Quiz.docx PDF

Luis General \| 07 feb 2025, 13:04:12 Hello, good afternoon. Ish Cayanan \| 07 feb 2025, 13:04:13 And the floor is yours. Luis General \| 07 feb 2025, 13:04:16 Oh okay. That\'s quick. All right, so I think we\'ve met before. Everybody. Yes. Okay. All right, so for today we\'re gonna discuss. Wh...

Luis General \| 07 feb 2025, 13:04:12 Hello, good afternoon. Ish Cayanan \| 07 feb 2025, 13:04:13 And the floor is yours. Luis General \| 07 feb 2025, 13:04:16 Oh okay. That\'s quick. All right, so I think we\'ve met before. Everybody. Yes. Okay. All right, so for today we\'re gonna discuss. What Garnet has? Shared with April and then shared with me. This one. Can you see my screen? Yazmin Chavez \| 07 feb 2025, 13:04:42 Yes, yes. Garnet Salem \| 07 feb 2025, 13:04:42 Yes. Luis General \| 07 feb 2025, 13:04:44 Yes. So Okay. The title of the presentation is Association versus substitution. Ethical considerations on the vision of peace. So I suppose everybody knows what we are talking about. Yes. Yazmin Chavez \| 07 feb 2025, 13:05:07 I believe only Anna. My be confused since she\'s made me and drops all of us do. Luis General \| 07 feb 2025, 13:05:14 Got it, okay. I\'ll take that into consideration. Okay, so the basic rule 1.5 point one. So this is Central to The referals Department. Tasks. Right. I think you\'ve been drafting 1.51 agreements. And actually I got one from or several from Google Drive. So, before discussing those drafts that I have gathered, Let\'s discuss the basics first. So, Rule 1.5 1.1. Is actually a new rule. The former rule was ruled 200, if I\'m not mistaken. Yes. Hey, no. Yazmin Chavez \| 07 feb 2025, 13:06:16 I\'m not sure. Luis General \| 07 feb 2025, 13:06:16 It\'s part of your, it should be good. It\'s part of the graph that I have seen. But yeah, but The wording Remains the Same. It\'s only the numbering that has been changed. Luis General \| 07 feb 2025, 13:06:35 This is the long version. Let\'s make it. Simple. So, basically, 1.51 Requires the following. Number one, return agreement between the lovers, the divide, the fee, or the lawyers. And number two, focus on the client. Luis General \| 07 feb 2025, 13:07:00 Return client. Consent after full disclosure. Let\'s take note of this one full disclosure because this is quite tricky as I\'ll explain later. And also, number two, I think it\'s the most important one. As. Several requirements under it. But then, Total fees must not increase. Feed the vision. Okay, so Now, as I was mentioned, In. This one. It has a several requirements on. So number one, it must be in righting number two. After full disclosure of these three things, the vision of fees identity of involve lawyers. Luis General \| 07 feb 2025, 13:08:01 And terms of the fee division, Okay, are we following and Yes. Okay, I think he said, yes but we could not hear. Ana Gallana \| 07 feb 2025, 13:08:12 I\'m sorry. Yes. Yeah. Luis General \| 07 feb 2025, 13:08:15 Okay, I think you said yes but we could not hear. Alright, thank you. Now, as I was saying, there is a lot of graphs accessible via the Google Drive. So this is one that I got. This was dated January, 14 and January 15, 2025 less than one month ago. So, our discussion will be focusing on this draft. That is, I\'ll be giving. The points in which, This draft complies with the rule. 1.5 And also some recommendations. So, first compliance. So, number one, It\'s good that we have, the Agreement that title this way because it\'s explicit about the fishing. And between that attorneys. And also, it includes the disclosure the client. And it specifies. The rule. 1.5 by 1, and Those numbering which is 2-200. Okay. So that\'s Number one. Number two, this one. Luis General \| 07 feb 2025, 13:09:46 It names. The parties involved in the face sharing Arrangement, number one fls. And number two, ZZR And also it clearly states that the division of peace. That is 66% and 33 for. But then this one and I\'ll discuss this later. It is under the disclosure to client. And not explicitly part of the agreement between the lovers. A question is, do we have a separate sheet or separate document for the agreement? Yazmin Chavez \| 07 feb 2025, 13:10:31 Know. We only use that one. Luis General \| 07 feb 2025, 13:10:32 That is just between the party attorneys. Know, it\'s This right. Okay. So yeah, probably we can have the vision. Made part of the main agreement here. Because we have this. Signpost. This subtitle here. If you are the reader, you may probably interpret interpret it as you know, part. Of that disclosure and that part of the main agreement. So yeah, probably, I\'d be repeating that. Later in the conclusion and recommendations. Yazmin Chavez \| 07 feb 2025, 13:11:13 Okay. Luis General \| 07 feb 2025, 13:11:16 And this one sign at dated, by the lawyers involved in the agreement. So, Yes. Okay. And also signed a dated by the plant And the division of fees and that identity of the law firms are all. So. Present. Now compliance with the rules. Probably, I mean identifying this compliance points are easy or easy. But we go to suggestions or recommendations, but I think we have one more here. Oh yeah, that division of fees does not mean it would increase the total fees attack client will finger. Luis General \| 07 feb 2025, 13:12:07 Okay, now we go to the hardware Park, which is the suggestion or recommendation, Luis General \| 07 feb 2025, 13:12:18 Okay, now we go to the hardware part which is the suggestions or recommendations. Luis General \| 07 feb 2025, 13:12:31 So, number one consent before actual division, If you were able to read the article that I provided to you, there is some still there. That says that. The agreement must be. Or rather the actual division of the Should take place after the agreement. So, In the graph that we have. I think it\'s explicitly stated that it would be signed before any division of fees. Right. So we have some case law that supports that And probably what we can do is We can provide something like this one in the agreement. Yazmin Chavez \| 07 feb 2025, 13:13:14 So Luis on that. Sorry, can we go a little bit back? Luis General \| 07 feb 2025, 13:13:19 That is the client has provided written consent. Prior to Yazmin Chavez \| 07 feb 2025, 13:13:20 Just to add this paragraph