Opinion #99. Collection of Lawyer Referral Service Administration Fee

Issued by the Professional Ethics Commission

Date Issued: September 6, 1989

Question

The Commission has been asked whether a lawyer referral service operated by a bar association may adopt a rule in substance as follows:

“Client will receive a free initial consultation of one‑half hour. Client agrees to pay the LRS a service fee of $15.00 which will be collected and forwarded to the LRS by the panel member. In addition, if the client retains the panel member, he/she agrees to contribute $15.00 to help fund the LRS.”

The inquiring attorney especially invites our attention to Bar Rule 3.3(e). We assume that the phrase “he/she” in the third sentence refers to the panel member. Thus, the client would pay LRS for a referral and an initial consultation, which the panel member would provide without an additional charge to the client. If a retainer resulted, the panel member would also pay LRS a fee.

Opinion

We conclude that the required fees would not violate Rule 3.3(e) or any other Bar Rule. Rule 3.3(e) prohibits a lawyer from sharing legal fees with a non‑lawyer, subject to exceptions not material here. Collection of the first fee by the panel member is not the sharing of a legal fee with a non‑lawyer, assuming as we do that an incorporated bar association is a non‑lawyer for all relevant purposes under the Bar Rules, since the fee is not the panel member’s to share. The first fee is an administrative fee charged by the referral service, not the lawyer. The lawyer is merely collecting that fee for the referral service. The proposed rule, to which the panel member presumably agrees, provides that the LRS is entitled to this fee.

With respect to the second fee, Bar Rule 3.9(f)(2) expressly permits a lawyer to pay the “usual and reasonable fees or dues charged by a lawyer referral service operated, sponsored, or approved by a bar association” while prohibiting all forms of compensation to other persons or organizations for recommending the lawyer’s employment by a client. Notwithstanding the inquiring attorney’s reference to Rule 3.3(e), the Commission is of the opinion that this part of the question is governed by Rule 3.9(f)(2). The express permission given by Rule 3.9(f)(2) to continue a common method of making lawyer referral services self‑supporting would be meaningless if the fees it expressly permits were prohibited by the ban on fee splitting in Rule 3.3(e).[1] Based on the language of the proposed rule, the Commission assumes that the second fee would not be charged to the client. The Commission concludes that the second fee is permissible under Rule 3.9(f)(2).


Footnote

[1] The Commission recommends that the referral service modify the description of the first half‑hour consultation as “free” in light of the administrative fee charged to the client. See Bar Rule 3.9(a) and (b).


Enduring Ethics Opinion