Guidance Inquiry 89-12
You have asked the Professional Guidance Committee for an opinion as to whether you may divide the contingent fee you anticipate receiving from certain passengers in an automobile collision with those passengers' former attorney, who was disqualified by Court Order from their continued representation.
You have informed us that your clients, three passengers in a taxi cab involved in a collision with another vehicle, and the driver of the taxi cab originally retained such former attorney to represent them For purposes of a lawsuit, that the driver subsequently retained other counsel, and that the passengers' former attorney was removed from the case following a Motion by counsel for one of the defendants.
It is the opinion of the Committee that nothing in the Rules of Professional Conduct prohibits such a fee-splitting arrangement, although we would like to point out a caveat.
The division of fees is addressed by Rule 1.5(e) of the Rules of Professional Conduct, which provides:
"(e) A lawyer shall not divide a fee for legal services with another lawyer who is not in the same firm unless:
(1) The client is advised of and does not object to the participation of all the lawyers involved, and
(2) The total fee of the lawyers is not illegal or clearly excessive for all legal services they rendered the client."
Thus, division of the fee with your clients' former attorney would appear to be permitted by Rule 1.5 so long as you have your clients' consent and the total fee is not illegal or excessive.
However, as we are assuming that your clients' former attorney was disqualified because of a conflict of interest that arose in representing both the passengers in and the driver of the taxi, we must caution you that there are cases where it has been held that an attorney who has violated the applicable ethical rules is not entitled to share in the legal fee. In a case in the Third Circuit decided under the Code of Professional Responsibility, the court ordered return of a portion of the legal fee paid to a law firm after it engaged in conduct contravening Canon 9 of the Code. See In re Eastern Sugar Antitrust Litigation: Pantry Pride, Inc. v. Finley, Kumble, Wagner, Heine, Underberq & Casey, 697 F. 2d 524 (1982). Thus, if your clients' former attorney violated the applicable provisions of the Code or Rules, he may be subject to having to return all or a portion of the fee paid to him.
In addition, at least one authority, the ABA/BNA Lawyers' Manual on Professional Conduct, has opined, at page 41:701, "Fees may not be divided with a lawyer who is under a legal or ethical impediment to representing the client, regardless of the services rendered or the responsibility assumed."
CAVEAT: The foregoing opinion is advisory only and is based upon the facts set forth above. The opinion is not binding on the Disciplinary Board of the Supreme Court of Pennsylvania or any court. It carries only such weight as an appropriate reviewing authority may choose to give it.