyers from different firms represent a single client in one matter, the ethics rules have long regulated the means and method by which they divide the resulting fee.³ That old restriction reflected what Professors Ronald Rotunda and John Dzienkowski call "a general distaste towards commercial methods of obtaining clients." It kept a lawyer from acting as a referring intermediary and collecting any part of the fee earned, and referral or forwarding fees were never permitted.⁴

The former Model Code of Professional Responsibility, in Disciplinary Rule 2–107(A), allowed fee division among lawyers outside a firm only if the client consented to the employment of another lawyer, full disclosure was made that the fee would be divided, and the fee was divided in direct proportion to the services performed and the responsibilities assumed.⁵ A lawyer who performed no services and assumed no responsibilities therefore had no basis for claiming a share.

Rule 1.5(e) keeps the concern but changes the technique. Lawyers who are not in the same firm have greater freedom to divide the fee, specifically including a division other than in proportion to services performed, but that freedom comes at the price of accepting greater responsibility for the representation.⁶ Rule 1.5(e)(1) offers two alternative mechanisms: the division is in proportion to the services each lawyer performed, or each lawyer assumes joint responsibility for the representation.⁷ Two further conditions apply in every case. The client must agree to the arrangement, including the share each lawyer will receive, and the agreement must be confirmed in writing.⁸ The total fee must also be reasonable.⁹

The "only if" structure makes the conditions cumulative. All must be satisfied, and satisfying most of them does not rescue a division that misses one. A split that tracks the work each lawyer performed, at a reasonable total fee, still fails if the client never agreed to the arrangement.¹⁰ The next section takes each condition in turn.