before the disclosure to client part. Luis General \| 07 feb 2025, 13:13:26 Any division of these, any actual division of peace? Okay. Your question is, should we add it in the agreement part or anywhere? Yazmin Chavez \| 07 feb 2025, 13:13:36 Or just anywhere. Aha, in the agreement or anywhere or does it make a difference? Luis General \| 07 feb 2025, 13:13:45 Doesn\'t. Doesn\'t make any difference. If I be honest. Or it\'s this refers to a third party. The client you can put it in the argument part. Yazmin Chavez \| 07 feb 2025, 13:14:00 Okay, I think it didn\'t get the article or I didn\'t see it Luis. You can send it to me later so I can see Luis General \| 07 feb 2025, 13:14:08 Oh, You don\'t have it. Yes. Okay. Yazmin Chavez \| 07 feb 2025, 13:14:13 The. I do have a follow-up question, so the wording that the client has provided with consent. Luis General \| 07 feb 2025, 13:14:15 All right. Okay, we have other questions before I proceed. 2002. Yazmin Chavez \| 07 feb 2025, 13:14:36 Prior to any division of fees, isn\'t it the same as hint signing or it just needs to be stated explicitly, that That they are agreeing to this division. Before you actually divide the face. So my question is, is it is kind of a way to be double safe. By adding the wording. Luis General \| 07 feb 2025, 13:15:07 The question is uh Adding the wording is it just uh you know uh making it Safer Yazmin Chavez \| 07 feb 2025, 13:15:21 Yeah, yeah, the agreement because it\'s I\'ve never, I don\'t think I\'ve seen that another one, five ones like Oh, maybe in one for Morgan. The client has provided away and content prior to any division of fees. But, For me, this sentence is similar to what we have. I understand that my legal fees will not increase By recent enough, this division of fees below. Luis General \| 07 feb 2025, 13:15:57 Ente Luis General \| 07 feb 2025, 13:16:44 That is there has been ad division of you earlier and then the signing the place after an actual division Bich is and that the whole i mean just apart. Yazmin Chavez \| 07 feb 2025, 13:16:51 Okay. Oh Yazmin Chavez \| 07 feb 2025, 13:17:06 Okay. Yazmin Chavez \| 07 feb 2025, 13:17:15 Okay. Luis General \| 07 feb 2025, 13:17:17 So I hope that Yazmin Chavez \| 07 feb 2025, 13:17:20 Thank you. Luis General \| 07 feb 2025, 13:17:22 And this Luis General \| 07 feb 2025, 13:17:30 Yeah for your uh, consideration and also may be if you can subgest this to Yazmin Chavez \| 07 feb 2025, 13:17:42 1151\. Harold. Luis General \| 07 feb 2025, 13:17:47 So recomend these to Harold ok number two clarity of terms of division Yazmin Chavez \| 07 feb 2025, 13:17:49 It\'s Harold and then just make sure that it\'s okay. Luis General \| 07 feb 2025, 13:18:09 If you look at the terms of the division it\'s very very Luis General \| 07 feb 2025, 13:18:21 And trial preparation discovery and FLS has perform? Luis General \| 07 feb 2025, 13:20:12 Including but not limited negociations And finally Carpenter etcétera Yazmin Chavez \| 07 feb 2025, 13:20:31 That does align with. Queso, but it also said that the division could be even if they just agreed on it. Right. Because the point of me bringing this up is, some of a referrals are intakes referrals, right? Well, we only do the intake. So If we put that one, and I seem like we did list for the percentage that we\'re asking, And, I\'m making it more hard to understand what I\'m trying to ask is, can we just put Full disclosure, something like attorneys, Al Green on this division of face. Um, And then, everybody click decided what to do on their own work. Know how to put at least because some of the referrals we sent we don\'t really do anything on them. We just have the intake right intake referrals. We just send them the potential client and we sign 151 so we haven\'t done anything but retained the Yazmin Chavez \| 07 feb 2025, 13:22:16 Others, we do little only some customer service and then we send it, but we still agree on 4660. I don\'t know if there\'s specific wording that can just Like something that would you just put Carpenter? Superman will be solely responsible for deviation. And then for us from has performed pre litigation work. And we can just leave it like that. Or you need to add the intuitive banana to client intake, initial negotiation. Luis General \| 07 feb 2025, 13:22:46 So Number 3 divisions Yazmin Chavez \| 07 feb 2025, 13:23:02 That was the question. Thank you. Luis General \| 07 feb 2025, 13:23:04 Okay, okay. Garnet Salem \| 07 feb 2025, 13:24:33 Uh, based on Um it it really depends. Most of what we do right now are substitution of attorney, especially for new attorneys. But I think we still have the notice Association for attorneys when we have work on a lot of cases before. Like, for example near, we still, we still do the Nova but for the new attorneys it\'s gonna be substitution of attorney. Luis General \| 07 feb 2025, 13:25:12 Here good that be point out Garnet Salem \| 07 feb 2025, 13:25:17 Luis. Sorry, I have a question. Regarding the sharing, because I know that. In the Philippines, the the sharing of the space on on, on like Quantum married or something like that. But here at well as to the sharing agreement, the the person page of the sharing agreement between flf and the other law firms, it\'s it\'s not really based on The work involved is that okay? Because I think for like, for example, for low value cases, it depends on On the type of the case and it\'s actually based on pure negotiation. Also, on another question is that if we put The, the statement that the Referral Attorney Law, Firm will advance. Like all the fees will it be problematic on our policy that Or is it a source of conflict or confusion? Because I think the policy that the firm must must handle its own expense, so Garnet Salem \| 07 feb 2025, 13:26:59 Yeah, that one will advance all litigation costs and expenses because I think there\'s an there\'s an understanding and correct me if I\'m wrong that Garnet Salem \| 07 feb 2025, 13:27:17 The referral Authority will only handle their own cost of litigation and expenses as well as flf will handle all the expenses prior to referral. Luis General \| 07 feb 2025, 13:27:29 Okay. Garnet Salem \| 07 feb 2025, 13:27:36 So, I think, I think I think going silent on this will will make