Fee Sharing is Permissible in Indiana
Under many circumstances, lawyers have cases which may need to be referred to other counsel for a variety of reasons. While the case may require referral, many lawyers are hesitant to do so due to fear of losing a fee. This fear arises from Professional Conduct Rule 7.3(f) which prohibits one being paid purely for a referral.
Notwithstanding the ban on pure referral fees, Rule 1.5(e) provides that lawyers in different firms can divide fees from cases provided that (1) the division is in proportion to the services performed by each lawyer or the attorneys assume joint responsibility for the representation; (2) the client agrees in writing to the division; and (3) the total fee is reasonable. Under this Rule, referring lawyers are still entitled to collect a fee so long as these requirements are satisfied.
This rule was noted by the Indiana Supreme Court in In re Hailey, 792 N.E.2d 851 (Ind. 2003). The Court stated that in all circumstances the total fee must be reasonable and the division must be accepted by the client in writing. Further, absent proportionality in services rendered by the referring attorney, all attorneys receiving a portion of the fee must accept, in writing, joint responsibility for the representation. This ruling resulted in the revision of Rule 1.5 in 2005.
