Both Sides Take Heat in Jacoby & Meyers' Suit Over Ban on Law Firm Investors

, New York Law Journal

   |5 Comments

Attorney James Denlea, after getting hammered by the panel for insisting he had standing to challenge Rule 5.4 of New York's Rules of Professional Conduct, sat back and watched with pleasure as Judge John Walker asked Assistant Solicitor General Won Shin why the case shouldn't just be remanded with instructions to amend the complaint and solve the standing problem.

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What's being said

  • Bruce Brown

    The significance of this case should not be underestimated. Non-lawyer investment in cases might lead to an efficient market that effectively bundles litigation risks across multiple claims and plaintiffs. This could significantly reduce the negotiation advantage that well-financed institutional defendants now have over individual plaintiffs. Currently, plaintiffs can too easily be put into the position of having to settle valuable claims for pennies on the dollar because the individual plaintiffs and their lawyers can literally not afford to lose.

  • Ellen Oxman

    This is a response from a doctor who has had a long career as such - why are lawyers held to lower standards? We the PUBLIC need to know.

    " In all my years I've understood that fee-splitting in the medical profession is unethical and illegal. I was about to write "and doesn't make sense", but...
    4 minutes ago " written by a Medical Doctor

  • Ellen Oxman

    Rule 5.4 has a basis in Professional Conduct across states (American Bar Assn) "a) A lawyer or law firm shall not share legal fees with a NON-lawyer" This suit challenges that....BUT the public needs to know lawyers refer clients to each other....and share fees over said client, even if the case is lost. There are so many Conflicts of interest in play by lawyers in NY, who are never held accountable for breaking the existing laws under New York Rules of Professional Conduct, especially in the First Dept. (Manhattan/Bronx). (disclaimer: I am not a lawyer) Do Doctors Share Referral/Investor Fees? Surgeons? Dentists? etc.

  • Ellen Oxman

    RULE 5.4:
    PROFESSIONAL INDEPENDENCE OF A LAWYER
    (a) A lawyer or law firm shall not share legal fees with a nonlawyer, except that:
    (1) an agreement by a lawyer with the lawyer’s firm or another lawyer associated in the firm may provide for the payment of money, over a reasonable period of time after the lawyer’s death, to the lawyer’s estate or to one or more specified persons;
    (2) a lawyer who undertakes to complete unfinished legal business of a deceased lawyer may pay to the estate of the deceased lawyer that portion of the total compensation that fairly represents the services rendered by the deceased lawyer; and
    (3) a lawyer or law firm may compensate a nonlawyer employee or include a nonlawyer employee in a retirement plan based in whole or in part on a profit-sharing arrangement.
    (b) A lawyer shall not form a partnership with a nonlawyer if any of the activities of the partnership consist of the practice of law.
    (c) Unless authorized by law, a lawyer shall not permit a person who recommends, employs or pays the lawyer to render legal service for another to direct or regulate the lawyer’s professional judgment in rendering such legal services or to cause the lawyer to compromise the lawyer’s duty to maintain the confidential information of the client under Rule 1.6.
    (d) A lawyer shall not practice with or in the form of an entity authorized to practice law for profit, if:
    (1) a nonlawyer owns any interest therein, except that a fiduciary

  • Richard Henderson

    Whatever happened to champerty and maintenance? Maybe all the judges should read the book a civil action. How many law firms have gone broke fighting a deep pocket defendant who takes it all the way to the Supreme Court? Think about the Micronite filter tobacco cases The 'safest "cigarette had the blue asbestos filter, the most dangerous asbestos of all .Which had the most dead bodies? Kent? of lawyers who wenr broke in litigation costs,? This was clearly reckless endangerment but nobody went to jail. To a man the tobacco executives lied under oath to Congress.
    The appellate judges chopped a billion dollar verdict down to peanuts.So why not let outside investors share some of the risks that lawyers take in these big cases?

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