Opinions of the General Counsel, 1113 ALBJ, 74 The Alabama Lawyer 416 (2013)

• Author: J. Anthony McLain

Opinions of the General Counsel

Vol. 74 No. 6 Pg. 416

Alabama Bar Lawyer

November, 2013

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0 J. Anthony McLain

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0May an attorney share legal fees with a non-lawyer earned while prosecuting a BP claim?

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0QUESTION:

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0May an attorney share legal fees with a non-lawyer earned while prosecuting a BP¹ claim?

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0ANSWER:

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0No. The sharing of a legal fee with a non-lawyer while prosecuting a BP claim violates Rules 5.4(a), 5.5 and 7.2(c), Ala. R. Prof. C.

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0DISCUSSION:

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0The Office of General Counsel has received numerous requests for opinions regarding the handling and filing of claims administered by the BP Claims Program on behalf of clients of accountants, accounting firms and persons holding themselves out as adjusters, public adjusters and consultants. Specifically, a number of Alabama attorneys have been approached by the above-described groups regarding the handling and filing of BP claims for those groups' clients. In many instances, these groups propose referring their clients to the Alabama lawyer in exchange for a portion of any contingency fee obtained by the lawyer or upon an agreement that the lawyer will protect the referring person's fee in the matter. The Disciplinary Commission is issuing this formal opinion to provide guidance regarding the Alabama Rules of Professional Conduct and the prosecution of BP claims. As a starting point, Rule 5.4(a), Ala. R. Prof. C, states as follows:

Rule 5.4 Professional Independence of a Lawyer

[a] A lawyer or law firm shall not share legal fees with a non-lawyer, except that:

[1] an agreement by a lawyer with the lawyer's firm, partner, or associate may provide for the payment of money, over a reasonable period of time after the lawyer's death, to the lawyer's estate or to one or more specified persons;

[2] a lawyer who undertakes to complete unfinished legal business of a deceased lawyer may pay to the estate of the deceased lawyer that proportion o f the total compensation which fairly represents the services rendered by the deceased lawyer; and

[3] a lawyer or law firm may include non-lawyer employees in a compensation or retirement plan, even though the plan is based in whole or in part on a profit-sharing arrangement.

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0In addition, Rule 7.2(c), Ala. R. Prof. C, provides:

Rule 7.2 Advertising

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0A lawyer who advertises concerning legal services shall comply with the following:

[c] A lawyer shall not give anything of value to a person for recommending the lawyer's services, except that a lawyer may pay the reasonable cost of any advertisement or written communication permitted by this rule and may pay the usual charges of a not-for-profit lawyer referral service.

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0Both Rules 5.4(a) and 7.2(c), Ala. R. Prof. C, prohibit attorneys from sharing legal fees with non-attorney and/or paying a non-lawyer anything of value in exchange for a referral of a legal client. The argument raised by some concerning the prosecution of BP claims is that the filing and prosecution of a BP claim is not the practice of law and, therefore, the ethical prohibitions prescribed by Rules 5.4(a) and 7.2(c) do not apply. The Disciplinary Commission disagrees.

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0In the opinion of the Disciplinary Commission, the filing or prosecution of BP claims on behalf of another is the practice of law. Section 34-3-36, Ala. Code 1375, states:

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0Whoever,

[1] In a representative capacity appears as an advocate on draws papers, pleadings, or documents, or performs any act in connection with proceedings pending or prospective before a court or a body, board, committee, commission, or officer constituted by law or having authority to take evidence in or settle or...