1

Filed 3/20/24 Liberty Law Office v. The Bloom Firm CA1/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for 

publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or 

ordered published for purposes of rule 8.1115. 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION ONE

LIBERTY LAW OFFICE, INC.,

Plaintiff and Appellant,

v.

THE BLOOM FIRM,

Defendant and Respondent.

 A165269

 A166497

 (Alameda County Sup. Ct.

 No. HG20079536)

ORDER MODIFYING OPINION 

AND DENYING REHEARING

 [NO CHANGE IN JUDGMENT]

 

It is ordered that the opinion filed herein on February 26, 2024 be 

modified as follows:

1. “CPRC” shall be corrected to read “CRPC” throughout the opinion as 

follows: 

a. On page 5, lines 5, 9, and 14; 

b. On page 10, Section B, line 4;

c. On page 12, first full paragraph, line 12; 

d. On page 19, lines 7, 13, and 17;

e. On page 22, first full paragraph, line 9. 

2. “Micha Starr” shall be corrected to read “Micha Star Liberty” on page 21, 

first full paragraph, line 9. 
2

3. Lastly, on page 22, we add new footnote 6 at the end of the sentence in 

line 2 from the top of the page (ending “in its entirety”) to read as follows: 

In a petition for rehearing, Liberty Law complains that our 

opinion only mentions CRPC rule 5.4 once in determining that the fee 

sharing agreement between Liberty Law and Bloom should not be 

voided on public policy grounds. Liberty Law suggests that if we “truly 

believe” that the Agreement did not violate rule 5.4 because of Bloom’s 

lack of registration with the State Bar “then the opinion needs to 

actually say that.” We thought we had made ourselves clear. The 

question with which we have grappled in this lengthy opinion is not

whether the rule was violated. The question is whether the Agreement 

should be voided on that basis. On these facts, our answer is no. 

The petition for rehearing is denied. 

Dated: 

____________________________

Humes, P. J.

A165269N, A166497N
1

Filed 2/26/24 Liberty Law Office v. The Bloom Firm CA1/1 (unmodified opinion)

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for 

publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or 

ordered published for purposes of rule 8.1115. 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION ONE

LIBERTY LAW OFFICE, INC.,

Plaintiff and Appellant,

v.

THE BLOOM FIRM,

Defendant and Respondent.

 A165269

 A166497

 (Alameda County Sup. Ct.

 No. HG20079536)

 

In this dispute over legal fees, Liberty Law Office, Inc. (Liberty) 

appeals from the trial court’s confirmation of an arbitration award in favor of 

The Bloom Firm (Bloom). Liberty argues that the arbitrators exceeded their 

powers within the meaning of Code of Civil Procedure1 section 1286.2, 

subdivision (a)(4) by enforcing an illegal contract. Specifically, citing 

Sheppard, Mullin, Richter & Hampton, LLP v. J-M Manufacturing (2018) 6 

Cal.5th 59 (Sheppard, Mullin), Liberty contends its agreement with Bloom is 

void and unenforceable as against public policy because Bloom failed to 

register as a professional law corporation as required by various statutes, the 

California Rules of Professional Conduct (CRPC), and the Rules of the State 

1 All statutory references are to the Code of Civil Procedure unless 

otherwise specified.
2

Bar of California (State Bar Rules). A panel of three arbitrators has 

thoroughly considered and rejected this claim, as has the trial court in its 

written decision confirming the arbitration award. We affirm. 

I. FACTUAL AND PROCEDURAL BACKGROUND

A. The Joint Venture Agreement & Arbitration Request

On August 23, 2019, Lisa Bloom for The Bloom Firm and Micha Star 

Liberty for Liberty Law Office entered into an agreement entitled Joint 

Venture Agreement Between the Bloom Law Firm and Liberty Law Office 

(JVA or Agreement). The JVA provided that the two organizations would be 

known as members of Bloom with Micha Liberty and her office having “of 

counsel” status. Thus, the JVA provided that Liberty and Bloom would

“collectively and collaboratively prosecute legal matters.” To that end, 

Liberty agreed to contribute to the joint venture “currently filed or retained 

personal injury and employment rights cases which Liberty had filed on a 

contingency basis” as listed on an attached schedule, and Bloom agreed to 

provide all aspects of business management and to fund all litigation matters 

subject to the joint venture. Any fees earned on these existing cases 

contributed by Liberty were to be split 50/50 between Liberty and Bloom. 

The JVA contained additional provisions for the payment of costs and the fee 

splitting with respect to any new cases retained for the joint venture.

The Agreement included provisions for the winding up of the joint 

venture under specified circumstances, including the “[e]xpress will of either 

Party” or the death or disability “of a Party.” And it contained an arbitration 

clause requiring that—after a good faith attempt to settle “any controversy 

relating to the Agreement”—the parties would submit the matter to binding 

arbitration. Finally, a stated purpose of the Agreement was “for the Parties 

to engage in the practice of law in the State of California (or elsewhere) in 
3

accordance with the California Business and Professions Code and all rules of 

practice and other regulations adopted by any courts and administrative 

bodies before which the Parties or the associates of either Party shall be 

admitted to practice.” The parties agreed not to “engage in any conduct that 

would contradict or compete with the purpose of the Joint Venture.”2 

In March 2020, Bloom indicated its intention to terminate the JVA. On 

June 3, 2020, Bloom filed an arbitration demand pursuant to the arbitration 

provision of the JVA. Bloom alleged that Liberty had failed to comply with 

the fee-splitting terms of the Agreement after dissolution.

