Can a Rhode Island lawyer join a nonprofit lawyer referral service that isn't run by the state bar and keeps a percentage of each fee?

Plain-English summary

The inquiring attorney asked whether he or she could participate in a lawyer referral service that was not affiliated with the Rhode Island Bar Association. The service was a non-profit charitable organization offering affordable legal services; it retained 25 percent of the total fee and paid the balance to the attorney who performed the work.

The panel drew on its recent Opinion 95-3, which had allowed the Rhode Island Bar Association's own Lawyer Referral Service to charge a percentage fee. That earlier opinion had addressed the fee-splitting dangers Rule 5.4 guards against, including competitive solicitation, control by a layperson interested in personal profit over the client's interests, and the risk that a layperson would steer clients to the attorney who paid the highest referral fee rather than the most competent one. Citing Emmons, Williams, Mires & Leech v. State Bar of California, 6 Cal. App. 3d 565 (1970), the panel noted that a bar association's referral service does not present these dangers because bar associations pursue public and professional objectives rather than individual profit.

Turning to the service before it, the panel applied Rule 7.2(c), which generally prohibits an attorney from giving anything of value to a person for recommending the lawyer's services. Because the service the inquiring attorney described was not operated, sponsored, or approved by the bar association, the panel concluded that participating in it would violate Rule 7.2(c). The panel opined that a lawyer referral service must be operated, sponsored, or approved by the Rhode Island Bar Association to safeguard the public from the pitfalls it identified.

Currency note

This opinion was issued in 1995, after the Rhode Island Supreme Court adopted the Model Rules of Professional Conduct effective November 15, 1988, and it applies Rules 7.2(c) and 5.4 as originally adopted. The Rhode Island Supreme Court later revised the Rules of Professional Conduct in 2007 as part of the nationwide Ethics 2000 process, which renumbered and amended the advertising and referral provisions. 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 Treat this page as historical context, not current guidance.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 mentioned here.

Common questions

Q: Could the lawyer join a non-bar referral service that took a percentage of the fee?

A: No. The opinion concluded that because the service was not operated, sponsored, or approved by the Rhode Island Bar Association, paying it a percentage would violate Rule 7.2(c).

Q: Why was the bar association's own referral service treated differently?

A: The opinion explained, following its Opinion 95-3 and Emmons v. State Bar of California, that a bar association's referral service does not carry the fee-splitting dangers because bar associations pursue public and professional objectives rather than individual profit.

Q: Did it matter that the service was a non-profit charity?

A: The opinion turned on whether the bar association operated, sponsored, or approved the service, not on the service's non-profit status; a non-profit not affiliated with the bar association still fell within Rule 7.2(c).

Background and rules framework

The opinion applied Rhode Island Rule of Professional Conduct 7.2(c) (Model Rule 7.2), which barred giving anything of value to a person for recommending the lawyer's services, subject to an exception for bar-association referral services. It also drew on Rule 5.4 (Model Rule 5.4), the rule against fee-splitting with non-lawyers, to explain the dangers the referral restriction guards against. The panel treated bar-association sponsorship or approval as the dividing line that distinguishes a permissible referral arrangement from a prohibited one.

Citations and references

Rules of Professional Conduct:

• Model Rule 7.2 / RI RPC 7.2(c) (giving value for recommending the lawyer's services; bar-service exception)
• Model Rule 5.4 / RI RPC 5.4 (division of fees with non-lawyers)

Cases:

• Emmons, Williams, Mires & Leech v. State Bar of California, 6 Cal. App. 3d 565 (Cal. Ct. App. 1970), a bar association's referral service does not present the dangers underlying the fee-splitting prohibition

Other opinions cited:

• RI EAP Op. 95-3: bar association's Lawyer Referral Service may charge a percentage fee
• Michigan Ethics Opinion R-6 (12/15/89); Tennessee Formal Ethics Opinion 90-F-122 (3/9/90): limits on participating in referral services

See also

• RI EAP Op. 95-03: Percentage referral fee for a nonprofit bar service
• RI EAP Op. 2019-03: Paying a for-profit internet lead service violates Rule 7.2(c)
• RI EAP Op. 2019-04: Paying a marketing agency for broker/title referrals violates Rule 7.2(c)

Source

• Landing page: https://www.courts.ri.gov/attorney-resources/Pages/Ethics-Advisory-Panel-default.aspx
• Original PDF: https://www.courts.ri.gov/Opinions/EAP%2095-05.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain; the linked PDF is authoritative.

Final

ETHICS ADVISORY PANEL
OPINION # 95-5, REQUEST # 563
ISSUED - JULY 13, 1995

The inquiring attorney asks whether he/she may participate in a lawyer referral service that is not affiliated with the Rhode Island Bar Association. The service is a non-profit charitable organization that offers affordable legal services. The service retains 25 percent of the total fee, the attorney performing the services is paid the balance.

This Panel recently reviewed the qualifications regarding a lawyer referral service and whether it may charge a percentage fee. In Ethics Advisory Panel Opinion # 95-3 (Issued March 23, 1995) the Panel opined that the Rhode Island Bar Association's Lawyer Referral Service may charge a percentage fee based upon specific criteria.

In that opinion, the Panel was concerned with the dangers of fee splitting which violated Rule 5.4 of the Rules of Professional Conduct. Such dangers are competitive solicitation, potential control by the layperson interested in personal profit rather than the interests of the client, and the layperson's potential to select the attorney who pays the highest referral fee rather than the most competent attorney. In Emmons, Williams, Mires and Leech v. State Bar of California, 6 Cal. App. 3d 565 (1970) the Court concluded that none of these dangers characterizes a local bar association's referral service. The Court reasoned that bar associations do not seek individual profit, rather, seek to fulfill public and professional objectives. Bar associations have a legitimate non profit interest in making legal services more available to the public and the public policy behind the prohibition of fee-splitting is not violated.

Rule 7.2(c) generally prohibits an attorney from giving anything of value to a person for recommending the lawyer's services. Because the service described by the inquiring attorney is not operated, sponsored or approved by the bar association Rule 7.2(c) would be violated by participating in this service.

Many jurisdictions have opined on this very issue and state that a lawyer may not participate in a lawyer referral service that fails to register with the state bar, interferes with the lawyer's independent professional judgment in rendering legal services, violates the rule on division of legal fees with non-lawyers, or fails to ensure that non-lawyers are properly supervised. See, Michigan Ethics Opinion R-6 (12/15/89), and Tennessee Formal Ethics Opinion 90-F-122 (3/9/90).

The Panel opines that a lawyer referral service must be operated, sponsored or approved by the Rhode Island Bar Association in order to safeguard the public from the potential pitfalls discussed above.