Colo. RPC 5.4

History

Source: Entire rule amended and adopted June 12, 1997, effective July 1, 1997; entire Appendix repealed and readopted April 12, 2007, effective January 1, 2008; (d) amended and (e) and (f) added and Comment amended and effective February 26, 2009; IP(d) and (e) amended and effective February 22, 2018; (f) amended and adopted May 20, 2021, effective July 1, 2021. COMMENT [1] The provisions of this Rule express tra- ditional limitations on sharing fees. These limi- tations are to protect the lawyer’s professional independence of judgment on behalf of the law- yer’s client. Moreover, since a lawyer should not aid or encourage a nonlawyer to practice law, the lawyer should not practice law or oth- erwise share legal fees with a nonlawyer. This does not mean, however, that the pecuniary value of the interest of a deceased lawyer in the lawyer’s firm or practice may not be paid to the lawyer’s estate or specified persons such as the lawyer’s spouse or heirs. In like manner, profit- sharing retirement plans of a lawyer or law firm which include nonlawyer office employees are not improper. These limited exceptions to the rule against sharing legal fees with nonlawyers are permissible since they do not aid or encour- age nonlawyers to practice law. Where someone other than the client pays the lawyer’s fee or salary, or recommends employment of the law- yer, that arrangement does not modify the law- yer’s obligation to the client. As stated in para- graph (c) such arrangements should not interfere with the lawyer’s professional judg- ment on behalf of the lawyer’s client. A lawyer should, however, make full disclosure of such arrangements to the client; and if the lawyer or client believes that the effectiveness of lawyer’s representation has been or will be impaired thereby, the lawyer should take proper steps to withdraw from representation of the client. [2] To assist a lawyer in preserving inde- pendence, a number of courses are available, For example, a lawyer may practice law in the form of a professional company, if in doing so the lawyer complies with all applicable rules of the Colorado Supreme Court. Although a law- yer may be employed by a business corporation with nonlawyers serving as directors or officers, and they necessarily have the right to make decisions of business policy, a lawyer must de- cline to accept direction of the lawyer’s profes- sional judgment from any nonlawyer. V arious types of legal aid offices are administered by boards of directors composed of lawyers and nonlawyers. A lawyer should not accept em- ployment from such an organization unless the board sets only broad policies and there is no interference in the relationship of the lawyer and the individual client the lawyer serves. Where a lawyer is employed by an organiza- tion, a written agreement that defines the rela- tionship between the. Lawyer and the organiza- tion and provides for the lawyer’s independence is desirable since it may serve to prevent mis- understanding as to their respective roles. Al- though other innovations in the means of sup- plying legal counsel may develop, the responsibility of the lawyer to maintain the law- yer’s professional independence remains con- stant, and the legal profession must insure that changing circumstances do not result in loss of the professional independence of the lawyer. [3] As part of the legal profession’s com- mitment to the principle that high quality legal services should be available to all, lawyers are encouraged to cooperate with qualified legal assistance organizations providing prepaid legal services. Participation should at all times be in accordance with the basic tenets of the profes- sion: independence, integrity, competence, and devotion to the interests of individual clients. A lawyer so participating should make certain that a relationship with a qualified legal assistance organization in no way interferes with the law- yer’s independent professional representation of the interests of the individual client. A lawyer should avoid situations in which officials of the organization who are not lawyers attempt to direct lawyers concerning the manner in which legal services are performed for individual members, and should also avoid situations in which considerations of economy are given un- due weight in determining the lawyers em- ployed by an organization or the legal services to be performed for the member or beneficiary rather than competence and quality of service. A lawyer interested in maintaining the historic traditions of the profession and preserving the function of a lawyer as a trusted and indepen- dent advisor to individual members of society should carefully assess those factors when ac- cepting employment by, or otherwise participat- ing in, a particular qualified legal assistance organization, and while so participating should adhere to the highest professional standards of effort and competence. ANNOTATION Annotator’s note. Rule 5.4 is similar to Rule 5.4 as it existed prior to the 2007 repeal and readoption of the Colorado rules of professional conduct. Relevant cases construing that provi- sion have been included in the annotations to this rule. Transferring various ownership interests to lawyer employees of firm who did not receive profits and were not managers war- ranted suspension of one year and a day. Suspension appropriate because attorney made misrepresentations and was dishonest in such transfers. People v. Reed, 942 P.2d 1204 (Colo. 1997). Motion to dismiss should have been denied on the basis that a joint venturer cannot shield itself from liability on the grounds that the joint venture was prohibited by this rule of professional conduct. Bebo Constr. Co. v. Mattox & O’Brien, 998 P.2d 475 (Colo. App. 2000). An attorney’s attempt to share legal fees with nonlawyers is professional misconduct. People v. Easley, 956 P.2d 1257 (Colo. 1998). Conduct violating this rule in conjunction with other disciplinary rules sufficient to jus- tify suspension. People v. Easley, 956 P.2d 1257 (Colo. 1998).