Can a lawyer share a referred fee with the lawyer who made the referral when that referral may create a conflict of interest for the referring lawyer?

Plain-English summary

The inquiring lawyer received a referral from another lawyer who had originally represented the referred client, along with others, in a products-liability claim. It then developed that the referred client might have a negligence claim against those other clients. The inquiry asked whether the inquiring lawyer could share fees with the referring lawyer based on the referral.

The committee was of the opinion that, as to the products-liability case, the lawyers could enter a reasonable fee-sharing agreement under the fee-division rule. As to the negligence action, the committee was of the opinion that RPC 1.9 may raise an issue of whether there is a conflict of interest for the referring lawyer to continue representing the other parties in the negligence action. Because of that, the committee concluded the referring lawyer would be entitled only to fees for the reasonable value of the services he rendered before withdrawing from representing the client who was referred out.

Currency note

This opinion was issued in 1988, before the 2006 revisions to the Washington Rules of Professional Conduct. The rules then numbered RPC 1.5(e) (division of fees between lawyers) and RPC 1.9 (duties to former clients) correspond to Model Rules 1.5(e) and 1.9 and were later renumbered or amended. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule mentioned here.

Common questions

Q: Can a lawyer split a fee with the lawyer who referred the case?

A: Per the opinion, yes for the matter the referring lawyer had originally handled. The committee was of the opinion that the lawyers could enter a reasonable fee-sharing agreement on the products-liability case under the fee-division rule, RPC 1.5(e).

Q: What happens to the referral fee when the referral creates a conflict for the referring lawyer?

A: On the negligence claim against the referring lawyer's other clients, the committee was of the opinion that RPC 1.9 may raise a conflict for him. As a result, he would be entitled only to the reasonable value of the services he rendered before withdrawing from representing the referred client.

Q: Why was the referring lawyer limited to the value of services rendered rather than a share of the new fee?

A: The opinion ties the limit to the RPC 1.9 conflict question: because continuing to represent the other parties against the referred client raised a former-client conflict, the committee treated the referring lawyer's recovery on the negligence matter as the reasonable value of work done before his withdrawal, not a negotiated split.

Background and rules framework

The opinion applies two rules. The rule then numbered Washington RPC 1.5(e), corresponding to Model Rule 1.5(e), governs the division of a fee between lawyers who are not in the same firm. The rule then numbered Washington RPC 1.9, corresponding to Model Rule 1.9, governs a lawyer's duties to former clients, including the conflict that can arise when a lawyer would act against a former client in a related matter. The committee applied 1.5(e) to permit fee sharing on the products-liability case and identified an RPC 1.9 conflict issue that confined the referring lawyer's recovery on the negligence claim.

Citations and references

Rules of Professional Conduct:

• Washington RPC 1.5(e) (division of fees between lawyers not in the same firm), corresponding to Model Rule 1.5(e).
• Washington RPC 1.9 (duties to former clients), corresponding to Model Rule 1.9.

See also

• WSBA Ethics Op. 1072: a referral fee paid to a lawyer who refers a case but does no work
• WSBA Ethics Op. 941: dividing a fee between lawyers in different firms
• WSBA Ethics Op. 1117: a departing lawyer and the former firm dividing a contingent fee

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=234

Original opinion text

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

Advisory Opinion: 1154
Year Issued: 1988
RPC(s): RPC 1.5(e); 1.9
Subject: Division of fees; conflict of interest for referring lawyer

The Committee understood the facts presented in your inquiry to be that another lawyer has referred a client to you. The other lawyer had originally represented that client and others in a products liability claim and it has now developed that the client referred to you may have a negligence claim against the other clients. You have inquired regarding sharing fees with the other lawyer based upon that referral. The Committee was of the opinion that with regard to the products liability case, you could enter into a reasonable fee sharing agreement pursuant to RLD 1.5 (e). However, regarding the negligence action, the Committee was of the opinion that RPC 1.9 may raise an issue as to whether there is a conflict of interest for the other lawyer to continue to represent the other parties in the negligence action, and therefore the other lawyer would only be entitled to fees for the reasonable value of the services rendered by him prior to his withdrawal from representing the client referred to you.