Can a lawyer pay a referral fee to a referring attorney who became suspended or disbarred after the fee-division agreement was signed?

Plain-English summary

A personal injury client was referred to the inquiring attorney in early 1988 under a contingent fee, and the inquirer agreed to pay the referring attorney 25% of the fees received. The inquirer later learned the referring attorney was no longer a member of The Florida Bar, the case settled in July 1989, and the inquirer asked whether paying the 25% referral fee was proper. The committee set out Rule 4-1.5(G), which permits fee division between attorneys not in the same firm either in proportion to work performed or, by written agreement with the client, where each lawyer assumes joint legal responsibility and is available for consultation.

The committee explained that, under the former Code, attorneys not in the same firm could divide fees only in proportion to work performed, and prior opinions (72-16, 66-20, 65-21) allowed paying a suspended or disbarred attorney for services performed before suspension. The current rule allows a non-working attorney to receive a portion of the fee in exchange for the written agreement to assume joint responsibility and be available for consultation, which is the quid pro quo for the referral share.

The committee concluded that it is ethically permissible to pay a suspended or disbarred referring attorney on a quantum meruit basis for the responsibility the attorney did assume and the time he or she was available for consultation prior to suspension or disbarment. A referring attorney suspended or disbarred during the representation becomes unable to fulfill the contractual obligations of responsibility and availability and so should not receive the entire contracted portion, but should not be denied all of it either. The committee added that the opinion also applies to attorneys who resign under Rule 3-7.11.

Currency note

This opinion was issued in 1990, before The Florida Bar's adoption of the 2006 revisions to the 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 Treat this page as historical context, not current guidance.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. A note appended to the opinion records that, after it was adopted, the Fourth District Court of Appeal held in Santini v. Cleveland Clinic Florida, 65 So. 3d 22 (Fla. 4th DCA 2011), that a lawyer who withdrew from a contingent fee case upon being suspended is not entitled to a fee.

Common questions

Q: Can a lawyer pay a referral fee to a referring attorney who was later disbarred?

A: The opinion concluded that, under a properly executed fee-division agreement, the suspended or disbarred referring attorney may be paid on a quantum meruit basis for the responsibility assumed and the time available for consultation while still licensed.

Q: Does the suspended attorney get the full contracted share?

A: No. The opinion concluded that an attorney suspended or disbarred during the representation can no longer fulfill the contractual obligations of joint responsibility and availability, so should not receive the entire contracted portion, only a quantum meruit amount.

Q: Does this also apply to a lawyer who resigns from the Bar?

A: Yes. The opinion stated that it also applies to attorneys who resign from The Florida Bar pursuant to Rule 3-7.11.

Background and rules framework

The opinion interprets Rule 4-1.5(G) (Model Rule 1.5), which governs the division of fees between lawyers not in the same firm and conditions a referral share on a written agreement in which each lawyer assumes joint legal responsibility and agrees to be available for consultation. The committee contrasted this with the former Code's rule allowing fee division only in proportion to work performed.

Citations and references

Rules of Professional Conduct:

• Fla. Rule 4-1.5(G) / Model Rule 1.5 (division of fees between lawyers not in the same firm)
• Fla. Rule 3-7.11 (resignation)

Other opinions cited:

• Fla. Ethics Ops. 65-21, 66-20, 72-16

See also

• FL Bar Ethics Op. 90-8: Dividing a Fee With an Out-of-State Attorney
• FL Bar Ethics Op. 94-7: Of-Counsel Fee Division Rules
• FL Bar Ethics Op. 94-1: Departing Lawyer's Fee Split With Former Firm

Source

• Landing page: https://www.floridabar.org/etopinions/etopinion-90-3/
• Original PDF: https://www-media.floridabar.org/uploads/2017/04/FL-Bar-Ethics-Op-90-3.pdf

Original opinion text

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

FLORIDA BAR ETHICS OPINION
OPINION 90-3
July 15, 1990
Advisory ethics opinions are not binding.

Payment of referral fee to attorney who, subsequent to execution of fee-division agreement, has become suspended, disbarred, or resigned from The Florida Bar, is to be made on a quantum meruit basis.

