Posted: September 2, 2025
Rules of Professional Conduct – Comment Period Closed October 17, 2025
A new rule 5.8 is proposed that outlines requirements for fee sharing between lawyers. Along with this new rule, amendments are proposed to rule 1.0 to include definitions for fee sharing, legal fees, referral fees, and new comments for legal fees and referral fees. Furthermore, amendments are proposed to rules 1.5 and 5.4 to include language regarding fee sharing and referral fees.
RPC01.0. Terminology. AMEND.
RPC01.5. Fees. AMEND.
RPC05.4. Professional independence of a lawyer. AMEND.
RPC05.8. Fee sharing between lawyers. NEW.
On September 2, 2025, I received an email from the CLE department about cultivating and retaining attorneys in Utah. The description said there would be a discussion on what Utah can do better to retain attorneys and talent in Utah. On the same day, the bar proposed these changes in these rules. This seems contrary to the stated desire to retain talent in Utah. This rule would cause attorneys to question returning referrals from friends with small acts of kindness. I have sent many Crumbl cookies to friends and other attorneys who have sent clients to me. I’ve sent lunch to offices for referrals. This rule would seem to punish that behavior.
The change to the rules proposed here does nothing to further the client’s interests. The primary purpose of these changes seems to express an intent to stop referral fees or other forms of compensation for referrals. See Clay’s comment from September 3rd. Even small gestures of gratitude are technically impermissible. The current rule includes the following language: “Whether in accepting or paying for referrals, or fee-sharing, the lawyer must protect the lawyer’s professional judgment, ensure the lawyer’s loyalty to the client, and protect client confidences.” Is there some other or new client interest that is being protected? Is this proposed rule change primarily benefiting larger firms that include in their compensation portions of legal fees from clients brought to the firm when the legal work is performed by other attorneys within the firm while simultaneously excluding independent and small firm attorneys from having some similar methods of compensation between themselves? Usually, the changes to our rules are to clarify a point or ensure that the client’s best interest is protected. Here, it does neither.
Referring to the proposed Comment 8 to Rule 1.0, the comment should refer to Rule 1.5(a) rather than simply listing three of the factors that may be the basis of legal fees.
Referring to Rule 5.8, subpart (a) is unnecessary because it is already stated in the proposed Rule 5.4.
In addition, in the proposed Rule 5.8(b)(1), the word “payable” is confusing. It would be more appropriate to state that no lawyer should receive any part of the fee until the fee is “earned” by the lawyer. In a comment, it would be appropriate to state that the prohibition on “receiving” fees does not apply to fees held in the lawyer’s trust account. As written, one might think a lawyer cannot receive a retainer for a matter where the fee is being shared with another lawyer.
Subpart (c) of the proposed Rule 5.8 is unnecessary and confuses the existing standard that already applies. Under Rule 1.5, lawyers are already prohibited from receiving unreasonable fees. There is no reason a different standard should apply simply because a lawyer is sharing a fee with another lawyer. The factors in Rule 1.5(a) already dictate whether a fee is reasonable. There is no reason to restate a subset of the factors in Rule 5.8. (By the same reasoning, Comment 5 to Rule 5.8 is also unnecessary.)
Finally, I agree with other commenters that this rule seems to be trying to fix a problem that doesn’t exist, or that is adequately covered by existing rules. Also, I agree that there should be an exception for a lawyer to give a de minimis gratuity or thank-you to someone who refers a case.
The prohibition of referral fees under Rule 5.8(a) creates unintended consequences that harm Utahns and distort ethical incentives. A well-regulated referral fee system—limited to licensed attorneys and subject to client disclosure—would better serve the public, the courts, and the legal profession. I respectfully request that the Court revise Rule 5.8 to permit referral fees between lawyers under appropriate safeguards.
