Opinion 1981

The inquiry concerns a situation where Attorney #1 refers a contingent fee case to Attorney #2, and Attorney #1 is disbarred prior to settlement of the contingent fee case by Attorney #2. Is it ethical for Attorney #1 to receive a fee from Attorney #2?

The committee opined that while the factual circumstances present a conflict between RPC 5.4(a) and RPC 1.5(e)(2), RPC 1.5(e)(2) should prevail and, assuming Attorney #1 provided services prior to disbarment, he is entitled to recover compensation in proportion to the services he provided so long as the client is advised of the circumstances and does not object, and the total fee is reasonable. Although not specified in the inquiry, the committee assumes that Attorney #1’s disbarment is not related to the case or client that was referred to Attorney #2.

The factual circumstances presented in the inquiry result in a clear conflict between RPC 5.4(a), the prohibition of fee sharing with non-lawyers and RPC 1.5(e)(2), and the fee-splitting provisions. It is the opinion of the authors of this response that the provisions of RPC 1.5(e)(2) prevail over RPC 5.4(a); and, therefore, Attorney #1 should be allowed to recover a proportion of the fees in compliance with the provisions of RPC 5.4(e)(2).

RPC 5.4(a) allows an attorney to share legal fees with a nonlawyer only under certain circumstances, none of which are applicable under the factual circumstances presented in this inquiry. However, the factual circumstances presented here indicate that Attorney #1, prior to his disbarment, may have performed some services as an attorney in good-standing (i.e., not a “nonlawyer”), which should entitle Attorney #1 to compensation for such services. See Barr v. Day, 124 Wn.2d 318, 329-30, 879 P.2d 912 (1994) (holding attorney under contingency agreement that is discharged prior to contingency is entitled to recover for services rendered under quantum meruit); In re Hawkins, 81 Wn.2d 504, 508-10, 503 P.2d 95 (1972) (requiring disbarred attorney to return retainer payments received after he was suspended because attorney performed no services to be entitled to such payments); see Sympson v. Osborne, 406 S.W.2d 26, 32 (Missouri 1966) (holding disbarred attorney is entitled to recover compensation for services performed prior to disbarment from attorney who assumes control of the litigation); Harris Trust & Savings Bank v. Chicago College of Osteopathic Medicine, 116 Ill. App. 3d 906, 452 N.E.2d 701 1983) (reviewing cases where disbarred attorney held to be entitled to compensation for the reasonable value of services provided before disbarment). (See Footnote) Prohibiting Attorney #1 from recovering compensation for services performed would not further the purpose of RPC 5.4(a), which is to remove the possibility of control over the litigation or lawyer by a lay person interested in his or her own profit rather than the client’s well-being. See Annotated Model Rules of Professional Conduct 444 (4th ed. 1999). Here, Attorney #1 is prohibited from providing legal services by way of his disbarment and, therefore, cannot influence Attorney #2 in the litigation subsequent to Attorney #1’s disbarment.

The sharing of fees or a fee-splitting agreement is ethically acceptable only if the requirements of RPC 1.5(e)(2) are met: (1) the fee division is in proportion to the services provided by each lawyer or the client agrees in writing that each lawyer assumes joint responsibility; (2) the client is advised and does not object to the participation of both attorneys; and (3) the total fee is reasonable. Barr v. Day, 124 Wn.2d 318, 329-330 n.2, 879 P.2d 912 (1994); see also Conn. Bar Ass’n Comm. on Professional Ethics, op. 97-22 (1997) (law firm may compensate former law partner, who has voluntarily surrendered license and no longer practices law, in amount rationally based on work partner actually performed, provided each affected client consents to payments and fee within original fee arrangement with client as required by ethical rules). Here, because Attorney #1 is disbarred, there is no opportunity for the client to agree to the joint responsibility of the attorneys and, therefore, the fee division can only be in proportion to the services provided by each lawyer. The inquiry fails to identify any services provided by Attorney #1 prior to disbarment. Assuming Attorney #1 provided some services prior to disbarment, the client is advised of the circumstances and does not object, and the total fee is reasonable, Attorney #1 should be entitled to compensation in proportion to the services he provided prior to disbarment.

The factual circumstances presented in the inquiry request guidance on the propriety of paying Attorney #1 10% of the total fees. RPC 1.5(e)(2) does not provide for a flat percentage-based payment to Attorney #1. If the services provided by Attorney #1 prior to disbarment amount to 10% of the total services provided to the client, then Attorney #1 is entitled to 10% of the total fees pursuant to RPC 1.5(e)(2). Otherwise, RPC 1.5(e)(2) specifically requires that Attorney #1 be compensated for the proportion of services he provided, whether such proportion is 10% or 90%.

(Footnote: It should be noted that there is an abundance of authority that suggests an attorney who is disbarred while working under a contingency agreement may not necessarily be entitled to a fee at all. See Annotated Model Rules of Professional Conduct 58-60 (4th ed. 1999) (explaining that under Model Rule of Professional Conduct 1.5, while a discharged attorney may be entitled to fees under quantum meruit, “[a] lawyer who withdraws from a contingent-fee case risks forfeiture of all fees, even in quantum meruit.”); Brandon v. Newman, 243 Ga. App. 183, 187, 532 S.E.2d 743 (2000) (refusing to enforce fee-sharing agreement where disbarred attorney would be compensated for referral and other services because agreement violated public policy of ethical rules prohibiting fee-splitting contracts with non-lawyers); Lee v. Cherry, 812 S.W.2d 361, 364 (Tex. App. 1991) (holding that attorney who was licensed at the time of referrals but subsequently disbarred may receive referral fees as long as the attorney has completed the legal work on the case prior to disbarment); Royden v. Ardoin, 160 Tex. 338, 331 S.W.2d 206, 209 (Tex. 1960) (holding that an attorney who is disbarred or suspended prior to the completion of his contingent fee contract is not entitled to collect fees for services rendered). However, these authorities liken the circumstances to where an attorney abandons the client. Here, Attorney #1 did not abandon the client, but rather took affirmative steps to ensure the client would be represented upon the attorney’s disbarment. Accordingly, these authors disagree with the underlying rationale of the authorities contained in this footnote and do not rely upon such authorities. See Sympson v. Osborne, 406 S.W.2d 26, 32 (Missouri 1966) (distinguishing disbarment from abandonment))