Legal Question in Business Law in California

Referral fees for business submitted to attorney

I have hundreds of collection claim leads that I need to refer to attorneys in california & eventually other states. In exchange for the referral I am looking for a percentage of the monies when it is collected. I provide a software product that manages the collection/litigation process. I was told that in california & many other states it is illegal to receive a referral fee. If I provide the service of software for the fee that i was going to charge (20%) of all collected, would this be considered legal??

please let me know if this is possible or if it is not, what ways may be considered legal under these circumstances..


Asked on 11/30/03, 11:40 am

4 Answers from Attorneys

Sheldon G. Bardach Law Offices of Sheldon G. Bardach

Re: Referral fees for business submitted to attorney

I believe you will find that prohibition is "directly or indirectly," so I am afraid you cannot share in the fee from the attorney. You can, however, make your deal with the person or company furnishing you with the lead(s). That's about the only way, that way you are not sharing in the attorneys' fees.

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Answered on 11/30/03, 12:27 pm
Michael Olden Law Offices of Michael A. Olden

Re: Referral fees for business submitted to attorney

am a little mixed up. Are you getting leads from a company and in trying to deal those leads, or are you part of the company and are dealing the leads. There is a substantial difference there. I might be interested but I will not in any way violate any rules in the state of California under the ethics sections of the State Bar. Therefore I must know more about all of this before I can either make an assessment or contact the ethics hotline of the State Bar hearing California. I have practiced law in the San Francisco Bay Area for over 30 years in this specialty if you wish to contact me please feel free to call me at 925 -- 945 -- 6000.

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Answered on 11/30/03, 1:06 pm
Joel Selik www.SelikLaw.com

Re: Referral fees for business submitted to attorney

I do collections. You may not share fees. If you obtain the clients, and they hire the attorney that is one way to work it out.

Joel Selik

800-894-2889

www.SelikLaw.com

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Answered on 11/30/03, 1:44 pm
Robert F. Cohen Law Office of Robert F. Cohen

Re: Referral fees for business submitted to attorney

You will find the prohibition codified in Rule 1-320 of the Cal. Rules of Professional Conduct, which states in pertinent part: "(A) Neither a member [lawyer] nor a law firm shall directly or indirectly share legal fees with a person who is not a lawyer . . ." with certain exceptions that don't seem applicable. Even if you had a lawyer on staff and you controlled the company, that would be a violation.

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Answered on 11/30/03, 3:26 pm


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