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Ethics Opinion

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RI-211

June 1, 1994

SYLLABUS

    A lawyer who refers a client to another lawyer because the referring lawyer will be testifying in the matter on behalf of and consistently with the interests of the client is not per se prohibited from accepting a referral fee in the matter. The client must be advised of and not object to the total arrangement between the lawyers, including both witness fees and referral fee.

    References: MRPC 1.4, 1.5(e), 3.7; RI-3, RI-116.

TEXT

A lawyer accepted a referral of a case from a lawyer in another firm who will be testifying in deposition and at trial on behalf of and consistently with the client's interests. The lawyer asks whether the witness may be paid a referral fee.

In answering this inquiry we assume that the referring lawyer will be participating in the matter merely as a witness, and is not continuing to work on the case with successor counsel under a co-counsel arrangement or otherwise. MRPC 1.5(e) states:

    "A division of a fee between lawyers who are not in the same firm may be made only if:

      "(1) the client is advised of and does not object to the participation of all the lawyers involved; and

      "(2) the total fee is reasonable."

In RI-116 the Committee opined that a lawyer who was prohibited from taking a case because of a conflict of interest may not refer the potential client to another lawyer and accept a referral fee. The opinion states:

    "If the referring lawyer has a conflict, then any advice might smack of a conflict, even if the advice is to go to a specific lawyer. If the conflict arises because the lawyer has a current client with interests directly adverse to those of the prospective client, MRPC 1.7(a), any advice regarding choice of counsel would be inappropriate, and akin to selecting one's adversary. If the conflict arises because the lawyer's duties to the lawyer's own interests or to a third party would materially limit the representation of the prospective client, MRPC 1.7(b), it is conceivable that the referring lawyer might be tempted to ill-advise the client as to a choice of counsel. Under MRPC 1.9, the propriety of the mere recommendation to the client would depend upon how apparent or how remote the conflict is to the subject matter. See MRPC 1.5(e)."

The facts presented indicate that the client was referred because the referring lawyer was going to be a witness for the client and that the referring lawyer's testimony was consistent with and on behalf of the client. The facts do not indicate whether the referring lawyer had a conflict of interest. MRPC 3.7 states:

    "(a) A lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness except where:

      "(1) the testimony relates to an uncontested issue;

      "(2) the testimony relates to the nature and value of legal services rendered in the case; or

      "(3) disqualification of the lawyer would work substantial hardship on the client.

    "(b) A lawyer may act as advocate in a trial in which another lawyer in the lawyer's firm is likely to be called as a witness unless precluded from doing so by Rule 1.7 or Rule 1.9."

The Rule prohibits a lawyer from acting as advocate in a proceeding in which the lawyer is a necessary witness concerning a contested fact. The prohibition does not depend upon whether the lawyer's testimony conflicts with the interests of one of the parties in the matter. Whether or not a lawyer is prohibited from acting as an advocate in a matter does not determine whether the lawyer has or does not have a conflict of interest prohibiting a referral fee.

The facts do not indicate whether the witness is being paid. RI-3 states that it is ethically improper for a lawyer to charge a client a fee at the lawyer's normal hourly rate for time expended as an expert witness, and statutory fee limitations apply for non-expert testimony. Although a lawyer/witness is not per se prohibited from receiving a referral fee, consideration should be given to the total amount the lawyer receives for all services, i.e., legal services, testimony and referral. When complying with MRPC 1.5(e)(1), i.e., ensuring that the client is advised of and does not object to the participation of all the lawyers involved, a lawyer should explain the entire interest the referring lawyer will receive. MRPC 1.4.

 
     

 

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