Can a law firm require a departing lawyer to share fees later earned from clients who follow that lawyer to a new practice?

Plain-English summary

A professional service corporation practicing law under Illinois Supreme Court Rule 721 wanted all of its attorney-employees to sign an agreement requiring each, after leaving, to remit to the corporation 25% of all legal fees collected for two years from any person or entity who had been a client of the corporation when the lawyer's employment ended. The committee was asked whether that fee-splitting clause violated the Code.

The committee analyzed the clause under former Rule 2-107, which makes division of fees between lawyers improper unless the client consents in writing, the division is proportional to services performed and responsibilities assumed, and the total fee is not excessive. The "referral fee" exception in Rule 2-107(a)(2) applies only when disclosed to the client and the referring lawyer keeps full responsibility, and it is not meant to recognize any proprietary interest in the client. The committee found the post-termination clause was not a referral within the letter or spirit of the rule; its evident purpose was to protect the firm from losing clients to departing lawyers.

The committee relied on its Opinion 628, which found a similar clause an attempt to establish a proprietary interest in clients' business, and stated a firm has no ethical, legal, or moral right to the continued patronage of past clients who freely choose to retain a departing lawyer. Because the clause required dividing fees without a proportionate division of services or responsibilities, it violated the rule. The committee distinguished Opinion 610, where an agreement limited fee-sharing to matters actively handled by the firm before the partner's withdrawal, which it treated as a practical sharing of fees actually earned in part by each. It concluded the proposed agreement would violate Rule 2-107 and was improper.

Currency note

This opinion was issued in January 1984, under the former Illinois Code of Professional Responsibility and before Illinois adopted the 1990 (and later 2010) Rules of Professional Conduct. The ISBA Board of Governors affirmed the opinion in July 2010 as generally consistent with the 2010 Rule (Rule 1.5(e)), while cautioning that the specific standards referenced may differ from the 2010 Rules. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule or requirement mentioned here.

Common questions

Q: Can a firm contract to take a cut of fees a departing lawyer later earns from former firm clients?

A: The opinion concluded no; the committee held that such a clause divides fees without a proportionate division of services, violating former Rule 2-107, and asserts a proprietary interest in clients the firm has no right to.

Q: Is this a permissible referral-fee arrangement?

A: No. Per the opinion, the post-termination clause was not a referral within the letter or spirit of Rule 2-107(a)(2); its purpose was to keep clients from leaving with departing lawyers, not to refer work.

Q: Can a firm ever share in fees with a departing lawyer?

A: The committee distinguished Opinion 610, where the agreement limited sharing to matters the firm actively handled before the partner left, treating that as a practical division of fees actually earned in part by each, which did not violate the rule.

Background and rules framework

The opinion applied former Illinois Code Rule 2-107 (division of fees between lawyers: written client consent, division proportional to services and responsibility, and a non-excessive total fee), including the referral-fee provision in Rule 2-107(a)(2). The Board's 2010 affirmation maps the analysis to current Illinois Rule of Professional Conduct 1.5(e) (division of a fee between lawyers not in the same firm), corresponding to ABA Model Rule 1.5(e).

Citations and references

Rules of Professional Conduct:

• Illinois Code Rule 2-107, Rule 2-107(a)(2) (applied in the opinion)
• Illinois RPC 1.5(e) (2010 equivalent per the Board's affirmation)
• MR 1.5 (fees; Rule 1.5(e) division of fees between lawyers)

Cases:

• Corti v. Fleisher, 93 Ill. App. 3d 517, 49 Ill. Dec. 74, 417 N.E.2d 764 (1981), cited in the Board's 2010 affirmation note

Other opinions cited:

• ISBA Opinion 628: a comparable clause was an improper attempt to claim a proprietary interest in clients
• ISBA Opinion 610: a clause limited to matters actively handled before withdrawal was a permissible practical fee division
• ISBA Opinion 776: purpose of the referral-fee exception

See also

• ISBA Ethics Op. 12-11: Fee Sharing Between Discharged and Successor Lawyer
• ISBA Ethics Op. 03-06: Fee Sharing When a Partner Becomes a Prosecutor

Source

• Landing page: https://www.isba.org/ethics/opinions/8415