The Ethics of Fee
Divisions in Personal Injury Referrals
Many Arizona lawyers believe that it is
unethical to receive a portion of the fee in a personal injury matter that they
refer to another attorney.
That belief is erroneous. In 2003, the State
Bar of Arizona amended
ER 1.5 regarding the division of a personal injury fee to read as follows:
division of fee between lawyers who are not in the same firm may be made only
lawyer receiving any portion of the fee assumes joint responsibility for the
client agrees, in a writing signed by the client, to the participation of all
the lawyers involved; and
total fee is reasonable.
With respect to subsection (1), this does
not mean that the referring lawyer must share in the work or do any of the work
on the case. "Joint responsibility" means being legally responsible. If the
attorney doing the work makes a mistake, the referring attorney is jointly
liable to the client for any damages. Thus, it is important to refer the case to
a competent attorney.
As for subsection (2), while the client’s
knowledge and signed consent are necessary, the client does not need to be
informed of how the fee will be divided.
Finally, regarding the reasonableness of
fees as required by subsection (3), at Aiken Schenk we have never
considered increasing the percentage of the contingency fee to cover a fee
division. We appreciate the confidence shown by the referring attorney, and we
share the fee based on that relationship.
Our goal is to serve the client’s need and
to return to the referring attorney a satisfied client.
Further discussion of this topic