B. Court Challenge

On November 9, 2020, Liberty filed a complaint for declaratory relief in 

this action, seeking resolution of the following issues: (1) whether the JVA 

was a valid and enforceable fee sharing agreement; and (2) whether Bloom 

was entitled to relief in quantum meruit when the attorney fee-sharing 

provision in the JVA is unenforceable. Specifically, citing Sheppard, Mullin,

supra, 6 Cal.5th 59, Liberty alleged that “[w]here attorneys fail to comply 

with the requirements of [CRPC rule] 1.5.1 and do not obtain written, 

informed consent from the client, any fee sharing agreement between them is 

rendered unenforceable as a matter of public policy.” Liberty also asked for 

an order staying any arbitration proceedings pending resolution of the court 

action. 

2 As these provisions make clear, although the Agreement was executed 

by the Liberty and Bloom firms, it uses the term “Party” more broadly to 

refer as well to individual attorneys Micha Liberty and Lisa Bloom. Indeed, 

the joint venture was at bottom a marriage between two sophisticated and 

well-known licensed attorneys, and it is doubtful it would have continued 

absent the participation of both lawyers. 
4

On November 25, 2020, the arbitration panel denied Liberty’s request 

to delay the arbitration proceedings, confirming that it had jurisdiction over 

the claims relating to the JVA, notwithstanding Liberty’s attack on the 

validity of the fee sharing provision in the Agreement. Liberty, however, 

refused to withdraw its lawsuit. On December 15, 2020, Bloom filed a motion 

to compel arbitration and stay proceedings in the declaratory action. On 

January 20, 2021, Liberty filed a statement of non-opposition to Bloom’s 

motion to compel, agreeing to arbitrate but asking the trial court to retain 

jurisdiction of the matter pending conclusion of the arbitration proceedings.3

The trial court granted the motion to compel arbitration and stayed the trial 

court proceedings on February 3, 2021. 

C. Decision of the Arbitrators

After evidentiary hearings on seven dates in May 2021 and posthearing written submissions and oral presentations from the parties, the 

panel of three arbitrators issued its decision on August 25, 2021. Bloom’s 

arbitration demand alleged breach of contract, breach of the implied covenant 

of good faith and fair dealing, and quantum meruit. Liberty asserted 

numerous counter claims/affirmative defenses, including fraud, illegality, 

unenforceability due to violations of the CRPC, and serious legal and ethical 

violations precluding quantum meruit. The arbitration panel preliminarily 

found that the parties attempted in good faith to settle their dispute before 

resorting to arbitration as required by the Agreement.

On the merits, the panel determined that there was no evidence any 

clients were harmed by formation or dissolution of the JVA or by Bloom’s 

3 Liberty asserts that this statement of non-opposition does not waive

her right to contest the enforceability of the JVA because she did not know at 

that time that Bloom was not registered as a law corporation with the State 

Bar. We will assume without deciding that this is correct.
5

alleged breaches of the CRPC. While the evidence showed that at all times 

during the joint venture Bloom had failed to register as a professional law 

corporation with the State Bar, the panel concluded that this was a matter 

for the State Bar, not a defense to Bloom’s claims. In so finding, the panel

rejected Liberty’s general suggestion that “any and all violations of the CPRC 

and the [State Bar Rules] implicate the public policy of the State of 

California,” rendering any contract entered into by an offending attorney or 

law firm void and unenforceable as against public policy. And it denied 

Liberty’s specific argument that failure to register as required by the CPRC 

and State Bar Rules implicated public policy such that the JVA should be 

deemed unenforceable. Moreover, since Liberty conceded during the 

arbitration that the client consents obtained by Bloom under the JVA were 

valid except to the extent they were entered into with a firm not authorized 

to practice law, its defense under CPRC Rule 1.5.1 with respect to client 

consents “[fell] with the law corporation registration defense.” The panel 

went on to reject the remainder of Liberty’s affirmative defenses.4 

Having concluded that Liberty was in breach of a valid and enforceable 

JVA, the panel next turned to the issue of damages. It found that client 

consents to the fee-splitting arrangement in the JVA had only been signed by 

eight clients. Accordingly, the arbitrators awarded Bloom contract damages

under the fee-splitting provision of the JVA (50 percent) for those eight 

clients (three whose cases had been resolved and five whose matters were 

4 The panel found much of the evidence presented by the parties—

including the involvement of Lisa Bloom’s husband (a non-lawyer) with 

Bloom, Lisa Bloom’s prior representation of Harvey Weinstein, Micha 

Liberty’s management style, Lisa Bloom’s trial experience, and the financial 

resources and professional experience of Bloom and its staff—irrelevant to 

the resolution of the issues presented. We concur.
6

still pending). Damages in quantum meruit were awarded for ten other cases 

(five resolved and five unresolved). Liberty was entitled to a setoff for unpaid 

management expenses and case costs for which Bloom was responsible.

