Opinion #124. Accepting Referrals from a Paralegal Advisor

Issued by the Professional Ethics Commission

Date Issued: May 6, 1992

Question

An attorney proposes to accept a client by referral from a self-described “independent ‘paralegal’ advisor” who is not an employee of the attorney, and who does not receive any type of payment directly from the attorney. The attorney questions the ethical propriety of accepting the client’s case on a standard contingent fee basis when the attorney knows that there is also a contract directly between the client and the “independent ‘paralegal’ advisor” whereby the advisor will receive 17% of any benefits received by the client as a result of the attorney’s work. Thus, the attorney knows that the total fees to be paid by the client in the event of recovery would equal 50% of the amounts collected.

Opinion

We believe that strictly upon the facts presented, the lawyer may accept the referred client without violating any provision of the Maine Bar Rules. We assume in so concluding that the lawyer and the “independent ‘paralegal’ advisor” are in fact completely independent from one another and that there exists no ongoing cooperative relationship between them. Under such circumstances, although Rule 3.3(a) governing contingent fee agreements prohibits a lawyer from charging or collecting an “illegal or excessive fee,” because the lawyer’s own independent agreement with the client in question comports with customary percentages there is no violation of that rule. Similarly, assuming no present or ongoing agency or cooperative arrangement between the attorney and the “independent ‘paralegal’ advisor,” Rule 3.9(f)(2) prohibiting the payment of compensation or reward for referral would not prohibit the attorney’s conduct. Finally, on such facts the proposed referral cannot be said to involve the “sharing” of a fee with a non‑lawyer in violation of Rule 3.3(e). Thus, the lawyer’s proposed conduct would be ethically proper.[1]

In conclusion, however, a note of caution must be observed. We can readily postulate the existence of additional facts beyond those provided here which would necessarily dictate a contrary result. For example, the lawyer and the “independent ‘paralegal’ advisor” might jointly develop a referral arrangement in order to benefit both of them financially on an ongoing, repeated basis. Of course, the attorney could not directly compensate or reward the non‑lawyer for the referrals, nor share “legal fees” with a non‑lawyer. See Rule 3.9(f)(2) and Rule 3.3(e). Such a referral plan, created as part of a joint venture, would “violate, circumvent or subvert” those provisions of the Maine Bar Rules if the plan were in essence designed to accomplish what otherwise is expressly forbidden.


Footnote

[1] Of course, the lawyer should still satisfy him or herself that taking up representation of the client with full knowledge of the pre‑existing 17% contingent fee agreement between the client and the non‑lawyer “independent ‘paralegal’ advisor” does not otherwise constitute a violation of substantive law beyond the relatively narrow question of propriety under the Maine Bar Rules. See, e.g. 17‑A M.R.S.A. § 516 (champerty); 17‑A M.R.S.A. § 57 (accomplice liability). Cf. Opinion No. 60: “Since the ultimate determination of an attorney’s duty in such cases depends on the application and interpretation of the Maine Criminal Code, we conclude that we are unable to authoritatively answer the questions.” (p. 216)


Enduring Ethics Opinion