RULE 5.4 PROFESSIONAL INDEPENDENCE OF A LAWYER
Effective Date: 3/1/1997
Obsolete Date: 8/1/2006
(a) A lawyer or law firm shall not share legal fees with a nonlawyer, except that:
(1) An agreement by a lawyer with his firm, partners, or associate may provide for the payment of money, over a reasonable period of time after his death, to his estate or to one or more specified persons;
(2) A lawyer who purchases the practice of a deceased, disabled, or disappeared lawyer may, under Rule 1.17, pay to the estate or other representatives of that lawyer the agreed-upon purchase price; and
(3) A lawyer or law firm may include nonlawyer employees in a compensation or retirement plan, even though the plan is based in whole or in part on the profit-sharing arrangement.
(b)A lawyer shall not form a partnership with a nonlawyer if any of the activities of the partnership consist of the practice of law.
(c)A lawyer shall not permit a person who recommends, employs, or pays him to render legal services for another to direct or regulate his professional judgment in rendering such legal services.
(d)A lawyer shall not practice with or in the form of a professional corporation or association authorized to practice law for a profit, if:
(1) A nonlawyer owns any interest therein, except that a fiduciary representative of the estate of a lawyer may hold the stock or interest of the lawyer for a reasonable time during administration;
(2) A nonlawyer is a corporate director or officer thereof; or
(3) A nonlawyer has the right to direct or control the professional judgment of a lawyer.
COMMENT
The provisions of this Rule express traditional limitations on sharing fees. These limitations are to protect the lawyer's professional independence of judgment. Where someone other than the client pays the lawyer's fee or salary, or recommends employment of the lawyer, that arrangement does not modify the lawyer's obligation to the client. As stated in paragraph (c), such arrangements should not interfere with the lawyer's professional judgment.
Reference: Minutes of the Professional Conduct Subcommittee of the Attorney Standards Committee on 11/08/85 and 01/10/86; Minutes of the Joint Committee on Attorney Standards Meetings of 09/15/95, 12/01/95, 06/11/96.