Sometimes a personal injury lawyer refers a client to a different lawyer. At such a time, the referring lawyer does a favor for the second lawyer. It then becomes that second lawyer’s duty to pay a referral fee to the member of the legal profession that has taken the time to utilize the referral process. Utilization of that process facilitates completion of an arrangement, one that has managed to aid one client’s discovery of a useful lawyer.
In which types of situations does payment of a referral fee qualify as a legal act?
It is a legal act if the lawyer’s client has been told that arrangements have been made for payment of such a fee. The paying of such a fee qualifies as a legal act, as long as the lawyer that is making such a payment does not charge the advised client any added amount of money.
How does such a fee get paid in a manner that agrees with the standards established by members of the legal community?
All such fees must be paid at the conclusion of a successful file. The timing for such payments is significant. The act of paying the receiving lawyer needs to be carried out whenever that same lawyer has chosen to process his or her fee.
How does the amount for such a fee get calculated?
The receiving personal injury lawyer in Burlington has charged the client a percent of the same client’s awarded compensation. The referring lawyer needs to get a pre-determined percent of the fee charged by the payment-receiving lawyer.
How this system might be used improperly
A law firm attracts clients and then sells those clients to a different firm or a different lawyer. The firm or lawyer that has sold a given client gets a fee from that same client’s new lawyer.
How the legal system deals with the improper use of referral fees
The legal system has sought to establish a set procedure for determination of such fees. For example, the lawyer that has benefited from the chance to welcome a referred client would be expected to pay a fee equal to 15% of the amount paid by the same client (from an awarded compensation).
The stipulation that seeks to prevent improper use of the available system focuses on the deals related to any succeeding referrals. Each of those deals would call for a payment of no more than 5% of the fee that has been paid charged the client with a new lawyer. The money that goes into the referring lawyer’s pocket comes from the lawyer with the new client.
