Dividing A Fee With A Per Diem Lawyer

There is no ethical duty for a law firm to disclose to a client the difference between an associate's billing rate and the hourly cost of the associate to the firm. In contrast, a law firm ("Hiring Firm") that utilizes a per diem lawyer ("Per Diem") must disclose the difference between what the Per Diem is paid and what the client is charged pursuant to Rule 1.5(g)(2) of the Rules of Professional Conduct ("Rules"). In other words, the Rules treat disclosure of the mark-up for an associate's time differently from the mark-up of the Per Diem's time. This difference results in a less favorable business model for small firms who use Per Diem lawyers, because it is not economical to employ a full time associate, due to the requirement of this fuller financial disclosure.