October 2017 – The Ethics Corner

Ethics Questions from Readers.

Legal Ethics Advice and Counsel for Solos and Small Firms.

I do personal injury (PI) and I was thinking about offering a small referral fee to attorneys in other firms to encourage them to refer PI cases to me. Is this a good idea?

Personal Injury Attorney – Columbus, Ohio

No!  Offering a referral fee to anyone who refers a case to you is a very bad idea so don’t even think about it.  What’s the problem? Ohio Professional Conduct Rule 7.2 forbids a lawyer from giving anything of value to another for recommending the lawyer’s services except for (1) reasonable advertisement costs permitted by the disciplinary rules like online attorney directories, (2) the usual charges associated with legal service plans, (3) a lawyer referral service authorized by the Ohio Supreme Court, or (4) relating to the sale of a law practice. “Anything of value” includes not only money but a reciprocal agreement with a lawyer or non-lawyer to refer work back and forth.

 The ethical way – the prohibition against the payment of referral fee does not mean an attorney cannot share a small portion of the attorney fee with the originating attorney if that attorney is willing to work for it.  Yes, Rule 1.5(e) allows lawyers in different firms to share attorney fees if the Rule 1.5(e) formalities are followed.  So, instead of paying a referral fee (which is unethical), you are sharing a portion of the attorney fees with the originating attorney (which is ethical) related to the services that he or she agrees to perform in the matter.  The amount shared is up to you if it is proportionate to the work to be performed.  Just don’t do this with non-lawyers, unless you want a Rule 5.4 violation for sharing legal fees with a non-lawyer.

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