If a former-client conflict bars a lawyer from taking a case, can she still refer it out and share in the other lawyer's fee?

Plain-English summary

Bar counsel asked about Attorney A, whom Company X wanted to engage to sue Company Z. A had represented Z in a past real estate matter and determined she was barred from taking X's case by a conflict of interest from that former representation. A proposed instead to refer X to Attorney B at another firm and to share in B's fee, subject to X's informed consent to B's employment and to the fee-division terms, with the total fee not exceeding reasonable compensation. The question was whether A could make the referral and share in B's fee.

The Commission concluded that sharing B's fee would be inconsistent with A's own determination that the former-client conflict precluded her from participating in the litigation against Z. It gave two grounds. First, reading Bar Rule 3.3(d) (fee division with a lawyer outside the firm), the Commission found that the rule's terms (client consent "to employment of the other lawyer" and compensation for legal services "they rendered to the client") presuppose that the referring lawyer has herself undertaken representation of the client in some sense, even if she expects to do no further work. Second, and independently, the Commission reasoned that a compensated referral to a particular lawyer is itself representation of X in the very matter on which X proposes to litigate: recommending a specific lawyer with the expectation of compensation requires at least a minimal analysis of the litigation theory, strategy, and tactics and a judgment that the recommended lawyer has the skills to pursue it. Because A's conflict barred her from undertaking any representation of X in the matter without Z's consent, that compensated recommendation would necessarily be tainted by the conflict. The Commission distinguished the situation from merely handing X a list of roughly equally qualified lawyers.

Currency note

This opinion was issued in 1994, before Maine's replacement of the former Maine Bar Rules with the Maine Rules of Professional Conduct (effective August 1, 2009). 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 Treat this page as historical context, not current guidance.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: Could a conflicted lawyer still earn a referral fee by sending the case elsewhere?

A: The opinion concluded no. It held that sharing the referred lawyer's fee was inconsistent with the lawyer's own determination that a former-client conflict barred her from participating in the litigation.

Q: Why is a paid referral treated as representation?

A: The opinion reasoned that recommending a particular lawyer for compensation requires at least a minimal analysis of the litigation theory, strategy, and tactics and a judgment about the recommended lawyer's fitness, which is itself representation in the matter, and so is tainted by the conflict.

Q: Would simply giving the client a list of lawyers be different?

A: Yes. The opinion noted the question did not involve merely providing a list of more or less equally qualified lawyers and firms; the problem was the compensated recommendation of a particular lawyer in a matter the lawyer was conflicted out of.

Background and rules framework

The opinion interprets Maine Bar Rule 3.3(d), which permits dividing a fee with a lawyer outside the firm only with the client's informed consent and a total fee that is reasonable, and reads that rule to presuppose that the referring lawyer has undertaken representation. The analysis rests on the former-client conflict that A herself recognized. These provisions correspond to ABA Model Rule 1.5(e) (division of fees among lawyers) and Model Rule 1.9 (duties to former clients).

Citations and references

Rules of Professional Conduct:

• Model Rule 1.5(e) (division of fees among lawyers)
• Model Rule 1.9 (duties to former clients)
• Maine Bar Rule 3.3(d)

See also

• Maine Ethics Op. 150: Referral Fee in Divorce Case
• ABA Formal Op. 487: Fee Split With Prior Counsel

Source

• Landing page: https://mebaroverseers.org/attorney_services/opinion.html?id=89779

Original opinion text

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

Issued by the Professional Ethics Commission

Date Issued: September 27, 1994

Facts

Bar counsel has submitted the following request for an opinion.

Attorney A is approached by Company X which wishes to engage Attorney A to bring litigation against Company Z. A represented Z in a past real estate matter, and determines that she is prevented from taking X?s case because of a conflict of interest from her former representation of Z. A will, instead, refer X to Attorney B in another firm. A will also share in B?s fee provided X, after full disclosure, consents to employment of B, to the terms for the division of the fee and the total fee does not exceed reasonable compensation for all the legal services rendered the client. May A refer X to B and share in B?s fee as outlined above?

Opinion

The Commission concludes that such a division of B?s fee for legal services would be inconsistent with A?s determination that she is precluded from participating in the litigation because of her former representation of Company Z.

Bar Rule 3.3(d) Fee Division provides as follows, in pertinent part:

?A lawyer shall not divide a fee for legal services with another lawyer who is not a partner in or associate of the lawyer?s law firm or office; unless: (1) the client, after full disclosure, consents to employment of the other lawyer and to the terms for the division of the fees; and (2) the total fee of the lawyers does not exceed reasonable compensation for all legal services they rendered to the client.?

Implicit in the terms of this rule is the concept that the referring lawyer, ?the other lawyer? in the rule, has undertaken representation of the client. Subparagraph 1 describes the requirement for client consent ?to employment of the other lawyer?. Subparagraph 2 refers to compensation for all legal services ?they rendered to the client?. The conclusion is inescapable that the Rule contemplates both lawyers being employed in some sense by the client, even if the referring lawyer does not expect to spend time proportional to her fee, or any time for that matter, or expect to be consulted about the litigation after her referral.

A further reason for the Commission?s conclusion, and support for its reading of Rule 3.3(d), is that a compensated referral to a particular lawyer is in and of itself representation of Company X in the matter on which it proposes to commence litigation. Attorney A?s determination that a conflict exists precludes her undertaking any representation of Company X in the matter without Z?s consent. Exercising a judgment about the lawyer most capable of handling the litigated matter in question is such representation. It requires at least a minimal analysis of the appropriate litigation theory, strategy and tactics, followed by a judgment that the lawyer to be recommended has the experience and professional skills required to pursue the indicated course of action. The question implies that Attorney A has not merely provided Company X with a list of lawyers and firms more or less equally qualified to undertake the litigation. The recommendation of a particular lawyer with the expectation of compensation would necessarily be tainted by the conflict that Attorney A has determined to exist.