Attorney Referral Fees in Florida - A Complete Guide

Overture Staff

15 min read

How to Ethically Share Fees With Other Florida Attorneys

Florida has perhaps the most unique fee splitting rules of any state, so attorneys should be careful review them, particularly if they are out of state since Florida has issued several ethics opinions concerning fee splitting with attorneys not admitted to practice in Florida.

Generally, Florida permits attorneys to divide fees when the attorneys either assume joint responsibility or base the division on the services performed. All fees must be reasonable, although Florida includes restrictions on certain contingency fee matters.

Florida Rules

Florida Rules of Professional Conduct Rule 1.5(g) lists the requirements for any division of fees. It states:

(g) Division of Fees Between Lawyers in Different Firms. Subject to the provisions of subdivision (f)(4)(D), a division of fee between lawyers who are not in the same firm may be made only if the total fee is reasonable and:

the division is in proportion to the services performed by each lawyer; or

by written agreement with the client:

(A) each lawyer assumes joint legal responsibility for the representation and agrees to be available for consultation with the client; and

(B) the agreement fully discloses that a division of fees will be made and the basis upon which the division of fees will be made.

Attorneys should note that a division based on joint responsibility includes the following additional requirements:

The referring lawyer must remain available for client consultation throughout the representation
An agreement that explains the planned fee division and how the fee will be divided

While attorneys are not required to obtain written agreement when a division is based on work performed, they may wish to include a written agreement anyway. In case of a disagreement, a written document can provide evidence of the previous agreement.

Attorneys can divide fees in any type of case as long as it does not violate other ethics rules. For example, while attorneys may divide fees in criminal or family law cases, the use of contingent fees is generally prohibited in those areas of the law.

Referral Fees for Contingency Fee Matters

Florida has implemented a unique set of rules specific to referrals for certain contingency fee matters. Below is the entirety of this rule followed by a summary and key takeaways.

FRPC Rule 1.5(f)(4)(D) provides:

(D)As to lawyers not in the same firm, a division of any fee within subdivision (f)(4) must be on the following basis:

(i) To the lawyer assuming primary responsibility for the legal services on behalf of the client, a minimum of 75% of the total fee.

(ii) To the lawyer assuming secondary responsibility for the legal services on behalf of the client, a maximum of 25% of the total fee. Any fee in excess of 25% will be presumed to be clearly excessive.

(iii) The 25% limitation will not apply to those cases in which 2 or more lawyers or firms accept substantially equal active participation in the providing of legal services. In those circumstances counsel must apply to the court in which the matter would be filed, if litigation is necessary, or if such court will not accept jurisdiction for the fee division, the circuit court in which the cause of action arose, for authorization of the fee division in excess of 25%, based on a sworn petition signed by all counsel that discloses in detail those services to be performed. The application for authorization of the contract may be filed as a separate proceeding before suit or simultaneously with the filing of a complaint, or within 10 days of execution of a contract for division of fees when new counsel is engaged. Proceedings on these applications may occur before service of process on any party and this aspect of the file may be sealed. Authorization of the contract will not bar subsequent inquiry as to whether the fee actually claimed or charged is clearly excessive. An application under this subdivision must contain a certificate showing service on the client and, if the application is denied, a copy of the petition and order denying the petition must be served on The Florida Bar in Tallahassee by the member of the bar who filed the petition. Counsel may proceed with representation of the client pending court approval., a maximum of 25% of the total fee. Any fee in excess of 25% will be presumed to be clearly excessive.

(iv) The percentages required by this subdivision are applicable after deduction of any fee payable to separate counsel retained especially for appellate purposes.

The key points to this section:

This section only applies to certain types of contingency fees cases, namely those involving personal injury, property damage, or wrongful death.
The secondary attorney, meaning the attorney who is not doing the majority of the work, cannot collect more than 25 percent of the total fee.
When the involved attorneys have “substantially equal active participation” in a case – essentially, a co-counsel relationship – the attorneys may petition the court for an exception to the 25 percent cap.

In addition, when there is a recovery, all involved attorneys must sign off on a closing statement. This statement must include itemized expenses and fees as well as the share each attorney is to receive.

The Rule 1.5 Comment states that a secondary attorney who:

(a) consults with the client;

(b) answers interrogatories;

(c) attends depositions;

(d) reviews pleadings;

(e) attends the trial; or

(f) assumes joint legal responsibility to the client is not automatically entitled to more than 25 percent of the fee or considered to be co-counsel.

The Comment continues with three factors to consider when determining if attorneys may be co-counsels:

(a) “based upon geographic considerations, the lawyers agree to divide the legal work, responsibility, and representation in a convenient fashion (such a situation would occur when different aspects of a case must be handled in different locations);

(b) where the lawyers agree to divide the legal work and representation based on their particular expertise in the substantive areas of law involved in the litigation; or

(c) where the lawyers agree to divide the legal work and representation along established lines of division, such as liability and damages, causation and damages, or other similar factors.”

Florida has not issued additional guidance on other types of contingency fee cases. Absent explicit instruction, the standard of “reasonable fees” applies.

