I referred an out-of-state accident case to a lawyer licensed there and did no other work. Now they've sent me a share of the fee. Can I keep it without any written agreement with the client?

Plain-English summary

The inquiring attorney, who was not licensed in the state where an accident occurred, had offered to locate counsel for an injured individual. The attorney gathered some facts, identified an attorney licensed in that state, and contacted that attorney to ask whether the attorney handled such cases, then referred the individual. The out-of-state attorney later notified the inquiring attorney that the case had settled and sent a check for the inquiring attorney's share of the fee. There was no written agreement with the client by which each lawyer assumed joint responsibility, and the inquiring attorney did not know the settlement amount or the fee arrangement. The attorney asked whether the Rules permitted sharing the fee and keeping the money.

The panel concluded that they did not, on these facts. Rule 1.5(e) permits a division of a fee between lawyers not in the same firm only if the division is in proportion to the services each performed, or, by written agreement with the client, each lawyer assumes joint responsibility for the representation, with the client advised and not objecting and the total fee reasonable. The panel explained that Rule 1.5(e) uncoupled services from responsibility, so proportionality is no longer required, but simply referring a case is not enough to make fee-splitting ethical: if the division is not based on an allocation of services, the rule requires a writing by which the referring lawyer assumes joint responsibility. Agreeing with the New York City ethics committee, the panel treated "joint responsibility" as synonymous with joint and several liability, a financial obligation that does not require the referring lawyer to supervise the receiving lawyer. A Rhode Island lawyer may share a fee with an out-of-state attorney if the Rhode Island lawyer assumes joint responsibility by written agreement with the client and fee-sharing is permitted in the other state. Because there was no such written agreement and the inquiring attorney had performed no work, the attorney could not share the fee.

Currency note

This opinion was issued in September 1997, after the Rhode Island Supreme Court adopted the Model Rules of Professional Conduct effective November 15, 1988, and it applies Rule 1.5 as originally adopted. The Rhode Island Supreme Court later revised the Rules of Professional Conduct in 2007 as part of the nationwide Ethics 2000 process. 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 mentioned here.

Common questions

Q: Can a lawyer collect a referral fee just for sending a case to another lawyer?

A: Not without meeting Rule 1.5(e). The opinion concluded that if the fee is not divided in proportion to services, the referring lawyer must, by written agreement with the client, assume joint responsibility for the representation.

Q: What does "joint responsibility" mean under this opinion?

A: The opinion, agreeing with the New York City committee, treated joint responsibility as joint and several liability, a financial obligation, and said it does not require the referring lawyer to supervise the receiving lawyer.

Q: Can a Rhode Island lawyer share a fee with an out-of-state attorney?

A: Yes, if the Rhode Island lawyer assumes joint responsibility by written agreement with the client and fee-sharing is permitted under the other state's ethics rules; here, without any written agreement, the lawyer could not share the fee.

Background and rules framework

The opinion applied Rhode Island Rule of Professional Conduct 1.5(e) (Model Rule 1.5(e)). A division of a fee between lawyers not in the same firm is permitted only if it is proportional to services performed or each lawyer assumes joint responsibility by written agreement with the client, the client is advised and does not object, and the total fee is reasonable. The panel contrasted this with the former Code's DR 2-107(A)(2), which required division in proportion to both services and responsibility, and relied on the ABA/BNA Lawyers' Manual and out-of-state authority in defining "joint responsibility."

Citations and references

Rules of Professional Conduct:

• Model Rule 1.5 / RI RPC 1.5(e) (division of fees between lawyers not in the same firm)
• Former DR 2-107(A)(2) (Code of Professional Responsibility; division in proportion to services and responsibility)

Other opinions cited:

• N.Y. City Bar Assoc. Comm. on Prof. Ethics Op. 715 (1996): "joint responsibility" means joint and several liability and is a financial obligation
• Michigan State Bar Comm. on Prof. and Judicial Ethics Op. RI-199 (1994): sharing a fee with an out-of-state attorney

See also

• RI EAP Op. 98-14: Splitting a contingent fee with a disbarred referring attorney
• RI EAP Op. 98-16: Contacting lawyer-referral-service clients is not solicitation

Source

• Landing page: https://www.courts.ri.gov/attorney-resources/Pages/Ethics-Advisory-Panel-default.aspx
• Original PDF: https://www.courts.ri.gov/Opinions/EAP%2097-16.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Final

