When two lawyers properly share a referral fee, do the rules limit how they split the fee, such as 50/50 for a referral?

Plain-English summary

A lawyer referred a personal-injury case to a personal-injury lawyer, and the two agreed to split the contingent fee equally. The referring lawyer's principal service was the referral, but he agreed to assume the same responsibility for the matter as if he were a partner in the receiving lawyer's firm. There was a written contingent-fee agreement with the client, the client consented in writing to the division, and the total fee was reasonable and not increased because of the referral. The inquiry asked whether, on those facts, it would violate the Rules for the referring lawyer to receive 50%, or alternatively one-third, of the fee.

The opinion concluded that, assuming the lawyers complied with Rule 1.5(f) and (g)(1) and (2), which require among other things that the client consent in a writing disclosing the division, the basis on which it is made, and the responsibility the referring lawyer assumes, the Rules of Professional Conduct impose no restriction on how such a reasonable fee may be divided between the lawyers.

Currency note

This opinion was issued in 1991, before Illinois adopted the 2010 Illinois Rules of Professional Conduct. The ISBA Board of Governors affirmed the opinion in January 2010 as generally consistent with the 2010 Rules (Rule 1.5(e)), while cautioning that the specific standards referenced may differ from the 2010 Rules. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule or requirement mentioned here.

Common questions

Q: Once the fee-division rules are satisfied, do the Rules limit how a referral fee is split?

A: The opinion concluded they do not; where the Rule 1.5 conditions are met and the total fee is reasonable, the Rules impose no restriction on how the fee is divided between the referring and receiving lawyers.

Q: Can the referring lawyer receive 50% of the fee for primarily making the referral?

A: The opinion concluded a 50% (or one-third) share is permissible, provided the referring lawyer assumes the same responsibility as a partner of the receiving lawyer and the Rule 1.5 disclosure and consent requirements are met.

Q: What must be in place for the division to be proper?

A: The opinion concluded the client must consent in a writing that discloses the division, its basis, and the responsibility the referring lawyer assumes (Rule 1.5(f) and (g)(1)-(2)), and the total fee must be reasonable.

Background and rules framework

The opinion interpreted Rule 1.5(f) (written client consent to a fee division) and Rule 1.5(g)(1)-(2) (the referral exception requiring disclosure of the economic benefit and the referring lawyer's assumption of partner-like responsibility), concluding the Rules cap the total fee at a reasonable amount but do not otherwise dictate the split between the lawyers (Model Rule 1.5).

Citations and references

Rules of Professional Conduct:

• Model Rule 1.5 (fees; division of fees) / Illinois Rule 1.5(f), 1.5(g)(1)-(2)

See also

• ISBA Ethics Op. 90-11: Referral Fee Despite Conflict
• ISBA Ethics Op. 16-04: Of Counsel, Fees and Conflicts

Source

• Landing page: https://www.isba.org/ethics/opinions/9018