Should a lawyer keep the fees owed to a referral service in the client trust account?

Plain-English summary

A lawyer asked how to handle the fees owed to a referral service. The committee considered whether those fees were client funds that belonged in the client trust account.

The committee was of the opinion that there is no attorney-client relationship between the lawyer and the referral service, and that the funds owed to the referral service are therefore not client funds. Because they are not client funds, the committee concluded they should not be held in the client trust account.

Currency note

This opinion was issued in 1991, before 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 Treat this page as historical context, not current guidance.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: Are fees owed to a referral service client funds?

A: No. The committee was of the opinion that there is no attorney-client relationship between the lawyer and the referral service, so the funds owed to it are not client funds.

Q: Should referral service fees be held in the client trust account?

A: No. Because the funds are not client funds, the committee concluded they should not be held in the client trust account.

Background and rules framework

The opinion addressed the safekeeping of funds under the then-current RPC 1.14, Washington's rule on safekeeping property, which corresponds to ABA Model Rule 1.15. (Washington renumbered its rules in the 2006 revisions; the 1991 RPC 1.14 covered the subject now in Model Rule 1.15.) The committee's conclusion turned on the absence of an attorney-client relationship between the lawyer and the referral service.

Citations and references

Rules of Professional Conduct:

• ABA Model Rule 1.15 (safekeeping property; client trust accounts) / Washington RPC 1.14 as it stood in 1991

See also

• AL Ethics Op. 1995-08: LRS Percentage-Fee Programs
• CA Op. 2002-159: Loan-Funded Legal Fees via Broker Referral

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=521

Original opinion text

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

Advisory Opinion: 1441
Year Issued: 1991
RPC(s): RPC 1.14
Subject: Trust account; referral service fee

The Committee reviewed you inquiry regarding the handling of referral service fees. The Committee is of the opinion that there is no attorney-client relationship between the lawyer and the referral service and therefore the funds owed to the referral service are not client funds. Therefore, they should not be held in the client trust account.