Opinion ID: 1888804
Heading Depth: 1
Heading Rank: 5

Heading: Fee-Sharing and Referrals

Text: Because petitioners vehemently have argued that this application amounts to a fee-splitting arrangement based on client-referrals that violates our rules, we take this opportunity to reiterate our well-established principles on the law concerning fees for all members of the bar. [13] The Rules of Professional Conduct are found in Article V of the Supreme Court Rules. Article V, Rules 1.5 and 7.2 control referral and fee-sharing between lawyers; the rules are separate and distinct. Rule 7.2(c) provides in relevant part: A lawyer shall not give anything of value to a person for recommending the lawyer's services except that a lawyer may    (4) refer clients to another lawyer or a nonlawyer professional pursuant to an agreement not otherwise prohibited under these [r]ules that provides for the other person to refer clients or customers to the lawyer, if (i) the reciprocal referral agreement is not exclusive, and (ii) the client is informed of the existence and nature of the agreement. Additionally, Rule 7.2(f) provides: Any lawyer or law firm who advertises that his or her practice includes or concentrates in particular fields of law and then refers the majority of cases in those fields of law or of that type to another lawyer, law firm or group of lawyers shall clearly state the following disclaimer: 1. `Most cases of this type are not handled by this firm, but are referred to other attorneys[,]' or if applicable: 2. `While this firm maintains joint responsibility, most cases of this type are referred to other attorneys for principal responsibility.' Whether the attorney fees can be shared by the referring lawyer or law firm and the lawyer to whom the case is referred is another question. Rule 1.5 provides the framework for how the division between lawyers dividing fees is governed: (e) A division of a fee between lawyers who are not in the same firm may be made only if: (1) the division is in proportion to the services performed by each lawyer or each lawyer assumes joint responsibility for the representation; (2) the client agrees to the arrangement, including the share each lawyer will receive, and the agreement is confirmed in writing ; and (3) the total fee is reasonable. (Emphases added.) Clearly, the Rules of Professional Conduct anticipate and permit attorney-to-attorney referrals; fee-splitting, however, is regulated more stringently to protect the client from unscrupulous practitioners. Attorneys are prohibited from paying other lawyers or anyone else for funneling business or channeling professional work. Rule 7.2, comment [6]. Further, a division of fees among lawyers who are not in the same firm is prohibited unless the division is based on the proportional amount of work performed by each lawyer or, if each lawyer not the law firm assumes joint responsibility for the representation. Rule 1.5(e)(1). A division of fee is a single billing to a client covering the fee of two or more lawyers who are not in the same firm. A division of fee facilitates association of more than one lawyer in a matter in which neither alone could serve the client as well, and most often is used when the fee is contingent and the division is between a referring lawyer and a trial specialist. Rule 1.5, comment [7]. Joint responsibility for the representation presumes that each lawyer who shares in the fee has rendered services in proportion to the fee or a lawyer not the law firmhas assumed responsibility for the representation as a whole. Rule 1.5, comment [7]. Responsibility for the representation is not an empty conceptit requires that an identified attorney assume financial accountability for the costs of the suit in a contingent-fee case, as well as individual ethical responsibility for the representation as if the lawyers were associated in a partnership. Id. Attorneys who are licensed to practice law in this state, no matter the form of the entity, must strictly adhere to the Rules of Professional Conduct governing fees, and we are confident that Disciplinary Counsel will pay close attention to these concerns.