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3 Ways You Can (And Can't) Split Costs with Fellow Attorneys

By Andrew Chow, Esq. | Last updated on

Tough times, like in our current economy, can call for tough measures, especially for small and solo law firms. Splitting costs with another small or solo firm can help you balance your budget -- but some cost-splitting agreements may get you in trouble.

As a reminder, here are three ways you can -- and can't -- split costs and fees, if you're thinking of joining forces with another law office:

You can:

  1. Split the costs of office overhead. Leasing office space is one of the biggest expenses for small and solo law firms -- which is why attorneys sometimes band together to buy office property on their own. Splitting overhead costs like rent, utilities, and office supplies is fine -- just make sure all parties clearly understand how costs will be split.
  2. Split the costs of hiring legal assistants or paralegals. With two or more law firms under one roof, it may make sense to split the cost of hiring staff members. You can go 50/50 (or 70/30, or whatever your agreement is) on salaries for these staffers, who will still bill their hours to each firm's clients.
  3. Split legal fees with another attorney, with conditions. The ABA's ethics rules generally allow attorneys to split fees with other attorneys, but such an arrangement must be disclosed in writing, and a client must give written consent. Check with your state's ethics rules as well.

You can't:

  1. Split a Westlaw or LexisNexis account. In general, a legal database account is specific for each registered user. Attorneys cannot share their Westlaw or LexisNexis accounts, and each office must keep its accounts separate.
  2. Share a PACER login. An attorney cannot share a PACER login with other attorneys to e-file documents. But an attorney can authorize an assistant or paralegal to e-file using the attorney's PACER login.
  3. Split legal fees with non-attorneys. This is not allowed, because such relationships may encourage higher fees, solicitation, or even the unauthorized practice of law by non-lawyers.

With regards to fee-splitting, some states have ruled that attorneys' use of online coupon sites like Groupon do not violate fee-splitting rules. But check with your state's bar association just to be safe.

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