In-House Counsel Ethics: Fee Sharing Implication


Summary

Lawyers are prohibited from sharing legal fees with non-lawyers unless an exception applies. The issue of fee sharing infrequently arises for in-house counsel as they are typically salaried employees who usually do not receive fees for advising their corporate employers. On the rare occasion that in-house attorneys represent their employer-client in litigation and arbitration matters, ethical issues involving fee sharing and the unauthorized practice of law may be implicated. New York State Bar Ass’n Comm. on Prof’l Ethics. Op. 1121 (2017) (Opinion 1121) issued by the New York State Bar Association, Committee on Professional Ethics (the Committee) in May 2017 dealt with two issues: (1) whether in-house counsel for a company may remit the entire attorney’s fee portion of an arbitration award to the claimant company without violating the fee-sharing rule and (2) whether remittal of attorney’s fees to its corporate employer would constitute aiding the non-lawyer company in the ...