First, I believe allowing referral fees protects clients from incompetent representation. Prohibiting referral fees incentivizes lawyers to retain cases outside their expertise to avoid losing compensation. This leads to poor case development, missed deadlines, and maybe even malpractice—especially in complex matters like trucking accidents where evidence preservation must occur early in a case. Permitting referral fees encourages lawyers to refer cases to specialists, ensuring clients receive competent and diligent representation.
Second, allowing referral fees prevents sham participation. Under the proposed rule, lawyers may feel compelled to perform token tasks to justify fee sharing, even when they lack the skill or capacity to handle the matter. This limits a lawyer’s ability to dedicate time to other cases the lawyer is competent to handle and unnecessarily requires their participation in a matter where their utility is questionable.
Third, allowing referral fees encourages ethical collaboration. Referral fees foster professional networks that connect clients with the right legal expertise. Solo and small firm practitioners often rely on referrals to serve clients effectively. When referral fees are permitted, lawyers are rewarded for ethical decision-making—not penalized for doing the right thing.
Fourth, allowing referral fees seems to align with the trend in many other jurisdictions. Based on my internet searches, it appears to me that 10 states allow “pure” referral fees (CA, CT, DE, KA, ME, MA, MI, NV, NH, OR). In addition, it appears that 10 more states allow referral fees with some vicarious liability or other safeguard/limit (AL, AZ, CO, FL, IL, LA, NJ, NY, TX, WI). I was unable to locate a single state that historically allowed payment of referral fees that changed its rule to prohibit them.
Finally, if referral fees are allowed, I support the following conditions: (a) Written disclosure and client consent of the referral fee arrangement. (b) No increase in total legal fees to the client. (c) Referral only to competent counsel.
Our bar’s president-elect has provided a thoughtful, articulate and entirely correct critique of this proposed rule. Mr. Young has worked in a field of law that often involves referral fees and co-counsel relationships, and he has practiced long enough to have seen the development of rules in this arena. His thoughts come from his own experience and should be given great weight.
I will add that in reviewing this proposed Rule 5.8, and comparing it with Rule 5.4, it appears there would be fewer restrictions on sharing a fee with a non-lawyer than sharing a fee with a licensed lawyer. That seems very wrong. The Supreme Court established the Sandbox and opened up new avenues for commercial interactions between lawyers and non-lawyers. It appears to make little sense that they would permit this scheme to proceed while tightening restrictions on licensed lawyers who are officers of the court, bound by professional and ethical obligations, and should consequently be given greater trust than those outside the profession who do not have the same duties and obligations.
Prohibiting referral fees between licensed attorneys disincentivizes attorneys from referring legal claims to the appropriate co-counsel. Such a prohibition would encourage unqualified attorneys to work on cases that they should refer to another attorney better suited for that subject matter. Also, out of state attorneys will be less likely to refer a Utah case to a Utah licensed attorney and instead attempt to resolve the matter on their own. The change should be that referral fees can only be given to another licensed attorney subject to appropriate client disclosure. Referral fees to non-attorneys should be forbidden for obvious reasons.
The community will be harmed by prohibiting referral fees under Rule 5.8(a) because lawyers who are not qualified to handle a case in a specific area will not be incentivized to refer out cases to lawyers who are better equipped and more knowlegeable. Instead, those less qualified lawyers will try and handle those cases – to the detriment of the members of the public who are the clients.
I support the following conditions: (a) Written disclosure and client consent of the referral fee arrangement. (b) No increase in total legal fees to the client. (c) Referral only to competent counsel.
I do not support referral fees to non-lawyers as this will encourage “marketing” and other “referral” groups to advertise for cases. Those marketing and referral groups do not owe the same fiduciary and other obligations to the clients and thus the clients’ rights will not be protected the same was as if a lawyer is initially signing up the case. Referral fees should be limited among lawyers.
I agree with Tyler.
Smaller firms won’t be able to refer cases without a referral fee. Each case is too important for these firms.
This proposed rule seems to disregard the client’s best interest. Smaller, less-experienced firms will be disincentivized to refer cases to more specialized firms or firms with better resources, resulting in suboptimal outcomes and ultimately damaging the client.
