Trial Magazine

Working with cocounsel from another law firm may give you the opportunity to handle a case that you could not, should not, or would not have done on your own. But it is not simply a matter of a handshake or reaching a verbal agreement over the phone. If you will be practicing law outside of your home state (where you are admitted to the bar and maintain a full-time office), or inviting an out-of-state attorney to work with you, here are some things you need to know to protect your client and yourself. 

Vetting Cocounsel

When seeking cocounsel in a part of the country where you are not familiar with the members of the bar, get references and do your homework. Get recommendations from attorneys you trust from that jurisdiction, other members of your state trial lawyers association or the American Association for Justice, and attorney and practice association list servers. Search for other litigation that your prospective cocounsel has been involved in. If the state court system has a searchable docket, look up the attorney, and speak with attorneys who appear on pleadings and who may be able to provide a reference. If you have a case that potentially will end up in federal court, you probably don’t want to cocounsel with an attorney who rarely has practiced in that venue.

Blindly associating with someone is dangerous. You would not hire an expert without vetting that person. You are about to enter into a long-term relationship with serious professional and financial consequences. Do your due diligence. This same precaution applies when you are asked to be cocounsel. 

Written Agreement

The specific terms of your cocounseling arrangement must be clearly laid out in writing. And one of the areas most fraught with peril is sharing litigation costs and expenses. Will one side foot the entire cost, will it be split equally, or will you split some other percentage? What control and oversight does either cocounsel have related to expenses?

For example, what would happen if your cocounsel, who was responsible for a particular issue in the case, spent thousands of dollars on something that was not economically justified or not beneficial to the case? You do not want to find out after a case settles that your cocounsel spent a lot of money prematurely creating unnecessary trial exhibits or editing video depositions. You can easily avoid this by including specifics in the agreement.

As part of this written agreement, you also need to provide a periodic written accounting to each other. At the end of the case, especially if it is not successful, you don’t want to unexpectedly discover that you owe your cocounsel thousands of
dollars in expenses that you were unaware had been incurred. Give the client and cocounsel regular statements that summarize how much money was spent, when it was spent, and on what it was spent—and require the same from your cocounsel.

The agreement also should specify whether reconciliations must be made if one side or the other gets out of balance on its share of the costs. Will internal expenses—copying charges, postage, mileage, and the like—be reconciled while the case is pending? In the unfortunate event of a non-recovery, what internal expenses are subject to reconciliation?

If you were the one brought in as cocounsel, consider including an upper limit on the expenses that you will advance while the case is ongoing, as well as an upper limit on the expenses that you will share with cocounsel in the event of a non-recovery. 

Admission to Practice

Every state bar has rules for being admitted to practice, in one form or another. All states allow attorneys to be admitted pro hac vice under certain circumstances, but these admission privileges vary, and in almost every state, admission is at the court’s discretion. But be aware that some states limit the number of times an attorney may be admitted pro hac.¹ So be careful: Not all pro hac vice admissions are equal.

In 2001, I moved from West Virginia, a state in which I had practiced law for 22 years, to Colorado, where I was also a member of the bar. I did not continue to maintain a law office in West Virginia, but I maintained my active status with the state bar. In the move to my new firm, I brought a medical malpractice case I had filed in my home state. One of my new partners, who had extensive med mal experience, was admitted pro hac vice to assist me with the case.

My partner was scheduled to depose the defendant doctor. A deposition notice was properly served, and the deposition was due to occur in Michigan, where the defendant now lived. I accompanied my partner, in part because I knew that West Virginia’s pro hac vice rule required a lawyer who had appeared in the case and was an active member in good standing with the state bar to be present at any proceeding where the pro hac vice attorney was going to participate.

As the deposition began, opposing counsel objected, citing West Virginia’s Rule for Admission to Practice 8.0(b), which requires not only that the pro hac vice attorney appear with an active member of the state bar at all proceedings but also that the active member maintain “an actual physical office equipped to conduct the practice of law in the state, which office is the primary location from which local counsel practice law on a daily basis.”

I had no such office in West Virginia. The deposition was aborted. It was retaken after we associated with an attorney who had a full-time office in West Virginia to accompany us to the rescheduled deposition in Michigan. I should have read the rule. When working with cocounsel, read and learn all the rules related to pro hac vice in that state—even if it is your state, and even if you are the one serving as the in-state attorney.

Some federal district courts allow attorneys who are not admitted to that state bar to be admitted in their own right, and not merely pro hac, without the association of local counsel.² To be admitted to the District of Colorado, for example, an attorney need only be admitted to “the highest court of a state” or another federal court.³ In the Western District of Wisconsin, “any lawyer licensed to practice before the highest court of any state or the District of Columbia is eligible for admission.”⁴ Association with local counsel is not required, unless the judge specifically directs the out-of-state attorney to do so.⁵

You must read the local rules governing admission to the bar in the federal district court in which you or your cocounsel will be practicing. First, check the court’s website for any information related to practicing in that court—or in front of the assigned judge—that is not in the local rules. Then, call the judge’s clerk to see if you must follow any additional procedures that are not available on the court’s website.

Fee Sharing

Forty-nine states, the District of Columbia, and the Virgin Islands have adopted the ABA Model Rules of Professional Conduct to guide and govern the professional conduct of attorneys.⁶ Regarding the division of a fee between lawyers who are not in the same firm, Model Rule 1.5(e) states:

(e) A division of a fee between lawyers who are not in the same firm may be made only if:

(1) the division is in proportion to the services performed by each lawyer or each lawyer assumes joint responsibility for the representation;

(2) the client agrees to the arrangement, including the share each lawyer will receive, and the agreement is confirmed in writing; and

(3) the total fee is reasonable.

