Legal Ethics Opinion 1488

      Fees-Division of Fees: Expressly Assume Responsibility

You have presented a hypothetical situation in which an attorney
has referred a case to another attorney.  The referring attorney
has not performed any of the work on the case.

You have asked the committee to opine whether, under the facts of
the inquiry, it is ethical for a referring attorney to receive a
fee from an attorney to whom he referred a case, when the
referring attorney has performed none of the work on the case.

The appropriate and controlling Disciplinary Rules related to
your inquiry are DRs 2-103(D) which states that a lawyer shall
not compensate or give anything of value to a person or
organization to recommend or secure his employment by a client,
or as a reward for having made a recommendation resulting in his
employment by a client, except under certain specified
circumstances; and 2-105(D) which provides that a division of
fees between lawyers who are not in the same firm may be made
only if:

     (1)  The client consents to the employment of additionalcounsel;
     (2)  Both attorneys expressly assume responsibility to theclient; and
     (3)  The terms of the division of the fee are disclosed to
          the client and the client consents thereto.
          [emphasis added]

Although the committee is aware that the term "referral fees" is
in common usage to indicate compensation or a reward for one
lawyer or law firm ["an individual or organization"] having
directed a client to a second lawyer or law firm, the committee
is of the view that the use of the term "fees" in DR 2-l05(D) is
not synonymous with the reference in DR 2-l03(D) to
"compensat[ion]".  The committee views DR 2-l03(D) as
articulating the general prohibition against such payments being
made to any individual or organization, while DR 2-l05(D)
addresses the more specific prohibition affecting the division of
monies received by lawyers from clients.  

In discussing a fee-splitting arrangement between interrelated
law offices, the committee has previously opined that such an
arrangement would be violative of DR 2-105(D) absent the client's
consent and the assumption of responsibility by both attorneys. 
See LEO #l380.  [emphasis added]  

The committee believes that legal fees can only be earned by the
performance and provision of legal services.  Therefore, the
committee is of the opinion that the "assumption of
responsibility" required before "a division of fees" can be made,
as referenced in DR 2-l05(D), mandates that legal services be
provided by the referring attorney in order for that individual
to receive a portion of the [legal] fees.  The committee believes
that the mere recommendation or referral of a case to another
lawyer, with nothing further, "cannot be construed as performing
a legal service or discharging responsibility in the case". 
Palmer v. Breyfogle, 535 P.2d 955, 967 (Kan. l975); see alsoMcFarland v. George, 3l6 S.W.2d 662, 67l (Mo. l958); Fitzgibbon
v. Carey, 688 P.2d l367, l374 (Or.App. l984); Iowa State Bar
Legal Ethics Opinion #82-9 (May l7, l982), ABA/BNA Law. Man. on
Prof. Conduct 801:3609; Michigan Opinion CI-893 (March l2, l983),
ABA/BNA Law. Man. on Prof. Conduct 80l:4860.  Furthermore,
themust be "meaningful," rather than merely the performance of
ministerial or mechanical tasks. 

In addition, where the assumption of responsibility as defined
above has been undertaken, the committee opines that the plain
language of DR 2-l05(D) does not require that the division of
fees between attorneys of different firms be made in proportion
to the services performed, so long as the client has consented to
the terms of the fee division.  See Pennsylvania Opinion 87-59
(October l987), ABA/BNA Law. Man. on Prof. Conduct 90l:7305.

Committee Opinion
October 19, 1992