it less confusing. Luis General \| 07 feb 2025, 13:27:42 So Garnet Salem \| 07 feb 2025, 13:27:44 Um, I don\'t know. Luis General \| 07 feb 2025, 13:27:45 If that\'s the policy actually what and expenses we\'ll be Bor Luis General \| 07 feb 2025, 13:28:16 Ok Luis General \| 07 feb 2025, 13:28:24 So No, uh, Association And what we actually one Uh Responsible Association it means that mean cancel of record responsible for the case Luis General \| 07 feb 2025, 13:29:06 Record and the associated Francis Sarausa \| 07 feb 2025, 13:29:56 Um for me like it will be to attorneys involving the case without like there will be a main attorney and a secondary Journey, but the main actor I mean in the secondary will not replace the main attorney and the case Yazmin Chavez \| 07 feb 2025, 13:31:00 Oh, which one noticeable Association? We do it in something. Ah, yes. Sometimes Mmm. Usually, the referral journey is the one who files, and then they just Send it over for signature. Luis General \| 07 feb 2025, 13:31:32 The Associated attorney this is uh Francisco so again uh to associate means to join to share responsibilities Luis General \| 07 feb 2025, 13:32:04 Ke Yazmin Chavez \| 07 feb 2025, 13:33:32 Agreement. It\'s, I think that the association Yeah, because it\'s It\'s not, I shouldn\'t be there and I also catch that before but I didn\'t know what to replace her with. Garnet Salem \| 07 feb 2025, 13:33:50 A. Yazmin Chavez \| 07 feb 2025, 13:33:51 To not sound as we should just leave it like to enter this fishing equipment. Garnet Salem \| 07 feb 2025, 13:33:54 Luis ethically. I have a question, sorry. You know, in order to be ethically compliant Garnet Salem \| 07 feb 2025, 13:34:08 Okay, to do. Do we do we need to actually specifically inform the client during Prior to the, Three-way call. We call it. The three-way call. That is the first introduction between that turn the the client and their fraternity do. We need to specifically inform the client whether if it\'s Garnet Salem \| 07 feb 2025, 13:34:49 A substitution or a Association. Or sorry, or still cancel, or the Noah, or the soul would suffice considering. That is that\'s the The, the, the the the document is signed, by the client, um, the reason I\'m asking is that sometimes, it\'s You know, for practical purposes, we\'re trying to avoid potential reaction from a client to say that we are no longer your attorney. So, if you\'re gonna have any problem with your new law firm, We\'re not gonna take you back something like that, so we It\'s, it\'s a bit of a gray area for us. So what what do you think? Luis General \| 07 feb 2025, 13:36:28 So Garnet Salem \| 07 feb 2025, 13:36:46 Yeah, as a suggestion, I think. The case manager should be aware of this because it is the, I believe it is the case managers. Garnet Salem \| 07 feb 2025, 13:37:02 Who inform the who initially informs the client that? Hurt. I think we we there\'s an additional task for that. Yes, right. Right. We already added that that prior to the three-way call the case manager, the case Handler will inform the client that the case is being or or Yazmin Chavez \| 07 feb 2025, 13:37:34 If? This is kind of a example. This is actually an example of practices not specifically a good practices or bad practices, but just practices that have been carried on Garnet Salem \| 07 feb 2025, 13:37:43 Power. We will have another attorney for his case. So, Yeah. Yazmin Chavez \| 07 feb 2025, 13:37:58 From, you know, years of dealing with this. So the past The past leaders of the department decided that it was easier to not fully explained and in a Chinese gonna substitute to us, write completely And the reason being to avoid them thinking that were just getting rid of their case. Garnet Salem \| 07 feb 2025, 13:38:18 Are abandoning them. Yazmin Chavez \| 07 feb 2025, 13:38:22 That we sold their case. We abandoning them. Yes. Others have used the worst Souls outsourced. So the reason why we do this not fully disclose it that is a substitution but kind of be once about it is to avoid the satisfied clients. But you know now that we know this that it\'s part of the world 51 and we don\'t want issues moving forward this could be something to to bring up to Justin and say how do you want to handle them moving forward, right. And we should come up with another Peach as chatty to give us some Think that fully discloses. But also doesn\'t annoy them or makes them feel bad that Yazmin Chavez \| 07 feb 2025, 13:40:11 It goes back to the same issue. Normally how much are we letting the clients know? Because as attorneys, we know, right between the attorneys it\'s clear Garnet always makes a clear. This is a substitution of attorney is a notice of Association the clients, they don\'t know the full extent Luis General \| 07 feb 2025, 13:40:38 Yes And Garnet Salem \| 07 feb 2025, 13:40:42 I think I saw in some referral agreements. Yes. The one sent by, they just said, it\'s 1.51 agreement. No, no caption whatsoever. Yeah, so it Yazmin Chavez \| 07 feb 2025, 13:40:57 Exactly. Garnet Salem \| 07 feb 2025, 13:40:58 It\'s it\'s it it\'s now depend on the referral legal assistance to explain to the client. What is that document Because yeah, they\'re not they\'re not Well. Verse with low, I guess. Luis General \| 07 feb 2025, 13:41:27 Okay, before, uh. Going to this section we have questions on this one Yazmin Chavez \| 07 feb 2025, 13:41:43 No, good pointers. Garnet Salem \| 07 feb 2025, 13:41:43 And none for me. Luis General \| 07 feb 2025, 13:41:48 So just one we touch up on this So again case loses that clients mas full understand that the fe division agrement Luis General \| 07 feb 2025, 13:42:05 And it\'s consequences Luis General \| 07 feb 2025, 13:42:28 T Garnet Salem \| 07 feb 2025, 13:44:27 Um, yeah, actually yeah, actually you don\'t talk to answer this but just wanna ask this anyway, we had an actual scenario where After we had 1.5 million Shine by the client. And, and the two law firms. This lawyer I\'m gonna identify him this lawyer. Have the client signed another agreement. For, for additional Fee. So, The client was. The client was curious or so I, I And I didn\'t know about it. The referrals did not inform me that that well apparently they do that. So I confronted that attorney the refrigerator journey and he confirmed that they have a separate agreement signed with the attorney allegedly for, you know, providing special services. That is not being provided by other law firms. So to speak, whatever is that is that something, you know, ethical or just or just that not conflict with the one he signed with us, that that Garnet Salem \| 07 feb 2025, 13:45:58 There\'s no additional fees on the part of the client or it conflicts, but it\'s okay because the client will sign the second agreement. Anyway, Or there\'s ratification. **Association v. Substitution:** **Ethical Considerations** **on Division of Fees** Luis General Feb 2025 Referrals Cross-Departmental TLC**The BasicsThe Legal BasisRequirements of Rule 1.5.1** 1\. Written agreement to divide the fee. 2\. Written client consent after full disclosure. 