Fee division with nonlawyers

Question 1

Fee sharing or splitting with lawyers in the same law firm is permitted. However, fee sharing with
nonlawyers is prohibited EXCEPT in the following limited circumstances:

Answer 1

-Fees are paid as a death benefit

-A lawyer purchases the law practice of a deceased, disabled, or disappeared lawyer

-Fees are shared via a compensation or retirement plan (even if based on a profit-
sharing arrangement)

-A lawyer shares court-awarded fees with a nonprofit organization that employed or
retained the lawyer

Question 2

“Law firm” definition:

Answer 2

“Law firm” refers to any of the following:

-Lawyer(s) in a partnership, professional corporation, sole proprietorship, or other association
authorized to practice law

-Lawyers employed in a legal services organization or the legal department of an organization

Question 3

A lawyer cannot form a partnership with a nonlawyer if:

Answer 3

Any of the partnership’s activities consist of the
practice of law.

Question 4

A lawyer cannot practice with—or as—a professional corporation (or association) authorized to practice law for a profit if a nonlawyer:

Answer 4

(1) owns any interest therein;

(2) is a corporate director or officer, OR;

(3) has the right to direct or control a lawyer’s professional judgment.

Question 5

“Law-related services”:

Answer 5

Those reasonably related to legal services but not prohibited as
unauthorized practice of law when provided by nonlawyer (e.g., accounting, tax prep).

Question 6

If a service is indistinct from the provision of legal services to clients, then:

Answer 6

-A lawyer is still subject to the MRPC

-lawyer must take reasonable measures to assure that a person obtaining law-related services knows that the protections of a client-lawyer relationship do not exist.

Question 7

Sale of law practice (including goodwill)- Compensation for the reasonable value of a law practice is permitted if the following requirements are
met:

Answer 7

1. The seller ceases to practice in the area of practice sold or the law entirely, within a geographic area
   or everywhere.
2. Clients receive written notice of the proposed sale, the right to seek other counsel, and the fact that
   consent to the transfer is presumed if no action is taken within 90 days.
3. The practice is sold to one or more lawyers or law firms
4. Client fees are not increased due to the sale.

So, the words to remember are:

1. Ceases to practice
2. Written consent, seek other counsel, and consent to the transfer
3. Sold to one or more lawyers
4. Fees not increased

Question 8

The purchaser of a law firm is obligated to:

Answer 8

Undertake all client matters, subject to client consent and conflict-of-
interest constraints.