However, administrative fees and expenses for the arbitration which had 

previously been advanced by Bloom were required to be reimbursed by 

Liberty. On October 13, 2021, the panel modified its decision to correct 

several calculation errors. 

D. Confirmation by the Trial Court

On October 25, 2021, Bloom filed a petition in the trial court to confirm 

the arbitration award. Liberty responded by filing a motion to vacate the 

award in November 2021. On January 28, 2022, the trial court issued its 

written decision, granting Bloom’s request to confirm the arbitration award 

and concomitantly denying Liberty’s motion to vacate. Specifically—noting 

that Sheppard, Mullin has facts bearing “little resemblance” to those in the 

instant case—the trial court rejected Liberty’s argument that the arbitration 

award must be vacated because the JVA was executed in violation of public 

policy as expressed in CRPC rules 1.5.1 and 5.4. Asserting that not every 

violation of every rule of professional conduct would render a fee-sharing 

agreement unenforceable as against public policy and that the cases relied 

upon by Liberty involved rules designed for the protection of the public, the 

trial court opined that Bloom’s failure to register as a law corporation did not 

render it incapable of validly executing the JVA (CRPC rule 5.4). Nor did its 

unregistered status impact the ability of clients to execute valid consents to 

the fee splitting (CPRC rule 1.5.1).

Judgment was issued on March 23, 2022, awarding Bloom $738,395.80 

in contract and quantum meruit damages for five resolved cases, $160,020.00 

in arbitration fees and expenses, and pre-judgment interest. In addition, the 
7

judgment provided for a 50 percent fee share upon receipt of attorney’s fees in 

five unresolved cases, and quantum meruit awards ranging from $332,300.00 

to $253.50 upon receipt of fees with respect to five other pending cases.

Liberty timely appealed. On September 13, 2022, the trial court issued an 

amended judgment nunc pro tunc correcting a clerical error. Liberty also 

appealed from the amended judgment. On April 5, 2023, we consolidated the 

two matters for briefing, oral argument, and decision.5 

II. DISCUSSION

A. Legal Frameworks and Standards of Review 

1. Rules of Arbitral Finality

“California law favors alternative dispute resolution as a viable means 

of resolving legal conflicts. ‘Because the decision to arbitrate grievances 

evinces the parties’ intent to bypass the judicial system and thus avoid 

potential delays at the trial and appellate levels, arbitral finality is a core 

component of the parties’ agreement to submit to arbitration.’ ” (Richey v. 

AutoNation, Inc. (2015) 60 Cal.4th 909, 916 (Richey).) Accordingly, “[i]n 

considering an appeal from a judgment confirming an arbitration award, we 

may not ‘ “review the merits of the dispute, the sufficiency of the evidence, or 

the arbitrator’s reasoning, nor may we correct or review an award because of 

an arbitrator’s legal or factual error, even if it appears on the award’s 

face.” ’ ” (State Farm Mutual Automobile Ins. Co. v. Robinson (2022) 

5 On August 22, 2023, we granted the application for leave to file an 

amicus curiae brief in this matter to several clients whose cases fell within 

the ambit of the JVA. While we question their characterization of themselves 

as “primary stakeholders” in this dispute, we have reviewed the briefing as 

well as the response filed by Liberty and conclude they add nothing to our 

determination of the issues before us.
8

76 Cal.App.5th 276, 282.) Indeed, “[a]rbitrators, unless specifically required 

to act in conformity with rules of law, may base their decision upon broad 

principles of justice and equity, and in doing so may expressly or impliedly 

reject a claim that a party might successfully have asserted in a judicial 

action.” (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 10–11 (Moncharsh).)

Section 1286.2 “provide[s] limited grounds for judicial review of an 

arbitration award.” (Richey, supra, 60 Cal.4th at p. 916.) Among these 

grounds is that “[t]he arbitrators exceeded their powers and the award 

cannot be corrected without affecting the merits of the decision upon the 

controversy submitted.” (§ 1286.2, subd. (a)(4).) This “excess-of-authority 

exception applies, and an arbitral award must be vacated, when a court 

determines that the arbitration has been undertaken to enforce a contract 

that is ‘illegal and against the public policy of the state.’ ” (Sheppard, Mullin, 

supra, 6 Cal.5th at p. 73.) 

Where, as here, a party claims that an award exceeded an arbitrator’s 

powers because “the entire [underlying] contract or transaction was illegal,”

the issue of illegality is for the trial court to decide, and it owes no deference 

to the arbitrator’s resolution of that issue. (Moncharsh, supra, 3 Cal.4th at 

pp. 31–32; Lindenstadt v. Staff Builders, Inc. (1997) 55 Cal.App.4th 882, 892.) 

In turn, “ ‘ “ ‘we review the trial court’s order (not the arbitration award) 

under a de novo standard.’ ” ’ ” (Roussos v. Roussos (2021) 60 Cal.App.5th 

962, 973; see Kahn v. Chetcuti (2002) 101 Cal.App.4th 61, 65 [whether 

arbitrator exceeded authority is legal issue independently reviewed on 

appeal].)