3\. Total fees must NOT increase solely due to fee division.**Client Consent Requirements** **Rule 1.5.1(a)(2)** Client consent must be: 1\. - In writing. 2\. - *After* full disclosure of: i\. Division of fees. ii\. Identity of involved lawyers. iii\. Terms of the fee division**Compliance with RulesCompliance with Rules** The agreement is explicitly titled**Compliance with Rules** It names the parties involved in the fee- sharing arrangement: FLF and CZR**Compliance with Rules** It clearly states the division of fees BUT it is under the *Disclosure to Client* and not explicitly part of the agreement between the law firms**Compliance with Rules** Signed and dated by the lawyers involved in the agreement**Compliance with Rules** Signed and dated by the client**Compliance with Rules** Division of fees Identity of law firms**Compliance with Rules** Division of fees ≠ Increase in total fee**Suggestions/Recommendations** **1. Consent before Actual Division**The agreement should explicitly state that it would be signed before any division of fees occurred to avoid arguments about after-the-fact ratification, which has been rejected in cases like Margolin v. Shemaria \(2000) 85 Cal.App.4th 891. **Suggestions** / **RecommendationsRecommended Fix:** The agreement should state: \"The client has provided written consent prior to any division of fees. \" **Suggestions** / **RecommendationsSuggestions/Recommendations** **2. Clarity of Terms of Division**Terms of the division NOT clear **Suggestions** / **Recommendations**Terms of the division NOT clear IF the client is not informed whether the percentage is based on: Work performed by each firm Responsibility assumed by each firm Case origination or referral arrangement Division of costs or risks **Suggestions** / **Recommendations** THEN, a defense lawyer or court could argue or rule that the client lacked "full written disclosure" as required by Rule 1.5.1.**Recommended Revision**  To eliminate any ambiguity and ensure compliance, the agreement should include a simple explanation of how the fee split was determined (*cf*. Chambers v. Kay and Margolin v. Shemaria.)  Recommended Revision (Add This Language to the Agreement): \"This fee division is based on the following considerations:  Carpenter, Zuckerman & Rowley will be solely responsible for the litigation, including filing the lawsuit and trial preparation.  Farahi Law Firm, APC, has performed pre-litigation work, including but not limited to client intake and initial negotiations.  Carpenter, Zuckerman & Rowley will advance all litigation costs and expenses. This allocation does not increase the client's fees or reduce the client's recovery. \"**Suggestions/Recommendations** **3. Division of Fees in Main AgreementSuggestions** / **Recommendations** Put the division of fees in the main agreement above, and repeat here**Suggestions/Recommendations** **4. This should be a Substitution of AttorneySuggestions** / **Recommendations** AMBIGUITY: Potential conflict in agreeing to an "association" and CZR's "assuming of sole responsibility"**Notice of Association v. Substitution of Attorney**  NOA → a formal document to indicate that an additional attorney has been associated with the attorney of record to assist in the case.  Typically signed by both the attorney of record and the newly associated attorney, and it is filed with the court and served on all parties involved in the case (Oaks Mgt. Corp. v. Superior Court)**Notice of Association v. Substitution of Attorney**  Purpose of **N**OA → to formally recognize the involvement of the associated attorney in the case, allowing them to participate in proceedings and assist in client representation  However, the associated attorney does not replace the attorney of record and cannot act as the sole attorney **UNLESS** a formal substitution of attorneys is made  They share responsibilities and duties concerning the conduct of the case, and the associated attorney must be adequately prepared to represent the client at all proceedings (Wells Fargo & Co. v. San Francisco)**Notice of Association v. Substitution of Attorney**  **SOA** - involves replacing the current attorney of record with a new attorney.  Requires either:  the consent of both the client and the attorney, --OR-- an order from the court upon the application of either the client or the attorney, after notice has been given from one to the other  Must be filed with the court, and written notice must be given to the adverse party**Suggestions** / **Recommendations** AMBIGUITY: Potential conflict in agreeing to an "association" and CZR's "assuming of sole responsibility"**"Association" v. "Sole Responsibility"**  The agreement refers to an \"association,\" implying co-counsel participation.  However, it also states that Carpenter, Zuckerman & Rowley assumes sole responsibility.  This creates inconsistency in roles and expectations.  Clients or courts may view the term \"association\" as ambiguous or misleading.**"Association" v. "Sole Responsibility"**  Rule 1.5.1 requires full disclosure of roles and responsibilities.  Misleading terms may confuse the client or lead to disputes.  Incomplete or unclear agreements can be challenged for non-compliance**"Association" v. "Sole Responsibility"** **Recommendations**  Clarify Terminology: Use accurate terms such as \"Referral and Substitution Agreement."  Expand Disclosure:  Explain that Carpenter, Zuckerman & Rowley will handle the case exclusively.  