I agree with Tyler Young’s comment above against Proposed Rule of Professional Conduct 5.8. I, too, oppose the proposed rule for the same reasons. The only safeguards needed for referral fees to attorneys are written consent by client and no increase in the total legal fees charged. Going beyond those safeguards will cause more harm than good.
I am concerned about the prohibition of referral fees under Rule 5.8(a). Most jurisdictions seem to allow referral fees. They make legal services more accessible to the populace by incentivizing lawyers to find the right practitioner to handle the representation and to share the burdens of representation jointly. Some carefully crafted limitations, like written disclosure and client consent, should prevent most abuses of this rule. Disallowing referral fees, on the other hand, will encourage practitioners to accept cases that they may not be equipped to handle.
I concur with Tyler Young’s post that the proposed changes should be modified to reflect pre-sandbox referral fee rules. Although I felt the change to referral fees related to the emergence of the sandbox was problematic, I believe fee sharing by licensed lawyers gives our client the best of both worlds. There will be no increased fee by a referral and if, as the pre-sandbox rule was put back in place, the client would be able to pursue any claims by both the referring and referral attorneys, potentially giving them more protection than a ban on referral fees. Competency of counsel is paramount to providing legal services that will protect Utah citizens. Under our Rules of Professional Conduct, we have the ability to “get competent” and handle matters outside our wheelhouse, the ability to refer generally gives lawyers the opportunity to utilize more competent referral sources where indicated. This is a win for Utah citizens. Removing the ability to refer cases and receive compensation would be a loss.
This is clearly proposed over-regulation. If the continued practice was injuring the public in any way, I may see it differently. But it seems that no one is damaged by the proposed changes except attorneys. Referring attorneys like it; and attorneys receiving referrals like it. The amount of the fee paid by the client does not increase. The client receives better representation by a more qualified attorney. Why change a win-win?
I disagree with this proposition because it will hurt Utah consumers and is not in the public’s interest. Utah consumers are protected when attorneys have the incentive to refer claims to attorneys who have more bandwidth to add to their current case load, or who specialize or practice in a more applicable area of law that the prospective client needs.
Having an incentive to refer potential claims to more competent and able attorneys also means that claims move through the claims process or litigation efficiently, cutting down on court backlog, because when claims are in the hands of an attorney with the knowledge and ability to accurately pursue the claim, it naturally moves through the system quicker.
At the end of the day, this proposal hurts Utah citizens and it hurts the relationships that firms have built with each other to help the right cases get to the right attorney.
I agree with the comments made by Mr. Young, and believe he articulates well how the ability to pay or receive a referral fee would serve pragmatic goals for the legal profession.
I am also of the opinion that a prohibition on referral fees creates a disparity in the legal community. A prohibition disadvantages small firms and solo practitioners by extinguishing a source of client leads on the one hand and revenue on the other. This is a significant consequence for firms with smaller marketing budgets or limited networks. In contrast, large firms can rely on existing regional or nationwide brands and invest in expensive digital marketing to attract clients. Not all clients are looking for large firms, and prohibiting referral fees diminishes the incentive to help a person connect with their preferred attorney type.
It seems to me that the goals of the committee to safeguard against greed or negligence can be accomplished without the imposition of a flat prohibition on referral fees. The Bar membership would welcome the opportunity to comment on the committee’s well-thought proposals to guide the responsible use of referral fees.
I agree with the comments opposing this change to the rules. As a specialist in medical malpractice I have seen far too many attorneys attempt to do a medical malpractice case, only to later withdraw when they decide that it is too complex or too expensive. These clients are often dropped shortly before the statute of limitations expires and they are not given any solid justification for why their prior attorney dropped the case. Allowing referral fees encourages attorneys to refer complex cases to attorneys specialized in the correct area of practice, benefiting the public.
I am not aware of any negative consequence that has prompted the desire to restrict referral fees.
