Under the Texas Code of Professional Responsibility, do the requirements of Disciplinary Rule ("DR") 2-107(A) apply to the payment by a law firm of a portion of legal fees received by the firm to a lawyer who is publicly represented to be "of counsel" to the firm and who has a regular, continuing and substantial relationship with the law firm?
DR 2-107(A) provides as follows: (A) A lawyer shall not divide a fee for legal services with another lawyer who is not a partner in or associate of his law firm or law office, unless:
1.The client consents to employment of the other lawyer after a full disclosure that a division of fees will be made.
2.The division is made in proportion to the services performed and responsibility assumed by each, or is made with a forwarding lawyer.
3 The total fee of the lawyers does not clearly exceed reasonable compensation for all legal services they rendered the client.
This provision applies only in the case of a lawyer's division of legal fees with another lawyer "who is not a partner in or associate of" the first lawyer's law firm or law office. The provision is intended to place special limitations on payments to outside lawyers by a lawyer or law firm to which the client makes payment for the provision of legal services.
Although a lawyer with an "of counsel" relationship to a law firm has a relationship that for some purposes may be distinguished from the relationship of "partner" or "associate," for other purposes of the Texas Code of Professional Responsibility a lawyer who is "of counsel" to a firm is appropriately treated as a member of the firm. See Texas Professional Ethics Committee Opinion No. 445 (Texas Bar Journal Sept. 1987). Where a lawyer has a regular, continuing and substantial relationship with a law firm and is publicly designated as "of counsel" to the law firm, the lawyer should be considered by the public as a part of the firm, like a partner or associate, who may work on firm matters and who may share in the fee income of the firm. Accordingly, the specific requirements of DR 2-107(A) should not apply to the "of counsel" lawyer's sharing in the law firm's legal fees. Of course, the requirements of DR 2-106 would apply as to legal fees charged by the firm regardless of whether or not the "of counsel" lawyer shared in a particular fee.
The requirements of DR 2-107(A) of the Texas Code of Professional Responsibility do not apply with respect to a law firm's sharing legal fees with a lawyer designated as "of counsel" to the firm and having a regular, continuing and substantial relationship with the law firm.