Advisory Opinion: 1335

Year Issued: 1990

RPC(s): RPC 1.5; 5.4(b); 5.4(c); 7.2(c)

Subject: Division of fees with nonlawyer; referrals; documents prepared by paralegal company

The Committee again reviewed your inquiry concerning a proposed arrangement with a paralegal company whereby you could be referred clients by a financial planner to whom they had been referred by the paralegal company. Under the proposal, the financial planner would collect the entire fee in the form of a check from the client payable to your trust account, and you would deposit that check into your trust account until the work was completed.
You would also be provided with worksheets which had been filled out with the financial planner for your review. After your review, you would return them to the paralegal company which would prepare the necessary documents to be returned to you. You described your participation in this arrangement as "supervising" the process. Upon your apparent approval of the completed forms, you would disperse the fees to the financial planner, the paralegal company and yourself.
The Committee was of the opinion that such an arrangement would violate several provisions of the Rules of Professional Conduct. First, the Committee thought that, as proposed it would constitute sharing legal fees with a non-lawyer in violation of RPC 5.4. Further, although the facts were not clear on this, if you operated as a partner with the paralegal company, the proposal would also violate RPC 5.4(b).
The Committee was also of the opinion that this proposal might violate RPC 7.2(c) in that the payment from you to the paralegal and/or financial planner might constitute a payment on value to someone for recommending your services. The Committee was also of the opinion that the fact that many of the decisions regarding the services to be provided to the client were made by persons other than the lawyer, such a proposal would violate RPC 5.4(c) as a limitation on the lawyer's professional judgment.
Finally, the Committee expressed some concern that the fee schedule as set out in the proposal might not meet the reasonable fee requirements of RPC 1.5.

Advisory Opinions are provided for the education of the Bar and reflect the opinion of the Committee on Professional Ethics (CPE) or its predecessors. Advisory Opinions are provided pursuant to the authorization granted by the Board of Governors, but are not individually approved by the Board and do not reflect the official position of the Bar association. Laws other than the Washington State Rules of Professional Conduct may apply to the inquiry. The Committee's answer does not include or opine about any other applicable law other than the meaning of the Rules of Professional Conduct.