## Facts

- Arthur Chambers and Philip Kay were attorneys in separate San Francisco practices, maintaining separate letterheads, addresses, and malpractice insurance.
- Kay rented shared office services from Chambers (conference room access and support services) while keeping separate files and business operations.
- In employment-related contingent-fee litigation for client Suzanne Nance (and related clients), Chambers assisted Kay under an oral arrangement that Kay would pay Chambers a percentage of any contingent fee recovered.
- No client signed a written consent to the fee division, and there was no written disclosure to the client stating that a fee division would be made and on what terms, as required by former California Rule of Professional Conduct 2-200(A)(1).
- After Kay obtained a successful result and collected substantial contingent fees, he refused to pay Chambers the claimed percentage; Chambers sued for contractual fee sharing and, alternatively, quantum meruit.

## Issues

1. Whether a lawyer may enforce a contingent fee-splitting agreement with a lawyer in a separate practice absent the client’s written consent after written disclosure as required by former Rule 2-200(A)(1).
2. Whether the fee-splitting rule is avoided because the lawyers were “associates,” partners, or joint venturers on the case.
3. Whether “substantial compliance,” client notice without objection, or implied consent can substitute for the rule’s written-consent requirement.
4. Whether the assisting lawyer may recover the claimed portion of the contingent fee under quantum meruit or other equitable theories despite noncompliance with Rule 2-200.

## Decision

- The California Supreme Court affirmed the judgment against Chambers.
- The Court held former Rule 2-200(A)(1) was binding and barred Chambers from sharing in the contingent fees because there was no written client consent after written disclosure of the division and its terms.
- The Court rejected the contention that Chambers was Kay’s “associate” or that they were partners or joint venturers on the matter; their relationship reflected separate practices and did not fall within the rule’s exception.
- The Court declined to treat client silence or partial notice as “substantial compliance”; the rule requires actual written consent.
- The Court refused to allow recovery of the disputed fee share through quantum meruit because doing so would circumvent the written-consent requirement and the public-protection policy behind the rule.

## Legal Principles

- A lawyer may not divide fees with a lawyer who is not a partner, associate, or shareholder in the same practice unless the client consents in writing after full written disclosure that a fee division will be made and the division’s terms (former Cal. R. Prof. Conduct 2-200(A)(1)).
- The “partner/associate/shareholder” exception is construed narrowly; shared office arrangements and occasional assistance do not, without more, establish an association or partnership that eliminates the written-consent requirement.
- Client silence or implied approval does not satisfy a rule requiring written disclosure and written consent; “substantial compliance” is insufficient where the rule demands a signed writing.
- Fee-splitting agreements that violate an express professional-conduct rule are unenforceable as a matter of public policy.
- Equitable recovery (including quantum meruit) is unavailable when it would effectively award the prohibited fee division and nullify the client-consent requirement.

## Conclusion

The court enforced former Rule 2-200’s written disclosure and written consent requirements strictly, holding that lawyers in separate practices cannot enforce a fee-splitting agreement—or obtain the same result through equity—when the client never provided the required written consent to the fee division.


Chambers v. Kay, 29 Cal. 4th 142 (Cal. 2002)