Some states have adopted 1.5(e) verbatim, and others differ in varying degrees, so be familiar with your jurisdiction’s applicable rule.⁷ For example, in Georgia, subsections 1 and 2 of Rule 1.5(e) slightly differ from the Model Rule.⁸ And Ohio has an additional requirement:

“[E]xcept where court approval of the fee division is obtained, the written closing statement in a case involving a contingent fee shall be signed by the client and each lawyer and shall comply with the terms of division (c)(2) of this rule.”⁹

The best practice is to make sure that the fee agreement your client signs delineates any fee sharing arrangement and division of responsibilities for all the firms involved. The ideal time to execute this agreement is at the very beginning of the case. As ABA Formal Opinion 474 states: “Such an agreement should not be entered into toward the end of such a relationship. Instead, the division of fees must be agreed to either before or within a reasonable time after commencing the representation.”¹⁰ Some courts have disallowed fee sharing when the client signed the agreement after the parties settled.¹¹

If you bring cocounsel into the case after the fee agreement has been signed, however, you have two options: Execute a new fee agreement disclosing that association and fee sharing, or obtain the client’s consent in a subsequent document or letter. Although Model Rule 1.5(e) requires the fee sharing arrangement to be “confirmed in writing,” it does not expressly require the client to sign the agreement. But it is a good idea to require the client to do so.

Additionally, before paying any subrogation liens, reimbursing counsel for any expenses, paying attorney fees, or distributing the client’s net recovery, always send a written final distribution statement to the client. This document should state the total amount of litigation costs and expenses being reimbursed to each law firm, attorney fees being paid to each law firm, the amount of any liens that must be paid, the amount of any “hold back,”12 and the client’s net recovery. The client should approve, sign, and return that final distribution statement before any payments, reimbursements, or distributions are made.

Working with cocounsel can offer plenty of opportunities—whether it’s taking on a case in a new jurisdiction, working in a new litigation area, or creating a new professional relationship. But don’t be distracted from the tasks that will make the partnership run smoothly. Only by crossing the t’s and dotting the i’s can you take advantage of a rewarding and productive experience.

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George E. McLaughlin is a partner with Warshauer-McLaughlin Law Group in Denver. He can be reached at gem@w-mlawgroup.com.

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Notes

1. See, e.g., Rules Regulating the Florida Bar, Rule 1-3.10(a)(2) (limits appearances to no more than three separate representations in a 365-day period); Supreme Court Rules for the Government of the Bar of Ohio, Rule XII Sec. 2(A)(6)(a) (limits appearances to no more than three proceedings in the same calendar year the application is filed); 2009 Amended Rules for Admissions to the Bar of Montana, Rule IV. C. (limits pro hac appearances to two, ever, except upon a choosing of good cause). Other states that may limit pro hac appearance include, but may not be limited to, Alabama, Arkansas, Iowa, Michigan, Mississippi, Nevada, New Mexico, Rhode Island, Virginia, and the District of Columbia. See ABA, Ass’n Ctr. Prof’l Responsibility CPR Policy Implementation Comm., Pro Hac Vice Admission Rules (2016), www.americanbar.org/content/dam/aba/administrative/professional_responsibility/prohac_admin_rules.authcheckdam.pdf.
2. While not an exhaustive list of all 94 federal districts, an attorney can be admitted in his or her own right as a full member of the bar—and without associating with local counsel—to the following federal district courts: Eastern and Western Districts of Arkansas; District of Colorado; Northern, Central, and Southern Districts of Illinois; Northern District of Indiana; Eastern District of Michigan; Northern District of Ohio; Western and Northern Districts of Oklahoma; Western District of Pennsylvania; Western District of Tennessee; Western and Northern Districts of Texas; and Eastern and Western Districts of Wisconsin.
3. D.C. Colo. Local Atty. R. 3(a). 
4. W.D. Wis. Rule 1 Local R. 83.5(A). 
5. W.D. Wis. Rule 1 Local R. 83.5(D).
6. California is the only state not to have adopted the Model Rules, but the California Rules of Professional Conduct contain many substantially similar provisions. See, e.g., Cal. Rules of Prof’l Conduct R. 2-200 (Financial Arrangements Among Lawyers), which has requirements similar to those found in Model Rule 1.5.
7. See, e.g., Colo. Rules of Prof’l Conduct R. 1.5(d), which is substantially similar.
8. Ga. Rules of Prof’l Conduct R. 1.5(e).
9. Ohio Rules of Prof’l Conduct R. 1.5(e)(3). Ohio Rules of Prof’l Conduct R. 1.5(c)(2) requires that written closing statements be provided to the client, with full disclosure of all fees and expenses, and that they be signed by the attorney and the client.  
10. ABA Standing Comm. on Ethics & Prof’l Responsibility, Formal Op. 474 at 6 (2016). 
11. Wagner & Wagner, LLP v. Atkinson, Haskins, Nellis, Brittingham, Gladd & Carwile, P.C., 596 F.3d 84, 91–92 (2d Cir. 2010) (rejecting referring lawyer’s argument that “technical” requirement of joint responsibility letter required by the Rules of Professional Conduct was met by complying before the fee was paid); Saggese v. Kelley, 837 N.E.2d 699, 705–06 (Mass. 2005) (affirming enforcement of an agreement to divide fees that client agreed to “toward the end of the attorney-client relationship,” but holding that after the issuance of the decision, referring lawyer was required to disclose fee sharing before the referral was made and secure the client’s consent in writing).
12. A hold back is an amount of money retained to cover any final expenses that have yet to be incurred or are unknown.