Attorney Referral Fees in Kentucky - A Complete Guide
How to Ethically Share Fees With Other Kentucky Attorneys
Kentucky allows attorneys to divide fees with another attorney when they either assume joint responsibility or divide the fee proportional to work performed. The state also requires that any referral meet the requirements for reasonable fees and competency.
Kentucky Rule
Kentucky Rules of Professional Conduct Rule 1.5(e) lists the requirements for a division of fees. It provides:
A division of a fee between lawyers who are not in the same firm may be made only if:
- the division is in proportion to the services performed by each lawyer, or, each lawyer assumes joint responsibility for the representation;
- the client agrees to the arrangement and the agreement is confirmed in writing;
and- the total fee is reasonable.
A September 1971 ethics opinion, still considered relevant even after the reorganizing of the state’s ethics rules, confirms that Kentucky requires attorneys to either perform work or assume responsibility to divide a fee. A second ethics opinion, also from the 1970s and which dealt with splitting from fees from attorneys in other jurisdictions, reaffirms this requirement.
Kentucky does not explicitly require attorneys to disclose the share that each attorney is to receive, although attorneys may include that information when informing clients of the agreement. Other states that have a similar rule have issued non-binding ethics opinions that attorneys must provide that information if clients ask. While Kentucky has not issued an ethics opinion or comment on that subject, attorneys should be aware that, under KRPC Rule 1.4, attorneys must comply with “reasonable requests for information.”
Reasonable Fees
KRPC Rule 1.5(a) lists some factors that determine when a fee is reasonable. It states:
A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses. The factors to be considered in determining the reasonableness of a fee include the following:
- the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
- the likelihood that the acceptance of the particular employment will preclude other employment by the lawyer;
- the fee customarily charged in the locality for similar legal services;
- the amount involved and the results obtained;
- the time limitations imposed by the client or by the circumstances;
- the nature and length of the professional relationship with the client;
- the experience, reputation, and ability of the lawyer or lawyers performing the services;
and- whether the fee is fixed or contingent.
These factors are not exclusive. Each case’s circumstances determine what meets the standards of a reasonable fee. For a division of fees, given the state’s ethics opinions, the work an attorney completed may determine what defines a reasonable fee.
Competency
The Rule 1.5(e) Comment requires that attorneys refer clients to attorneys they believe to be competent. KRPC Rule 1.1 defines competency. It states:
A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.
The Rule 1.1 comment provides additional context. Attorneys do not need to possess all of the necessary skills and knowledge at the time of the referral. Rather, they must have the ability to gain the needed skills and knowledge over the course of representation. In addition, attorneys must be able to stay abreast of any changes to the law during representation.
Conclusion
Attorneys in Kentucky may divide fees when they complete work for a client or assume joint responsibility. They must inform the client in writing and obtain client consent in writing, usually with a signature. All fees must be reasonable, and attorneys must be competent to handle the matter.
