Attorney Referral Fees in Tennessee - A Complete Guide
How to Ethically Share Fees With Other Tennessee Attorneys
Tennessee follows the ABA Model Rules and allows attorneys to divide fees when they base the split on work performed or the assumption of joint responsibility. All fees must be reasonable.
Tennessee Rule
Tennessee Rules of Professional Conduct Rule 1.5(e) lists the requirements for a division of fees. It states:
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.
All agreements with the client must be confirmed in writing.
Reasonable Fees
Any division must involve reasonable fees charged to the client. Rule 1.5(a) governs what constitutes a reasonable fee. It provides:
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, if apparent to the client, 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;
- whether the fee is fixed or contingent;
- prior advertisements or statements by the lawyer with respect to the fees the lawyer charges;
and- whether the fee agreement is in writing.
Reasonableness should be a case-by-case determination. These factors are not exclusive and may or may not be relevant in any situation.
Competency
The Rule 1.5 Comment states that attorneys should only refer a client to an attorney they believe to be competent. Rule 1.1 defines competency as:
A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness, and preparation reasonably necessary for the representation.
Competency can mean an attorney either possesses or has the means to obtain the skills and knowledge necessary for representation. In either case, attorneys must maintain that level of skill and knowledge throughout representation.
For referrals, attorneys may wish to consider the following factors:
- How the client will benefit from involving another attorney
- The other attorney’s education, experience, and reputation
- The circumstances
- The expected nature of the other attorney’s services
- Any relevant legal protections or ethics rules
Attorneys should ensure open communication between all parties throughout the course of representation. This includes all parties, including the client, knowing the expected scope of each attorney’s responsibilities.
Ethics Opinion
A 1983 ethics opinion answers the question of whether an attorney may still divide fees with a suspended attorney.
Issued in 1983, Formal Ethics Opinion 83-F-50 states that an attorney may share fees with a suspended attorney for work that the attorney performed before the suspension and while the attorney was an active member in good standing with the bar. Several other states have found similarly for both suspended and disbarred attorneys, and the question is the timing for work completed. The opinion reaffirms that the division must still abide by all other requirements of Rule 1.5(e).
Conclusion
Attorneys may split fees with another attorney when the division is based on work performed or joint responsibility. All attorneys should be competent to handle the matter at hand.