Reasonableness of Fees

Florida prohibits attorneys from collecting fees that are “illegal, prohibited, or clearly excessive.” Rule 1.5(g), however, states that, for a division of fees, fees must be reasonable. FRPC Rule 1.5(b)(1) lists the factors for determining a reasonable fee. It provides:

Factors to be considered as guides in determining a reasonable fee include:

(A) the time and labor required, the novelty, complexity, difficulty of the questions involved, and the skill requisite to perform the legal service properly;

(B) the likelihood that the acceptance of the particular employment will preclude other employment by the lawyer;

(C) the fee, or rate of fee, customarily charged in the locality for legal services of a comparable or similar nature;

(D) the significance of, or amount involved in, the subject matter of the representation, the responsibility involved in the representation, and the results obtained;

(E) the time limitations imposed by the client or by the circumstances and, as between attorney and client, any additional or special time demands or requests of the attorney by the client;

(F) the nature and length of the professional relationship with the client;

(G) the experience, reputation, diligence, and ability of the lawyer or lawyers performing the service and the skill, expertise, or efficiency of effort reflected in the actual providing of such services; and

(H) whether the fee is fixed or contingent, and, if fixed as to amount or rate, then whether the client’s ability to pay rested to any significant degree on the outcome of the representation.

FRPC Rule 1.5(c) states that “the time devoted to the representation and customary rate of fee” should not be the only factors when determining a fee’s reasonableness. Instead, attorneys should consider all listed factors, including any justification for a fee that is either higher or lower than it would be when considering just time and rate.

Ethics Opinions

Over the past sixty years, Florida has issued over twenty ethics opinions related to the division of fees. These opinions are not binding but do provide guidance on navigating Florida’s ethics rules. Florida highlighted four ethics opinions on referral fees in a single packet.

Opinion 90-8

In Opinion 90-8, the Committee offered four hypothethicals to illustrate when and how to divide fees with out-of-state attorneys.

In the first situation, a New York-barred attorney resides in Florida and makes a referral to a Florida attorney. The Committee stated that this example would be unlikely to meet the requirements under FRPC Rule 1.5(g). As the New York-barred attorney did not reside in New York, he would be unlikely to be able to meet the requirements and runs the risk of unauthorized practice of law in Florida. This hypothetical reaffirmed Opinion 62-3, which stated that an attorney licensed in another jurisdiction who resided in Florida would be unlikely to meet either the requirement for services performed or the assumption of joint responsibility.

The second scenario dealt with an individual who consulted with an out-of-state attorney about a criminal matter in Florida. That attorney then referred the matter to a Florida attorney. This example might be allowed if all other ethical rules are met. If any of the fees are contingent, for example, the attorney could not divide the fee as Florida bans the use of contingency fees in criminal matters.

In a similar vein, the third scenario involved a personal injury case in Florida when the injured party resided in another state. A division that satisfied other ethics rules would likely be allowed. As this is a personal injury case, the secondary attorney – here, the out-of-state attorney – must not collect more than 25 percent of the total fee.

The fourth scenario twists the third scenario: Here, the Florida attorney is the secondary attorney who refers a client to an out-of-state attorney. Even with the change in the fact pattern, the secondary attorney, as a member of the Florida bar, cannot collect more than 25 percent of the contingent fee and is unlikely to qualify for any of the exceptions to increase that amount.

Opinion 17-1

In Opinion 17-1, the committee stated when Florida attorneys may share fees with out-of-state attorneys who work for firms that include nonlawyer ownership. A division meets Florida’s ethics rules when:

No attorneys are engaging in the unauthorized practice of law; e.g., each attorney is providing services that their respective jurisdiction authorizes them to provide
The out-of-state law firm’s domicile allows nonlawyer ownership of law firms
The out-of-state law firm meets all of the ethical requirements of its home jurisdiction
The division is allowed under FRPC Rule 1.5(g)

Opinion 90-3

Next, Opinion 90-3 addressed whether a suspended, disbarred, or inactive attorney was still party to an agreement to divide fees. A 2011 case from the Fourth District Court of Appeal, Santini v. Cleveland Clinic Florida, 65 So.3d 22 (Fla. 4th DCA 2011), somewhat alters the opinion.

The original opinion, issued in 1990, states that when an attorney is suspended, disbarred, resigns, or otherwise becomes an inactive member of the Florida Bar, they are entitled to a portion of the fee on a quantum meruit approach. The 2011 case, however, found that an attorney who withdrew from representation before being suspended was not entitled to a fee.

Opinion 89-1

Finally, Opinion 89-1 looks at the relationship between conflicts of interest and division of fees. In general, if a conflict exists, attorneys may not divide fees.

This specific opinion focuses on a personal injury case and the 25 percent fee for the secondary attorney. This opinion reaffirmed two earlier opinions, both of which stated that an attorney could not collect a fee when there was a conflict of interest. Opinion 89-1 arrived at the same conclusion.

While the ethics rules were revised after those earlier opinions were issued, the Committee found that did not affect the restriction on fee divisions when a conflict of interest exists. The only fees an attorney or law firm would be entitled to collect would be those related to “the reasonable value of services rendered to the client before the conflict emerged.” Put another way, attorneys should be paid for work completed.

Conclusion

While Florida uses the ABA Model Rules as a basis, the state includes additional requirements, especially regarding contingency fees in personal injury cases. When divisions of fees involve either other jurisdictions or potential conflicts of interest, attorneys should consult ethics opinions for guidance to avoid any ethical issues.

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