Rule 16-504 - Professional independence of a lawyerA.Fee sharing. A lawyer or law firm shall not share legal fees with a nonlawyer, except that: (1) an agreement by a lawyer with the lawyer's firm, partner or associate may provide for the payment of money, over a reasonable period of time after the lawyer's death, to the lawyer's estate or to one or more specified persons;(2) a lawyer who purchases the practice of a deceased, disabled or disappeared lawyer may, pursuant to the provisions of Rule 16-117 NMRA of the Rules of Professional Conduct, pay to the estate or other representative of that lawyer the agreed-upon purchase price;(3) a lawyer who undertakes to complete unfinished legal business of a deceased, disabled or disappeared lawyer may pay to the estate or other representative of the deceased, disabled or disappeared lawyer that proportion of the total compensation that fairly represents the services rendered by the deceased, disabled or disappeared lawyer; (4) a lawyer or law firm may include nonlawyer employees in a compensation or retirement plan, even though the plan is based in whole or in part on a profit-sharing arrangement; and(5) a lawyer may share court-awarded legal fees with a nonprofit organization that employed, retained or recommended employment of the lawyer in the matter.B.Partnerships with nonlawyers. A lawyer shall not form a partnership with a nonlawyer if any of the activities of the partnership consist of the practice of law.C.Influence by nonclient. A lawyer shall not permit a person who recommends, employs or pays the lawyer to render legal services for another to direct or regulate the lawyer's professional judgment in rendering such legal services.D.Professional corporations and associations. A lawyer shall not practice with or in the form of a professional corporation or association authorized to practice law for a profit, if:(1) a nonlawyer owns any interest therein, except that a fiduciary representative of the estate of a lawyer may hold the stock or interest of the lawyer for a reasonable time during administration;(2) a nonlawyer is a corporate director or officer thereof or occupies the position of similar responsibility in any form of association other than a corporation; or(3) a nonlawyer has the right to direct or control the professional judgment of a lawyer.N.M. R. Prof'l. Cond. 16-504
As amended by Supreme Court Order No. 08-8300-29, effective 11/3/2008.Committee commentary. -
[1] The provisions of this rule express traditional limitations on sharing fees. These limitations are to protect the lawyer's professional independence of judgment. Where someone other than the client pays the lawyer's fee or salary or recommends employment of the lawyer, that arrangement does not modify the lawyer's obligation to the client. As stated in Paragraph C, such arrangements should not interfere with the lawyer's professional judgment.
[2] This rule also expresses traditional limitations on permitting a third party to direct or regulate the lawyer's professional judgment in rendering legal services to another. See also Paragraph F of Rule 16-108 NMRA of the Rules of Professional Conduct (lawyer may accept compensation from a third party as long as there is no interference with the lawyer's independent professional judgment and the client gives informed consent).
[Adopted by Supreme Court Order No. 08-8300-29, effective November 3, 2008.]
. ANNOTATIONS The 2008 amendment, approved by Supreme Court Order No. 08-8300-29, effective November 3, 2008, added new Subparagraphs (2) and (5) of Paragraph A; relettered former Subparagraph (2) of Paragraph A as Subparagraph (3) of Paragraph A; in Subparagraph (3) of Paragraph A, added "disabled or disappeared lawyer"; relettered former Subparagraph (3) of Paragraph A as Subparagraph (4) of Paragraph A; and in Subparagraph (2) of Paragraph D, added "or occupies the position of similar responsibility in any form of association other than a corporation". Compiler's notes. - The old ABA Comment was replaced by the 2008 committee commentary. Holding out unauthorized person as partner is violation. - If an attorney aids a person not authorized to practice law in this state to engage in practice and holds that person out as his partner in advertising, such conduct constitutes a violation of this rule (former Rule 3-103 ) and warrants public censure. In re Bailey, 1981-NMSC-122, 97 N.M. 88, 637 P.2d 38. Am. Jur. 2d, A.L.R. and C.J.S. references. - Validity and effect of agreement between attorney and layman to divide attorney's fees or compensation for business of third person, 86 A.L.R. 195. Attorney's splitting fees with other attorney or layman as ground for disciplinary proceeding, 6 A.L.R.3d 1446.