Lawyer’s are not allowed to ‘solicit’. We can’t pay anyone to send us clients. We can’t approach injured people to persuade them to hire us. We can’t chase ambulances, despite rumor to the contrary. Its unethical to do so.
We can, however, pay referral fees to lawyers who send files to us because they do not practice in the area of injury law. This is standard practice in the industry.
In April 2017, the Rules around referral fees were changed. These amendments included:
- Capping referral fees based on a percentage of the legal fee: 15% for the first $50,000 of legal fees and 5% of all legal fees thereafter to an absolute cap of $25,000.
- Prohibiting the payment of referral fees to lawyers and paralegals whose licenses were suspended at the time of referral.
- Banning up-front referral fees.
The following transparency measures were also approved:
- The client must be provided with the Law Society Requirements for Referral Fees information sheet and the opportunity to review and consider it.
- The client, the referring lawyer or paralegal and the lawyer or paralegal accepting the referral must complete and sign a standard referral agreement, in the form provided by the Law Society.
- The account to the client must clearly indicate the amount of the referral fee.
- The client must sign an acknowledgement for the referral payment at the time the payment is payable or paid.
- Lawyers and paralegals must record referral fees paid and received in their books and records and report on referral fee practices in the annual reports they submit to the Law Society.
The above requirements and transparency measures do not apply to enforceable referral agreements entered into before or on April 27, 2017.