Three weeks ago, I discussed the basic rule regarding fee-splitting between lawyers (Fee Division – The basic rule). Among other things, Rule 1.5(e) requires that the fee-splitting arrangement be disclosed to and approved by the client.
But that is not always the case. One important exception to Rule 1.5(e) involves fee-splitting between lawyers who previously worked together at the same law firm. (See, e.g., Ga. Rule Prof. Conduct 1.5, cmt. 8; ABA Model Rule 1.5, cmt. 8.
When lawyers were previously associated at a law firm enter into an agreement to divide fees on a matter that existed at the prior firm, client disclosure and approval is not necessary. See, e.g., Baron v. Mullinax, Wells, Mauzy & Baab, Inc., 623 S.W.2d 457, 462 (Tex. Civ. App. 1981)(“Since this agreement was between a law firm and an associate of the firm during the overall process of his separation from that firm, there is no requirement that the clients either be informed or give their consent.”).
In theory, this exception should help soon-to-be former colleagues fight over clients. In practice, well…