                         RHODE ISLAND SUPREME COURT
                            ETHICS ADVISORY PANEL
                        OPINION NO. 97-16, REQUEST NO. 722
                              Issued September 11, 1997

Facts:

     The inquiring attorney referred an individual who was involved in an accident in another

state to an attorney licensed to practice law in that state. The inquiring attorney, who is not li-
censed in the state where the accident occurred, had offered to locate an attorney for the individ-
ual. To that end, the inquiring attorney gathered some facts relating to the accident, identified an
attorney for the case, and communicated with the attorney, making inquiries as to whether the at-
torney handled this type of case. Recently the out-of-state attorney notified the inquiring attor-
ney that the case has been settled, and sent him/her a check for the inquiring attorney's share of
the fee. There was no written agreement with the client by which each lawyer assumed joint re-
sponsibility for the representation. The inquiring attorney has no knowledge of the amount of
the settlement or the fee arrangement between the out-of-state attorney and the individual.

Issues Presented:

    The inquiring attorney asks whether the Rules of Professional Conduct permit him/her to

share the attorney's fee and to keep the money.

Opinion:

    Where lawyers divide a fee without regard to the amount of work performed, Rule 1.5(e)

requires a written agreement with the client by which the lawyers assume joint responsibility for
the representation. In the absence of such an agreement, Rule 1.5(e) does not permit the inquir-
ing attorney to share the attorney's fee.
Reasoning:

     Rule 1.5(e), which addresses the division of fees between attorneys, states:

            (e) A division of a fee between lawyers who are not in the same
            firm may be made only if:
                 (1) the division is in proportion to the services performed
                 by each lawyer or, by written agreement with the client,
                 each lawyer assumes joint responsibility for the represen-
                 tation;
                 (2) the client is advised of and does not object to the par-
                 ticipation of all the lawyers involved; and

(3) the total fee is reasonable.
Final
Op. 97-16
Page 2

    The former Code of Professional Responsibility required that fees be divided in propor-

tion to both the services performed and the responsibility assumed by the lawyers. See former
DR 2-107 (A)(2). Rule 1.5(e)(1) uncouples services and responsibility, permitting a division of
fees either if the division is in proportion to the services performed by each lawyer, or if each
lawyer by written agreement with the client assumes joint responsibility for the representation.1
See ABA/BNA Law. Man. of Prof. Conduct at 41:707 (1991 Supp.). In addition, the total fee
must be reasonable. Rule 1.5(e)(3).

    Although proportionality is no longer a requirement under Rule 1.5(e), simply referring a

case or a client to another lawyer is not sufficient to make a fee-splitting arrangement ethical un-
der the Rules. See ABA/BNA Law. Man. on Prof. Conduct, at 41:709. If the division of fees is
not based upon an allocation of services, the Rule requires a writing by which the referring law-
yer agrees to assume joint responsibility for the representation. The requirement of a writing in-
dicates that the rule was intended to add to the protection already available to the client by pro-
viding a contractual remedy in addition to the remedy available under the law of negligence.
N.Y. City Bar Assoc. Comm. on Prof. Ethics, Op. 715 (1996).

    The Panel agrees with the New York City Committee on Professional Ethics which has

stated that "joint responsibility" is synonymous with joint and several liability, and further agrees
that the "joint responsibility" requirement is financial and does not impose an obligation on the
referring attorney to supervise the receiving attorney. Id. In order to share a fee without regard
to work performed, lawyers are ethically obligated under Rule 1.5(e) to accept vicarious liability
for any malpractice that occurs during the course of the representation. Id.

    The Panel is also of the opinion that a Rhode Island lawyer may share a fee with an out-

of-state attorney provided the Rhode Island attorney, by written agreement with the client, as-
sumes joint responsibility, i.e., accepts the financial consequences of the referral, and provided
further that sharing a fee is permitted under the ethical rules of the other state. See Michigan
State Bar Comm. on Prof. and Judicial Ethics Op RI-199 (1994).

    In the instant inquiry, the inquiring attorney did not perform work on the case. In order

to share in the fee, he/she was required to assume, by written agreement with the client, joint re-
sponsibility for the representation. There being no such written agreement, the panel concludes
the inquiring attorney is not permitted to share the attorney's fee.

1
Comparable ethical rules in other states allow referral fees by eliminating references to propor-
tionality and shared responsibility. See e.g., Cal. Rule 2-20(A); Mich. Rule 1.5(e).