You have asked for this Committee's opinion whether an attorney, licensed in New Jersey only, can be of counsel to a Pennsylvania law firm and share in the fees generated by the Pennsylvania law firm. Based on the information presented in your inquiry, the Committee believes that the circumstances under which your firm intends to engage the New Jersey attorney (the "NJ Attorney") conform to the Pennsylvania Rules of Professional Conduct.
You have advised the Committee of the following facts: The NJ Attorney will be identified on your firm's letterhead as "of counsel," a "member of New Jersey Bar only," and will assist your firm with banking regulation matters and mortgage foreclosure work. Your firm also intends to share fees with the NJ Attorney, which will be generated by your law firm in particular cases. You have not disclosed, however, whether the fee sharing agreement will be limited to only those cases where the NJ Attorney has offered advice or service to the client
Employment: In reviewing the Rules of Professional Conduct, we note that no rule restricts a firm located in Pennsylvania from employing an attorney not licensed to practice in the Commonwealth of Pennsylvania. Nevertheless, assuming the NJ Attorney provides advice to your clients in Pennsylvania, or engages in the practice of law in Pennsylvania, the NJ Attorney may be subject to the jurisdiction of the courts of Pennsylvania. If so, the NJ Attorney must act in compliance with the Pennsylvania Rules of Court, including the Rules of Professional Conduct. In view of this potential interstate activity, the NJ Attorney may want to consult the applicable New Jersey ethics rules to determine what limitations, if any, are placed on a New Jersey lawyer rendering advice to clients located in jurisdictions where the attorney is not licensed to practice.
Fee Sharing: Although the exact nature of the attorney's employment status is unclear from the information you have provided to the Committee, we believe that two rules are applicable to the manner of compensation you describe in your inquiry.
Rule 1.5(e) provides as follows:
A lawyer shall not divide a fee for legal services with another layer who is not in the same firm unless:
(1) the client is advised of and does not object to the participation of all lawyers involved, and
(2) the total fee of the lawyers is not illegal or clearly excessive for all legal services they rendered the client.
From your inquiry, it appears that you have already reviewed Rule 1.5(e) since you intend (a) to disclose to your clients your firm's association with the NJ Attorney, and (b) maintain the same fee structure. Rule 1.5(e), however, only applies to lawyers who are not in the same firm. If the NJ Attorney is in your firm, then Rule 1.5(e) does not require disclosure of the fees that will be shared or the fact that the NJ Attorney's compensation is based, in part, on the fee charged to the client.
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