Advisory Opinion:
2189
Year Issued:
2008
RPC(s):
RPC 7.2(b), 1.5(e)
Subject:
paying or accepting referral fees from another lawyer for client referrals
The inquirer asks whether it is permissible for a lawyer to pay to or receive from another lawyer a fee solely for referral, in which the referring lawyer neither performs work on the matter nor assumes any responsibility for the representation of the referred client. The payment to or receipt from another lawyer of a fee solely for referral is prohibited under RPC 7.2(b) and RPC 1.5(e). See also Belli v. Shaw, 29 Wn. App. 875, 881-82, 631 P.2d 980 (1981), aff'd, 98 Wn.2d 569, 577-78, 657 P.2d 315 (1983); Robert H. Aronson, An Overview of the Law of Professional Responsibility: The Rules of Professional Conduct Annotated & Analyzed, 61 WASH. L. REV. 823, 840 n.82 (1986).
DISCUSSION
With specified exceptions not applicable here, RPC 7.2(b) prohibits a lawyer from giving “anything of value to a person for recommending the lawyer’s services.” In addition, RPC 1.5(e), as revised in 2006, permits fee splitting between lawyers who are not in the same firm only where the division involves an authorized WSBA or county bar association lawyer referral service, or where the following requirements are met:
(a) the division is in proportion to the services provided by each lawyer or each lawyer assumes joint responsibility for the representation;
(b) the client agrees to the arrangement, including the share each lawyer will receive, and the agreement is confirmed in writing; and
(c) the total fee is reasonable.
Washington appellate cases have applied prior, similar versions of the “fee splitting” rule to prohibit the payment between lawyers of pure “forwarding” and “referral” fees, recognizing that payment of such fees is in substance a fee-splitting arrangement. See, e.g., Belli v. Shaw, 29 Wn. App. 875, 881-82, 631 P.2d 980 (1981), aff'd, 98 Wn.2d 569, 577-78, 657 P.2d 315 (1983); McNeary v. American Cyanamid Co., 105 Wn. 2d 136, 139-42, 712 P.2d 845 (1986).
Paying a pure referral fee to anyone is generally prohibited by RPC 7.2(b). Also, because the referral fee proposed by the inquirer is not in proportion to services rendered, and the referring lawyer is not assuming any responsibility for the representation, payment and receipt of the fee is prohibited under RPC 1.5(e). As Professor Robert Aronson noted when the RPCs were first adopted in Washington, “Unless another lawyer is not considered ‘a person,’ then pure referral fees are impermissible under RPC 7.2(c) [now subsection (b)], even if not barred by RPC Rule 1.5(e)(2).” Robert H. Aronson, An Overview of the Law of Professional Responsibility: The Rules of Professional Conduct Annotated & Analyzed, 61 WASH. L. REV. 823, 840 n.82 (1986). The same result is reached under the current version of the rules.
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