Iowa R. Prof'l Conduct 32:5.4

(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 purchases the practice of a deceased, disabled, or disappeared lawyer may,

pursuant to the provisions of rule 32:1.17, pay to the estate or other representative of that

lawyer the agreed-upon purchase price; and

(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.

(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 32:1.8(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).