Attorney Referral Fees in Maine - A Complete Guide

How to Ethically Share Fees With Other Maine Attorneys

As a pure referral fee state, Maine allows attorneys to collect a fee when they refer a client or case to another attorney. Attorneys can collect a fee regardless of work completed and without assuming joint responsibility.

Maine provides attorneys with additional comments on what constitutes an ethical division of fees. The state also encourages attorneys to consider a division of fees when it results in better client representation.

Maine Law

Maine Rules of Professional Conduct Rule 1.5(e) states:

“A lawyer shall not divide a fee for legal services with another lawyer who is not a partner in or associate of the lawyer’s law firm or office unless:

1. after full disclosure, the client consents to the employment of the other lawyer and to the terms for the division of the fees, confirmed in writing; and
2. the total fee of the lawyers does not exceed reasonable compensation for all legal services they rendered to the client.”

The key provisions are that an attorney must attain a client’s written consent and that all fees are reasonable.

The Rule’s accompanying comment provides additional context. This includes:

• A fee division should be a single billing to the client
• A division of fees benefits clients when a single attorney could not provide service as well as two attorneys
• Lawyers should only refer cases or clients to attorneys they believe are reasonably competent

Lawyer Competency

Lawyers should only refer cases to attorneys they believe to be competent to handle the case in question. The Comment for Rule 1.5(e) refers to Rule 1.1 to determine a lawyer’s competency.

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.”

Additional commentary from various committees, discussed below, provides additional guidance on attorney competency when dividing fees.

Reasonableness of Fees

Rule 1.5(a) provides guidance in determining what constitutes a reasonable fee. The rule sets out that:

“(a) A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses. A fee or charge for expenses is unreasonable when, after a review of the facts, a lawyer of ordinary prudence would be left with a definite and firm conviction that the fee or expense is in excess of a reasonable fee or expense. 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 that the acceptance of the particular employment will preclude other employment by the lawyer;
3. the range of fees customarily charged in the locality for similar legal services;
4. the responsibility assumed, 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;
9. whether the client has given informed consent as to the fee arrangement;
10. whether the fee agreement is in writing; and
11. any other risks allocated by the fee agreement or potential benefits of the fee agreement, judged as of the time the fee agreement was made.”

As highlighted by (11), the listed factors are not conclusive and are likely to vary depending on both the client and the case. Other considerations may also affect whether a fee is reasonable.

2005 Task Force and the Model Rules

The Advisory Committee on Professional Responsibility considered whether to drop the state’s current fee division rule in favor of the Model Rule version in 2005. The Model Rule version has two key differences from the Maine Rule, then Rule 3.3:

• Fee sharing is proportional to each lawyer’s services performed
• The referring attorney assumes joint responsibility for representation

After opening the discussion up to public comment from attorneys, the Advisory Committee opted to keep the current rule. The one change made was that attorneys had to obtain client consent in writing.

One comment worth noting form the Advisory Committee’s findings:

“The Advisory Committee observed the fee division rule as set forth in M. Bar R. 3.3(d) [now Rule 1.5(e)] has been serving its intended purpose of encouraging the early referral of cases to lawyers with greater experience and expertise to handle them.”

This observation highlights one of the values of referral fees, which is encouraging attorneys to refer clients and cases to more qualified or specialist attorneys. By declining to adopt the Model Rules, Maine signaled that attorneys do not have to base fees on work completed or accept joint representation

Ethics Opinion: Referral Fees and Conflicts of Interest

A 1994 opinion on referral fees is one of the Professional Ethics Commission’s enduring opinions. Opinion No. 145 deals with referral fees and conflicts of interest.

Here, Company X approached an attorney about suing Company Z. The attorney had previously represented Company Z in another matter and believed there would be a conflict of interest in representing Company X against Company Z. The attorney referred Company X to another attorney and wanted to know if she could collect a referral fee.

The Ethics Commission found that the attorney could not collect a referral fee in this case. They cited two reasons, both which dealt with how to define representation.

1. The rule on fee division implies that the first attorney has in some way represented the client: “The conclusion is inescapable that the Rule contemplates both lawyers being employed in some sense by the client, even if the referring lawyer does not expect to spend time proportional to her fee, or any time for that matter, or expect to be consulted about the litigation after her referral.”
2. When one lawyer makes a compensated referral to another attorney, that referral is a form of representation regardless of the actual work completed. The Commission highlights the difference between providing a client with a list of lawyers who may or may not be qualified to represent the client versus a referral to a specific attorney. In the latter situation, a lawyer is using at least minimal analysis of “the appropriate litigation theory, strategy and tactics, followed by a judgment that the lawyer to be recommended has the experience and professional skills required to pursue the indicated course of action.”
   
   In other words, a referral fee implies that an attorney has provided some level of service and used some level of knowledge when making that referral. This relates back to the 1.5 Comment that an attorney should only refer a client or case to another attorney when they believe that attorney to be reasonably competent.

Attorneys who review this opinion should remember it predates the current Rules of Professional Conduct. The cited rule on fee division, Rule 3.3 (d), is now Rule 1.5(e).

Conclusion

As a pure referral fee state, Maine allows attorneys to divide fees when they refer a client to another attorney. They must obtain written consent from the client, and the fee must be reasonable. Referrals should be based on an attorney’s belief that the other attorney is competent in the matter at hand. When an attorney refers a case due to a conflict of interest, the attorney should decline any division of fees.