2. Relevant Statutes & Rules Governing Attorney Conduct

Pursuant to section 6160 of the Business and Professions Code: “A law 

corporation is a corporation which is registered with the State Bar of 
9

California and has a currently effective certificate of registration from the 

State Bar pursuant to the Professional Corporation Act, as contained in 

Part 4 (commencing with Section 13400) of Division 3 of Title 1 of the 

Corporations Code, and this article. Subject to all applicable statutes, rules 

and regulations, such law corporation is entitled to practice law. With 

respect to a law corporation the governmental agency referred to in the 

Professional Corporation Act is the State Bar.” (See also Corp. Code, § 13404 

[with exceptions not relevant here “no professional corporation shall render 

professional services in this state without a currently effective certificate of 

registration issued by the governmental agency regulating the profession in 

which such corporation is or proposes to be engaged”]; State Bar Rules, rule 

3.150(A) [“To practice law in California, a corporation must be certified by the 

California Secretary of State and registered by the State Bar. These rules 

refer to such a corporation as a law corporation.”].)

The CRPC was adopted by the Board of Trustees of the State Bar and 

approved by our Supreme Court with the intent “to regulate professional 

conduct of lawyers through discipline.” (CRPC, rule 1.0(a).) They were 

promulgated pursuant to Business and Professions Code sections 6076 and 

6077 “to protect the public, the courts, and the legal profession; protect the 

integrity of the legal system; and promote the administration of justice and 

confidence in the legal profession.” (CRPC, rule 1.0(a).) A “willful violation” 

of any of the rules “is a basis for discipline.” (Id., rule 1.0(b)(1).)

Rule 5.4 of the CRPC, titled “Financial and Similar Arrangements with 

Nonlawyers” provides in relevant part that “[a] lawyer or law firm shall not 

share legal fees directly or indirectly with a nonlawyer or with an 

organization that is not authorized to practice law.” And, according to CRPC 

rule 1.5.1(a): “Lawyers who are not in the same law firm shall not divide a fee 
10

for legal services unless: (1) the lawyers enter into a written agreement to 

divide the fee; (2) the client has consented in writing, either at the time the 

lawyers enter into the agreement to divide the fee or as soon thereafter as 

reasonably practicable, after a full written disclosure to the client of: (i) the 

fact that a division of fees will be made; (ii) the identity of the lawyers or law 

firms that are parties to the division; and (iii) the terms of the division; and 

(3) the total fee charged by all lawyers is not increased solely by reason of the 

agreement to divide fees.”

3. Validity of Contracts

Under Civil Code section 1667, a contract is illegal if it is “[c]ontrary to 

an express provision of law” or “[c]ontrary to the policy of express law, though 

not expressly prohibited.” Although “ ‘questions of public policy are primarily 

for the legislative department to determine,’ . . . a contract or transaction 

may be found contrary to public policy even if the Legislature has not yet 

spoken to the issue.” (Sheppard, Mullin, supra, 6 Cal.5th at p. 73, italics 

added.) An administrative regulation may establish a public policy with 

which a contract must comply to be lawful. (Ibid., italics added.) 

B. The JVA Is Not Void on Public Policy Grounds

On appeal, Liberty renews the argument it made before both the

arbitration panel and in the trial court that the JVA is void and 

unenforceable as against public policy because Bloom failed to register as a 

professional law corporation as required by various statutes, the CPRC, and 

the State Bar Rules. Liberty additionally contends, for the first time on 

appeal, that the executed client consents in this matter were inadequate and 

thus the fee-sharing provision is invalid. We conclude that the JVA as a 

whole was not rendered unenforceable due to Bloom’s registration error. We 

thus do not reach Liberty’s other claims, as they were decided pursuant to a 
11

valid arbitration provision in an enforceable agreement and are thus immune 

from judicial review. 

1. Relevant Precedent

In Loving & Evans v. Blick (1949) 33 Cal.2d 603 (Loving), the Supreme 

Court considered the propriety of a judgment entered upon an arbitration

award in compensation to certain contractors for work performed and 

services rendered under a building contract. (Id. at p. 604.) One of the two 

contractors (Evans) as well as the partnership (Loving and Evans), however, 

had failed to comply with state licensing requirements. The Court concluded 

that the award could not “be reconciled with the settled public policy of this 

state as expressed in our statutory law.” (Id. at pp. 604-605.) In particular, 

the Court reaffirmed that “ ‘a contract made contrary to the terms of a law 

designed for the protection of the public and prescribing a penalty for the 

violation thereof is illegal and void, and no action may be brought to enforce 

such contract.’ ” (Id. at p. 607, italics added.) While the court proceedings 

involved confirmation of an arbitrator’s award, “the rules which give finality 

to the arbitrator’s determination of ordinary questions of fact or of law are 

inapplicable where the issue of illegality of the entire transaction is raised in 

a proceeding for the enforcement of the arbitrator’s award.” (Id. at p. 609.)

