Opinion 745 -New Jersey Ethics Committee bars referral fees to out of state lawyers

 

The New Jersey Supreme Court's Advisory Committee on Professional Ethics has faced a recurring question: may a New Jersey Certified Trial Attorney pay a referral fee to an out of state lawyer? Opinion 745 answers the question.  Mostly in the negative.

Bounded by New York and Pennsylvania, with many citizens andy members of the State Bar part-time residents of Florida, the question arises frequently..

 The Rules of Professional Conduct generally  New Jersey lawyers from paying referral fees. RPC 7.2(c) (lawyers shall not “give anything of value to a person for recommending the lawyer’s services”) and RPC 7.3(d) (lawyers “shall not compensate or give anything of value” to a person for recommending the lawyer’s employment by a client or “as a reward for having made a recommendation resulting in the lawyer’s employment by a client”). Referral fees are a division of the legal fee not reflective of work participation.

But the state's 35 year old system of certification of specialists has from the first treated Certified Trial Attorneys differently.  New Jersey lawyers who are certified trial lawyers under Court Rule 1:39-1 through 1:39-9 may pay a referral fee.  Certification is achieved by demonstration of substantial trial experience, peer recognition, and passage of a written test on the Rules of Evidence.  Certified trial lawyers may and do advertise their readiness to pay referral fees regardless of work participation, and without the referring attorney assuming joint professional liability.

Under New Jersey's Rules of Court published Opinions of the seventeen member ACPE bind members of the bar.  But any lawyer and any bar association may petition the Supreme Court for review.

- GWC

OPINION 745 Referral Fees 

The Advisory Committee on Professional Ethics and the attorney ethics research assistance hotline have received inquiries about out-of-state lawyers seeking payment of referral fees from New Jersey certified attorneys. Some states, such as Florida, host seasonal New Jersey residents who present local lawyers with legal issues that involve New Jersey law; out-of-state lawyers in our neighboring states may also have local clients with New Jersey matters. For the reasons set forth in this Opinion, certified lawyers generally may not pay referral fees to out of-state lawyers. 

Certified lawyers also may not pay referral fees to New Jersey lawyers who cannot accept a case, or must withdraw from a case, due to a conflict of interest. Certified lawyers may, however, pay referral fees to New Jersey lawyers who referred a case when they were eligible to practice but were thereafter suspended or disbarred when the case resolved and the referral fee was payable.

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Opinion 745 concludes:

In sum, certified lawyers may not pay referral fees to out-of-state lawyers unless those out-of-state lawyers are licensed and eligible to practice law in New Jersey. In addition, certified lawyers may not pay referral fees to a lawyer who 6 cannot handle a matter due to a conflict of interest, though they may pay referral fees to lawyers who referred a case when they were eligible to practice but were suspended or disbarred at the time the case resolved and the referral fee was payable.