Generally, in order for attorneys to split fees for a referral of a client under Illinois Rule of Professional Conduct 1.5(e), the split must be disclosed and approved by the client. Bridget Clark v. Francisco Olavarria illustrates an exception to this rule.

Here, Clark was employed by the Law Offices of Francisco Olavarria as an attorney. In 2008, Clark and Francisco, individually and as an officer of the firm, entered into an employment agreement where Clark would receive one-third of the firm’s fees received from any personal injury or medical malpractice case that Clark brought into the firm.

Clark later brought in Patricia Burkowski for representation of a personal injury matter. The case was settled for $325,00. But, the settlement was continued for the approval of the bankruptcy court and to resolve outstanding liens. While the settlement was pending, Clark informed Francisco that she was leaving the firm.

Thereafter, the bankruptcy court approved the settlement and the law firm received $90,333 for its fee. Clark asked for her one-third but Francisco refused to provide her share. She then filed a breach of contract suit.

Francisco argued that 1.5(e) prohibited Clark from sharing the fee because there was no written agreement establishing Burkowski’s assent to Clark splitting the fee. Clark then argued that Rule 1.5(e) was inapplicable in this instance the rule only applied to “a division of fees between lawyers who are not in the same firm” at the time of the agreement. Ultimately the First District agreed with Clark.

Alex Passo and Patterson Law Firm, LLC handle commercial litigation and professional negligence cases throughout Illinois. Alex can be reached at (312) 750-1820 or apasso@pattersonlawfirm.com