Business Development Through Fee Sharing

Looking to build your law practice by creating fee sharing arrangements with an attorney outside your law firm? Referral arrangements are a great way to develop your book of business — leading to promotion opportunities within the firm, opportunities at other firms (if the book of business is portable), and higher overall compensation. However, double-check your state bar’s ethical rules to be sure you’re in compliance, including with providing to avoid conflicts of interest. Recently, the American Bar Association Standing Committee on Ethics and Professional Responsibility issued ABA Formal Opinion 474, which discusses the application of ABA Model Rules of Professional Conduct related to the division of fees. Opinion 474:

• Clarifies the phrase “joint responsibility” to mean “joint representation,”

• Emphasizes that conflicts of interest rules (and their exceptions) be followed

• Requires that the total fee is reasonable and approved, in writing, by the client

Because state rules vary, be sure to check our your own state’s ethical rules before entering into referral arrangements. Read more in “Division Adds Up: Sharing fees with a lawyer outside the firm passes ethics muster as long as certain rules are followed”, by David L Hudson, Jr. in the ABA Journal (online title: "Sharing fees with a lawyer outside the firm is OK as long as certain ethics rules are followed")