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TLI Top Tip: Ethics Committee Opinion 706 – Lawyers cannot pay nonlawyer-owned companies based on a percentage of law firm revenues.
March 6, 2025
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Opinion 706, issued last month by the Professional Ethics Committee, determined that a lawyer cannot pay a nonlawyer-owned entity that provides a platform of support services for the law firm based on a percentage of revenues of the lawyer or the lawyer’s firm. To do so is considered sharing fees with a nonlawyer, and thus, would violate Texas Disciplinary Rule of Professional Conduct 5.04(a). Rule 5.04(a) states that a lawyer or law firm shall not share or promise to share legal fees with a non-lawyer. Opinion 706 joins three prior Texas ethics opinions which also prohibit lawyers from paying nonlawyer third parties based on a percentage of a lawyer’s or law firm’s gross revenue.
Opinion 467 (November 1990) determined that, although common in leases for commercial property, an office lease arrangement in which a law firm agrees to…