Two lawyers who shared office space were in the same firm and therefore didn’t have to comply with the ethics rule on fee-sharing among unaffiliated lawyers, the Missouri Court of Appeals, Western District, decided Feb. 7 ( Brady v. Starke , 2017 BL 35962, Mo. Ct. App. W. Dist., No. WD79291, 2/7/17 ).
The circumstances of the lawyers’ office-sharing arrangement indicated to the public that they were in the same firm, so their fee-splitting agreement was enforceable without regard to whether it comported with Missouri Rule of Professional Conduct 4-1.5(e), Judge Cynthia L. Martin said.
The case might be a wake-up call for office-sharing lawyers to think through how their arrangement looks to the public. Lawyers who share space but don’t practice together should make the separate nature of their practices clear to visitors and clients, the decision suggests.
James Brady rented office space from Patrick Starke for about two years. The two lawyers agreed to split fees in cases they referred to each other, with the referring attorney getting 25 percent. After moving out Brady claimed their fee-sharing agreement was invalid because it didn’t meet the requirements of Rule 1.5.
The trial court found the agreement enforceable and awarded Starke his contractual share of a big fee from a personal injury case he had sent to Brady during their office-sharing agreement.
Rule 1.5(e) imposes several requirements for division of a fee between “lawyers who are not in the same firm.” Fee-sharing agreements that don’t comply with Rule 1.5(e) are unenforceable in Missouri, but the requirements in the rule don’t apply when the lawyers are in the same firm, the court of appeals said.
The court noted that Rule 4-1.0(c) defines the terms “firm” and “law firm.”
A comment to Rule 1.0(c) says that whether two or more lawyers constitute a firm can depend on the specific facts, and that “if they present themselves to the public in any way that suggests that they are a firm or conduct themselves as a firm, they should be regarded as a firm for purposes of the Rules.”
Brady argued that he and Starke weren’t in the same firm because they had separate bar listings, used individual office forms, didn’t advertise together, didn’t list each other on accounts or insurance, and had separate letterheads, websites, e-mail addresses and business cards.
However, the court said the record supported the trial court’s finding that Brady and Starke presented themselves to the public in a way that suggested they were a firm.
It wasn’t necessary for the trial court to find that the two attorneys “held themselves out” to be in the same firm, the court said.
The court pointed to the following evidence as support for finding that the lawyers publicly presented themselves as being in the same firm:
Jonathan Sternberg, Kansas City, Mo., represented Brady. William L. Carr, Independence, Mo., represented Starke.
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