Inform the client that Farahi Law Firm has no further role beyond fee sharing.  Align with Ethical Rules:  Emphasize full terms of fee division and responsibilities.  Allow the client to ask questions about the agreement.  Execute Proper Substitution: File a Substitution of Attorney form if not already completed.**Suggestions/Recommendations** **5. Client's Full Understanding of AgreementSuggestions** / **Recommendations** Issue: Courts emphasize that clients must fully understand the fee division agreement. Add a provision confirming that the client has received an explanation of Rule 1.5.1.**Suggestions** / **Recommendations** **Recommended Fix:** Add a clause: \"I have had the opportunity to ask questions about this fee-sharing arrangement and understand its terms. \"**Non-Compliance with Rule 1.5.1Non-Compliance = Unenforceable**  The original attorney can enter into an agreement with a new attorney for the division of fees after a substitution of attorney  Fee-sharing agreement must comply with Rule 1.5.1  Non-compliance → unenforceable**IF Unenforceable** → **Quantum Meruit**  The original attorney may still recover fees under the theory of quantum meruit, which allows for the recovery of the reasonable value of services rendered  does not increase the amount of attorney\'s fees paid or owed by the client"The strength of the \[legal\] profession lies in the trust of those we serve. Transparency isn't just compliance---it's integrity."**Questions / Discussion**THANK YOU! ☺☺☺ page1image35254048 **User Name:** harold\@farahilaw.com\ **Date and Time:** Monday, February 3, 2025 4:49:00AM PST **Job Number:** 244305777 **Documents (2)** 1\. *Rule 1.5.1. Fee* **Client/Matter:** -None-\ 2. *Rule 1.5. Fees for Legal Services* **Client/Matter:** -None- ------------- --------- ----------- *Divisions* *Among* *Lawyers* ------------- --------- ----------- page1image35230384 \| About LexisNexis \| Privacy Policy \| Terms & Conditions \| Copyright © 2025 LexisNexis page1image35230800page1image35231216 page2image35150544page2image35151376page2image35150752 ***Cal.of Rule*** This document reflects first and last orders received through December 27, 2024. Rules are current through December 27, 2024. ***CA - California Local, State & Federal Court Rules* \> *RULES OF THE STATE BAR OF*** ***CALIFORNIA* \> *Rules of Professional Conduct* \> *Chapter 1. Lawyer-Client Relationship*** **Rule 1.5.1. Fee Divisions Among Lawyers** **(a)** Lawyers who are not in the same law firm\* shall not divide a fee for legal services unless: **(1)** the lawyers enter into a written\* agreement to divide the fee; **(2)** the client has consented in writing,\* either at the time the lawyers enter into the agreement to divide the fee or as soon thereafter as reasonably\* practicable, after a ***Rules*** ***Prof\'l*** ***Conduct,*** ***1.5.1*** page2image35153248 full written (\*) disclosure to the client of: (i) the fact that a division of fees will be made; (ii) the identity of the lawyers or law firms\* that are parties to the division; and \(iii) the terms of the division; and **(3)** the total fee charged by all lawyers is not increased solely by reason of the agreement to divide fees. **(b)** This rule does not apply to a division of fees pursuant to court order. **History** Rule 1.5.1 approved by order of the Supreme Court filed September 26, 2018, effective November 1, 2018. Annotations page2image35153664 (\*) An asterisk (\*) identifies a word or phrase defined in the terminology rule, rule 1.0.1. **Commentary** Rule 1.5.1. Fee Divisions Among Lawyers Page 2 of 8  **Comment** The writing\* requirements of paragraphs (a)(1) and (a)(2) may be satisfied by one or more writings.\* **Case Notes** 1\. Generally 2\. Outside Lawyer as Employee of Firm 3\. Co-Counsel with Separate Practices 4\. Failure to Inform 5\. Refusal to Enforce Agreement 6\. Quantum Meruit 7\. Purpose of Rule 8\. Goodwill **1. Generally** Agreement to share attorney fees with a non-lawyer consultant, for services in an action against the consultant\'s former employer, was illegal. The court noted that the terms fee \"splitting\" or \"division\" were used in the rules for agreements between attorneys and therefore avoided those terms. *v. Mills Cal App 1st Dist) 121 Cal App 4th 333, 17 Cal* *Rptr 3d 66, 2004 Cal App LEXIS 1268*. Rules prohibiting fee-splitting, particularly Cal. R. Prof. Conduct 2-200, do not apply to agreements between a partner and his own law firm. *& v. Yee* *Cal App 2d Dist) 135 Cal App 4th 129, 37 Cal Rptr 3d 627, 2005 Cal App 1967*. page3image35173168page3image35174624 *McIntosh* *(2004,* page3image35175456page3image35175872 *Anderson,* *McPharlin* *Connors* page3image35233088 *(2005,* *LEXIS* page3image35233504 Rule 1.5.1. Fee Divisions Among Lawyers Because a partnership agreement in which a lawyer agreed that if he left his law firm and took clients, he would make payments to the firm according to a formula spelled out in the partnership agreement, was made between the lawyer on the one hand and his partners on the other, it could not be viewed as an agreement by the lawyer or by the firm with a lawyer who was not his partner, and Cal. R. Prof. Conduct 2-200(A) did not apply. That the contract provision would not be performed, if at all, until a time at which the lawyer was no longer a partner was beside the point because the California Rules of Professional Conduct that were dependent upon the continuation of a partnership relationship, specifically Cal. R. Prof. Conduct 1-500(A), spelled out the fact that those provisions did not survive termination of the partnership relationship. *& v. Yee Cal App 2d Dist) 135 Cal App 4th* *129, 37 Cal Rptr 3d 627, 2005 Cal App LEXIS 1967*. **2. Outside Lawyer as Employee of Firm** Where an outside lawyer functions on a particular matter essentially on the same basis as an employee of the law office, the outside lawyer is an associate for purposes of Prof Cond Rule 2- 200, and no case referral is involved. Accordingly, in such circumstances the outside lawyer may enforce a fee-sharing agreement, even though there was no written disclosure to, and written consent by, the client. *Sims v. Cal App 2d Dist) 86 Cal App 4th 884,* *103 Cal Rptr 2d 619, 2001 Cal App LEXIS 61*, overruled in part *v. Kay 