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Virginia Legal Ethics Opinion 1739

Rule 1.5(e) permits «fee-splitting among lawyers who do not practise in the same firm» under certain conditions: (1) the client is informed of the participation of all affected lawyers and agrees to attend; (2) the conditions for apportioning fees are notified to the client and the client consents thereto; (3) the total costs are reasonable; and (4) fee allocation and client consent are obtained prior to the provision of legal services, preferably in writing. The ethics committee relied on analysis of the application of section 4.2 to other bodies, including federal and state jurisprudence, as well as ethical advice from state bar associations. (2) pay the usual fees of any non-profit legal services plan or qualified legal investment service; Payment to a non-lawyer for removal is prohibited under Rule 7.3(d). Rule 1.5(e) permits the apportionment of lawyers` fees and a lawyer cannot share the lawyer`s fees with a non-lawyer under Rule 5.4(a). A lawyer may give a «nominal gift of gratitude» to a lawyer or a non-lawyer referral source that is not offered as compensation for a referral, but may not give anything of value to a non-lawyer to compensate for a referral. LEO 1739 also addresses the question of whether a lawyer can announce his willingness to pay recruitment fees to other lawyers. The notice does not directly prohibit it, but stresses that this practice could violate legal prohibitions on «running and capping» and should therefore be avoided. The notice recommends that a lawyer or firm only advertise that it is available for referrals, without any reference to remuneration for referral. How do we reconcile these rules? Legal ethics opinion 1739 helps by stating that while the lead lawyer does not have to assume responsibility to the client, fee splitting is not appropriate if the referring lawyer «simply makes a referral without assessing the client`s legal issue and without determining whether a referral is appropriate or necessary.» Thus, under Rule 1.5(e), a fee-splitting agreement is not a simple agency fee, since lead counsel must exercise some judgment in assessing the issue and appropriateness of the referral.

The committee`s opinion analyzed 14 points regarding the rule, including: LEO 1739 also helps us understand why Virginia Rule 1.5(e) differs from Virginia`s previous Rule (RD 2-105(D)) and the ABA`s Model Rule approach to allowing fee splitting where the lead counsel/sharing has no responsibility for representation. In line with the Committee`s observation on rule 1.5, the accountability requirement was removed «in order to encourage referrals in appropriate circumstances by not requiring the lawyer making the referral to automatically assume ethical responsibility for all the activities of other lawyers involved in the agreement.» LEO 1739 interprets this to mean that a lawyer is encouraged to fulfill his ethical obligations by referring the client to another lawyer if there is a conflict or if the lawyer does not have the competence to handle the case. The purpose of the rule is to protect a represented person from being deceived by the opposing lawyer to give the case, the statement said. The opinion is Va. State Bar Standing Comm. on Legal Ethics, No. 1890, 1/9/20. The Virginia Supreme Court has adopted a compendium of opinions from the Standing Committee on Legal Ethics on the Public Prosecutor`s Office dealing with the «no-contact rule,» which limits a lawyer`s interaction with other lawyers on the same issue.

However, for this practice to be permitted, the requirements of Rule 1.5(e) must always be followed. Rule 1.5(e)(1) requires the client to consent to the «participation of all relevant lawyers», including lead counsel, although the lead counsel`s involvement may be limited to the assessment of the client`s case and referral. Message from the Ethics Council /article/Ethics+Counsel%E2%80%99s+Message/4243374/742461/article.html Contact the editors responsible for this article: Jessie Kokrda Kamens at jkamens@bloomberglaw.com; Rebekah Mintzer to rmintzer@bloomberglaw.com Without official explanations from the court, it is impossible to know what prompted him to leave the LEO he had just passed. Virginia Lawyers Weekly reported at the time that two attorneys had previously objected to the LEO`s approval by the Virginia State Bar, in particular because it claimed to «allow attorneys to interview litigation employees without notice to the employer.» Earlier this year, we reported on the adoption of the 1890 Legal Ethics Notice («LEO») by the Virginia Supreme Court regarding Rule 4.2 of the Virginia Rules of Professional Conduct. Rule 4.2, known as the «no-disclosure rule,» prohibits a lawyer «from communicating about representation with a person whom he knows is represented by another lawyer in the case.» LEO 1890 generally upheld Virginia`s narrow interpretation of Rule 4.2, including that it does not apply to former employees of a represented organization and restricts ex parte communication with a current employee only if the employee is «in the `control group` or is the alter ego of the represented organization.» Less than four months later, as the world retired to quarantine, the Supreme Court «allowed and rescinded» its earlier order to adopt LEO 1890. No reason or explanation was given beyond «for reasons which appear to the Court». Virginia Rule of Professional Conduct 4.2 states that when representing a client, «a lawyer shall not communicate about the purpose of the representation with a person whom he knows is represented by another attorney in the case, unless the attorney has the consent of the other attorney or is legally authorized to do so.» (1) pay reasonable advertising or communication fees authorized under this Rule and Rule 7.1, including online group advertising; To contact the reporter about this story: Melissa Heelan Stanzione in Washington mstanzione@bloomberglaw.com This seems to mean that a lawyer cannot pay a «referral fee» to someone who refers a case, as this would constitute compensation for recommending the lawyer`s services. But the story doesn`t end there. (3) to remunerate a law firm in accordance with rule 1.17; and A lawyer may not indemnify, give or promise anything of value to a person who is not an employee or attorney in the same law firm for recommending the services of the attorney, except that a lawyer: It is possible that the Virginia Supreme Court, by expelling LEO 1890, signals a desire to distance itself from the so-called control group/alter ego view of the scope of Rule 4.2.

However, practitioners should be aware that the control group test remains anchored in Virginia`s Comment 7 on the rule. As a result, represented organizations should continue to expect opposing counsel to attempt to communicate directly with non-controlling group staff regarding ongoing or potential litigation.