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Was Karen Greene an associate of Rose Kingsley for financial arrangement purposes under Rule 200? If, she was not an associate, was the financial arrangement nevertheless perfected through the client’s consent?
Yes, Greene classifies as an associate of Kinsley in she worked for rather than with her. No, the client did not give her consent because she was never informed of the arrangement in writing.
After agreeing to represent Janice Moreno in and negligence case against Graham-Hadley, Inc., attorney Rose Kingsley, who has extensive experience in this type of litigation, discovered that she would need assistance in understanding the data involved in the case, and in preparing for trial. Subsequently, she contacted Karen Green, a new attorney who had previously worked as a mechanical engineer. Kingsley and Moreno would eventually come to an agreement in which, Green would be under Kingsley's supervision until the case was resolved. In that capacity, Green worked in Kingsley's office and made use of Kingsley’s staff. Kingsley agree to pay Green 30 percent of any damages she received in representing Moreno. While Kingsley and Green met Moreno in person together, Green was not permitted to meet with Moreno individually. At one point, Green and Moreno did speak over the phone about the case. But that was the extent of their meetings. Shortly, before the trial, however, tensions between Green and Kingsley led to a separation. They never talked again. Kingsley won the trial and was paid $1 million. She was planning on planning on paying Greene around $30,000 when she received a letter from Green demanding $300,000.
Under Rule 200 of the Franklin Rules of Professional Conduct, lawyers are prohibited from dividing fees for legal services rendered with lawyers who have provided temporary services. In this case, Kingsley did employ Greene for a temporary case. As a result, without anything more, Kingsley would be prohibited from splitting any fee she received from Moreno with Greene.
However, Rule 200 allows one exception to the prohibition, namely if the hired lawyer is an associate of the lawyer, then fees for legal services can be divided. Under Chambers v. Kay, a court will consider a hired lawyer as an associate if they work for, rather than with another lawyer. Taking into account the totality of circumstances surrounding the hired lawyers working circumstances, if the hired lawyer is working for another lawyer when there is both direct and indirect control of the lawyer, the degree of the lawyer’s control over the work environment, and the relationship with the client. Applying these standards to Ms. Kingsley’s situation, it is clear that Greene was an associate. First, Kingsley has primary control over the work environment, as well as, direct supervision over Greene. Moreover, Kingsley did not allow Green to talk to Morena without direct supervision.
Another exception to the prohibition of dividing fees holds that if the fee-splitting agreement was discussed with the client, and the client consented to the arrangement, then the fees can be divided. Accordingly, on the chance that a court does not find an associate relationship, they might nevertheless find that the client, Ms. Moreno, agreed to the arrangement. Under Margolin v. Shemarla, a court will have found that a client understood, acknowledged, and agreed to the fee-splitting arrangement when they have first received a written explanation of the fee arrangement, and second, provided written consent to the arrangement. Applying these standards to the facts of the situation, it is clear that Moreno did not receive a written document explaining the fee arrangement, nor did she provide her written consent.
On the one hand, Greene was working for Kingsley for Rule 200. Consequently, Kingsley may have to pay her in the agreed-upon amount. On the other hand, Moreno was not properly informed of the fee arrangement, so if a court does not find that Greene is an associate, then the judge will find that Moreno did not consent to the arrangement.