It is customary in all business or services to follow the practice of referral. The referral between two individual service providers or between two firms helps getting customers or clients. The referring party also gets referral commission from the party, who receives the referral client.
For example, you may be a lawyer, but you are already overloaded from the works and can not handle any more clients. But, still parties come to you for contesting their cases. If you do not want to outright reject such parties, you can refer them to another lawyer or firm, who can take in the party as their client and offer their services to them. You may get certain percentage of commission for referral. The commission may amount to a small percentage of fees, which the party may pay you.
Referral among service providers or firms shows healthy and cordial relationship between them. It also shows the confidence of one party on another. Referral can also be the source of extra income, without actually performing any work or service.
But, it is also necessary that the referral service provider party or firm should apprise the potential client through letter that, his/her or their firm has been referred by the specific service provider or firm and it is customary to pay certain percentage of party’s fees to that form or party, who has referred their name. It is also mentioned in the letter that, the sharing does not increase the fees but, it will remain same as agreed between them. Thus, the party’s consent of no objection for participating or sharing of fees between layers or law firms must be acquired in writing, before the agreement between the referral service provider and the party.
Below given Referral Agreement consent letter template will help you, when you also seek the permission of the party referred by another lawyer:
Referral Agreement Letter template
Date_________________________
Name________________________
Address______________________
___________City, _______________State _____________ Zip Code
Re: _________________________(describe legal matter)
Dear ___________________[Name of Client]
As you know, ________________[name of referring attorney] referred you to me to represent you regarding ___________________[describe matter]. It is customary when one attorney refers a client to another attorney in legal matters such as yours, for the representing attorney to pay a “referral fee” to the referring attorney. The ethics rules governing lawyers encourage lawyers to explain to a client, in writing, the financial aspects of the referral fee, and the rules require that the client consent to the referral fee.
We have agreed that my fee will consist of 33.1/3% of all sums obtained on your behalf in this matter either through trial, settlement or otherwise, after deduction of the out of pocket costs incurred in pursuing this matter. I have proposed to share _______[% or $] of my fee with _______________[name of referring attorney]. Sharing part of my fee with attorney _______ will not increase the fee you have agreed to pay to me. Attorney ______will be paid strictly out of my fee.
Please examine this letter carefully and let _________________[me/our firm] know immediately if you have any questions or concerns. If you have no objections to my sharing my fee with attorney __________, I ask that you please sign this letter and return to me in the postage paid envelope enclosed for your convenience.
Thank you again for retaining me to represent you in this important matter. I look forward to working with you.
Sincerely,
[Your name_________________________
Firm name]_________________________
cc: ____________________________[Name of referring attorney]
Suggested procedure: Docket for a future date and have staff follow up to ensure that the client has no questions and signs and returns the agreement. Send a signed copy to the referring attorney.