Attorney Referral Fees in Montana - A Complete Guide

How to Ethically Share Fees With Other Montana Attorneys

Montana allows attorneys to divide fees when the attorneys either based the division on work completed or with the assumption of joint responsibility. In all cases, client agreement must be confirmed in writing.

Montana Rule

The requirements for a division of fees can be found in Montana Rules of Professional Conduct Rule 1.5(e). It states:

A division of a fee between lawyers who are not in the same firm may be made only if:

• 1. the division is in proportion to the services performed by each lawyer or each lawyer assumes joint responsibility for the representation;
• 2. the client agrees to the arrangement, including the share each lawyer will receive, and the agreement is confirmed in writing; and
• 3. the total fee is reasonable.

In Montana, all divisions of fees must be agreed to in writing and all fees must be reasonable.

The ABA Comment to Rule 1.5(e) defines joint responsibility as “representation [that] entails financial and ethical responsibility for the representation as if the lawyers were associated in a partnership.”

MRPC Commentary

The state’s Rules of Professional Conduct are mostly adopted from the ABA Model Rules of Professional Conduct. While comments are not included in the published version of the rules, references to the commentary for the ABA Model Rules can be found in disciplinary decisions, and the preamble to the MRPC states that “comments do not add obligations to the Rules but provide guidance for practicing in compliance with the Rules.”

For those looking for a summary of disciplinary orders, which can sometimes provide context for rule interpretation, the website of the Office of Disciplinary Counsel for the State of Montana has a PDF of the most recent annotations on its website. As of the 2022 version, no annotations exist for Rule 1.5(e).

Competency

While not binding, attorneys should take note that the commentary adds an expectation of competency to any referral. The comment to Rule 1.5(e) states, “a lawyer should only refer a matter to a lawyer whom the referring lawyer reasonably believes is competent to handle the matter.”

MRPC Rule 1.1 governs competency. It provides:

“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 ABA Comment provides additional context for what defines competency. The lawyer’s knowledge, skills, experience, and any specialized training should all be considered when determining their competency to handle a case. If an attorney does not have the needed skills or knowledge to represent the client, they should be able to undertake the “necessary study” during representation.

The comment also includes guidance on work with other attorneys, including a division of fees. For example, one way an attorney can reach a level of competent representation is “through the association of a lawyer of established competence in the field in question.” When determining another attorney’s competency, an attorney should consider that attorney’s education, experience, reputation, and the ethics rules of the relevant jurisdiction.

All attorneys should ensure clear communication throughout representation. From the initial agreement until the resolution, attorneys should make sure that all involved parties, including the client, are aware of each attorney’s responsibilities.

Reasonable Fees

Like any other fee, a division between two attorneys must be reasonable. MRPC Rule 1.5(a) provides guidance on reasonable fees and 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:

• 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.

The ABA Comment states that these are non-exclusive factors and may not be relevant in all cases.

Conclusion

Attorneys may divide fees with another attorney when they either assume joint responsibility or base the division on services provided. All attorneys must be competent to handle the case.