February 18, 2021
Referral fees are a beautiful 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. It’s a win for the attorney who gets the case because it’s business that might have gone elsewhere. It’s a win for the attorney who refers the case because that attorney can receive a fee from the referred attorney. And it’s a win for the client, who gains valuable assistance in finding just 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 pick up the phone and call around until the right colleague is found for the client’s case. When done in a manner consistent with the attorney’s professional obligations, this kind of vetting can be of tremendous value to the client.
Attorneys, if a client comes to you with a business litigation, intellectual property, or other case and you think I might be able to assist, please get in touch. I am always happy to chat and provide insights where I can. And if I take on the matter, I’ll gladly pay a referral fee consistent with the Rules of Professional Conduct because I want you to keep coming back. Conversely, know that I am regularly asked to recommend lawyers outside my own areas of competence, and 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. I am happy to give and receive referrals from attorneys in other states. But please understand that payment of a referral fee, if any, needs to comply with the relevant state’s rules.
February 18, 2021
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