29 Cal* *4th 142, 126 Cal Rptr 2d 536, 56 P3d 645, 2002 Cal LEXIS 7396*. **3. Co-Counsel with Separate Practices** Where two attorneys with separate legal practices served as co-counsel in a sexual harassment suit which resulted in a large award of compensatory and punitive damages for the client and a significant award of attorney fees, the unpaid attorney could not prevail in a breach of contract suit premised on an agreement that did not comport with Prof Cond Rule 2-200, as Page 3 of 8 page4image35446496page4image35444208 *Anderson,* *McPharlin* *Connors* *(2005,* page4image35448160 *Charness* *(2001,* page4image35440672page4image35446912 *Chambers* *(2002)*  Rule 1.5.1. Fee Divisions Among Lawyers page5image35595200 he failed to obtain the client\'s written consent to fee splitting. *v. Kay 29 Cal 4th* *142, 126 Cal Rptr 2d 536, 56 P3d 645, 2002 Cal LEXIS 7396*. **4. Failure to Inform** Where the compensation of an outside attorney did not constitute fee-splitting, Prof Cond Rule 2-200(A) was not relevant to the fee application, but since there was no evidence that debtors were informed in advance and consented to a contract attorney\'s representation in Chapter 13 case, the debtors could not be charged for the contract attorney\'s time either as an expense or as a fee. *In re CD Cal) 290 BR 145, 2003 187*. **5. Refusal to Enforce Agreement** In a breach of contract suit between two law firms and their attorneys arising out of a case referral, the trial court properly granted a defense motion for a directed verdict based on plaintiffs\' failure to satisfy the requirements of Prof Cond Rule 2-200. Although there were allegations and evidence that defendants had agreed to provide the client with the required written disclosure of a fee-sharing agreement and to obtain her consent to such agreement, plaintiffs\' reliance on these promises was not sufficiently reasonable to afford them relief from the requirements of Prof Cond Rule 2-200. Plaintiffs, as attorneys, were presumed to have known that Prof Cond Rule 2-200 required actual written disclosure and written consent, not a promise by the receiving attorney to provide that disclosure and secure that consent. Moreover, the failure to share fees did not constitute unjust enrichment sufficient to support application of the doctrine of equitable estoppel. In addition, the potential for professional discipline of plaintiffs was not a reasonable alternative to denying them the benefit of their fee-sharing agreement. The policy considerations which caused Prof Cond Rule 2-200 to be enacted for the benefit of the public also required that the fee-sharing agreement at issue not be enforced by a court of law. *v. Cal App 2d Dist) 85 Cal App 4th 891, 102 Cal Rptr 2d 502,* *Chambers* *(2002)* Page 4 of 8 page5image35420384page5image35417472page5image35416016 *Wright* *(2003,* *Bankr* *Bankr* *LEXIS* page5image35415600page5image35415184 *Margolin* *Shemaria* *(2000,* page5image35414768 *2000 Cal App LEXIS 978*. Rule 1.5.1. Fee Divisions Among Lawyers The fee-splitting agreements between attorneys, one of whom had referred a personal injury claim arising from a motorcycle accident to the other, were unearned forwarding fee agreements and were unenforceable as contrary to public policy, where under the agreements, the attorney who received the claim, agreed to pay one-third of any fees recovered to the referring attorney\'s law firm plus and additional 10 percent of such fees to the referring attorney himself. At the time the agreements were made, although the California State Bar Association had not officially adopted the American Bar Association (ABA) Code of Professional Responsibility provision against referral fee-splitting agreements, it had incorporated it by reference. Even though a violation of the ABA Code was not subject to disciplinary action, the fee-splitting agreements were contrary to the public policy of preventing exorbitant fees. Furthermore, there was no evidence that either the injured client or his widow was informed of the referring attorney\'s referral fee, and the record failed to show that the referring attorney acted in his client\'s interest and not in his own in making the fee-splitting arrangements. *v. Cal App* *2d Dist) 83 Cal App 3d 153, 147 Cal Rptr 716, 1978 Cal App LEXIS 1750*. In an attorney\'s action against other attorneys for breach of contract to recover a fee for referral of a client, the trial court properly granted summary judgment in defendants\' favor, where plaintiff referred a client to defendants under an oral fee-splitting agreement that the parties failed to disclose to the client. Former Prof Cond Rule 2-108 (now Prof Cond Rule 2-200) prohibits fee- splitting unless the client has consented in writing after the agreement and the terms thereof have been fully disclosed in writing. It was uncontroverted that there was no compliance with the rule, and thus the trial court properly held the alleged referral agreement was unenforceable on public policy grounds. It would have been absurd to allow plaintiff to recover under the contract when he was subject to professional discipline for entering into it. Moreover, although plaintiff contended that he was not equally culpable because defendants had agreed to obtain the client\'s written consent, plaintiff failed to plead these allegations, and thus defendants were not required to meet them to be entitled to summary judgment. *v. Kolts Cal App 2d* *Dist) 37 Cal App 4th 635, 44 Cal Rptr 2d 31, 1995 Cal App LEXIS 752*, reh\'g denied, *(1995, Cal* Page 5 of 8 page6image35197408 *Altschul* *Sayble* *(1978,* page6image35197200page6image35200112 *Scolinos* *(1995,* page6image35201568 *App 2d Dist) 1995 Cal App LEXIS 825*, review denied, *Cal) 1995 Cal 6838*. *(1995,* *LEXIS* page6image35202400 Rule 1.5.1. Fee Divisions Among Lawyers **6. Quantum Meruit** Where law firm\'s agreement to split with referring law firm attorney fees recovered in action against health care provider was unenforceable because the firms had not informed the client and obtained the client\'s written consent, as required by Cal. R. Prof. Conduct 2-200, the referring firm was still entitled to recover in quantum meruit for the value of legal services rendered because payment for the value of legal services performed was not tied to and was not a division of the attorney fee award to the client in violation of the rule. *& v.