I continue to encounter confusion about referral fees. This week, the topic arose during an inquiry I received, and again at a CLE seminar I presented.
My position remains that Vermont’s rules do not authorize straight referral fees.
Here’s my quick analysis:
- Rule 7.2(b) prohibits a lawyer from “giving anything of value to a person for recommending the lawyer’s services;”
- Rule 7.2(b)(4) authorizes lawyers to make referrals and enter into reciprocal referral arrangements; but,
- Comment  states that “[e]xcept as provided in Rule 1.5(e), a lawyer who receives referrals from a lawyer or nonlawyer must not pay anything solely for the referral . . .”
- Rule 1.5(e) authorizes lawyers who are not in the same firm to share fees if:
- the division is in proportion to the services each performs, OR, each lawyer assumes joint responsibility for the representation;
- the client confirms in writing the client’s agreement to the division of the fee; and,
- the overall fee is reasonable.
Here’s a primer on referral fees. And, here’s a post that discusses what it means”to assume joint responsibility for a representation,” and thereby trigger Rule 1.5’s authorization of a division of fees.