As a paralegal, it’s very frustrating to watch attorneys work on cases outside their practice areas just because they don’t want to lose the potential fees to be earned. Allowing for referral fees alleviates that problem. I agree that this is obvious over-regulation and will only negatively impact clients and their ability to get into the hands of an expert. Allowing attorneys and firms to make their own decision about if/what referral fees should be paid is the right thing to do.
I agree with Benjamin Cloward: “I support the following conditions: (a) Written disclosure and client consent of the referral fee arrangement. (b) No increase in total legal fees to the client. (c) Referral only to competent counsel.”
Eliminating referral fees between lawyers is not in the interests of Utah citizens in need of good and competent legal assistance. I suspect the most common area where referral fees are paid are personal injury cases which are typically handled on a contingency fee basis. Referral fees between lawyers does not increase the cost of legal services to the consumer. Rather, referral fees are typically paid when a lawyer, though competent to handle a case, feels that another lawyer is more competent and can add value to the client by associating with the more experienced lawyer. The lawyers then agree on a referral fee that is within the original contingency fee the client agreed to pay. It is a positive thing for all parties involved.
Even in other areas of the law, referral fees amongst lawyers is beneficial to clients in need of legal services. It promotes attorneys to stay within their lane and refer cases outside of their comfort zone to other attorneys rather than muddle along trying to learn as they proceed on the case.
I cannot imagine that there has been any significant problem related to referral fees amongst attorneys that would outweigh the benefit to consumers by incentivizing lawyers to stay in their lane and refer cases they have retained to others and recover at least some of the case value and case acquisition expenses.
I oppose the proposed new rule that would prohibit referral fees between attorneys. After years of trying to build a reputation, I’m fortunate to be contacted frequently by potential clients that need assistance that is related to the industry that I specialize in, but outside of my preferred scope of practice, which is somewhat narrow. Over the last several years I’ve vetted a small number of firms that are experienced and well qualified to provide those services, and I’ve established referral arrangements with them. After some inquiry to confirm their needs, I’ve referred hundreds of potential clients in this manner, and I don’t think a single one of them has ever come back to me with a complaint. The firms that I refer potential clients to value these leads, and I value the referral fees. The incentives are in place to produce results that benefit everyone involved. I recognize that there is a potential for referral fees to be abused, but I’m thinking that type of behavior would be inconsistent with several of our existing professional standards. From my perspective, the proposed new rule is unnecessary and harmful to both clients and attorneys.
I am opposed to the proposed Rule 5.8 of the Utah Rules of Professional Conduct.
As the rules committee is certainly aware, in 2021, the Utah Supreme Court eliminated Rule 7.2(f) of the Utah Rules of Professional Conduct which had prohibited referral fees. The amendment was part of a package that was intended to allow innovation that might increase access to justice.
In my experience, this reform has worked to increase access. It encouraged firms to work with other firms to direct clients to lawyers that have particularized experience or practice structures that would help individuals looking for representation.
As any practicing lawyer knows, lawyers are often inundated with emails or calls from individuals looking for services. Many are seeking services outside of an attorney’s practice area. Some attorneys, eager for any business, may attempt to provide service to those individuals, despite their lack of competence. Allowing referral agreements encourages attorneys to find trusted attorneys who do have expertise in those areas and enter into agreements that will compensate the referring attorneys for referring individuals to those having the expertise.
Since the amendment of the rules, my firm has entered into agreements to refer clients and accept clients who have the inclination and expertise to provide those services clients need. It has worked well.
The usual objections to referral agreements are simply not supported by my experience. These objections include that (a) referral relationships may create a conflict between an attorney’s personal financial interests and a prospective client’s, (b) the referral agreement undermines the integrity of the profession by treating clients as commodities, (c) referral agreements interfere with a client’s ability to choose the client’s own attorney, or (d) attorneys may refer to other attorneys based on financial incentive, rather than by competence.