* *Wolf 32 Cal 4th 453, 9 Cal Rptr 3d 693, 84 P3d 379, 2004 Cal 1239*. Cal. R. Prof. Conduct 2-200 requires that the client\'s written consent be obtained prior to any division of fees, and this simple dictate cannot reasonably be read to require the client\'s written consent prior to the lawyers\' entering into a fee-splitting arrangement, or prior to the commencement of work, or at any time other than prior to any division of fees, and Rule 2-200 certainly cannot be read to include a requirement nowhere appearing therein, that the fee- splitting agreement between the attorneys must be in writing; thus, while written agreements are preferable to oral ones, and written consents obtained early in the process are preferable to those obtained after-the-fact, those preferences are not contained in Rule 2-200, and therefore cannot invalidate a written consent which complies in all respects with the plain language of the rule, as in this case. *Mink v. Cal App 2d Dist) 121 Cal App 4th 835, 17 Cal* *Rptr 3d 486, 2004 Cal App LEXIS 1348*, review denied, *2004 Cal.*. Because case law established that a lawyer promised a referral fee could recover under the theory of quantum meruit even in the absence of a client\'s written consent under Cal. R. Prof. Conduct 2-200, an attorney\'s cause of action in quantum meruit survived demurrer; because a demurrer did not permit the trial court to make any implicit findings, the court rejected the argument that the attorney\'s cause of action was implicitly found not to be genuine. *Mink v.* *Cal App 2d Dist) 121 Cal App 4th 835, 17 Cal Rptr 3d 486, 2004 Cal App* Page 6 of 8 page7image35395680 *Huskinson* *Brown* page7image35401920 *(2004)* *LEXIS* page7image35401504page7image35401088 *Maccabee* *(2004,* page7image35402336page7image35404832 *(2004)* *LEXIS* *11079* page7image35404208page7image35403792 *Maccabee* *(2004,* page7image35403168page7image35402752 *LEXIS 1348*, review denied, *2004 Cal.*. *(2004)* *LEXIS* *11079*  page8image35243856page8image35256544 *Sayble* *1750*. **8. Goodwill** *(1978,* Rule 1.5.1. Fee Divisions Among Lawyers **7. Purpose of Rule** A codification of former Prof Cond Rule 22, (superseded by former Prof Cond Rule 2-108), which prohibited fee-splitting agreements, was done for the reason that there was an existing state public policy against such agreements that was continuing to be violated. *Altschul v.* *Cal App 2d Dist) 83 Cal App 3d 153, 147 Cal Rptr 716, 1978 Cal App* *Bogucki* Page 7 of 8 *LEXIS* page8image35525088 Payment for goodwill following the break-up of a law partnership is barred by former Prof Conduct Rule 2-108(A) (see now Prof Cond rule 2-200), as a division of fees without regard to services actually rendered. *v. Cal App 2d Dist) 203 Cal App 3d 604, 250* *Cal Rptr 41, 1988 Cal App LEXIS 704*, review denied, *Cal) 1988 Cal 531*, superseded by statute as stated in *v. 6 Cal 4th 409, 25 Cal Rptr 2d 80,* *863 P2d 150, 1993 Cal LEXIS 6006*, *28 ALR5th 811*. **Research References & Practice Aids** **Collateral References:** Matthew Bender(R) Practice Guide: California Contract Litigation, 9.12. Cal Jur 3d (Rev) Attorneys at Law §§ 130, 239. **Law Review Articles:** The dilemma of referral fees in California. 8 Cal Law No. 7 p 61. Attorney Internet Ethics: 22 Cal. Lawyer 4. page8image35526544 *Fraser* *(1988,* page8image35622768page8image35176864 *(1988,* *LEXIS* page8image35177488page8image35177904 *Howard* *Babcock* *(1993)* page8image35179152 Rule 1.5.1. Fee Divisions Among Lawyers 2002 Ethics Roundup: Issues of Loyalty and Confidentiality Continue to Dominate Developments in Legal Ethics. *26 Los 31*. Law practice management: billing and referral fee blues. Cal Law, Jan \'97, p 31. Deering\'s California Codes Annotated Copyright © 2025 by Matthew Bender & Company, Inc. a member of the LexisNexis Group. All rights reserved. **End of Document** Page 8 of 8 page9image35163184page9image35163392 *Angeles* *Lawyer* *(April,* *2003)* page9image35164016 page10image35518064page10image35519728 ***Cal. of Rule 1.5*** This document reflects first and last orders received through December 27, 2024. Rules are current through December 27, 2024. ***CA - California Local, State & Federal Court Rules* \> *RULES OF THE STATE BAR OF*** ***CALIFORNIA* \> *Rules of Professional Conduct* \> *Chapter 1. Lawyer-Client Relationship*** **Rule 1.5. Fees for Legal Services** **(a)** A lawyer shall not make an agreement for, charge, or collect an unconscionable or illegal fee. **(b)** Unconscionability of a fee shall be determined on the basis of all the facts and circumstances existing at the time the agreement is entered into except where the parties contemplate that the fee will be affected by later events. The factors to be considered in determining the unconscionability of a fee include without limitation the following: **(1)** whether the lawyer engaged in fraud\* or overreaching in negotiating or setting the fee; **(2)** whether the lawyer has failed to disclose material facts; **(3)** the amount of the fee in proportion to the value of the services performed; **(4)** the relative sophistication of the lawyer and the client; **(5)** the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly; **(6)** the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer; ***Rules*** ***Prof\'l*** ***Conduct,*** page10image35179360 **(7)** the amount involved and the results obtained; Rule 1.5. Fees for Legal Services **(8)** the time limitations imposed by the client or by the circumstances; **(9)** the nature and length of the professional relationship with the client; **(10)** the experience, reputation, and ability of the lawyer or lawyers performing the services; **(11)** whether the fee is fixed or contingent; **(12)** the time and labor required; and **(13)** whether the client gave informed consent\* to the fee. **(c)** A lawyer shall not make an agreement for, charge, or collect: **(1)** any fee in a family law matter, the payment or amount of which is contingent upon the securing of a dissolution or declaration of nullity of a marriage or upon the amount of spousal or child support, or property settlement in