Attorney Referral Fees in Ohio - A Complete Guide

How to Ethically Share Fees With Other Ohio Attorneys

Attorneys in Ohio may divide fees with another attorney when they either assume joint responsibility or base the division on work completed.

Ohio Rule

For those familiar with the ABA Model Rules, it’s worth noting that Ohio adds several additional requirements for attorney referrals. Ohio Rules of Professional Conduct Rule 1.5(e) governs divisions of fees. It states:

Lawyers who are not in the same firm may divide fees only if all of the following apply:

• (1) the division of fees is in proportion to the services performed by each lawyer or each lawyer assumes joint responsibility for the representation and agrees to be available for consultation with the client;
• (2) the client has given written consent after full disclosure of the identity of each lawyer, that the fees will be divided, and that the division of fees will be in proportion to the services to be performed by each lawyer or that each lawyer will assume joint responsibility for the representation;
• (3) except where court approval of the fee division is obtained, the written closing statement in a case involving a contingent fee shall be signed by the client and each lawyer and shall comply with the terms of division (c)(2) of this rule;
• (4) the total fee is reasonable.

In Ohio, joint responsibility includes not just financial and ethical responsibility but also that the referring attorney be available to the client throughout representation.

Cases involving contingency fees require that a lawyer draft a closing statement and follow the requirements of Rule 1.5(c)(2). This rule states:

• (c) A fee may be contingent on the outcome of the matter for which the service is rendered, except in a matter in which a contingent fee is prohibited by division (d) of this rule or other law. ...
  • (2) If the lawyer becomes entitled to compensation under the contingent fee agreement and the lawyer will be disbursing funds, the lawyer shall prepare a closing statement and shall provide the client with that statement at the time of or prior to the receipt of compensation under the agreement. The closing statement shall specify the manner in which the compensation was determined under the agreement, any costs and expenses deducted by the lawyer from the judgment or settlement involved, and, if applicable, the actual division of the lawyer’s fees with a lawyer not in the same firm, as required in division (e)(3) of this rule. The closing statement shall be signed by the client and lawyer.”

For a division of fees, the Rule 1.5(c)(2) signature requirement extends to all involved attorneys.

Reasonable Fees

Any referral must involve a reasonable fee. ORPC Rule 1.5(a) provides guidance on what defines a reasonable fee. It states:

A lawyer shall not make an agreement for, charge, or collect an illegal or clearly excessive fee. A fee is clearly excessive when, after a review of the facts, a lawyer of ordinary prudence would be left with a definite and firm conviction that the fee is in excess of a reasonable fee. 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;
• (8) whether the fee is fixed or contingent.

These factors are not exclusive. Reasonableness will depend on the circumstances of each case.

Competency

The Rule 1.5(e) Comment states that referrals should be limited to attorneys who are competent to handle the matter at hand. ORPC Rule 1.1 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 points out that some cases may require attorneys who possess specialized skills or knowledge above and beyond that of a general practitioner. When referring a client to another attorney, the referring attorney should either believe the attorney’s current skills or knowledge are currently sufficient or that the attorney has the knowledge and training to gain the level of competency needed for representation.

Attorneys should consider the reasons when making a referral. The Rule 1.1 Comment suggests the following factors regarding competency when making a referral:

• The other attorney’s education, experience, and reputation
• The expected services the other attorney will perform
• Any ethical considerations for the relevant jurisdictions

The involved attorneys should also consult with each other and the client about each attorney’s role in the representation. Attorneys should ensure that all involved parties know the extent of each attorney’s expected responsibilities.

Ethics Opinions

The Ohio Board of Professional Conduct has issued several opinions on the division of fees. Of those considered current, three are relevant for attorneys who plan to use Rule 1.5(e) as part of their practice.

Opinion 89-002, issued under the previous Ohio Code of Professional Responsibility, remains current under the Ohio Rules of Professional Conduct. This opinion found that an attorney may divide fees with a suspended or disbarred attorney if:

1. The agreement was made while all attorneys were active and in good standing. and
2. The division is based on work completed while an attorney was active and in good standing.

Opinion 2016-11 states that attorneys who are in an informal association and not a formal partnership, including those who share office space, are considered non-firm attorneys under Rule 1.5(e). Attorneys in these informal partnerships will need to follow the requirements of a division of fees, including an agreement with each client.

Opinion 2022-11 reaffirmed that attorneys who share office space are not considered to be part of the same firm. The opinion highlighted the importance of protecting client information in shared spaces and following Rule 1.5(e) for any work on the same case.

Conclusion

Attorneys in Ohio may divide fees with another attorney when the client consents, the attorneys are competent to handle the matter, and the total fee is reasonable. Attorneys may divide fees with inactive attorneys when an agreement was made when both attorneys were active and for any work the inactive attorney completed while still an active member of the bar.