The American Bar Association Standing Committee on Ethics and Professional Responsibility has issued Formal Opinion 475 that details how a lawyer who receives a payment that should be shared with a non-firm lawyer colleague should handle and distribute the money.
Model Rule 1.5(e) allows lawyers who are not in the same firm to divide a fee under certain circumstances. The new formal opinion cites additional model rules related to “Safekeeping Property” in spelling out that the receiving lawyer must deposit the funds in an account (typically a trust account) separate from the lawyer’s own property.
“When one lawyer receives an earned fee that is subject to such an arrangement and both lawyers have an interest in that earned fee, Model Rules 1.15(a) and 1.15(d) require that the receiving lawyer hold the funds in an account separate from the lawyer’s own property, appropriately safeguard the funds, promptly notify the other lawyer who holds an interest in the fee of receipt of the funds, promptly deliver to the other lawyer the agreed upon portion of the fee, and, if requested by the other lawyer, provide a full accounting,” Formal Opinion 475 said.
The ABA Standing Committee on Ethics and Professional Responsibility periodically issues ethics opinions to advise lawyers, courts and the public in interpreting and applying ABA model ethics rules to specific issues of legal practice, client-lawyer relationships and judicial behavior.
Formal Opinion 475 and previous ABA ethics opinions are available on the ABA Center for Professional Responsibility website, www.americanbar.org/groups/professional_responsibility.html.
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