Breach of contract claims by one attorney against another related to alleged client referrals; Michigan Rules of Professional Conduct (MRPC) 1.5(e); Sherbow, PC v Fieger & Fieger, PC (Sherbow I & II); Principle that contracts that violate the MRPC are against public policy & are unenforceable

Holding that the trial court correctly ruled that plaintiff-attorney’s alleged agreement with defendant-law firm to be paid for assisting defendant in securing certain clients was unenforceable under the MRPC, the court affirmed summary disposition for defendant. “Plaintiff testified that he was generally paid one third of the attorney fees earned by defendant for cases in which plaintiff referred the client or otherwise assisted in retaining the client.” He sued for breach of contract after defendant did not pay him for his involvement in two cases – the Shoemaker case and the LaMay case. He asserted he was owed a fee of between 20-30% (up to 1/3) of the attorney fees defendant received in the “cases—a clear division of fees.” But he did not assert, and the record did “not support an inference, that his alleged agency relationship with defendant caused him to be ‘in the same firm’ for the purposes of MRPC 1.5(e),” and he failed to provide “any other reason why MRPC 1.5(e) should not apply” here. Rather, he asserted the trial court erred in determining that this “rule required an attorney-client relationship between plaintiff and the Shoemaker and LaMay clients, and that there can be no violation of MRPC 1.5(e) when defendant never informed the clients of the agreement.” The court disagreed. Sherbow II held that “MRPC 1.5(e) requires the attorney to participate as an attorney, which in turn requires him or her to establish a professional relationship with the client, which can be accomplished by a direct or indirect (i.e., through the client’s agent) consultation.” There was no record evidence permitting “a reasonable fact-finder to conclude that plaintiff established an attorney-client relationship with either the Shoemaker or LaMay clients.” The parties’ alleged contract was unenforceable because “dividing fees when the referring attorney has no attorney-client relationship with the client violates MRPC 1.5(e)[.]” In addition, there was no record evidence “that the clients in either case were informed of any fee-splitting agreement. Consequently, regardless of the existence of an attorney-client relationship, a division of fees in these cases would independently violate MRPC 1.5(e)(1), which states that ‘[a] division of a fee between lawyers who are not in the same firm may be made only if . . . the client is advised of and does not object to the participation of all the lawyers involved . . . .’”