RI-19

January 26, 1989

SYLLABUS

A lawyer whose license is revoked or suspended, or who is transferred to inactive status pursuant, may not share in any legal fees for legal services performed by another lawyer during the period of disqualification from the practice of law. A disbarred, suspended, or inactive lawyer may be compensated on a quantum meruit basis for legal services rendered and expenses paid by the lawyer prior to the effective date of the revocation, suspension, or transfer to inactive status.

Reference: MRPC 1.5, 5.4(a), 8.4; MCR 9.119(F).

TEXT

Lawyers A and B have entered into an agreement whereby lawyer A has agreed to represent a client of lawyer B in several litigation matters and will pay lawyer B a fee over a period of time equal to a percentage of lawyer A's hourly charge in handling the referred litigation matters. The client has consented to the referral. Subsequent to making this agreement, lawyer A is advised that lawyer B is about to have his license to practice law suspended for six months for conduct which, apparently, is unrelated to the referred litigation. Lawyer A is aware of MRPC 5.4(a), which generally prohibits sharing legal fees with a nonlawyer.

The lawyer asks whether (1) is it unethical for lawyer A to continue to pay lawyer B the agreed-upon referral fee once lawyer A becomes aware of lawyer B's suspension; and (2) is it unethical for lawyer A to accrue referral fees on lawyer B's behalf and to pay those fees, although "earned" during the period of suspension, after lawyer B is reinstated.

MCR 9.119(F) states:

"An attorney whose license is revoked or suspended, or who is transferred to inactive status pursuant to MCR 9.121, may not share in any legal fees for legal services performed by another attorney during the period of disqualification from the practice of law. A disbarred, suspended or inactive attorney may be compensated on a quantum meruit basis for legal services rendered and expenses paid by him or her prior to the effective date of the revocation, suspension, or transfer to inactive status."

Any lawyer who "charges" or "collects" an illegal fee violates MRPC 1.5, and a lawyer who knowingly assists another in doing so is guilty of professional misconduct. MRPC 8.4.