Most of these objections are exaggerated and can be overcome with the application of other rules of professional conduct. For instance, objection (a) is no different from any attorney relationship with a client. There is an inherent tension between an attorney’s financial interests and any client. The fact that lawyers are most often paid hourly by their clients (excepting pro bono relationships) creates natural tensions between an attorney’s interests and a client’s, e.g., a lawyer is rewarded by being less efficient in his or her work. Yet, the bar does not prohibit hourly work—in fact, many rules encourage hourly work (See Rule 1.5.) There is no rational argument that a referral fee creates a greater tension on a lawyer’s duties to a potential client than an hourly relationship does. And the bar has other rules that can punish a lawyer for violating his or her professional duty to prioritize his or her client’s interest over the lawyer’s.
Objection (b) has similar problems. Although the legal profession requires its practitioners to act as fiduciaries, all lawyers must be paid. And lawyers compete with each other to secure the biggest and best cases from clients even without referral fees. If anything, referral fees encourage professional treatment of other practitioners and incentivize attorneys to find relationships that will allow lawyers to get a client to the best practitioner to handle a case.
Objection (c) presumes that a potential client has no ability to refuse to retain the lawyer the client has been referred to. Even in a referral relationship, a client has the ability to make his or her own choice in determining to retain an attorney. The only way this objection makes sense is if one assumes that a client has an absolute right to demand that the first attorney the client contacted take his or her case. Of course, except in cases where a court assigns a case to an attorney, the committee is certainly aware that no attorney is required to take a case after a client has sought out representation.
The only objection that merits significant attention is objection (d), which is that attorneys may refer to another attorney based on financial interest rather than professional competence. While this could be true, external forces will likely correct that concern. In the first instance, this objection assumes that the attorney receiving the referral will ignore his or her duties to the client and take the case outside of his or her areas of competence—an assumption that is significantly troubling. In fact, if one accepts that presumption, not allowing referral fees is more likely to lead to bad results. Allowing a referral fee encourages a lawyer to make money by referring cases to a competent lawyer rather than by taking a case for which the lawyer lacks competence.
Perhaps more importantly, an attorney who is primarily financially incentivized will want to refer to attorneys who will do a good job, because a client, once referred, may return and complain if the referred attorney is doing a bad job, thus increasing the opportunity cost for the referral. Moreover, a bad attorney will likely be driven from the market, eliminating the attorney as a referral source. And again, enforcement of other professional rules is a better and more direct way to prevent abusive practices.
While I do not agree that the underlying objections justify the elimination of referral fees, if, in fact, there is actual abuse, it makes much more sense to allow referral fees but with prohibitions that reduce a specific abusive practice. For instance, if there is an actual problem of referrals to attorneys that are incompetent, the committee might consider requiring attorneys to demonstrate that they have exercised reasonable diligence in entering into referral relationships to ensure that the referral is to an attorney or firm that has competence in the referred area. The committee may also want to consider restricting referral relationships that require an attorney to send all referrals regardless of area of practice to a single attorney or firm.
Thank you for considering my comments. I am happy to provide additional thoughts if the committee believes that they may be helpful.
I am opposed to proposed Rule 5.8 as written. I think this will discourage attorneys from referring cases to more experienced counsel. Too often, attorneys accept complex cases, but they are not equipped to handle them. This proposed change could lead to consumer harm because less scrupulous attorneys will be less incentivized to refer cases to competent counsel. I second Tyler Young’s comment above.
In addition to the comments I made earlier, I would also note that these changes unfairly impact smaller law firms with no apparent rationale. Larger law firms often create compensation formulas that provide compensation to an attorney for his or her origination of work when they have done no work on a case at all. In other words, they receive a referral fee. There is no prohibition in these rules against those internal law firm compensation schemes. Yet, if an attorney decides to work in a smaller firm, he or she is prohibited from entering into agreements that essentially replicate the compensation formulas in larger firms. If there is a danger in these referral fee arrangements between smaller firms, why is there no danger in a large firm? There appears to be no logical rationale for the distinction. In fact, the effect of the rule is to give a competitive advantage to larger firms.