5.4 Professional Independence of a Lawyer

(a) A lawyer or law firm shall not share legal fees with a nonlawyer, 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 of the total compensation which fairly represents the services rendered by the deceased lawyer;

(3) a lawyer or law firm may include nonlawyer employees in a compensation or retirement plan, even though the plan is based in whole or in part on a profit-sharing arrangement; provided that the amounts paid to nonlawyer employees in addition to fixed salary,

(i) are not based upon business brought to the law firm by such employees;

(ii) are not based upon services performed by such employees in a particular case; and

(iii) do not constitute the greater part of the total remuneration of such employees;

(4) a lawyer may share court-awarded legal fees with a nonprofit organization that employed, retained or recommended employment of the lawyer in the matter.

(b) A lawyer shall not form a partnership with a nonlawyer if 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 the lawyer to render legal services for another to direct or regulate the lawyer’s professional judgment in rendering such legal services.

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

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

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

(3) a nonlawyer has the right to direct or control the professional judgment of a lawyer.


COMMENT

[1] The provisions of this Rule express traditional limitations on sharing fees. These limitations are to protect the lawyer’s professional independence of judgment. Where someone other than the client pays the lawyer’s fee or salary, or recommends employment of the lawyer, that arrangement does not modify the lawyer’s obligation to the client. As stated in paragraph (c), such arrangements should not interfere with the lawyer’s professional judgment.

[2] This Rule also expresses traditional limitations on permitting a third party to direct or regulate the lawyer’s professional judgment in rendering legal services to another. See also Rule 1.8(f) (lawyer may accept compensation from a third party as long as there is no interference with the lawyer’s independent professional judgment and the client gives informed consent). This Rule is not intended to apply to a lawyer, in the context of a professional disciplinary case, who is directed by the court as a condition of probation, to be supervised and mentored by a member of the Maine Bar.


REPORTER’S NOTES:

Model Rule 5.4 (2002) is substantively in accord with M. Bar R. 3.12, although there are some distinctions.

Model Rule 5.4(a)(2) (2002) contemplates the sale of a deceased lawyer’s practice. The Task Force thought that M. Bar R. 3.12(a)(2) was a more realistic and practical directive for lawyers who are winding up a deceased lawyer’s practice. Thus, the Task Force recommended the adoption of the language of the Maine provision.

Model Rule 5.4(a)(3) (2002) tracks the first clause of M. Bar R. 3.12(a)(3). The Task Force thought that the provision setting forth the fee division rules with respect to non-lawyers found in the second clause of M. Bar R. 3.12(a)(3) offered a useful directive and thus recommended its inclusion.

The Task Force, after discussion, agreed that this Rule was not applicable to a lawyer who is directed by the court to be supervised and mentored by another member of the Maine Bar as a condition of disciplinary probation. In such a case, the supervised lawyer may be subject to the professional judgment of the supervising lawyer.

Because the Task Force thought Model Rule 5.4 (2002) was a clear articulation of the Rule addressing the Professional Independence of a Lawyer, it recommended adoption, subject to the noted modifications.