Rule 5.4 - PROFESSIONAL INDEPENDENCE OF A LAWYER(a) 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 RPC 1.17, pay to the estate or other representative of that lawyer the agreed-upon purchase price;(3) 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;(4) a lawyer may share a court-awarded fee with a client represented in the matter or with a non-profit organization that employed, retained, or recommended employment of the lawyer in the matter;(5) a lawyer who is a full-time employee of a client may share a legal fee with the client to the extent necessary to reimburse the client for the actual cost to the client of permitting the lawyer to represent another client while continuing in the full-time employ of the client with whom the fee will be shared; and(6) a lawyer may pay to a non-profit intermediary organization a referral fee calculated by reference to a reasonable percentage of the fee paid to the lawyer by the client referred to the lawyer by the non-profit intermediary organization.(b) 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) 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) A lawyer shall not practice with or in the form of a professional corporation, or other 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 ownership 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.Amended by Order filed May 12, 2022 and effective 1/1/2022.Comment
[1] The provisions of this Rule express traditional limitations on sharing fees with and the co-ownership of law practices by nonlawyers. These limitations are to protect the lawyer's independence of professional 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 RPC 1.8(f) (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).
DEFINITIONAL CROSS-REFERENCES "Firm" and "law firm" See RPC 1.0(c) "Partner" See RPC 1.0(g) "Reasonable" See RPC 1.0(h)