88-F-115 - Bar Association Lawyer Referral Service


The Lawyer Referral Service of a nonprofit metropolitan bar association inquires
concerning the propriety of requiring participating members of help finance the
service by contributing a percentage of fees generated by referrals.

The metropolitan bar association is a nonprofit organization. The only sources of revenue
generated from the operation of its lawyer referral service are a small referral fee paid by the
client for the referral and a small annual registration fee by participating lawyers. These fees may
not be significantly increased without adversely affecting the program.
Additional revenues are needed in order to improve the efficiency and quality of legal services
delivered to the public through the program. Funds are needed to computerize the referrals to
attorneys of particular expertise and to assure proper rotation as well as follow-up referrals.
Additional revenues are also needed to engage in multi-media marketing of the program.
American Bar Association Formal Ethics Opinion 291 states there is no impropriety in a bar
association requiring members of a lawyer referral service to help finance the service either by
flat charge or a percentage of fees collected.
Ethical Consideration 2-1 of the Code of Professional Responsibility states:
The need of members of the public for legal services is met only if
they recognize their legal problems, appreciate the importance of
seeking assistance, and are able to obtain the services of acceptable
legal counsel. Hence, important functions of the legal profession
are to educate laymen to recognize their problems, to facilitate the
process of intelligent selection of lawyers, and to assist in making
legal services fully available.
There is no impropriety in a bar association requiring members participating in its lawyer referral
program to contribute no more than ten percent of any net fee realized from a referral by the bar
association to finance the referral program. Such payments should be used exclusively to assist
with the administrative expenses of the referral program and therefore do not constitute improper
division of legal fees.
A lawyer who receives a referral from the bar association may not increase the hourly rate or the
percentage of a contingency fee, or in any other way pass on the costs of the referral service to
the clients. Such a practice would increase the cost of the delivery of legal services and be
contrary to public policy.
88-F-115 Page 2
This 12th day of September , 1988.
Cecil D. Branstetter
Jean Nelson
Jerry C. Colley