In voiding the contract (and thus the corresponding arbitration award), 

the Court expressly distinguished two other cases. In Gatti v. Highland Park 

Builders, Inc. (1946) 27 Cal.2d 687, “a judgment in favor of plaintiff 

contractors was affirmed although no license in the name of the partnership 

under which they had been operating had been issued to the two plaintiff 

contractors as such.” (Loving, supra, 33 Cal.2d at p. 608.) However, both 

partners possessed individual contractor’s licenses, and, during the 

performance of the contract, a joint contractor’s license was issued to the two 
12

partners and a third party. Under such circumstances, the Court concluded 

that “ ‘the legislative scheme in relation to the licensing of contractors, 

intended “for the safety and protection of the public,” would become an 

unwarranted shield for the avoidance of a just obligation.’ ” (Ibid.; see also

Citizen’s State Bank v. Gentry (1937) 20 Cal.App.2d 415, 418–420.)

Subsequently, in Moncharsh, supra, 3 Cal.4th 1, an attorney 

(Moncharsh) entered into an employment contract with a law firm (Blase) 

which included a fee sharing provision pursuant to which, if Moncharsh left 

the firm, Blase would receive 80 percent of any fees generated by clients that 

left with him. (Id. at p. 6.) Moncharsh subsequently terminated his 

relationship with Blase, taking six clients with him (five of whom he had 

brought to the firm with him and one that had been recently acquired while 

he was still employed by Blase). (Ibid.) After Moncharsh refused to share 

fees with respect to these clients, the matter was submitted to arbitration 

during which Moncharsh argued that the fee sharing provision of the 

employment agreement was unenforceable because it violated public policy 

and various provisions of the CPRC. (Id. at pp. 6–7.) The arbitrator

disagreed, noting that, at the time Moncharsh agreed to the employment 

contract, he “was a mature, experienced attorney, with employable skills” 

who could have negotiated something different if he did not agree with the 

80/20 split.” (Id. at p. 7.) The arbitrator upheld the fee-sharing provision 

except as it related to the recently acquired client because, with respect to 

that client, the split would be unconscionable. (Id. at pp. 7–8.) 

After the trial court confirmed the arbitrator’s award, the Supreme 

Court considered whether the award was reviewable. (Moncharsh, supra, 3 

Cal.4th at p. 8.) The Court held that judicial review of private arbitration 

awards is limited “to those cases in which there exists a statutory ground to 
13

vacate or correct the award.” (Id. at p. 28.) And it rejected the notion that 

arbitrators “exceed[] their powers” within the meaning of section 1282.6 

merely by reaching an erroneous decision. (Moncharsh, at p. 28.) The Court 

then considered Moncharsh’s contention that judicial review of an arbitration 

award is available “when one party alleges the underlying contract, a portion 

thereof, or the resulting award, is illegal or in violation of public policy.” (Id.

at p. 29.) It concluded that a party may avoid arbitration altogether “if an 

otherwise enforceable arbitration agreement is contained in an illegal 

contract.” (Ibid.) However, when “the alleged illegality goes to only a portion 

of the contract (that does not include the arbitration agreement), the entire 

controversy, including the issue of illegality, remains arbitrable.” (Id. at 30.)

Moncharsh was only challenging the fee-splitting provision of the 

employment agreement. Nevertheless, relying on Loving, he argued judicial 

review was appropriate because the provision was “ ‘illegal’ ” and violative of 

“ ‘public policy’ ” as reflected in several provisions of the CRPC. (Moncharsh, 

supra, 3 Cal.4th at p. 31.) The Court distinguished Loving as involving the 

alleged illegality of the entire agreement. While it acknowledged that 

judicial review of an arbitrator’s decision on the facts presented might be 

available in exceptional circumstances, given the Legislature’s strong support 

for the finality of arbitral awards, the Court concluded such awards should be 

immune from judicial scrutiny “[a]bsent a clear expression of illegality or 

public policy.” (Moncharsh, at p. 32.) The Supreme Court perceived “nothing 

in the Rules of Professional Conduct at issue in this case that suggests 

resolution by an arbitrator of what is essentially an ordinary fee dispute 

would be inappropriate or would improperly protect the public interest.” (Id., 

at p. 33, italics added.) Accordingly, judicial review of the arbitrator's 

decision was unavailable. 
14

In Chambers v. Kay (2002) 29 Cal.4th 152 (Chambers), the Supreme 

Court refused to uphold a fee-sharing agreement between two attorneys who 

were not partners or associates of each other, or shareholders in the same law 

firm where no written client consent had been obtained pursuant to former 

CRPC rule 2-200. (Chambers, at p. 148.) Under such circumstances, the 

Court opined that if it upheld the fee-sharing agreement “with no indication 

that the required client consent was either sought or given, [it] would, in 

effect, be both countenancing and contributing to a violation of a rule we 

formally approved in order ‘to protect the public and to promote respect and 

confidence in the legal profession.’ ” (Id. at p. 158, citing CRPC, former rule 

1-100(A) and Bus. & Prof. Code, § 6076; compare MW Erectors, Inc. v. 

Niederhauser Ornamental & Metal Works Co., Inc. (2005) 36 Cal.4th 412, 

440-441 [construction contract was enforceable where the contractor was 

unlicensed when it executed the contract but licensed by the time it 

performed the work; noting that the law regulating contractors (CSLL) had 

its own enforcement scheme and concluding under the circumstances of the 

case that, “[n]o compelling reason exist[ed] to conclude that the public 

protective purposes of the CSLL can only be served by deeming such 

contracts illegal, void, and unenforceable” based on lack of licensure alone].)

