Referral Fees are a Win-Win-Win
Referral fees are a great thing.
In Michigan, attorneys may pay and receive referral fees. Of course, these must be consistent with the Michigan Rules of Professional Conduct. Referral fees are permitted only if the client is advised and does not object and the total fee is reasonable.
If someone has a legal problem, the person will probably call a lawyer he or she knows, even if the lawyer does not specialize in the area needed.
Maybe the person was arrested for drunk driving, and the lawyer is a divorce lawyer. Maybe the person was bitten by a dog, and the lawyer handles wills and estates. Maybe the person was ripped off by a business partner, and the lawyer focuses on immigration. Clients understand that lawyers tend to know other lawyers, and are often in a position to make quality recommendations.
In my opinion, a referral fee is a win-win-win.
Referral fees are a win for the attorney who gets a case that might have gone elsewhere.
They're a win for the referring attorney because that attorney can receive a fee from the referred attorney.
And they're a win for the client, who gains invaluable help finding the right attorney for the job.
I believe lawyers should try to make good referrals to anyone who asks. Still, a referral fee can provide an added incentive for a lawyer to identify just the right lawyer for the client’s case. When done in a manner consistent with professional obligations, this vetting can be of tremendous value to the client.
Attorneys, if a client comes to you with a trade secret, business litigation, IP, or other case that you think I can help with, please get in touch. I am always happy to chat and provide insights, whether or not I take the case. And if I do take the case, I’ll gladly pay a referral fee because I want you to keep coming back.
Conversely, I am regularly asked to recommend lawyers outside my own focus areas, and I am always looking for good attorneys to whom I can refer these matters.
P.S. This letter is intended for Michigan attorneys. Other states have different rules. Please understand that payment of a referral fee, if any, needs to comply with the relevant states' rules.
Civil Litigation Client