Following is the 43rd post in a series from Parker Taylor Law Group about recent changes to the California Bar Association (CBA)’s Rules of Professional Conduct (RPC). This rule is found in Chapter 1 – “Lawyer-Client Relationship,” relating to how fees should be divided among lawyers. The Rule of Professional Conduct, as revised, is as follows:
Rule 1.5.1 Fee Divisions Among Lawyers
(a) Lawyers who are not in the same law firm shall not divide a fee for legal services unless:
(1) the lawyers enter into a written agreement to divide the fee;
(2) the client has consented in writing, either at the time the lawyers enter into the agreement to divide the fee or as soon thereafter as reasonably practicable, after a full written disclosure to the client of: (i) the fact that a division of fees will be made; (ii) the identity of the lawyers or law firms that are parties to the division; and (iii) the terms of the division; and
(3) the total fee charged by all lawyers is not increased solely by reason of the agreement to divide fees.
(b) This rule does not apply to a division of fees pursuant to court order.
Two additions have been made to this rule, as set forth above. Formerly found in CBA RPC Rule 2-200(A)(1)-(2), this regulation added a new sub-subdivision under (a), stating that lawyers who are not in the same law firm will be allowed to divide a fee for legal services if the lawyers entered in a written agreement to divide the fee. (That exception was missing from the CBA’s previous RPC.) The other addition to the new rule is subdivision (b), explaining that the rule does not apply to a division of fees pursuant to court order.
The American Bar Association (ABA) RPC discusses several aspects of legal fees in Rule 1.5. Only subdivision (e) of the ABA’s RPC addresses the splitting of legal fees between attorneys who are not in the same firm. Although the wording is different (and not as lengthy) in the ABA’s RPC version of this rule, the meaning is the same. The three conditions listed in ABA Rule 1.5(e)(1)-(3) are: the division is in proportion to the services performed by each lawyer or each lawyer assumes joint responsibility for the representation; the client agrees to the arrangement, including the share each lawyer will receive, and the agreement is confirmed in writing; and the total fee is reasonable.
Benefit: Generally speaking, this rule helps to protect the financial interests of any client being represented by an attorney in the state of California.
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