lieu thereof; or **(2)** a contingent fee for representing a defendant in a criminal case. **(d)** A lawyer may make an agreement for, charge, or collect a fee that is denominated as \"earned on receipt\" or \"non-refundable,\" or in similar terms, only if the fee is a true retainer and the client agrees in writing\* after disclosure that the client will not be entitled to a refund of all or part of the fee charged. A true retainer is a fee that a client pays to a lawyer to ensure the lawyer\'s availability to the client during a specified period or on a specified matter, but not to any extent as compensation for legal services performed or to be performed. **(e)** A lawyer may make an agreement for, charge, or collect a flat fee for specified legal services. A flat fee is a fixed amount that constitutes complete payment for the performance of described services regardless of the amount of work ultimately involved, and which may be paid in whole or in part in advance of the lawyer providing those services. **History** Page 2 of 6 page11image35467872 Rule 1.5. Fees for Legal Services Rule 1.5 approved by order of the Supreme Court filed September 26, 2018, effective November 1, 2018. Annotations **Commentary** **Comment** *Prohibited Contingent Fees* \[1\] Paragraph (c)(1) does not preclude a contract for a contingent fee for legal representation in connection with the recovery of post-judgment balances due under child or spousal support or other financial orders. *Payment of Fees in* *Advance of Services* \[2\] Rule 1.15(a) and (b) govern whether a lawyer must deposit in a trust account a fee paid in advance. \[3\] When a lawyer-client relationship terminates, the lawyer must refund the unearned portion of a fee. (See rule 1.16(e)(2).) *Division of Fee* \[4\] A division of fees among lawyers is governed by rule 1.5.1. *Written\* Fee Agreements* \[5\] Some fee agreements must be in writing\* to be enforceable. (See, e.g., *Bus. & Prof. Code,* *§§ 6147* and *6148*.) **Case Notes** **1. Illustrative Cases** A law firm was not charging its clients unconscionably high fees in violation of Prof Cond Rule 4-200(A), where there was nothing ethically disturbing in charging clients a premium as compensation for the firm\'s loss of the time-value of retainer fees (by allowing clients to defer payment until after termination of the case), and for the additional risk of nonpayment which the firm was shouldering. *In re & ND Cal) 192 BR 211, 1996 US Dist* *LEXIS 1005*. Page 3 of 6 page12image35196368page12image35202816page12image35203232 *Hessinger* *Assocs.* *(1996,* page12image35203648 Rule 1.5. Fees for Legal Services Disbarment was appropriate where the attorney had been previously disbarred, no extraordinary circumstances warranted leniency, the attorney demonstrated an apparent lack of insight into the wrongfulness of his actions, and the attorney induced his clients to enter into post-settlement agreements by telling them that the retainer agreements that they had signed already authorized him to compromise their medical bills and to keep any savings. *In re* *36 Cal 4th 81, 29 Cal Rptr 3d 766, 113 P3d 556, 2005 Cal 6848*. An attorney\'s action in unilaterally withholding \$2,500 per year in interest on a loan from a client, as security for or payment of attorney fees, while refusing to account for his time and failing to provide services justifying fees in the amount withheld, constituted the charging of an unconscionable fee in violation of former Prof Cond Rule 2-107 and the duties of an attorney under *B & P C § 6103*. In addition to such conduct, the attorney gave false testimony in the underlying disciplinary proceedings, had been previously disciplined for engaging in a transaction with a client and for failing to protect the client\'s interests, appeared unrepentant, and admitted no responsibility. Accordingly, the attorney was placed on probation for three years, conditioned on his actual suspension for one year and compliance with certain other terms and conditions. *v. State Bar 34 Cal 3d 36, 192 Cal Rptr 244, 664 P2d 148,* *1983 Cal LEXIS 196*. Attorney who collected attorney fees in a conservatorship matter without prior court approval violated *Prob C §§ 2640*, *2642* and thus willfully received an illegal fee in violation of former *Prof* *Cond Rule v. State Bar 39 Cal 3d 539, 216 Cal Rptr 919, 703 P2d* *390, 1985 Cal LEXIS 320*. **Research References & Practice Aids** **Cross References:** Guidelines and Minimum Standards for the Operation of Mandatory Fee Arbitration Page 4 of 6 page13image35467664page13image35461632 *Silverton* *(2005)* page13image35467456page13image35465584page13image35468496page13image35468912 Programs: Prog & Svcs Rule 3.560. *LEXIS* page13image35469744 *Warner* *(1983)* page13image35470160 *2-107(A).* *Rossman* *(1985)* Rule 1.5. Fees for Legal Services Standards for sanctions for offenses involving violation of this rule: Proc Rules, Std 2.7. **Collateral References:** Cal Jur 3d (Rev) Attorneys §§ 127 et seq. Retaining control of legal fees and costs: new uses for the retention letter. 17 CEB Cal Bus L Rep 191. Rutter Cal Prac Guide, Enforcing Judgments and Debts §§ 1:64 et seq.; Family Law §§ 1:230 et seq.; Law Practice Management §§ 17:40 et seq.; Personal Injury §§ 1:119 et seq.; Probate §§ 14:46.3 et seq.; Professional Responsibility §§ 5:395 et seq. **Law Review Articles:** Do fee schedules violate antitrust law? 61 ABAJ 565. Fee agreements in California: If clients pay on installment, consumer protection statutes may apply. 8 Cal Law No. 5 p 71. When are fees unconscionable in California? 8 Cal Law No. 5 p 88. The ethics of billing: An attorney has an obligation to inform the client of matters which affect the propriety of the fee charges. 34 Orange County Law No. 11 p 42. \"Justifiable cause\" and other cases. 25 SF Atty No. 1, p. 11. Law practice management: billing and referral fee blues. Cal Law, Jan \'97, p 31. Attorney fees paid in advance and client trust accounts, a conundrum. SF Atty (April-May 95\) p 19. Deering\'s California Codes Annotated Copyright © 2025 by Matthew Bender & Company, Inc. a member of the LexisNexis Group. All rights reserved. Page 5 of 6 Rule 1.5. Fees for Legal Services Page 6 of 6 page15image35441296 **End of Document**