Two appellate cases from 2003 and 2007 are also instructive. Olson v. 

Cohen (2003) 106 Cal.App.4th 1209 (Olson) involved a client class action 

under the unfair competition laws seeking disgorgement of legal fees from a 

lawyer (Cohen) and his professional corporation for the years the corporation 

was not registered to practice law with the State Bar. (Id. at pp. 1211–1212.) 

On appeal, the court rejected the argument that, during the period before the 

corporation was registered, all services rendered by it were illegal and thus 

the related fee agreements were void. (Id. at p. 1214.) It noted that the 
15

decision to incorporate as a professional corporation “is typically made to 

obtain tax advantages and to avoid personal liability for the corporation’s 

debts” and thus is “not undertaken for the protection of clients. The

protections for clients mandated by laws governing incorporation of law

corporations, such as restrictions on who may be a shareholder and

requirements for security for claims against the corporation, protect against

abuses which might otherwise occur from the use of the corporate structure.

Failure to comply with these requirements may result in an order to cease

and desist or suspension or revocation of registration. (Bus. & Prof. Code,

§§ 6168, 6169.).” (Olson, at pp. 1214–1215.) In that case—where Cohen 

himself was licensed, there was no allegation of malpractice, the failure to 

register was subject to other regulatory penalties, and no evidence was 

presented that the clients were harmed by the oversight—requiring 

“disgorgement of fees because of a failure to register the corporation . . . [was 

deemed] disproportionate to the wrong.” (Id. at pp. 1214–1215.) Put another 

way, the object of the fee agreements was the provision of legal services by 

Cohen, a licensed attorney, not violation of the law. (Id. at p. 1215; accord, 

Steven M. Garber & Associates v. Eskandarian (2007) 150 Cal.App.4th 813 

(Garber) [relying on Olson, which “took into consideration broad questions of

policy” in determining that “the failure to register as a professional

corporation should not have, and does not have, an impact on attorney fees”].) 

Most recently, in Frye v. Tenderloin Housing, Inc. (2006) 38 Cal.4th 23,

the housing clinic—a nonprofit public benefit corporation—provided legal

services through licensed attorney-employees for low and moderate income

tenants. After the clinic retained a portion of a damages award received in

successful litigation pursuant to a contingency fee agreement, one of the

represented tenants (Frye) argued that the clinic was not entitled to retain
16

the fees because it had failed to register with the State Bar as a law

corporation. (Id. at pp. 29–31.) Although acknowledging a public purpose of

the registration requirement was to protect clients against a profit motive (id.

at p. 38), the Supreme Court disagreed with Frye, concluding that—even if

the nonprofit was engaged in the unauthorized practice of law and should

have registered and complied with the Business and Professions Code—that

failure did not justify disgorgement of statutory attorney fees from the

nonprofit to Frye where Frye was not injured by the nonprofit’s compliance

failures. (Id. at pp. 47–49.) Specifically, since “[u]nder no imaginable

circumstance would Frye have fared better had [the clinic] registered with

the State Bar,” the Court opined that “ ‘[t]o require disgorgement of fees

because of a failure to register the corporation . . . is disproportionate to the

wrong.’ ” (Id. at p. 48, quoting Olson.)

It is against this backdrop that the Supreme Court decided Sheppard, 

Mullin, supra, 6 Cal.5th 59, in 2018. There, a large law firm agreed to 

represent J-M Manufacturing Company, Inc. (J-M), as the defendant in 

certain litigation brought by a number of public entities; at the same time, 

different attorneys within the law firm were representing one of the publicentity plaintiffs in the J-M litigation, South Tahoe Public Utility District 

(South Tahoe), in an unrelated matter. (Id. at pp. 67–69.) Both clients 

signed engagement agreements containing purported general waivers of 

current and future conflicts of interest. (Id. at pp. 68–69.) Based on these 

waivers, the law firm concluded it did not need to disclose to either client that 

it was also representing the other. (Id. at pp. 69–70.) However, after 

discovering the simultaneous representation, South Tahoe successfully 

moved to disqualify the law firm from its representation of J-M in the 

litigation between J-M and South Tahoe. The law firm then sued J-M for its 
17

unpaid fees and the matter was sent to arbitration over the objection of J-M, 

which maintained that the entire agreement was unenforceable given the 

conflict of interest. (Id. at pp. 70–71.)

The arbitrators found in Sheppard, Mullin’s favor, concluding that—

even assuming Sheppard, Mullin’s failure to disclose the conflict constituted 

an ethical violation—the violation was not sufficiently egregious to warrant 

forfeiture or disgorgement because there was no showing that the dual 

representation had damaged J-M. (Sheppard, Mullin, supra, 6 Cal.5th at 

p. 71.) After Sheppard, Mullin petitioned to confirm the award, J-M moved to 

vacate, contending the attorney engagement agreement was unenforceable 

because it violated former CRPC rule 3-310(C)(3), which prohibited an 

attorney, without the informed written consent of each client, from 

“ ‘[r]epresent[ing] a client in a matter and at the same time in a separate 

matter accept[ing] as a client a person or entity whose interest in the first 

matter is adverse to the client in the first matter.’ ” (Shepard, Mullin, at 

p. 80.) Citing Moncharsh for the proposition that a violation of the CRPC 

does not render a retainer agreement unenforceable, the superior court 

confirmed the award. (Sheppard, Mullin, at p. 71.) The appellate court then 

reversed, finding a violation of the CRPC despite the broad conflict waivers in 

place and concluding that this rendered the engagement agreement 

unenforceable and disentitled Sheppard Mullin from any fees for 

representing J-M. (Sheppard, Mullin, at pp. 71–72.)

