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Rule 5.4

Rule 5.4. Professional Independence of a Lawyer.

(a) A lawyer or law firm shall not share legal fees with a nonlawyer, except that:

(a)(1) an agreement by a lawyer with the lawyer's firm, partner or associatemay provide for the payment of money, over a reasonable period of time afterthe lawyer's death, to the lawyer's estate or to one or more specified persons;

(a)(2)(i) a lawyer who purchases the practice of adeceased, disabled or disappeared lawyer may, pursuant to the provisions ofRule 1.17, pay to the estate or other representative of that lawyer theagreed-upon purchase price; and

(a)(2)(ii) a lawyer who undertakes to complete unfinished legal business ofa deceased lawyer may pay to the estate of the deceased lawyer that proportionof the total compensation which fairly represents the services rendered by thedeceased lawyer; and

(a)(3) a lawyer or law firm may include nonlawyeremployees in a compensation or retirement plan, even though the plan is basedin whole or in part on a profit-sharing arrangement.

(b) A lawyer shall not form a partnership with a nonlawyerif 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 thelawyer to render legal services for another to direct or regulate the lawyer'sprofessional judgment in rendering such legal services.

(d) A lawyer shall not practice with or in the form of a professionalcorporation or association authorized to practice law for a profit, if:

(d)(1) a nonlawyer owns any interest therein,except that a fiduciary representative of the estate of a lawyer may hold thestock or interest of the lawyer for a reasonable time during administration;

(d)(2) a nonlawyer is a corporate director orofficer thereof or occupies the position of similar responsibility in any formof association other than a corporation; or

(d)(3) a nonlawyer has the right to direct orcontrol the professional judgment of a lawyer.

(e) A lawyer may practice in a non-profit corporation which is establishedto serve the public interest provided that the nonlawyerdirectors and officers of such corporation do not interfere with theindependent professional judgment of the lawyer.


[1] The provisions of this Rule express traditional limitations on sharingfees. These limitations are to protect the lawyer's professional independenceof judgment. Where someone other than the client pays the lawyer's fee orsalary, or recommends employment of the lawyer, that arrangement does notmodify the lawyer's obligation to the client. As stated in paragraph (c), sucharrangements should not interfere with the lawyer's professional judgment.

[2] The Rule also expresses traditional limitations on permitting a thirdparty to direct or regulate the lawyer?s professional judgment in renderinglegal services to another. See also Rule 1.8(f) (lawyer may accept compensationfrom a third party as long as there is no interference with the lawyer?sindependent professional judgment and the client gives informed consent)

[2a] Paragraph (a)(4) of the ABA Model Rule wasnot adopted because it is inconsistent with the provisions of Rule 7.2(b),which prohibit the sharing of attorney?s fees. Rule 5.4(e) addresses a lawyerpracticing in a non-profit corporation that serves the public interest. Thereis no similar provision in the ABA Model Rules.