Thursday, May 26, 2016

Conflicts, Referred

  • “A lawyer who expects to receive a fee for referring a client must confirm that the referred matter doesn't present a conflict of interest and must get the client's written consent to the fee division at the outset, the ABA's ethics committee advised April 21.”
  • “Rules on conflicts among clients apply because the referring lawyer in a fee-splitting arrangement ‘represents’ the referred client even if the lawyer doesn't provide the legal services, according to the opinion.”
  • “Accordingly, the committee said, the referring lawyer in a fee-sharing arrangement represents the referred client for purposes of the ethics rules even if the other attorney performs all legal services in the matter.”
  • “Model Rule 1.7(a) forbids concurrent representation of clients who will be directly adverse to each other. It also prohibits lawyers from representing a client when there's a significant risk that the lawyer's responsibilities to another client will materially limit the representation, or that the lawyer's duties to a former client or a third person or the lawyer's own personal interests will hamper the representation.”
See also additional analysis and commentary by former conflicts and ethics counsel at Holland & Knight, and current Preferred Service Provider for Paragon, Gilda T. Russell: “ABA Formal Opinion 474 (2016) – Referral Fees
  • “Hence, under the ABA Model Rule, a referral fee to a lawyer in a different firm is not allowed unless the division of the fee between the lawyer and the outside lawyer is proportional to the services performed by each lawyer or each lawyer assumes joint responsibility for the matter.2”
  • “2: While such is the approach of ABA Model Rule 1.5(e), there is a wide variation in jurisdictional approaches to referral fees. A number of states follow the requirements of proportionality or joint responsibility. See e.g., District of Columbia Rule Prof. Cond. 1.5(e); Florida Rule Prof. Cond. 4-­‐1.5(g); Illinois Rule Prof. Cond. 1.5(e); New York (New York Rule Prof. Cond. 1.5(g); and Texas Disc. Rule Prof. Cond. 1.04(f). Other states do not have any such proportional division or joint responsibility provisions for referral fees, but, rather, require only client consent and that the total fee is reasonable. See e.g., California Rule Prof. Cond. 2-­‐200(A);”

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