Law Business Essentials

The Code of Conduct prohibits lawyers from paying referral fees, or splitting fees, with any non-lawyer who refers clients to the lawyer (Rule 3.6-7). You are also prohibited from giving financial or other rewards to non-lawyers for the referral of clients.

In contrast, you can pay referral fees to other lawyers. Generally, lawyers can identify colleagues who have the skills to serve the client’s needs, and the payment of a referral fee is not seen as objectionable. Keep in mind that the Code does not allow the payment of referral fees if the referral is compelled by a conflict of interest which prevents the referring lawyer from acting (Rule 3.6-6).  You are also required to ensure that referral fees are reasonable and that clients are informed of the fees and consent.

The Rules do not prevent you from engaging in promotional activities or making reasonable expenditures on promotional items or activities that may result in the referral of clients. You can take clients out for meals, provide tickets to sporting or other events, or sponsor client functions. You can also pay non-lawyers reasonable advertising costs, including flat fees for lawyer referral services, and can compensate employees for marketing and public relations services. However, compensation cannot be directly related to a specific client matter, whether based on a fee per file or a percentage of the overall billings generated on the file. See Commentary [1] to Rule 3.6-7 for a full list of activities lawyers may do that do not contravene the rule.