Advisory Opinion 48
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State Disciplinary Board
Advisory Opinion No. 48
July 26, 1985
Expert Witness Consulting Services
Pursuant to the provisions of Rule 4-223 of the Rules and Regulations for the Organization and Government of the State Bar of Georgia (219 Ga. 873,as amended), the State Disciplinary Board of the State Bar of Georgia, after a proper request for such, renders its opinion concerning the proper interpretation of the Code of Professional Responsibility of the State Bar of Georgia.
Facts: A client asks an attorney to investigate a possible medical malpractice claim. An appropriate expert is located and the attorney advises the client that the expert requires an hourly fee of X dollars per hour to review the records and that the first hour must be paid in advance.
The client tells the attorney that the client cannot pay the expert's fee and asks whether there are any possible alternatives. The attorney is aware of one alternative whereby the client contracts with an expert witness consulting service to locate the services of an appropriate medical expert to review the records to determine whether a cause of action exists. If the expert determines that no cause of action exists, then the client would be so advised and no fee would be owed. If, on the other hand, there appears to be a cause of action, the client would agree to compensate the consulting service on a contingent fee basis from any recovery generated.
The consulting service would contract directly with the client, rather than the attorney, and would agree to pay the expert on an hourly basis for time spent by the expert in case preparation, including research, depositions and trial.The expert is not an employee of this organization, however, and would work directly with the attorney on the client's behalf.
Upon successful completion of the case, the consulting service would receive approximately 7% of the recovery plus reimbursement for any fees paid to the expert by the service according to the rate specified in the contract. The attorney would also sign the contract to guarantee payment of the consulting service on behalf of the client from the proceeds in the attorney's possession. If no recovery is obtained, the the client would only be required by the contract to reimburse the service for any hourly fees paid to the expert.
Question: Does the proposed use of such an expert witness consulting service violate Bar Rules?
Opinion: The Board first recognizes the existence of several such services and that for some clients, an arrangement similar to that proposed may be the only means available to retain the services of an expert to pursue a cause of action. Since there is substantial uncertainty about the existence of a cause of action until an appropriate expert offers a favorable opinion, a lawyer may be unwilling or unable to assume the risk of personally advancing the necessary expenses to the client, particularly where it appears likely that the client will not reimburse the attorney if the expert's investigation reveals that there is no cause of action.
Standard 58 of Bar Rule 4-102 states as follows:
"A lawyer shall not pay, offer to pay, or acquiesce in the payment of compensation to a witness contingent upon the content of his testimony or the outcome of the case. But a lawyer may advance, guarantee, or acquiesce in the payment of:
(a) expenses reasonably incurred by a witness in attending or testifying;
(b) reasonable compensation to a witness for his loss of time in attending or testifying;
(c) a reasonable fee for the professional services of an expert witness.
A violation of this standard may be punished by disbarment."
Under the proposed arrangement, the lawyer would acquiesce in the payment of a contingent fee to the organization that locates the expert witness, but only in the payment of a fixed fee to the expert. Provided the fee paid to the expert by the consulting service is reasonable, Standard 58 does not appear to be violated. It is very important, however, that the attorney determine that the expert has absolutely no connection with the consulting service, since the reason for the prohibition on contingency compensation to witnesses is to promote truthful testimony uncolored by an financial interest of the witness in the proceedings. See Person v. Association of the Bar of the City of New York, 554 F. 2d 534 (2nd Cir.), cert. den., 434U.S. 924 (1977). Such impermissible interests could range from significant evidence of interest by the particular expert in future repeated referrals by the consulting service in exchange for a demonstrated willingness to provide favorable opinions, to some type of financial interest of the expert in the service as a director, officer, shareholder or some other form of profit-sharing. The lawyer also cannot permit the consulting service or its employees to provide any testimony or evidence either directly or indirectly through substantial technical assistance to the expert which might somehow fundamentally affect the expert's opinion and transform him into a mere "mouthpiece" for the service.In summary, the expert and his opinion must be completely neutral, detached and independent from the consulting service.
Standard 26 prohibits an attorney from aiding a non-lawyer in the unauthorized practice of law. In this regard, the lawyer should insure that the contract with the consulting service does not impair the lawyer's strategic and tactical responsibility to decide which witnesses to call and what evidence and testimony to present on behalf of the client. So long as the participation of the consulting service in the case is confined to locating an appropriate expert and assuming a portion of the risk of prosecuting the cause of action, it would not appear that the lawyer has aided the consulting service in the unauthorized practice of law.
Finally, the contract in question provides for the payment of a portion of any proceeds recovered by the lawyer to the consulting service which raises the issue of fee splitting with a lay organization. With certain inapplicable exceptions, Standard 26 prohibits a lawyer from sharing legal fees with a non-lawyer. In this case, however, the contract does not split attorney fees with the organization since it is the client that contracts with the organization to pay a specific share of the client's recovery to the organization in exchange for its services. The attorney is obligated only to guarantee the client's reimbursement of expenses advanced by the organization and, where appropriate, the payment of the consulting service's share of any recovery. Fees charged by the attorney, however, should be computed and paid without reduction by the fee paid to the consulting service. Otherwise, the contract becomes a mere subterfuge for fee splitting between the attorney and a lay organization. Provided the attorney insures the client is fully advised of these consequences of the contract and the client freely agrees to be so bound, there appears to be no fee splitting involved in the proposed arrangement.
This opinion finds support in similar opinions issued by the following organizations:
Informal Opinion 1375 of the ABA Committee on Ethics and Professional Responsibility (1976);
Opinion Nos. 55 and 56 of the Committee on Legal Ethics of the District of Columbia Bar (1978);
Formal Opinion 1984-79 of the California State Bar Standing Committee on Professional Responsibility and Conduct (1984).
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