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Non-sharing of fees with non-lawyer, C3S43 CPRA

Section 43, Canon III

SECTION 43. Non-Sharing of fees with non-lawyers. – A lawyer shall not share, split, or divide or stipulate to divide, directly or indirectly, a fee for legal services with persons or organizations not licensed or authorized to practice law. (2023 Code of Professional Responsibility and Accountability or CPRA)

1. Non-Sharing of fees with non-lawyers

Under this section, and whether directly or indirectly, lawyers are prohibited from sharing, splitting, or dividing or stipulating to divide “a fee for legal services with persons or organizations not licensed or authorized to practice law.”

Lijauco v. Terrado, A.C. No. 6317, August 31, 2006, Per Ynares-Santiago, J.:

• [Respondent-lawyer’s] admission that he divided the legal fees with two other people as a referral fee does not release him from liability. A lawyer shall not divide or stipulate to divide a fee for legal services with persons not licensed to practice law, except in certain cases.

a. Waiving of legal fees in favor of another person

Heirs of Carlos v. Linsangan, A.C. No. 11494, July 24, 2017, Per Tijam, J.:

• [A] Supplemental Compromise Agreement dated December 16, 2009 was submitted by the heirs of Juan and Atty. Linsangan, dividing among them the 7,500 square meter-portion of the property as follows: 3,750 square meters to the heirs of Juan and 3,750 square meters to Atty. Linsangan pursuant to the Contract for Professional Services.1âwphi1 In said Supplemental Compromise Agreement, Atty. Linsangan waived in favor of his wife and children his 3,750 square meter share, except as to the 250 square meters thereof…

• What is more, Atty. Linsangan, at the guise of merely waiving portions of the subject property in favor of his wife and children, actually divided his attorney’s fee with persons who are not licensed to practice law in contravention of Rule 9.02,49 Canon 950 of the [old CPR].

a. Exception

The prohibition against non-sharing of fees with non-lawyers is subject to the exception:

Where a lawyer undertakes to complete unfinished legal business of a deceased lawyer, a division or sharing of fees is allowed with the deceased lawyer’s legal heirs or estate. (CPRA, Paragraph 2, Section 42, Canon II)

NB: The above is the one and only exception where lawyers may be divided or shared with non-lawyers. In the old Code of Professional Responsibility, there were two additional exceptions, namely: (a) Where there is a pre-existing agreement with a partner or associate that, upon the latter’s death, money shall be paid over a reasonable period of time to his estate or to the persons specified in the agreement; and (b) Where a lawyer or law firm includes non-lawyer employees in a retirement plan, even if the plan is based in whole or in part, on a profit-sharing arrangement. These exceptions are no longer provided in the CPRA.

References

Canon III, 2023 Code of Professional Responsibility

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