This article applies to personal injury cases. This article does not address whether a Florida lawyer may pay a referral fee to an out of state attorney. I believe that the Rules Regulating The Florida Bar say it is permissible, subject to certain conditions, for a Florida attorney to get a referral fee from an out-of-state attorney if the other state allows referral fees and even if the Florida lawyer:
1) refers a personal injury case to an out-of-state attorney; and
2) the client lives out-of-state; and
3) the incident occurred out-of-state; and
4) and the out-of-state attorney is the primary lawyer handling the case.
However, there are 3 things that the Florida attorney needs to look at before signing an out of state fee contract or accepting a referral check from the out of state lawyer.
1. How did the Prospect Client Find the Florida lawyer?
Ethics counsel for the Virginia Bar was kind enough to explain to me the following. A Virginia would not allow a Florida attorney to get a referral fee if the Florida lawyer met the client through a “no prior relationship” type scenario. An example of a “no prior relationship” type situation is if the prospective client finds the Florida lawyer through advertising (Florida lawyer’s website appears) in Virginia. But if the person who is being referred is a former, current client, friend or family member, then Virginia apparently allows the Virginia attorney to pay the Florida lawyer a referral fee so long as some formalities (some similar to those required by the Florida bar) are met which I won’t get into here.
So, if someone were to see my website and was willing to accept a referral to a Virginia lawyer, – with whom I have no prior relationship – who was injured in Virginia and lives in Virginia, I cannot get a referral fee. I would just refer this person to a Virginia attorney who I thought was qualified. At the least it is good karma. At best, perhaps I may get a referral down the line. But I will not ask the Virginia attorney to send me a case in the future.
This is because Virginia, similar to Florida, has a Rule 7.3(d) that states:
A lawyer shall not compensate or give anything of value to a person or organization to recommend or secure employment by a client, or as a reward for having made a recommendation resulting in employment by a client.
I am unsure of the position that other states take in regards to this but until I know the answer I error on the side of caution.
2. Unlicensed practice of law (UPL).
I heard a story from one attorney who was told that one particular state takes the position that a lawyer commits the unlicensed practice of law if he or she advises an out of state client about an out of state matter.
So how does a Florida lawyer get a fee without arguably committing UPL? Call and speak, if you are lucky, to the UPL department for the state that you want to refer a case to and see whether it takes a position that receiving a referral fee constitutes UPL. The safest approach is to appear Pro Hac Vice “for the particular purpose” – Black’s Law Dictionary) in the out-of-state court.
Assuming the prospective client in California or any other state wants a lawsuit to be filed, is the proper time for the Florida attorney to become a party to the fee contract after the case is in suit and the Florida lawyer has been granted the motion to appear pro-hac vice?
I called the UPL division of the California Bar. The person who answered told me that she was sure that it would not be UPL for an out-of-state lawyer to receive a referral fee for referring a case to a California lawyer. But I could not get it in writing.
3. Does Other State Allow Referral Fees?
The Florida attorney should be certain to make sure that it is ethical under the out-of-state bar rules for the Florida attorney to receive a referral fee (a/k/a co-counsel or participation fee). If the out-of-state bar takes the same position as Florida does in regards to allowing the payment of a referral fee to an out-of-state attorney, then the Florida attorney must be able to legitimately provide some legal services to the out-of-state client.
Florida ethics opinion 90-8 stated that “if the other state had a more significant relationship to the client and the cause of action than did Florida; therefore, the Committee concluded that the other state’s contingent fee rules were applicable.” Ethics opinion 88-10 also speaks to this.
In addition to using a fee contract that complies with the out-of-state bar rules (and the Rules Regulating the Florida Bar), the Florida lawyer should make sure that the fee contract with the out-of-state client has language such as the following:
You should be sure to get the referral agreement added to the client’s fee contract so that you don’t get stiffed by the attorney who you are sending the prospective client to. I will insert language such as:
“Injury law firm will receive 25% of the fees payable under the terms of this Contract.”
Some states such as Illinois, I believe, require that the referring attorney be jointly responsible with the attorney receiving the referral.
The Florida attorney should ask the out-of-state attorney (that is receiving the referral) to provide the Florida lawyer with a written ethics opinion from out-of-state bar attorney ethics hotline, if one exists, stating that the Florida lawyer may receive a referral fee. I was told verbally from the California Ethics hotline that there is no limit on the percentage fee that a California attorney can pay an out of state lawyer in a personal injury case so long as the entire contingency fee that the client agrees to is reasonable.
I urge you to be very careful. Many attorneys will tell you that they know their states ethical rules in regards to this but they may be dead wrong. I have heard attorneys, one too many times, sound convincing when telling me the incorrect ethical rules. Unless you see it in writing from an out-of-state ethics hotline, UPL opinion, out-of-state case or ethics opinion, do not believe it! Your license is simply too valuable to incur the stress and risks.
The Florida lawyer should ask the out-of-state ethics attorney to provide the Florida attorney with a written ethics opinion that states that the Florida lawyer can ethically receive a referral fee.
Also, if the client lives in Florida and the accident happened in another state, then I believe that if the other state’s rules were similar to Florida rules, then I would be allowed to accept a referral fee without appearing pro-hac vice in the other state.
I accept referrals from non-Florida lawyers. I pay referral fees when in compliance with Florida ethics rules.
My thoughts: In addition to possibly getting a referral fee, one of the advantages of referring prospective clients to an attorney in another state is that the other attorney may send you a referral in the future. Moreover, perhaps the out of state attorney will recommend you on his or her listserver if he or she is a member of one. I have referred cases to attorneys whose names appeared in the archives of a listserver of which I am a member. I feel that it is better to find an out of state attorney this way than “blindly” looking through the internet.
I have settled many personal injury cases in Florida, including car accidents, slip and falls, and cruise ships accidents. I represent clients if they were injured in an accident in Florida, or on a cruise ship or boat. Call me now at (888) 594-3577 to Get a Free Consultation.
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