Supreme Court Reiterates Ban on Fee-Sharing with Non-Lawyers

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A lawyer shall not share, split, or divide, or stipulate to divide, directly or indirectly, a fee for legal services with persons or organizations not licensed or authorized to practice law. – Supreme Court reminds lawyers. Tan Tek Beng v. David (1983)



By ATTY. PHIL JURIS 
June 17, 2025



Manila, Philippines — The Supreme Court has once again underscored a fundamental ethical rule in the legal profession: lawyers are strictly prohibited from sharing, splitting, or dividing legal fees with individuals or organizations not licensed or authorized to practice law. This reminder draws from the landmark case of Tan Tek Beng v. David (1983), where the Court reprimanded a lawyer for entering into a fee-sharing agreement with a non-lawyer intermediary, declaring such arrangements void and unethical.

The Court emphasized that the prohibition is rooted in public policy and the need to protect the integrity of the legal profession. Allowing non-lawyers to profit from legal services undermines the standards of competence and accountability expected of those admitted to the Bar. The Supreme Court’s decision in Tan Tek Beng v. David serves as a stern warning: any lawyer found to be in violation of this rule faces disciplinary action, including suspension or disbarment, as the privilege to practice law is reserved for those who meet the profession’s rigorous qualifications and ethical standards.

This principle is consistently echoed in the current Code of Professional Responsibility and Accountability, which expressly forbids lawyers from dividing fees with non-lawyers, whether directly or indirectly. The Supreme Court’s reminder is a call for vigilance among legal practitioners to uphold the profession’s honor and to avoid arrangements that could compromise their independence or expose them to administrative sanctions.

The CPRA, which took effect in 2023, represents the most comprehensive overhaul of the ethical framework governing Filipino lawyers. Among its key provisions is a direct prohibition on the sharing of fees with non-lawyers.

Section 43 of the CPRA provides:

“A lawyer shall not share, split, or divide or stipulate to divide, directly or indirectly, a fee for legal services with persons or organizations not licensed or authorized to practice law.”

This provision, while a continuation of the former rule under the old CPR, brings greater clarity and enforcement potential. It captures not only formal contracts but also indirect arrangements, such as referral commissions, brokered engagements, and informal "finder’s fees"—all of which remain unethical.

Why the Prohibition Matters

The importance of this rule extends far beyond technical ethics. It reflects the profession’s commitment to:

  • Preventing the Unauthorized Practice of Law: Only those duly licensed may engage in or profit from legal representation. This deters “fixers,” brokers, and unauthorized agents from interfering in legal matters.

  • Protecting Clients: Clients deserve to be represented solely by professionals held to legal and ethical standards. Involving non-lawyers in fee arrangements may compromise the objectivity and loyalty of counsel.

  • Preserving Professional Integrity: Lawyers must maintain their independence. Sharing fees with outside parties—especially those with a financial stake—risks corrupting legal judgment with commercial interest.

RELATED CASE:


After an investigation, the Integrated Bar of the Philippines (IBP) found the respondent guilty of violating the Code of Professional Responsibility and recommended a six-month suspension and the return of the legal fees. ... Rogelio P. Terrado from the practice of law for six months and ordered him to return the legal fees to the complainant.

"“By openly admitting he divided the Php70,000.00 to other individuals as commission/referral fees respondent violated Rule 9.02, Canon 9 of the Code of Professional Responsibility which provides that a lawyer shall not divide or stipulate to divide a fee for legal services with persons not licensed to practice law. Worst, by luring complainant to participate in a compromise agreement with a false and misleading assurance that complainant can still recover after Three (3) years her foreclosed property respondent violated Rule 1.01, Canon 1 of the Code of Professional Responsibility which says a lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.”

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