Question

I have been asked to jointly represent a client with another law firm. How do we handle billing that client?

Answer

There are several options for billing when two law firms are providing joint representation to a client. The two law firms can bill separately for the services they provide or share the fees billed to the client, but certain ethical requirements must be considered when sharing fees from a representation.

Wisconsin’s rule regarding the sharing of fees, SCR 20:1.5(e) of the Wisconsin Rules of Professional Conduct, has very clear requirements for dividing fees between two lawyers or law firms. The rule provides as follows:

(e) A division of a fee between lawyers who are not in the same firm may be made only if the total fee is reasonable and:

(1) the division is based on the services performed by each lawyer, and the client is advised of and does not object to the participation of all the lawyers involved and is informed if the fee will increase as a result of their involvement; or

(2) the lawyers formerly practiced together and the payment to one lawyer is pursuant to a separation or retirement agreement between them; or

(3) pursuant to the referral of a matter between the lawyers, each lawyer assumes the same ethical responsibility for the representation as if the lawyers were partners in the same firm, the client is informed of the terms of the referral arrangement, including the share each lawyer will receive and whether the overall fee will increase, and the client consents in a writing signed by the client.

As indicated in the rule, the lawyers can separately bill the client, based on the specific services performed by each lawyer. However, the separate billing is permissible only if the client 1) is advised of the arrangement, 2) does not object to the participation of all the lawyers involved, and 3) is informed if the fee will increase as a result of the two lawyers providing representation to the client. Under this scenario, each lawyer bills the client separately for the services being provided.

The other alternative is a sharing of fees between the two lawyers. It is important to recognize that when lawyers jointly submit the bill to the client, “each lawyer assumes the same ethical responsibility for the representation as if the lawyers were partners in the same firm.” In addition, the client must be informed of the terms of the joint representation or referral arrangement, including the share of fees that each lawyer will receive, and must be notified if the overall fee will increase. The client must consent in writing to the sharing of fees between the two lawyers and must sign the agreement between the two lawyers for the sharing of the fees.

When lawyers jointly submit the bill to the client, “each lawyer assumes the same ethical responsibility for the representation as if the lawyers were partners in the same firm.”

The most important aspect of these requirements is that both lawyers understand that each is responsible for the representation of the client as if they were partners in the same law firm. This does not mean that each lawyer must be prepared for trial, but that each lawyer must have a clear understanding of what their respective responsibilities are and both lawyers owe ethical responsibilities to the client including the duty of communication and the duty of competent representation. Both lawyers must be prepared to answer questions from the client about the matter and be able to advise the client as needed about the status of the representation.

The division of fees between lawyers is becoming a very common occurrence as lawyers become more specialized in their particular practice areas. Lawyers must always recognize their ethical duties when engaging in this type of joint representation of a client. For further information, please refer to Formal Ethics Opinion EF 10-02 of the Committee on Professional Ethics.