Can an Oregon lawyer agree to send clients to a nonlawyer business in exchange for that business referring customers back to the lawyer?

Plain-English summary

The opinion addresses two arrangements. In the first, Lawyer A would agree to send clients to a trust company when they need its services, in exchange for the trust company agreeing to recommend Lawyer A to its customers and to employ Lawyer A whenever practicable. In the second, Lawyer B would share office space with a CPA but with no sharing or cross-referral of clients, keeping the two practices separate and independent.

The opinion concludes the first arrangement is not ethical and the second is. It applies Oregon RPC 7.2(b), which bars giving anything of value for recommending the lawyer's services except for limited categories such as advertising costs, legal-service-plan or referral-service charges, payment for a practice under RPC 1.17, and nominal gifts. It also applies Oregon RPC 5.4(e), which prohibits referring a client to a nonlawyer with the understanding that the lawyer will receive a fee, commission, or anything of value in exchange for the referral.

The opinion reasons that the quid pro quo nature of Lawyer A's arrangement, where each side's referrals are the consideration for the other's, clearly violates these provisions, also reading RPC 8.4(a)(1) (a lawyer cannot do indirectly what the rules forbid directly) together with RPC 7.3. A mere office-sharing arrangement with no exchange of value or referrals, as proposed by Lawyer B, does not violate the rules.

In practice

Under this opinion, an Oregon lawyer may not enter a reciprocal referral pact with a nonlawyer business where each party's referrals are bargained-for consideration for the other's. The opinion treats the exchange of value, not the referral itself, as the violation, so an office-sharing arrangement that keeps the practices separate and involves no cross-referrals is permissible.

Common questions

Q: Can an Oregon lawyer trade client referrals with a nonlawyer business?

A: No. The opinion concludes a reciprocal arrangement to exchange referrals with a nonlawyer business violates Oregon RPC 7.2(b) and 5.4(e) because each side's referrals are the consideration for the other's.

Q: Can an Oregon lawyer share office space with an accountant or other nonlawyer?

A: Yes, where the arrangement involves no sharing or cross-referral of clients. The opinion concludes a plain office-sharing arrangement that keeps the practices separate and independent is permissible.

Q: What rule prohibits paying a nonlawyer for client referrals?

A: Oregon RPC 5.4(e) bars referring a client to a nonlawyer with the understanding that the lawyer will receive a fee, commission, or anything of value in exchange, and RPC 7.2(b) limits what a lawyer may give for a recommendation.

Background and rules framework

The opinion interprets Oregon RPC 7.2 (communications about legal services and payment for recommendations) and RPC 5.4(e) (referrals to nonlawyers for value), read together with RPC 8.4(a)(1) (misconduct, including acting indirectly) and RPC 7.3 (solicitation). These track Model Rules 7.2, 5.4, 8.4, and 7.3.

Citations and references

Rules of Professional Conduct:

• Oregon RPC 7.2(b) / Model Rule 7.2 (payment for recommending services)
• Oregon RPC 5.4(e) / Model Rule 5.4 (referrals to nonlawyers for value)
• Oregon RPC 8.4(a)(1) / Model Rule 8.4 (acting indirectly)
• Oregon RPC 7.3 / Model Rule 7.3 (solicitation)

See also

• ABA Formal Op. 474: Referral Fees and Conflicts of Interest
• ABA Formal Op. 464: Fee Division With Lawyers Who Share With Nonlawyers
• OSB Ethics Op. 2021-196: Solicitation of Clients

Source

• Landing page: https://www.osbar.org/ethics/toc.html
• Original PDF: https://www.osbar.org/_docs/ethics/2005-2.pdf