Joint Ventures & Associating Counsel

Law firms can enter into joint ventures so long as they comply with ethical rules and the client is properly advised. In some states, such division of fees between lawyers who are not in the same firm may be allowed provided that certain conditions apply, including: 

• Both parties have consented.
• The fee and fee split meet such additional ethical requirements as are set forth by the applicable state.

In Virginia, Rule 1.5 (e), Virginia Rules of Professional Conduct, Virginia State Bar, states, lawyers who are not in the same firm may divide fees only if they follow these guidelines.

1. The client understands that all lawyers involved will be participating in this matter, and has given consent.
2. The terms of the agreement will be disclosed to the client and their consent is necessary before they can take effect.
3. The total fee is reasonable.

Both the client’s consent and the fee division are documents (preferably in writing) before any legal services are offered. 

The Virginia State Bar contemplates that there will be situations in which joint ventures and associating counsel take place. Indeed, the “Comment” by the V Speedway Bars states: “A division of fee refers to a single billing to a client covering the fee of two or more lawyers who are not in the same firm. A division of fee facilitates association of more than one lawyer in a matter in which neither alone could serve the client as well, and most often is used when the fee is contingent and the division is between a referring lawyer and a trial specialist”. 

The Virginia State Bar says that Rule 1.5 (e) removed the requirement “that each lawyer involved in a fee-splitting arrangement assume full responsibility to the client, regardless of the degree of the lawyer’s continuing participation” in order “to encourage referrals under appreciated circumstances.”

With regard to a lawyer’s competence, the Virginia State Bar states: “In determining whether a lawyer employs the requisite knowledge and skill in a particular matter, relevant factors include the relative complexity and specialized nature of the matter, the lawyer’s personal experience, the lawyer’s training and experience in the field in question, the preparation and study the lawyer is able to give the matter and whether it is feasible to refer the matter to, or associate or consult with, a lawyer of established competence in the field in question.”

To learn more about joint ventures and associating legal counsel, contact us online today.