On petition for review, the Supreme Court first reaffirmed the holding 

in Loving that “an arbitral award must be vacated, when a court determines 

that the arbitration has been undertaken to enforce a contract that is ‘illegal 

and against the public policy of the state.’ ” (Sheppard, Mullin, supra, 

6 Cal.5th at p. 73, italics added.) The Court rejected the argument that a 
18

contract can only be found unenforceable in violation of public policy when 

the policy at issue had been declared by the Legislature. (Ibid,, quoting Civ. 

Code, § 1667.) Rather, citing Chambers, the Court observed that “California 

courts have held that a contract or transaction involving attorneys may be

declared unenforceable for violation of the Rules of Professional Conduct, the 

set of binding rules governing the ethical practice of law in the State of 

California.” (Id. at p. 73, italics added.) The Court thus confirmed that

“California law holds that a contract may be held invalid and unenforceable 

on public policy grounds even though the public policy is not enshrined in a 

legislative enactment. (Id. at p. 79.)

Turning to the merits of the case before it, the Supreme Court opined 

that the “limitations in rule 3-310(C)(3) serve to enforce ‘the attorney’s duty—

and the client’s legitimate expectation—of loyalty.” (Sheppard, Mullin, 

supra, 6 Cal.5th at p. 84.) “It is for this reason that the rules encompass 

simultaneous representation even in unrelated matters where there is no risk 

that confidential information will be transmitted.” (Ibid.) Because the 

“transaction was entered under terms that undermined an ethical rule 

designed for the protection of the client as well as for the preservation of 

public confidence in the legal profession,” the Court found the contract as a 

whole unenforceable. (Id. at p. 87.) Under the circumstances, the Supreme 

Court remanded the matter for a determination of whether the law firm 

should recover in quantum meruit for the reasonable value of the legal 

services it provided to J-M. (Id. at pp. 88-89.) 

2. The JVA is not Unenforceable As Against Public Policy

Having reviewed the case law in this area at some length, we have 

discerned several general principles which we conclude determine the 

resolution of this matter. First, “ ‘the Legislature has expressed a “strong
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public policy in favor of arbitration as a speedy and relatively inexpensive 

means of dispute resolution.” ’ ” (Sheppard, Mullin, supra, 6 Cal.5th at p. 72, 

quoting Moncharsh.) Nevertheless, a contract (which includes an otherwise 

valid arbitration provision) may be deemed void and unenforceable in its 

entirety by the courts if it violates a law, rule, or regulation designed for the 

protection of the public. Thus, a number of cases have found contracts 

unenforceable where they have violated specific CPRC rules designed for 

public protection. (See, e.g, Sheppard, Mullin, at p. 87 [since CRPC conflict 

rules are “designed for the protection of the client as well as for the 

preservation of public confidence in the legal profession,” contract 

unenforceable where firm failed to disclose a known current conflict];

Chambers, supra, 29 Cal.4th at pp. 156–157 [refusing to enforce fee-sharing 

agreement where no client consent was obtained in violation of CPRC 

because clients are entitled to the protection of knowing how any fees will be 

split]; Hance v. Super Store Industries (2020) 44 Cal.App.5th 676, 684, 689 

[failure of attorney to disclose lack of professional liability insurance to 

clients pursuant to CPRC rule 3-410 rendered consents obtained under feesplitting agreement unenforceable; noting “[t]he disclosure would enable the 

client to make an informed decision whether to engage an attorney who did 

not carry insurance that would protect the client in the event of the 

attorney’s negligent or other wrongful conduct that might have an adverse 

effect on the client’s case”].)

Licensing statutes and regulations, however, have been treated 

somewhat differently. While licensing schemes obviously serve to protect the 

public from “incompetence and dishonesty” (MW Erectors, supra, 36 Cal.4th 

at p. 436), not all contracts entered into by unlicensed entities are 

automatically void (see id. at p. 440). For instance, while Loving found 
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unenforceable an agreement where only one of two partners was a licensed 

contractor and the partnership was also unlicensed, it expressly 

distinguished cases where (1) a partnership was unlicensed but both 

individual partners were licensed; and (2) a contractor’s license expired 

during performance of the contract but was renewed in the name of a 

corporation bearing the contractor’s name and work was completed by the 

corporation. (Loving, supra, 33 Cal.2d at p. 608; see also Brawerman v. Loeb 

& Loeb, LLP (2022) 81 Cal.App.5th 1106, 1120 [the unlicensed practice of law 

by a firm attorney does not completely invalidate retainer agreement 

pursuant to which firm attorneys also engaged in the licensed practice of 

law].) This makes sense because, where the safety and protection of the 

public was otherwise protected, strict adherence to the licensing regime 

“ ‘would become an unwarranted shield for the avoidance of a just 

obligation.’ ” (Loving, at p. 608.) Thus, in these situations, the courts look to 

facts like the sophistication of the parties, the licensing of the individuals 

performing the actual work, whether the client was injured by the compliance 

failure, and whether the law provides for other penalties for noncompliance

short of voiding the entire agreement. 

