Also known as: reciprocal referral arrangements · reciprocal referrals · referral arrangement · reciprocal referral
Written by attorneys · grounded in primary & secondary sources — see below
An agreement between a lawyer and another lawyer or a nonlawyer professional under which each undertakes to refer clients or customers to the other. The arrangement qualifies for an exception to the prohibition on compensating third parties for recommendations only when the agreement is not exclusive and the client receives disclosure of its existence and nature.
Rachel Ramirez, a tax lawyer, and Ricardo Rojas, an estate planner, sign a written agreement to refer clients to each other when the matter falls outside their own practice areas. Each continues to refer clients to other lawyers as well. When Rachel refers a client to Ricardo, she tells the client about the arrangement and its nonexclusive character before the client decides whether to proceed.
Rosa Ruiz, a personal injury lawyer, agrees with Rocky Mountain Mining that the company will refer all injured workers exclusively to her in exchange for her referring workers compensation matters back to the company. Because the deal locks out other lawyers, a disciplinary board finds that the arrangement violates the nonexclusivity requirement even though clients receive some disclosure.
Select any source to read its text and confirm it supports the definition.
The arrangement must be nonexclusive so that each party remains free to refer clients elsewhere. The client must also receive disclosure of the agreement's existence and nature before deciding whether to accept the referral.
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No. The rule does not require a writing, but the arrangement must still satisfy the nonexclusivity and client-disclosure conditions. An oral understanding that meets those conditions can qualify for the exception.
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The arrangement becomes improper when it is exclusive, when the client receives no disclosure, or when the lawyer provides substantial value that functions as payment for the referral rather than as a nominal gift or reasonable advertising cost.
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No. Fee sharing tied directly to referred clients constitutes compensation for the recommendation itself and falls outside the reciprocal-referral exception, which permits only the exchange of referrals without additional payment.
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