David Grossbaum Pens Law360 Byline on Potential Pitfalls Involved in Lawyer Fee-Sharing Arrangements
Hinshaw partner David Grossbaum has authored a byline in Law360 titled "Lessons From Lawyer Fee-Sharing Agreements Gone Wrong." A recent case—Edelson, P.C. v. Girardi, et al.—has put a spotlight on what can happen when a fee-sharing agreement goes bad.
Grossbaum examines various state fee-sharing rules and emphasizes that clients must be informed of and provide written consent to any fee-sharing agreement. Lawyers who do not strictly follow the applicable fee-sharing rules may risk a disciplinary complaint, the loss of their share of the fee, or wind up in costly fee litigation with co-counsel. Even with a valid fee-sharing agreement, one lawyer may be held liable to the client for the negligence or malfeasance of the other.
To help mitigate risk, Grossbaum recommends establishing in writing a clear division of responsibility and fees between the lawyers and then informing the client of this division. Because fee-sharing agreements often require that all lawyers accept joint responsibility for handling the matter, he adds that doing due diligence on the other counsel is important, such as checking with the local professional conduct committee to make sure that there are no complaints against the other lawyers and ensuring that they have credible references.
"Lessons From Lawyer Fee-Sharing Agreements Gone Wrong" was published by Law360 on June 23, 2022.