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Economic Factors Driving Increase In Nonlawyer Payment Inquiries

By Zack Needles
September 01, 2016

As evidenced by a recent Pennsylvania Superior Court ruling invalidating an alleged fee-splitting arrangement between a law firm and an outside consultant, questions about the proper way for attorneys to pay nonlawyers who help generate business still arise frequently. In fact, professional ethics lawyers said they've received an increasing number of such inquiries post-recession, as demand for legal services has failed to keep pace with a growing attorney population.

In a nonprecedential July 8 ruling in SCF Consulting v. Barrack, Rodos & Bacine, No. 1413 EDA 2015 (Sup. Ct. Pa., July 8, 2016), a Superior Court panel ruled 2-1 that a consultant to Philadelphia securities litigation firm Barrack, Rodos & Bacine was not entitled to an allegedly promised cut of the firm's profits from cases he worked on because that type of fee-splitting agreement violates state ethics rules.

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