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Common Issues When Referring Cases to Other Lawyers

Referring cases sounds simple enough, right? All you have to do is – shoot an email to your lawyer mailing list or inform the Facebook lawyers group you’re in that you’re referring out a case and, voila! You’ll get more names than you know what to do with, which will likely leave both you and your client feeling confused and overwhelmed.

When you do narrow down the list and present the best options to your client, they may call the lawyers you referred them to only to find that they can’t take the case due to a potential conflict of interest or for one reason or another.

This article explores three of the most common lawyer referral issues and how to overcome them.

1. Not Being Specific When Seeking an Out-of-State Lawyer

This is more common than you might think. It’s not enough to state that you’re looking for a lawyer in a different state. You need to go a step further and specify the city or county they need to be working in.

A client will certainly not want to drive 100 miles both ways every time they need to meet with their lawyer. Even with Skype and Zoom, a client would still require an attorney who’s relatively close to them, particularly if the client in question can only pay in cash.

The more specific you are in your lawyer referral request, the better it is for everyone involved.

2. Not Specifying the Amount at Issue

If the amount at issue is too small, it might not be cost-effective for the receiving lawyer to take on the case. If, on the other hand, the amount at issue is too large, it might mean that the case has lots of moving parts and might be more suited to a larger firm.

3. Not Being Clear on Whether You Want a Lawyer Referral Fee

There’s no consensus on this one. Some lawyers will gladly pay an attorney referral fee if asked to, while others will question the integrity of those who request for it. Others have mixed feelings when it comes to the whole issue of giving or receiving such fees. In reality, however, lawyers do have to factor in referral fees when deciding whether or not to take on a client.

What is a referral fee? It is the amount paid by a contingent fee lawyer to the referring attorney based on the referred case settlement. Of course, there is a huge difference between paying the referring lawyer a portion of the recovery amount and sending a thoughtful gift as a “thank you” for receiving a referral.

If you expect to receive a referral fee, you need to make it clear at the outset.  The most unethical issue that may arise when referring a case is:

Lawyer X refers a prospective client to Lawyer Y. The client and Lawyer Y sign a fee agreement, only for Lawyer X to pop back into the picture and demand a referral fee from Lawyer Y.

ABA Referral Criteria

To avoid any confusion or unethical conduct, the American Bar Association (ABA) has a set of guidelines in its Model Rules for Professional Conduct that governs attorney referral fees and fee agreements. These are outlined below.

  1. The total fee to be split needs to be reasonable
  2. The fee split needs to be proportional to the amount of work done by each of the attorneys
  3. The client must be aware that the referring and receiving lawyer will be splitting the fee
  4. The client has to consent to the arrangement
  5. A lawyer can only refer a client to another “competent” lawyer

To clarify, all fee-division arrangements don’t always have to be proportional. Non-proportional agreements can be allowed if each attorney assumes “joint responsibility.” It means that the referring and receiving lawyers are both equally liable for any malpractice claim lodged against them.

To ensure ABA compliance in your jurisdiction, always check the respective state rules and apply them to the letter.

Referral Fee Agreement Best Practices

Since state bar compliance effectively renders both attorneys jointly responsible for a case, referrals can be a little tricky. To avoid any potential issues when entering into a referral fee agreement, here are some best practices you can adopt.

Set Clear Expectations

Agreements need to stipulate what the roles and responsibilities of each attorney in the case are. If only one attorney is expected to physically handle the case, this needs to be stated clearly in the agreement. The last thing you want is a misunderstanding about the role of each lawyer in the middle of litigation.

Don’t Assume

This is one area where you don’t want to be making any assumptions when it comes to the percentage of the fee the referring attorney expects. Depending on the state you live in, attorney referral fees can be 30 percent or more of the recovery amount.

Establish what is considered “reasonable” in your state and make sure this is indicated in the agreement.

Referrals Should Be Made to Attorneys You Trust

Remember, the ABA Model Rules stipulate that you must refer a client to a competent lawyer. It makes you jointly responsible for the actions of the receiving attorney.

It is always a good idea to refer clients to attorneys you’ve worked with in the past. If that’s not the case, you should, at the very least, check their reputation to ensure they’re qualified enough to represent your client.

One way to do this would be to use a credible lawyer referral service. That way, you know you’re working with lawyers who have been screened in specific practice areas and are competent enough to represent your client.


How to Report a Lawyer When They Violate an Ethical Rule

In most states, you file a complaint with the disciplinary board by filling in and mailing a state-issued form. Some of the details you’re required to provide include the lawyer’s name and contact information, your name and contact information, and a detailed description of the issue in question.

You’ll also need to provide copies of the relevant documents related to the violation in question. Some states allow complaints to be filed online or via a phone call.

To avoid ethical issues from cropping up, make sure you follow the ABA Model Rules when referring cases to other lawyers.

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