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Can a referral arrangement get you in trouble with the State Bar?

On Behalf of | Sep 13, 2021 | Moral Character, Professional License Defense |

Many attorneys with a solo practice depend upon word-of-mouth referrals from their clients to gain new clients. In fact, referrals are often much more effective than advertising. As such, you may decide to partner with another solo practitioner that has a different practice area, so that you can refer clients to each other. While this type of arrangement can be effective, can it land you in hot water with the California State Bar’s disciplinary committee?

The Rules of Professional Conduct

The California Rules of Professional Conduct contain a provision in Rule 7.2 concerning referral arrangements. Under the Rule, these arrangements are not prohibited – as long as they comply with certain requirements.

The first requirement is that the arrangement be non-exclusive. In other words, there’s no problem with creating an agreement wherein you and the other attorney agree to refer clients with specific legal needs to each other. However, your written agreement cannot contain a provision that binds you to only refer clients to each other no matter the circumstance or their individual needs.

The second requirement is that you inform any client that you refer of the arrangement. You can do this at the time of the referral. Simply tell them that you are referring them to another attorney that specializes in their particular legal needs, and mention that you also have a non-exclusive referral arrangement with that attorney.

The disciplinary process

If your referral arrangement does not comply with the above requirements, it’s possible that the State Bar could investigate the circumstances and nature of your arrangement. If they find it necessary, they could initiate disciplinary proceedings.

These disciplinary proceedings occur in the State Bar Court. The Court may order fines for minor infractions, but more severe violations could lead to license suspension or even disbarment.

As a solo practitioner, you often have to get creative in your approach to obtaining new clientele. Just make sure, if you set up a referral arrangement with another attorney, that it complies with the Rules of Professional Conduct.


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