The Florida Bar

(April 30, 1995)

An attorney who is "of counsel" to a law firm is considered to be a member of that firm for purposes of the fee-division rules only if that attorney practices through that firm exclusively.

RPC: 4-1.5(f)(4)(D)(iii); 4-1.5(g)

Opinions: 71-49, 72-29, 75-41; ABA Formal 90-357, Arizona 86-3; California 1986-88; District of Columbia 151 and 197; New Jersey 476; Maryland 87-37

The Professional Ethics Committee has been asked to address two inquiries concerning the division of fees between an "of counsel" attorney and a law firm:

1. A former partner in a law firm is "of counsel" to the firm. The attorney has scaled back his practice, but will continue to practice through the firm. The attorney will not practice law at any other firm. The attorney requests an opinion whether the fee division rules apply to his compensation from the firm.

2. A law firm has inquired whether the fee division rules govern the division of fees between the law firm and an attorney who is "of counsel" when the firm refers a personal injury case to the "of counsel" lawyer. The "of counsel" attorney has an independent practice, although the attorney spends some time working out of the inquiring firm's office. This attorney too requests an opinion concerning the applicability of the fee division rules in this situation.

Traditionally the term "of counsel" was used to designate a semi-retired lawyer who was formerly a regular member of the law firm. Opinion 72-29. The permissible use of the term has since been expanded to include a lawyer who maintains a close, continuing relationship with a law firm in a capacity other than that of a partner or an associate. Opinions 71-49; 75-41; ABA Formal Opinion 90-357. Nevertheless, the relationship must be more than a mere referral arrangement. Opinion 72-29.

No existing formal opinions of this committee discuss whether an attorney who is "of counsel" to a firm is considered to be a member of the firm for purposes of the fee division rules. A number of other jurisdictions have considered this issue, however, and many have concluded that fee-splitting with an "of counsel" lawyer is limited by that jurisdiction's fee division rules. See, e.g., Arizona Opinion 86-3; California Opinion 1986-88; District of Columbia Opinions 151 and 197; New Jersey Opinion 476; Maryland Opinion 87-37.

District of Columbia opinions 151 and 197 conclude that rules governing the division of fees between attorneys in different firms apply unless the "of counsel" attorney functions as a member of the firm and does not have another practice. We agree that, for the purposes of the fee division rules, an attorney is in the "same firm" to which the attorney is "of counsel" only if the attorney is "of counsel" in the traditional sense -- that is, only if the attorney is affiliated with and practices through that one firm exclusively.

Our conclusion finds support in the fact that the Supreme Court of Florida has clearly indicated its intention to regulate fee-division practices in contingent fee personal injury-type matters. The Court has declared that, even in true co-counsel situations, circuit court authorization must be obtained if the fee is to be divided in a manner other than 25% (to secondary attorney) - 75% (to primary attorney). Rule 4-1.5(f)(4)(D)(iii).

Therefore, we conclude that the fee division rules do not apply to the former law partner who continues to work exclusively at the law firm in an "of counsel" capacity. The referral of a personal injury matter to the "of counsel" attorney who continues a practice outside the firm, however, is governed by the fee division rules set forth in subdivisions (g) and (f)(4)(D)(iii) of Rule 4-1.5.

[Revised: 08-24-2016]