Ethics Opinon 1976-13

November 24, 1976

SUBJECT: DIVISION OF FEES BETWEEN AN ATTORNEY AND HIS FORMER EMPLOYER FOR WORK PERFORMED AFTER TERMINATION OF THE EMPLOYMENT.

I
QUESTIONS PRESENTED

An attorney left employment with a San Francisco law firm and commenced employment with another office in San Diego. Since joining the San Diego firm, the attorney has performed work on two projects for a client of his former firm which projects were assigned to him prior to the cessation of his employment with that firm.

The first matter involved the preparation of a post-trial memorandum in an action handled through trial exclusively by the attorney who was presumably the only person with sufficient background in the case to prepare the memorandum. The second matter involved a response to a request from the client received by the firm and assigned to the attorney, but not answered by him until after he had left the firm's employ. All work for the client was done on an hourly basis.

No information has been provided with respect to who made the decision for attorney to continue to represent the client, whether the client knowingly consented in advance to have the attorney continue to perform the work, or whether the attorney suggested to the client that he continue to handle these matters after he left employment with the San Francisco firm.

The time for which the client has been billed on these matters was all expended by the attorney after leaving the firm and the question presented is whether the San Francisco firm is entitled to any portion of the billing for services of the attorney on these matters.

II
CONCLUSIONS

The San Francisco firm would be entitled to a division of fees in each case commensurate with the performance of services by it or the degree of responsibility assumed. The amount of such division is a question of fact in each case, and the resolution of such a dispute is not within the scope of the activities of the committee. Each case must be resolved between the parties on a case by case basis depending upon their relationship with each other and with the client.


III
APPLICABLE RULES

In California, the division of fees between attorneys is regulated by Rule of Professional Conduct 2-108, which provides as follows:

A member of the State Bar shall not divide a fee for legal services with another person licensed to practice law who is not a partner in or associate of his law firm or law office, unless:

(1) The client consents to employment of the other person licensed to practice law after a full disclosure that a division of fees will be made; and

(2) The division is made in proportion to the services performed or responsibility assumed by each; and

(3) The total fee charged by all persons licensed to practice law is not increased solely by reason of the provision for division of fees.

This rule is primarily concerned with an unethical division of fees between an attorney "obtaining" the client and the attorney who provides the service; it is thus not written in a manner which provides a clear-cut answer where attorneys are in dispute concerning the division and there is no contractual agreement. It does provide authority for the proposition that the San Francisco firm would be entitled to a portion of the fees billed if it maintained some responsibility over the matters even though almost all of the services were provided after the attorney left his employment with the firm; this could be the situation, for example, if the law firm was also of record in the first matter, or if the client would reasonably assume that the firm continues to handle or supervise the handling of either matter. The San Francisco firm would not be entitled to compensation solely by virtue of having acquired the client or the case, however.

In San Diego County Bar Ethics Opinion 1969-4, the committee sanctioned the following method of computation for a take-over of a deceased attorney's practice, as between the new attorney and the deceased attorney's estate:

This reimbursement can be figured on either an hourly rate for the number of hours for services rendered by attorney A up to the date of his death, if the case was handled on an hourly basis, or on a percentage of time spent by attorney A as against the total time involved in carrying the case to its conclusion, if the case was a flat fee or contingent fee matter.

This opinion only partially answers the question because it addressed a situation in which the prior attorney ceased to provide any service to the client and could exercise no responsibility over the matter. In the present situation, if the San Francisco firm did not exercise or have any responsibility over the matters after the attorney's termination, and the attorney billed the client only for the hours in service to the client after such termination, the firm would not be entitled to compensation.

A more serious problem involves the manner in which these matters were removed from the old firm by the attorney. American Bar Association Informal Opinion 787, citing Canon 7 and Henry S. Drinker, Legal Ethics, stated that it would be unethical and a violation of his obligation to his former employers for an attorney to remove files upon which he had been working from the offices of the partnership without the knowledge of the partners, even when done with the client's knowledge, and that it would be improper for a departing attorney to contact clients of the partnership and tell them that he would like to continue doing legal work for them which he had commenced while employed by the partnership. The opinion stated that fees collected by an attorney who had done these acts should belong to the partnership. Canon 7 does not have a parallel in the Rules of Professional Conduct and is not binding on California attorneys; however, certain activities in contacting clients could be prohibited solicitations of professional employment under Rule 2-101, or could be a civil matter if they interfered with an advantageous business relation enjoyed by the former employer. The committee lacks sufficient information from which it could determine whether the activities of the attorney amounted to solicitation.

This opinion is advisory only. It is not binding upon the State Bar, the Board of Governors, its officers or employees.

 

Disclaimer: This opinion was issued by the Legal Ethics Committee of the San Diego County Bar Association. It is advisory only and is not binding upon any member of the SDCBA, any other member of the State Bar of California, the State Bar of California or its Board of Governors, or any persons or tribunals charged with regulatory responsibilities. The SDCBA, its officers, directors, agents, and the Legal Ethics Committee members assume no responsibility or liability in rendering this opinion.