Attorney Referral Fees in Rhode Island - A Complete Guide
How to Ethically Share Fees With Other Rhode Island Attorneys
Attorneys in Rhode Island may divide fees when they base the division on services performed or assume joint responsibility. All fees must be reasonable.
Rhode Island Rule
The requirements for a division of fees are in Rhode Island Rule 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.
The Ethics Advisory Panel has issued several ethics opinions over the years reaffirming the importance of following all of the requirements of a division under Rule 1.5(e).
Rhode Island requires that attorneys disclose their shares to the client. The Rule 1.5 Comment suggests that attorneys should rely on Rule 1.5(e) when they could not represent a client on their own as well as they could with another attorney.
The comment also defines joint responsibility as involving financial and ethical responsibilities that are similar to a partnership.
Reasonable Fees
Rule 1.5(e)(3) requires reasonable fees. Rule 1.5(a) defines a reasonable fee as:
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.
These factors are not exclusive. All or none may be relevant when determining what is a reasonable fee. Reasonableness should be a case-by-case determination.
Competency
Lawyers should only refer a client to another attorney they believe to be competent. The Rule 1.5 comment adds this requirement to any division, using Rule 1.1 as the guide. The rule 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. A lawyer and client may agree, pursuant to Rule 1.2, to limit the scope of the representation with respect to a matter. In such circumstances, competence means the knowledge, skill, thoroughness, and preparation reasonably necessary for the limited scope representation.
Attorneys should either already possess the necessary skills and knowledge or be able to acquire the needed skills and knowledge to be considered competent to handle a matter.
Similar to reasonable fees, competency is a case-by-case determination. Both the circumstances of the case and the attorney’s skill, knowledge, and experience should factor into determining an attorney’s competency. Some cases, for example, may require specialized knowledge.
Rule 1.2, which defines the scope of representation, mentions that limited scope representation, such as a referral, should include a written agreement and be “reasonable under the circumstances.” To ensure clear communication, attorneys should ensure that all parties, including the client, are aware of the scope of each attorney’s responsibilities.
Ethics Opinions
As mentioned above, Rhode Island has several ethics opinions that reaffirm the need to follow all of the requirements of Rule 1.5(e) for a division. Other ethics opinions provide additional context above and beyond the rules.
In Opinion No. 97-12, the Panel stated that an attorney who has since become a judge is still entitled to a fee for work completed while they were an active attorney.
In Opinion No. 97-16, the Panel found that Rhode Island attorneys may split fees with an attorney licensed in another jurisdiction as long as they follow Rule 1.5(e). In this case, while both attorneys had assumed joint responsibility, they did not have a written agreement with the client for the division, which meant Rule 1.5 did not apply.
In Opinion No. 98-1, the Panel stated that a disbarred attorney is still entitled to a fee for work performed while an active attorney. The division should be based on the reasonable value of services performed by the now-disbarred attorney. The Panel concludes by pointing out that this division may differ from what was originally agreed upon by the client. If this is the case, the attorneys should notify the client of the change in the division.
A similar fact pattern appeared in Opinion No. 99-19, although the attorney was briefly suspended rather than disbarred. This opinion reaffirmed that a disbarred or suspended attorney is entitled to fees based on work performed while they were members in good standing. The Panel differentiated this case in that representation occurred over nearly a decade, and the attorney was briefly suspended and resumed representation once they were again an active member of the bar.
Several ethics opinions also highlight that, absent an agreement under Rule 1.5(e), an attorney may be entitled to fees for work performed on a quantum meruit basis.
Conclusion
When dividing fees with another attorney, attorneys should make sure they are following all of the requirements of Rule 1.5(e). This includes basing the split on either work performed or joint responsibility and obtaining written client agreement.
