Can a referring lawyer take a share of the fee from the lawyer he sent the case to when he did none of the work?

Plain-English summary

An attorney referred a case to another attorney and performed none of the work. The committee was asked whether it is ethical for a referring attorney to receive a fee from the attorney he referred the case to when he did none of the work.

The controlling rules were DR 2-103(D) (a lawyer must not compensate or give anything of value to recommend or secure employment, with exceptions) and DR 2-105(D), which permitted a division of fees between lawyers not in the same firm only if the client consents to additional counsel, both attorneys expressly assume responsibility to the client, and the terms of the division are disclosed to and consented to by the client.

The committee concluded that "fees" in DR 2-105(D) is not synonymous with "compensation" in DR 2-103(D): the former addresses dividing monies received from clients, the latter the general bar on payments for recommendations. It held that legal fees can only be earned by performing legal services, so the "assumption of responsibility" required for a fee division means the referring attorney must actually provide legal services, and a mere recommendation or referral "cannot be construed as performing a legal service or discharging responsibility in the case" (quoting Palmer v. Breyfogle). The services must be "meaningful," not merely ministerial. The committee added that where responsibility has been assumed as defined, the plain language of DR 2-105(D) does not require the division to be proportional to the services performed, so long as the client consents to the terms.

Currency note

This opinion was issued in 1992, under Virginia's former Code of Professional Responsibility (the disciplinary rules it cites), before the Virginia State Bar's adoption of the Rules of Professional Conduct effective January 1, 2000. As the opinion's committee note observes, current Rule 1.5(e) permits fee sharing between lawyers in different firms if the client consents and the fee is reasonable, and a referring attorney may charge a fee for referring a case without further participation, a change from the rule this opinion applied. Treat this page as historical context, not current guidance.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 referring lawyer who did no work share in the fee under the former rules?

A: Under this 1992 opinion, no. The committee held that DR 2-105(D)'s "assumption of responsibility" required the referring lawyer to provide meaningful legal services, and a bare recommendation was not enough to earn a share of the fee.

Q: Did the fee division have to be proportional to the work each lawyer did?

A: No. The committee held that where responsibility was assumed, the plain language of DR 2-105(D) did not require the division to be proportional to services performed, so long as the client consented to the terms.

Q: Has the rule changed since this opinion?

A: Yes. The opinion's committee note states that current Rule 1.5(e) permits fee sharing if the client consents and the fee is reasonable, and that a referring attorney may charge a referral fee without further participation in the matter.

Background and rules framework

The opinion interpreted former Virginia DR 2-103(D) (compensation for recommendations) and DR 2-105(D) (division of fees among lawyers in different firms). Fee division is now governed by Virginia Rule 1.5(e), which, as the committee note explains, no longer conditions a referral fee on the referring lawyer performing legal services.

Citations and references

Rules of Professional Conduct:

• Former Virginia DR 2-103(D); DR 2-105(D) (Code of Professional Responsibility)
• ABA Model Rule 1.5(e) (division of fees); Model Rule 7.2 (payments for recommendations)

Cases:

• Palmer v. Breyfogle, 535 P.2d 955 (Kan. 1975), a referral alone is not performing a legal service.
• McFarland v. George, 316 S.W.2d 662 (Mo. 1958); Fitzgibbon v. Carey, 688 P.2d 1367 (Or. App. 1984).

Other opinions cited:

• Virginia LE Op. 1380: fee-splitting between interrelated offices requires client consent and assumption of responsibility.
• Iowa LE Op. 82-9; Michigan Op. CI-893; Pennsylvania Op. 87-59.

See also

• VA LEO 1739: Referral Fee Without Responsibility
• VA LEO 1572: For-Profit Nonlawyer Referral Service
• VA LEO 1751: Referral Service Percentage Fee

Source

• Landing page: https://vsb.org/Site/about/rules-regulations/leo-opinions.aspx
• Original PDF: https://www.vsb.org/common/Uploaded%20files/LEOs/1488.pdf

Original opinion text

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

Committee Opinion
October 19, 1992
LEGAL ETHICS OPINION 1488

FEES - DIVISION OF FEES: EXPRESSLY
ASSUME RESPONSIBILITY.

You have presented a hypothetical situation in which an attorney has referred a case to
another attorney. The referring attorney has not performed any of the work on the case.
You have asked the Committee to opine whether, under the facts of the inquiry, it is
ethical for a referring attorney to receive a fee from an attorney to whom he referred a
case, when the referring attorney has performed none of the work on the case.
The appropriate and controlling Disciplinary Rules related to your inquiry are DR:2103(D) which states that a lawyer shall not compensate or give anything of value to a
person or organization to recommend or secure his employment by a client, or as a
reward for having made a recommendation resulting in his employment by a client,
except under certain specified circumstances; and DR:2-105(D) which 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.
[emphasis added]
Although the Committee is aware that the term "referral fees" is in common usage to
indicate compensation or a reward for one lawyer or law firm [" an individual or
organization"] having directed a client to a second lawyer or law firm, the Committee is
of the view that the use of the term "fees" in DR:2-105(D) is not synonymous with the
reference in DR:2-103(D) to "compensat[ion]". The Committee views DR:2-103(D) as
articulating the general prohibition against such payments being made to any individual
or organization, while DR:2-105(D) addresses the more specific prohibition affecting the
division of monies received by lawyers from clients.
In discussing a fee-splitting arrangement between interrelated law offices, the
Committee has previously opined that such an arrangement would be violative of DR:2105(D) absent the client's consent and the assumption of responsibility by both attorneys.
See LE Op. 1380. [emphasis added]
The Committee believes that legal fees can only be earned by the performance and
provision of legal services. Therefore, the Committee is of the opinion that the
"assumption of responsibility" required before "a division of fees" can be made, as
referenced in DR:2-105(D), mandates that legal services be provided by the referring

Committee Opinion
October 19, 1992
attorney in order for that individual to receive a portion of the [legal] fees. The
Committee believes that the mere recommendation or referral of a case to another
lawyer, with nothing further, "cannot be construed as performing a legal service or
discharging responsibility in the case." Palmer v. Breyfogle, 535 P.2d 955, 967 (Kan.
1975); see also McFarland v. George, 316 S.W.2d 662, 671 (Mo. 1958); Fitzgibbon v.
Carey, 688 P.2d 1367, 1374 (Or.App.1984); Iowa State Bar LE Op. 82-9 (May 17, 1982),
ABA/BNA Law. Man. On Prof. Conduct 801:3609; Michigan Opinion CI-893 (March
12, 1983), ABA/BNA Law. Man. on Prof. Conduct 801:4860. Furthermore, the
committee adopts the view that the legal services provided must be "meaningful," rather
than merely the performance of ministerial or mechanical tasks.
In addition, where the assumption of responsibility as defined above has been
undertaken, the Committee opines that the plain language of DR:2-105(D) does not
require that the division of fees between attorneys of different firms be made in
proportion to the services performed, so long as the client has consented to the terms of
the fee division. See Pennsylvania Opinion 87-59 (October 1987), ABA/BNA Law. Man.
on Prof. Conduct 901:7305.
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.