Note: Subsequent to the adoption of this opinion, the Fourth District Court of Appeal held that a lawyer who withdrew from a contingent fee case upon being suspended is not entitled to a fee. Santini v. Cleveland Clinic Florida, 65 So.3d 22 (Fla. 4th DCA 2011).

RPC: 4-1.5(G)
Opinions: 65-21, 66-20, 72-16
Misc: Rule 3-7.11, Rules Regulating The Florida Bar

A client with a personal injury claim was referred to the inquiring attorney by another attorney in early 1988. The inquirer agreed to represent the client on a contingent fee basis. The inquirer also agreed to pay to the referring attorney 25% of the total attorney's fees received in the case.

In late 1988 or early 1989 the inquirer learned that the referring attorney was no longer a member of The Florida Bar. The client's case was settled in July 1989. The inquirer is now concerned about the propriety of paying the 25% referral fee to the referring attorney, who is not presently licensed to practice law in Florida.

The regulations governing division of fees between attorneys who are not in the same firm are set forth in Rule 4-1.5 of the Rules Regulating The Florida Bar. Section (G) of Rule 4-1.5 provides:

(G) Subject to the provisions of paragraph (F)(4)(d) [which limits a referring attorney's share of the fee in a personal injury-type case to 25% absent court approval], a division of fee between lawyers who are not in the same firm may be made only if the total fee is reasonable and:

(1) The division is in proportion to the services performed by each lawyer; or

(2) By written agreement with the client:

(a) Each lawyer assumes joint legal responsibility for the representation and agrees to be available for consultation with the client; and

(b) The agreement fully discloses that a division of fees will be made and the basis upon which the division of fees will be made.

Presumably the inquirer and the referring attorney entered into the written agreement with the client described in section (G)(2).

The former Code of Professional Responsibility provided that the only permissible way in which attorneys not in the same firm could share a legal fee was in proportion to the work performed by each attorney. Referral fees were not authorized. When the Rules Regulating The Florida Bar became effective on January 1, 1987, this long-standing absolute prohibition on referral fees was modified. Rule 4-1.5(G), quoted above, now permits attorneys not in the same firm to divide legal fees either: (1) in proportion to the work performed by each; or (2) pursuant to a written agreement, signed by the client and all attorneys who are to participate in the fee, that sets forth the manner in which the fee is to be divided and provides that each attorney will assume joint legal responsibility for the representation and be available for consultation with the client. In situations where the fee is to be divided other than in proportion to the work performed (e.g., the typical referral situation), an attorney's acceptance of joint legal responsibility for the case and agreement to be available to consult with the client is the quid pro quo for the attorney's receipt of a portion of the fee that does not represent payment for work performed.

As noted, the former Code allowed attorneys who were not in the same firm to divide fees only in proportion to the work performed by each attorney. In various advisory opinions issued under the old rule, the Professional Ethics Committee stated that it was not unethical for an attorney to pay a suspended or disbarred attorney for services that the suspended or disbarred attorney performed prior to suspension or disbarment. See Florida Opinions 72-16; 66-20; 65-21.

The current fee-division rule, however, allows an attorney who does not perform services to receive a portion of the fee in exchange for his or her written agreement to assume joint legal responsibility and to be available for consultation. In view of this rule, the Committee concludes that it is ethically permissible for an attorney to pay, pursuant to a properly executed fee-division agreement, a suspended or disbarred referring attorney for the responsibility that the attorney did assume and the time that he or she was available for consultation prior to suspension or disbarment.

This quantum meruit approach is both logical and reasonable. Because the Florida Supreme Court decided that it is permissible for an attorney to receive a portion of a fee simply for agreeing in writing to assume joint responsibility for a representation and to be available for consultation with the client, a referring attorney who is suspended or disbarred during the course of the representation should not be denied all of his or her portion of the fee. On the other hand, a referring attorney who is suspended or disbarred at some point during the representation becomes unable to fulfill the contractual obligations of responsibility and availability and, therefore, should not receive the entire portion of the fee that he or she contracted for in the required written agreement. Instead, the suspended or disbarred referring attorney ethically may receive payment on a quantum meruit basis for the responsibility that he or she did assume and the time that he or she was available for consultation while licensed to practice.

This opinion also applies to attorneys who resign from The Florida Bar pursuant to Rule 3-7.11.