Oral Fee Split Upheld

The high court of Massachusetts upheld a lower court decision that found and enforced an oral fee-splitting arrangement between two lawyers. The lawyer who refused to share the fee claimed that the agreement was not only not it writing but was not agreed to by the client (which is also required in Tennessee).

The Court held that the requirement of client approval was to protect the client, not a breaching lawyer. The agreement was upheld.

The Court also announced this rule for future cases: “the referring lawyer, who usually is in the best position to secure compliance with rule 1.5 (e), is required to disclose the fee-sharing agreement to the client before the referral is made and secures the client’s consent in writing. The rule will be construed to require this in fee-sharing agreements that are formed after the issuance of the rescript in this decision. Although the primary responsibility for compliance will fall on referring lawyers, lawyers to whom referrals are made are not absolved of all responsibility, and should confirm, before undertaking such representations, that there has been compliance with rule 1.5 (e). We emphasize that although failure to comply with the rule may not necessarily render a contract unenforceable between lawyers, it may subject both lawyers to disciplinary action upon division of a fee.”

Read the entire opinion here.

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