A lawyer may not split legal fees with a paralegal nor pay a paralegal for the referral of legal business. A lawyer may compensate a paralegal based on the quantity and quality of the paralegal's work and the value of that work to a law practice, but the paralegal's compensation may not be contingent, by advance agreement, upon the outcome of a particular case or class of cases

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Page 19

GUIDELINE 9: A lawyer may not split legal fees with a paralegal nor pay a paralegal

for the referral of legal business. A lawyer may compensate a paralegal based on the

               

practice, but the        

agreement, upon the outcome of a particular case or class of cases.

COMMENT

▪Lawyers may not split fees or compensate paralegals on a contingent fee basis.

M ‘   M C D‘ 2(A) and A under the Model Cod e, clearly

          

         V    

state bar associations have continued this prohibition in one form or another. See, e.g.,

K “C‘  “‘  M G  M G III N

Carolina Guideline 7 N H ‘  “‘    ‘I “ C A V ‘  

South Carolina Guideline V. It appears clear that a paralegal may not be compensated on a

              

Having stated this prohibition, however, the guideline attempts to deal with the p ractical

consideration of how a paralegal may be compensated properly by a lawyer or law firm.

T               

       12See, e.g. , Matter of Struthers, 877

P.2d 789 (Ariz. 1994) (an agreement to give to nonlawyer all fees resulting from

        Florida Bar v.

Shapiro, 413 So. 2d 1184 (Fla. 1982) (payment of contingent salary to nonlawyer b ased on

       “ B  M O  

(lawyer paid on contingency basis for debt collection cannot share that fee with a

nonlawyer collection agency that worked with lawyer). The underlying purpose of the

fee-splitting rule is to guard the professional independence of a lawyer.  In the Matter of

Disciplinary Proceedings Against Wiegel, 817 N.W.2d 835 (Wis. 2012).

▪These limits do not prohibit paying the paralegal a discretionary bonus based on t he

overall financial success of the firm, so long as the bonus is not based on the outcome

or profitability of a specific case.

There is no general prohibition against a lawyer who enjoys a particularly profitable p eriod

recognizing the contribution of the paralegal to that profitability with a discretionary bonus

so long as the bonus is based on the overall success of the firm and not the fees generated

from any particular case. See, e.g. P B A P G C O  

7 (law firm may pay nonlawyer employee a bonus if bonus is not tied to fees generated

12In its Rule 5.4 of the Rules of Professional Conduct, the District of Columbia permits lawyers

to form legal service partnerships that include nonlawyer participants. Comments 5 and 6 to that

              

    nlawyer assistants under Rule 5.3 do not have managerial

authority or financial interests in the 