Turning to the merits of this case, we note, as stated above, that the 

State Bar Rules were not promulgated just to protect clients, but also to 

protect the courts, the legal profession, and the integrity of the legal system. 

(CRPC, rule 1.0(a).) And two appellate courts have expressly concluded that 

the failure to register a law corporation with the State Bar does not 

automatically vitiate a fee agreement because the purpose of the requirement 

is not to protect the public but is a decision “typically made to obtain tax 

advantages and to avoid personal liability for the corporation’s debts.” 

(Olson, supra, 106 Cal.App.4th at pp. 1214–1215.) Further, to the extent 
21

incorporation implicates other concerns involving misuse of the corporate 

structure, such issues may be addressed through administrative penalties. 

(Id. at p. 1215.) In addition, the Supreme Court in Moncharsh saw nothing in 

the CRPC rules at issue in that case suggesting to it that “resolution by an 

arbitrator of what is essentially an ordinary fee dispute would be 

inappropriate or would improperly protect the public interest.” (Moncharsh, 

supra, 3 Cal.4th at p. 33, italics added.) Similarly, we see nothing in the 

current “ordinary fee dispute” that would mandate holding the JVA 

unenforceable in its entirety.

This case does not involve safeguarding a client against a corporate 

profit motive as discussed in Frye. Here, the arbitrator simply divided fees in 

the eight cases for which client consents existed and distributed the 

remainder of the fees under the JVA pursuant to principles of quantum 

meruit. Moreover, the JVA was executed by two sophisticated attorneys on 

behalf of their respective law corporations with little difference in bargaining 

power. One firm’s consideration was largely to fund and administer 

operations of the other. And, as mentioned above, the Agreement

presupposed the involvement of the two lead attorneys, Micha Starr and Lisa 

Bloom. Had Liberty wanted a different agreement, it could simply have 

negotiated it. Further, there is no allegation that Bloom or any of the other 

attorneys actually providing legal services under the JVA were not properly 

licensed to practice law. Nor does Liberty suggest that the parties were

aware of the compliance issue when they executed the JVA. In addition, 

there is no evidence any of the clients were harmed by Bloom’s lack of State 

Bar registration. And, as the parties agree, the object of the agreement was 

to “collectively and collaboratively prosecute legal matters”, not to violate the 

CRPC. Finally, as the arbitrators noted, Bloom is subject to other discipline 
22

for failing to register as required. Under these circumstances, we cannot 

conclude that the JVA was void and unenforceable in its entirety.

Having made this determination, Liberty’s other contentions 

necessarily fail. We have assumed without deciding that Liberty did not 

waive the right to challenge the illegality of the JVA as a whole by 

submitting to arbitration and then raising the issue before the arbitrator as 

soon as Liberty became aware of it. However, the same cannot be said of its 

claims with respect to the inadequacy of the consents obtained in this case. 

Rather, as mentioned above, Liberty conceded before the arbitrator that its 

only challenge to the consents was that they were illegal based on Bloom’s 

failure to register as a law corporation and thus its defense under CPRC Rule 

1.5.1 with respect to client consents “[fell] with the law corporation 

registration defense.” Under such circumstances, we have no authority to 

revisit the arbitration panel’s conclusions with respect to the legality of the 

consents that were obtained in this case. (Moncharsh, supra, 3 Cal.4th at 

p. 12 [“[I]t is within the power of the arbitrator to make a mistake either 

legally or factually. When parties opt for the forum of arbitration they agree 

to be bound by the decision of that forum knowing that arbitrators, like 

judges, are fallible.”]; Marsch v. Williams (1994) 23 Cal.App.4th 238, 243–244 

[citing Moncharsh in concluding that unless one of the enumerated statutory 

grounds exists, “a court may not vacate an award even if it contains a legal or 

factual error on its face which results in substantial injustice].) Nor would 

we at this late hour. (Law Finance Group, LLC v. Key (2023) 14 Cal.5th 932, 

958 [citing Moncharsh for conclusion that “challenges going ‘to only a portion 

of the contract’ can be forfeited if they are not timely raised”]; Moncharsh at 

p. 30 [“[W]e cannot permit a party to sit on [its] rights, content in the 

knowledge that should [it] suffer an adverse decision, [it] could then raise the 
23

illegality issue in a motion to vacate the arbitrator’s award. A contrary rule 

would condone a level of ‘procedural gamesmanship’ that we have condemned 

as ‘undermining the advantages of arbitration.’ ”].)

III. DISPOSITION

The judgment is affirmed. Bloom is entitled to its costs on appeal.
24

GETTY, J.

WE CONCUR:

HUMES, P. J.

BANKE, J.

A165269

 Judge of the Solano County Superior Court, assigned by the Chief Justice 

pursuant to article VI, section 6 of the California Constitution.