Can a lawyer accept a forwarding (referral) fee on a case he had to forward to other counsel because of a conflict of interest?
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This page answers the general question as of 1988. Ezel answers yours: whether it's allowed on your facts, under the current Virginia Rules of Professional Conduct, with citations.
Plain-English summary
A lawyer asked whether he could accept a forwarding fee on a case he had forwarded to other counsel because a conflict of interest prevented him from handling it himself. The committee identified DR 2-105(D) as the controlling rule.
DR 2-105(D) permitted a division of fees between lawyers not in the same firm only if (1) the client consents to the employment of additional counsel; (2) both attorneys expressly assume responsibility to the client; and (3) the terms of the division are disclosed to the client and the client consents. Because the conflict that forced the referral also prevented the forwarding lawyer from expressly assuming responsibility to the client, he could not satisfy the second condition. The committee opined that, on those facts, it would be improper for him to accept the forwarding fee.
Currency note
This opinion was issued in 1988, under Virginia's former Code of Professional Responsibility (the disciplinary rule it cites), before the Virginia State Bar's adoption of the Rules of Professional Conduct effective January 1, 2000. As the committee note observes, current Rule 1.5(e) permits fee sharing between lawyers in different firms provided the client consents and the total fee is reasonable, and allows a referring lawyer to charge a fee for referring a case without further participation. 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 Treat this page as historical context, not current guidance.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: Can a lawyer take a forwarding fee when a conflict forced him to refer the case out?
A: Under this 1988 opinion, no. The committee concluded that the conflict preventing the lawyer from handling the case also prevents him from expressly assuming responsibility to the client, which the fee-division rule required.
Q: What did DR 2-105(D) require for a fee division between lawyers in different firms?
A: Client consent to additional counsel, both attorneys expressly assuming responsibility to the client, and disclosure of the division's terms with the client's consent to them.
Q: Which condition could the forwarding lawyer not meet?
A: The express assumption of responsibility to the client. The same conflict that required the referral barred him from assuming that responsibility.
Background and rules framework
The opinion interpreted former Virginia DR 2-105(D), which set the conditions for dividing a fee between lawyers who are not in the same firm. Virginia's current counterpart is Rule 1.5(e), the analog of ABA Model Rule 1.5(e). As the committee note records, the current rule permits fee sharing on consent with a reasonable total fee and allows a pure referral fee.
Citations and references
Rules of Professional Conduct:
- Former Virginia DR 2-105(D) (division of fees between lawyers in different firms)
- ABA Model Rule 1.5 (fees; division of fees among lawyers)
Other opinions cited:
- Virginia LE Op. 945: fee division and forwarding fees.
- Virginia LE Op. 1130: fee division and forwarding fees.
See also
Source
- Landing page: https://vsb.org/Site/about/rules-regulations/leo-opinions.aspx
- Original PDF: https://www.vsb.org/common/Uploaded%20files/LEOs/1160.pdf
Original opinion text
Reproduced from the official source for research purposes. The linked source is authoritative.
Committee Opinion
November 16, 1988
LEGAL ETHICS OPINION 1160
FEES: CONDITIONS FOR ACCEPTING
A FORWARDING FEE.
You wish to know whether an attorney may accept a forwarding fee on a case which he
has forwarded because of a conflict of interest.
You correctly identify DR:2-105(D) as the appropriate and controlling rule in this
situation. Disciplinary Rule 2-105(D) provides that a division of fees between lawyers
who are not in the same firm may be made only if (1) the client consents to the
employment of additional counsel; (2) both attorneys expressly assume responsibility to
the client; and (3) the terms of the division of the fee are disclosed to the client and the
client consents thereto. You correctly conclude that in your situation where you will not
be able to "expressly assume responsibility to the client" because a conflict prevents you
from doing so, you will be unable to meet the requirements of this disciplinary rule.
Therefore, the committee opines that it would be improper for you to accept a
forwarding fee based on the facts outlined above. (See also L E Op. No. 945 and L E Op.
No. 1130)
Committee Opinion
November 16, 1988
Legal Ethics Committee Notes. – Rule 1.5(e) permits fee sharing between lawyers in
different firms provided the client consents and the fee is reasonable. The referring
attorney may charge a fee for referring a case to another lawyer without further
participation in the client’s matter.
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