Can a lawyer accept a referral fee from a financial services firm for sending clients there for loans?
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This page answers the general question as of 1991. Ezel answers yours: whether it's allowed on your facts, under the current rules of professional conduct in your state, with citations.
Plain-English summary
The inquiry concerned a proposal from a financial services firm to pay lawyers a referral fee of 1% of the gross amount for loans made to clients referred to that firm. The committee was of the opinion that such a kickback for referrals violates RPC 1.8(f)(2) because it interferes with the independent judgment of the lawyer, and it noted that the arrangement creates a conflict between the lawyer and client.
After discussion, the committee did not believe the matter required publication at the time, because it did not appear to be a widespread problem.
Currency note
This opinion was issued in 1991, before the Washington State Bar Association's adoption of the 2006 revisions to the Washington Rules of Professional Conduct. 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 Treat this page as historical context, not current guidance.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, deadline, or requirement mentioned here.
Common questions
Q: Can a lawyer take a cut of loan proceeds for referring clients to a lender?
A: Under this 1991 opinion, no; the committee was of the opinion that such a kickback violates RPC 1.8(f)(2) because it interferes with the lawyer's independent judgment.
Q: Why is the referral fee a conflict?
A: The committee noted that the arrangement creates a conflict between the lawyer and client, because the lawyer's financial interest in the referral is at odds with the client's interest.
Background and rules framework
At the time of this opinion, Washington's RPC 1.8(f)(2) addressed compensation arrangements that interfere with a lawyer's independence of professional judgment, the subject the Model Rules place in Rule 1.8. The committee treated a per-loan referral kickback as exactly that kind of interference and as a lawyer-client conflict.
Citations and references
Rules of Professional Conduct:
- ABA Model Rule 1.8 (conflicts; interference with independent judgment)
- Washington RPC 1.8(f)(2)
See also
- WA Ethics Op. 1396: Lawyer Employed by a Life Insurance Company
- WA Ethics Op. 1346: Insurer Paying Lawyers to Explain Its Product
Source
- Landing page: https://ao.wsba.org/print.aspx?ID=479
Original opinion text
Reproduced from the official source for research purposes. The linked source is authoritative.
The Committee reviewed your inquiry concerning the proposal from a financial services firm regarding a referral fee to lawyers of 1% of the gross amount for loans to clients referred to that firm. The Committee was of the opinion that such a kickback for referrals violates the provisions of RPC 1.8(f)(2) because it interferes with the independent judgment of the lawyer. They also noted that such an arrangement creates a conflict between the lawyer and client. After discussion, the Committee did not believe that this was a matter that required publication at this time because it does not appear to be a widespread problem. Thank you for calling this to the Committee's attention.
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