Attorney Referral Fees in Kansas - A Complete Guide

How to Ethically Share Fees With Other Kansas Attorneys

Kansas is one of a minority of states that allow attorneys to collect a ‘pure’ referral fee—meaning that an attorney can receive a share of legal fees for a matter without maintaining joint responsibility or other such requirements commonly required by states following the ABA Model Rules. Notwithstanding, attorneys looking to split fees in Kansas should be aware of some of the nuances in that state before proceeding with a particular referral or engagement. Attorneys in Kansas should be aware both of the legal requirements for a division of fees and recommended but not required procedures.

Kansas Law

Kansas Rules of Professional Conduct Rule 1.5(g) governs the division of fees, and it provides:

“A division of fee, which may include a portion designated for referral of a matter, between or among lawyers who are not in the same firm may be made if the total fee is reasonable and the client is advised of and does not object to the division.”

Reasonableness of ‘Total’ Fee

Attorneys must inform clients of the fee division. Kansas does not, however, require the attorneys tell clients the specifics of the division each attorney is to receive. Kansas Rules of Professional Conduct, Rule 1.5 Comment [4] provides:

“Paragraph (g) permits the lawyers to divide a fee by agreement between the participating lawyers if the client is advised, does not object, and the total fee is reasonable. It does not require disclosure to the client of the share that each lawyer is to receive.”

Rule 1.5(a) provides guidance on what constitutes a reasonable fee and lists eight nonexclusive factors to help attorneys determine whether a fee is reasonable:

1. the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
2. the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
3. the fee customarily charged in the locality for similar legal services;
4. the amount involved and the results obtained;
5. the time limitations imposed by the client or by the circumstances;
6. the nature and length of the professional relationship with the client;
7. the experience, reputation, and ability of the lawyer or lawyers performing the services; and
8. whether the fee is fixed or contingent.

Notably, Rule 1.5(c) also highlights that even if a court considers a fee to be unreasonable, that does not create a presumption of an ethical violation on the part of the attorney. It also will not require that an attorney face discipline.

Written and Signed

While not always required, attorneys in Kansas should consider always providing clients with a written overview of the division of fees and have them sign a copy of the document. Other states that allow referral fees often require that attorneys not only give clients with a written summary of the fee division but also have clients sign that document.

The one exception is contingent fees.  Rule 1.5(d) mandates that all contingent fee agreements be in writing. Clients also have the right to have any fee agreement reviewed by the court in the appropriate jurisdiction.

Kansas attorneys would benefit from providing clients with a written overview of any agreement and asking for signed consent. As Kansas requires that attorneys inform the client of the fee and obtain the client’s consent, a signed document outlining the division of fees is one of the easiest ways to prove an attorney followed the law.

Common Uses of Fee Agreements

The Rule 1.5 Comment gives examples of when a division of fees is most likely. These are not exclusive, however, and attorneys can use division of fees in other situations.

A division of fees is most likely to occur when:

1. The attorneys, by working together, can better serve the client than either could alone
2. The division is between an attorney and trial specialist
3. A lawyer refers the matter to a lawyer in another jurisdiction

If referring a case to an attorney in another jurisdiction, attorneys should review that state’s rule of professional conduct. Some do not allow referral fees, and lawyers may not be able to charge or receive a referral fee with an attorney barred in that state.

Conclusion

Kansas allows attorneys to collect ‘pure’ referral fees when the total fee to the client is reasonable and the client consents. Attorneys are not required to inform clients of the exact division of fees. Even when not required, attorneys should obtain signed consent from the client as proof that they both informed the client and that the client agreed to a division of fees.