Referral Fees
Convocation approved amendments to the Rules of Professional Conduct, the Paralegal Rules of Conduct and By-Law 9 with respect to referral fees on April 27, 2017. 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. (PDF * Download PDF and open in Adobe to complete and save the form) / (Word)
- 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.
Resources
To support lawyer and paralegals, the Law Society has developed:
See also: