Tag Archives: Cliff Scott-Rudnick

Job Search Strategies: giving and getting referrals

Aurora Donnelly is a solo practitioner always looking forward to the next exciting transition.

Among my friends and colleagues who are in the process of setting up their own law offices I hear a lot of conversations about referrals. Is it OK to give another attorney a referral and to collect a referral fee? What if a civilian wants to send a case our way and get compensated for doing that? Can I send out all the cases I get to other lawyers and make a living collecting referral fees? Do I have to pay a referral fee to a lawyer who sends me a case and will he/she notice if I don’t?

Well, the rules changed as of January 2010, and actually were loosened up some from what they were before. Before the new rules were in place, you had to stay involved in any case you referred out to another attorney and actually had to do some unspecified amount of work on the case. Now you no longer have to be involved, you may refer the case out and collect the referral fee when the recipient of the referral gets paid. So the answer to the first question is yes, you can certainly refer cases out and collect a referral fee.

But keep in mind that you are really assuming joint and several liability in order to get any fee at all and that the client has to be informed and consent to the payment of the referral fee.  It seems to me to still be a good idea to stay involved so there is no question that you have earned the fee and to make sure you are not blind-sided by being asked to assume joint financial responsibility after the referral. Rule 1.5 addresses the issue of split fees. The section on advertising, Rule 7.2 addresses working with non-lawyers.

If you enter into a referral agreement, review Illinois Revised Rule 7.2(b)(4) Advertising, and note that notice to the client is required and the reciprocal referral agreement cannot be exclusive.

As to the second question, the answer is a firm no, and this has not changed. Attorneys and non-attorneys may not be partners in business and neither may be compensated by the other for referring cases. This is a tricky rule, because the form of payment may mislead you into thinking that it is OK to accept compensation from a non-attorney.

For example, a couple of months ago I wrote about a situation where a non-attorney wanted to set up an immigration assistance center and as part of the services he wanted to offer attorney counseling on site. He asked me to work with him on this and I immediately realized that I could not. Here is the applicable rule in part:

Rule 5.4. Professional Independence of a Lawyer

(b) A lawyer shall not form a partnership with a nonlawyer if any of the activities of the partnership consist of the practice of law.

(c) A lawyer shall not permit a person who recommends, employs, or pays the lawyer to render legal services for another to direct or regulate the lawyer’s professional judgment in rendering such legal services.

(d) A lawyer shall not practice with or in the form of a professional corporation or association authorized to practice law for a profit, if:

(1) a nonlawyer owns any interest therein, except that a fiduciary representative of the estate of a lawyer may hold the stock or interest of the lawyer for a reasonable time during administration;

(2) a nonlawyer is a corporate director or officer thereof, except that a nonlawyer may serve as secretary thereof if such secretary performs only ministerial duties; or

(3) a nonlawyer has the right to direct or control the professional judgment of a lawyer.

In the deal in question, the non-lawyer was proposing to pay all the office expenses, the support staff salary, supplies, phones etc. and I would simply counsel individuals who were contemplating submitting or already had, submitted immigration applications. I would charge my own fees and keep those fees. I immediately realized that I could not do that and not be subject to an ARDC inquiry, should it ever come to light. Explaining this to him was another matter altogether and I don’t think he ever really understood the issue.  So that takes care of our second question above.

Can you run your practice on the basis of screening cases and referring them out? Apparently you can, with a couple of caveats. Make sure that both you and the attorney to whom you are referring the case have malpractice insurance. Should the worst happen and the other attorney is sued, you can also be named in that malpractice matter. And, as a beginning point, of course, make sure that the attorney you refer the case to is competent.  This applies to the first question above as well.

Not all attorneys who refer cases out keep careful track of those referrals. Sometimes the cases take years to settle or go to trial, and when people are busy, they can overlook that they referred a case to you. It is up to you to keep good track and to pay out those referral fees as they come due. Do not be tempted to “forget” to pay the fee, it will eventually be noticed and you will kill what might be a good source of new cases for you.

Make sure that when you receive the referral you and the referring attorney have clearly agreed on the referral fee. You do have to notify the client in writing of the referral arrangement, including disclosing the amount of the referral fee.

All of the above is my understanding of the pertinent new rules of professional responsibility and I am not an expert in that area, so please be sure to do your own research and/or to check with a legal ethics expert when you decide to engage in any referral arrangement. Cliff Scott-Rudnick, director of continuing education and professionalism and assistant professor at The John Marshall Law School advised me on this topic, but the information I have provided here is my interpretation of the rules, which can be complicated.

I also encourage you to ask your malpractice carrier for advice on this issue, as well as utilize the attorney advice services of the various bar groups.

Job Search Strategies: A meaningful CLE class

Aurora Donnelly is a solo practitioner always looking forward to the next exciting transition.

In last week’s posting I commented that CLE programs often are not directly instructive to our specific areas of law, but that we sometimes sit through them just to comply with the CLE hourly requirement.

In contrast, the Continuing Legal Education conference titled “Ethics in the Movies Presents Michael Clayton” at The John Marshall Law School I attended last week was pertinent, instructive, and enjoyable. You can find more information at http://www.jmls.edu/cle/index.shtml

The Professional Responsibility requirement of the Supreme Court Rule prescribing CLE requires a minimum of four hours of instruction in professionalism, diversity issues, mental illness and addiction issues, civility, or legal ethics.

Just about all of these issues are covered in the movie Michael Clayton.  Cliff Scott-Rudnick, director of continuing legal education and assistant professor at The John Marshall Law School, presents an engaging and illuminating program centered around this movie.  Attorney and movie expert Richard Adler contributes with a detailed and fascinating look at the symbolism in the film.  Entertainment attorney Hal “Corky” Kessler provides useful commentary as well.

The program begins with a discussion of the concept of professional responsibility and of the New Illinois Rules of Professional Conduct effective January 1, 2010.  Scott-Rudnick provides handouts to facilitate the discussion:  “The New Rules Guide – Rule by Rule” from the ARDC, “Highlights of the New Illinois Rules of Professional Conduct,” and a comprehensive “Redline Comparison of the 1990 Illinois Rules of Professional Conduct to the 2010 Illinois Rules of Professional Conduct.”

Selected scenes from the movie are then discussed in the context of ethical breaches by the characters and of the professionalism Rules that are being stretched, or violated. On the other hand, it is interesting to note that in a couple of the scenes, dialog or actions that seem to be violations of the Rules, are not.

Presenting the CLE topic within this format is highly effective because specific Rules are illustrated by particular scenes in the movie and guide the discussion.  The drama in the scenes, the human motivation revealed and the moral dilemmas are compelling and therefore, memorable.

For example, the failure to timely confront and deal with a senior partner’s mental illness results in a cataclysm for all parties involved in the case.  Should I ever encounter a colleague suffering from a similar affliction, I think the pertinent scenes in this movie would quickly come to mind, reminding me vividly of the reason and necessity for the Rules. Illustration is a powerful tool in the learning process.

This excellent program, through its creative format, promotes learning in a painless and memorable way.  And, if you haven’t seen Michael Clayton, watch it. I guarantee you will be moved and will find it meaningful in your practice of law.

Q & A with Cliff Scott-Rudnick

Cliff Scott-Rudnick, a visiting professor and director of Continuing Education and Professionalism at The John Marshall Law School, will be participating in the May 8 panel discussion at the Attorneys in Transition event. Here are his answers to a few questions regarding his participation in the panel.

What are your top three pieces of advice for a lawyer looking for his or her next job?

He suggests asking yourself:

What do you really want to do? What are your passions for the law?  How much money do you need?

How should lawyers keep busy while they look for a job?

Network. Volunteer. Exercise.

What do you hope those who attend the event will take away from or learn from the panel discussion?

You are not alone.  It is not the end of the world or your career.  Things will get better.