ABA Committee on Ethics and Professional Responsibility issues new opinion on safeguarding fees to be split with lawyers outside the firm

The ABA Standing Committee on Ethics and Professional Responsibility has issued a new Formal Opinion (No.475) to explain the duties of a lawyer who receives earned fees that must be shared with a lawyer from another law firm.  According to the opinion, the lawyer who receives the money must take steps to appropriately safeguard the funds by placing them in an account separate from his or her own property.  The attorney must then promptly notify the other lawyer, promptly forward the agreed portion to the other lawyer, and provide an accounting if the other lawyer requests it.  The opinion is available here for a limited time.

Not all jurisdictions agree with the approach but it makes sense to me.  The alternative is to have the lawyer transfer the money to the lawyer's general account and then pay the outside lawyer with funds from there.  Either way, the money will be commingling with either clients' money or lawyer's funds for a period of time.

IPethics & INsights has a nice comment on the opinion and its applicability to IP practice here. The Lawyer Ethics Alert Blog also has a comment on the opinion here.