You Decide: Should Outsider Referral Fees Be Considered Attorney Misconduct?

For lawyers, the mystification regarding the laws surrounding lawyer referral fees can be a common complaint.  As I mentioned in an earlier article, only lawyers can receive referral fees.  Many attorneys think this is an outdated practice, as it completely goes against how most other businesses operate. Giving someone an incentive to help you bring in new business should not be considered a crime. And yet, referral fees to non-lawyers is considered attorney misconduct. Today I ask you – should it be?

What Loss of License Means For A Lawyer

According to Mass.gov, loss of license means you are completely 100% shut down from doing any business as a lawyer and in any job remotely related to law. After loss of license, it becomes exceeding difficult for a lawyer to get his or her lawyer license back. Attorney misconduct is the number one reason for loss of license.

What Constitutes Attorney Misconduct?

As in most professions, lawyers are held to a particular level of conduct and professionalism. Attorney misconduct can range anywhere from bribery of a judge to criminal actions like fraud. When the ethics of how a lawyer gives and receives attorney fees comes into question, one must ask if the punishments for attorney misconduct are fair.

What the ruling against a lawyer referral fee doesn’t resolve is what truly constitutes as attorney misconduct. Bribery, extortion, fraud: these all seem like good reasons for someone not to be a professional representative of the legal system. Unfortunately, for those who do pay referral fees to non-lawyers, they can be accused of attorney misconduct.  This is something happening every day across America, while more serious offenses go unnoticed.

So, Is a Loss of License the Appropriate Punishment for This Type of Attorney Misconduct?

The Take from Joshua Just?  Attorney Loss of license is a pretty harsh punishment for something as inconsequential as a referral fee. If someone receives excellent legal advice – even though someone else was compensated for helping bring in a new client – who is the victim?  More often than not, business associates and former clients are the ones recommending their lawyers. From tanning salons and gyms to banking deals to job referrals, there are incentives for recommending a particular firm or establishment over another.  They are housed under many names— “loyalty programs”  and “finders fee” come to mind – but the idea is the same.

What do you think? Is loss of license a fair punishment for misinterpreting lawyer referral fees?

Joshua Just, an attorney in New York City, has over 20 years experience as a lawyer, which gives him unique insight to many legal matters. Joshua Just blogs at his website here, and has written several other articles about lawyer issues as well.

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