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A Swiss Verein is an alliance between autonomous business entities that have separate organizational structures and independent financial operations. A verein is usually formed for the purpose of sharing a common brand name and unified marketing strategy. Law firms have recently begun to use this business structure and verein members currently engage thousands of attorneys.

Vereins do not practice law, their members do

Vereins are not law firms although they appear to be. The verein does not practice law in any locality, does not have to be responsive to local tax regulations and is not accountable to local qualifying bodies or regulators such as the U.S. Security and Exchange Commission. Nonetheless, the image presented by the verein is one of a unified organization that is global in scope. This business model is a relatively recent development and thus far ethical and regulatory concerns are seemingly satisfied by full disclosure on the website of its members of its structure and of the fact that it does not practice law in any specific place.

Are verein firms ethically sustainable?

Referrals and the fees that they generate are the lifeblood of a verein. Indeed the purpose of the formation of this kind of entity is to generate revenue for its members. Pursuant to ABA Model Rule 1.5(2)(e), a source of guidance to state bar associations, ethical authorization for fee splitting depends upon the fulfillment of three conditions:

  • Preliminary and full disclosure to the client in writing and the client's written consent to the arrangement including the share each attorney will receive
  • A reasonable fee
  • Fee division that is proportional to the services actually rendered or the assumption of joint accountability [some states]

Since verein firms are by definition and charter independent of one another, there can be no opportunity for pooled profits in the absence of a fee splitting arrangement. Unless there is compliance with the above conditions, a matter of some speculation in light of concerns with client receptivity, there is an ethical breach that would come into conflict with state ethics regulations.

Growth, innovation and change are the hallmarks of our age. Ethical questions are presented in contexts heretofore unexplored. The King Law Corporation, located in San Diego, offers you expert guidance when you are attempting to chart a course in new territory. If you have questions about fee agreements, Mr. King can custom-tailor an ethical agreement to cover any lawful arrangement agreed upon by both attorney and client.

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James King's trial testimony as a legal expert has been praised by juries and judges for his unique ability to distill complex legal issues into understandable concepts. A graduate of Stanford Law School (Order of the Coif, Law Review), Mr. King has consistently qualified as an expert whenever his testimony has been offered. His 30+ years of experience and knowledge are reflected in his assignments: he has supervised and coordinated billion dollar litigation and has arbitrated or testified in over 250 legal fee and malpractice claims (with hundreds of millions of dollars at issue). Superior Court Judges have chosen Mr. King to work confidentially with them as a Special Master in a number of serious criminal cases, including homicide and judicial bribery. He has testified extensively in Federal and State Courts, and also has appeared as an expert before the U.S. Tax Court, the U.S. Patent and Trademark Office, and the High Court of Kenya.

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