03/08/2006
Fee Sharing Agreement Between Former and Successor Counsel is Enforceable Even Though it May Violate Disciplinary Rule Requiring Fees to be Shared in Proportion to Services Rendered
Ballow Brasted O’Brien & Rusin P.C. v. Logan, ___F.3d ___ 2006 WL 147501 (C.A. 2 , January 20,2006) (N.Y.)
Brief Summary
There is considerable diversity in state disciplinary rules governing fee division between lawyers not in the same firm. Those rules are applied most typically to referral fees, especially in contingent fee contracts for personal injury cases. This case holds that New York’s version of the fee division rule, ABA Model Code DR 2-107, applies to an agreement between a discharged lawyer and a successor lawyer. The court declines to hold, however, that an agreement that does not divide fees in proportion to the work performed is automatically unenforceable. Before entering into an agreement to divide fees with another lawyer, ethics counsel in the appropriate jurisdiction should be consulted to be sure that the agreement complies with applicable rules.
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