The Florida Bar
Attorney who refers personal injury case to another lawyer because of conflict of interests may not take 25 percent referral fee authorized by fee rule.
(March 1, 1989)
(March 1, 1989)
RPC: 4-1.5(F)(4)(d); 4-1.5(G)
Opinions: 67-21, 73-2
The Committee has been asked whether a lawyer who refers a personal injury case to another lawyer because of a conflict of interests can ethically receive or be paid a 25 percent referral fee pursuant to Rule 4-1.5(F)(4)(d). The answer is no; it is impermissible for a lawyer who refers a case because of a conflict to receive any part of the fee for legal services performed, or to be performed, after the emergence of the conflict.
In Opinion 67-21 this Committee concluded that a lawyer who cannot ethically accept employment in the first instance because of a conflict cannot ethically participate in a division of the fee. In Opinion 73-2 this Committee similarly stated that a law firm precluded by conflict rules from participating in the representation or sharing responsibility for it likewise is precluded from sharing in the fee; the only compensation the referring firm can ethically receive is for the reasonable value of services rendered to the client before the conflict emerged.
Both of the cited opinions were issued at a time when referral fees as such were strictly prohibited. The ethics rules at the time permitted a division of fees between lawyers not in the same firm only in proportion to services performed and responsibility assumed. The rule against fee divisions has since been relaxed, but the results remain the same in conflict referral situations.
Currently Rule 4-1.5(F)(4)(d) of the Rules Regulating The Florida Bar expressly permits a referring lawyer (or "the lawyer assuming secondary responsibility for the legal services") to be paid up to 25 percent of the fee in a personal injury case. This fee division is subject to the additional requirements set forth in paragraph (G) of the rule. Paragraph (G), which applies to all fee divisions between lawyers not in the same firm, regardless of the type of matter, provides that
... a division of fee between lawyers who are not in the same firm may be made only if the total fee is reasonable and:
(1) The division is in proportion to the services performed by each lawyer; or
(2) By written agreement with the client:
(a) Each lawyer assumes joint legal responsibility for the representation and
agrees to be available for consultation with the client[.]
It is clear that a lawyer who performs some legal services for a client before the conflict requiring withdrawal emerges is permitted to receive only reasonable compensation for services actually performed before emergence of the conflict, as in Opinion 73-2. A lawyer who is obligated to decline employment in the first instance because of a conflict cannot ethically receive any portion of the fee. The reason is apparent: from the outset the lawyer is ethically proscribed from performing any legal services in the matter, and the lawyer cannot ethically assume any responsibility for the representation or consult with the client or the client's attorney. Thus a lawyer who is obligated to refuse employment in the first instance fails both of the Rule 4-1.5(G) tests. The result is the same as in Opinion 67-21.