Advisory Opinion: 1730

Year Issued: 1997

RPC(s): RPC 5.4(a); 7.2(c)

Subject: Division of fees with nonlawyer; preferred provider program which receives a percentage of required discount of attorneys' fees

Your question was whether an attorney's participation in a "preferred provider program" constitutes inappropriate fee sharing. "XYZ, Inc." is a third party administrator of self-insured workers' compensation claims. This company wishes to provide its clients with a "preferred provider program" pursuant to which attorneys and other service providers who participate would agree to discount their fees by ten percent. The company would receive the attorney's bill for services rendered to the client, accumulate and summarize that bill and the bills of other service providers, apply the ten percent discount, and then submit a single monthly bill to the client. The company would charge its clients thirty percent of the ten percent in reduced fees, which sum the clients would pay directly to the company.

The RPC Committee decided that participation of an attorney in the proposed "preferred provider program" does not meet the minimum standards set forth in the Rules of Professional Conduct. The Committee directs you specifically to RPC 5.4(a) and 7.2(c).

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.