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Rule 5.4. ProfessionalIndependence of a Lawyer

(a)A lawyer may provide legal services pursuant to this Rule only if there is atall times no interference with the lawyer?s:

(1) professionalindependence of judgment,

(2) duty of loyalty to aclient, and

(3) protection of clientconfidences.

(b) Alawyer may permit a person to recommend, retain, orpay the lawyer to render legal services for another.

?(c) A lawyer or law firmmay share legal fees with a nonlawyer if:?

(1) the fee to beshared is reasonable and the fee-sharing arrangement has been authorized as required by Utah Supreme Court Standing Order No. 15;

(2) thelawyer or law firm provides written notice to the affected client and, ifapplicable, to any other person paying the legal fees;

(3) thewritten notice describes the relationship with the nonlawyer, including thefact of the fee-sharing arrangement; and

(4) thelawyer or law firm provides the written notice before accepting representationor before sharing fees from an existing client.

(d)A lawyer may practice law withnonlawyers, or in an organization, including a partnership,in which a financial interest is held or managerial authority is exercised byone or more persons who are nonlawyers, provided that the nonlawyers orthe organization has been authorized as required by Utah Supreme Court StandingOrder No. 15 and provided the lawyer shall:

(1) before accepting arepresentation, provide written notice to a prospective client that one or morenonlawyers holds a financial interest in the organization in which the lawyerpractices or that one or more nonlawyers exercises managerial authority overthe lawyer; and

(2)set forth in writing to a client the financial and managerial structure of theorganization in which the lawyer practices.

Comments

[1]The provisions of this Rule are to protect the lawyer?s professionalindependence of judgment, to assure that the lawyer is loyal to the needs ofthe client, and to protect clients from the disclosure of their confidentialinformation. Where someone other than the client pays the lawyer's fee orsalary, manages the lawyer?s work, or recommends retention of the lawyer, thatarrangement does not modify the lawyer's obligation to the client. As stated inparagraph (a), such arrangements must not interfere with the lawyer?sprofessional judgment. See also Rule 1.8(f) (lawyer may accept compensationfrom a third party as long as there is no interference with the lawyer?s independentprofessional judgment and the client gives informed consent). This Rule doesnot lessen a lawyer?s obligation to adhere to the Rules of Professional Conductand does not authorize a nonlawyer to practice law by virtue of being in abusiness relationship with a lawyer. It may be impossible for a lawyer to workin a firm where a nonlawyer owner or manager has a duty to disclose clientinformation to third parties, as the lawyer?s duty to maintain clientconfidences would be compromised.

[2]The Rule also expresses traditional limitations on permitting a third party todirect or regulate the lawyer?s professional judgment in rendering legalservices to another. See also Rule 1.8(f) (lawyer may accept compensation froma third party as long as there is no interference with the lawyer?s independentprofessional judgment and the client gives informed consent).

[3] Paragraph (c) permitsindividual lawyers or law firms to pay for client referrals, share fees withnonlawyers, or allow third party retention. ?In each of these instances, the financialarrangement must be reasonable, authorized as required under Supreme CourtStanding Order No. 15, and disclosed in writing to the client before engagementand before fees are shared.? Whether inaccepting or paying for referrals, or fee-sharing, the lawyer must protect thelawyer?s professional judgment, ensure the lawyer?s loyalty to the client, andprotect client confidences.

[4]Paragraph (d) permits individual lawyers or law firms to enter into business oremployment relationships with nonlawyers, whether through nonlawyer ownershipor investment in a law practice, joint venture, or through employment by anonlawyer owned entity. In each instance, the nonlawyer owned entity must be approvedby the Utah Supreme Court for authorization under Standing Order No. 15.

 

 

Effective August 31, 2020