What? You Accept Cases on Referral?

A young lawyer called me with a question the other day.  He was looking at a case that required a significant amount of experience to handle it appropriately, and was clearly struggling.  He wanted to keep the case (it had tremendous potential), but I could hear during several moments of silence in the conversation that he knew he lacked the ability to handle it the way he knew it should be handled.

I finally did something I had not done in years – I asked him why he didn’t get someone to work with him on the case, to refer it to a more experienced lawyer.  He said, "Can you do that?" and then "how does that work?"

I must say I was surprised.  I started practicing law in 1981 with a fantastic lawyer, John T. Conners, Jr.  Much of Mr. Conners work was from referred to him from other lawyers.  Therefore, I quickly came to understand that lawyers routinely refer cases to other lawyers and never really gave the issue much thought.  I assumed that everyone knew what I knew.

I was wrong.  Indeed,  my co-shareholder Rebecca Blair had a similar inquiry recently, which tells me that there are lots of people out there who don’t know about the referral system.

So, here is the deal:  Yes, our law firm accepts cases on referral from other lawyers.  In fact, the vast majority of our work comes from other lawyers.  Many lawyers send their clients to us when they get a case outside their daily practice area.  Other lawyers ask for our assistance with they get a particularly complicated case in their practice area – a case that will require a tremendous commitment of time and/or money.  And still other lawyers ask us to work with them when they obviously have the skills and money to handle the case but they simply have too many other irons in the fire to handle the case in a timely, responsible fashion.

It is very difficult to have the large number of files the average lawyer handles and throw a significant personal injury or wrongful death case in the mix.  A significant case can require hundreds or even thousands of hours of work, even for people who routinely handle those cases.  So, what many lawyers have found is that throwing a major case into the mix it adversely impacts all of their other clients and adversely impacts cash flow.  Then, in an effort to tend to those clients, the major case sits around much longer than it should, increasing the risk of error and potentially diminishing the value of that case.  Lawyers in that position come to realize that their clients – all of their clients – are much better off getting some help with that case on the front-end.

"But." this young lawyer said to me, "I hate to lose the fee."   Fair point.  Except Tennessee law permits the payment of referral fees to lawyers in a manner consistent with the Rules of Professional Conduct.

Rule 1.5(2) provides that " A division of a fee between lawyers who are not in the same firm may be made only if:  (1) the division is in proportion to the services performed by each lawyer or, by written consent of the client, each lawyer assumes joint responsibility for the representation; and  (2) the client is advised of and does not object to the participation of all the lawyers involved; and (3) the total fee is reasonable."

We routinely share fees consistent with this rule.  Some lawyers do not want a referral fee – they do not want to have their name on the contract and have the risk associated with it.   But lawyers who are willing to undertake that risk or who are willing to have some hands-on activity in the case are permitted to accept a referral fee. We pay hundreds of thousands of dollars(indeed, sometimes over a million dollars) to such lawyers every year.  Lawyers are routinely pleasantly surprised when they receive a referral check and reflect on the number of hours they spent to earn the fee.

I think the referral system is a fair one.  It rewards lawyers who work in the trenches, develop relationships with clients,  and for one reason or another are not able to handle a given case at a given time.  It helps clients – it gives them access to a larger team of lawyers who often handle a larger volume of "bigger" cases, and therefore are more familiar with the particular challenges of those types of cases.  It does not cost the client more money – we charge the same fee whether a client calls us directly or the case is referred by another lawyer.  It works for everyone.

One last point on the issue of my practice.  I occasionally meet people who ask me if I still practice law.  Part of me is flattered – I guess some people think that I have done well enough to just quit.  And part of me is concerned – do I spend so much time with the newsletter, book and blog that people think I don’t have time to practice?

Here is the answer.  I practice half-time –  twelve hours a day.  Seriously, I do put in long days and vast majority of those days are hands-on work with clients.  I do the other activities early in the morning, often starting at 4:00 a.m. and getting a couple of hours in before the kids have to go to school.  I love to write,  to stay current on developments in  tort law around the country, and to share what I have come to learn with other lawyers.  I believe that a rising tide lifts all boats, and by sharing what we know we improve the state of the law and the perception of the legal community.  I plan to continue to do it – and when I retire from the active practice of law I intend to continue to do it.

But retirement is way off, both because I still love practicing law and because on or about August 3 my wife and I will be experiencing the birth of our daughter.  This yet-unnamed child will make sure that I continue to work for the next several decades.

The bottom line:  Yes,  we accept cases on referral.  We split fees consistent with the ethics rules.  We accept  all types of personal injury and wrongful death cases across the state.  We would like the opportunity to work with you and help you serve your client.