Rules of Professional Conduct – Comment Period Closed June 4, 2026

You may want to clarify about a circumstance when the attorney wants to share its awarded “fees” with his own non-lawyer client — either as part of a contingency recovery or just because the attorney doesnt want to accept the awarded fees. For example, if the court awards attorney fees on a matter but the attorney doesnt want to keep the fees and wants to give those awarded fees to the non-attorney client. There is no sharing of fees with another non-lawyer party except for the client whom it seems should benefit. There is not a sandbox requirement since it is the client. It seems the rule would inhibit or prevent this. I wonder if simply defining the “nonlawyer” under this rule as excluding the client. Maybe I am missing something but it seems we should clarify.

To the Rules Committee:

I am writing to express my strong opposition to the proposed blanket prohibition on referral fees, specifically as drafted in the new Rule 5.8(a) and the amended Rule 5.4(c).

As the committee is aware, in 2021, the Utah Supreme Court eliminated the prior prohibition on referral fees to foster innovation and increase access to justice. In my experience, this reform has worked exactly as intended. It has encouraged attorneys to collaborate and direct clients to lawyers with the particularized expertise needed for their specific cases. Reverting to a prohibition on referral fees is a step backward that ignores the practical realities of legal practice.

The Practical Reality of Referrals

Lawyers are frequently inundated with calls from individuals seeking representation outside of the attorney’s core practice area. Without a financial incentive to refer the case out, attorneys eager for business may attempt to provide services despite lacking the requisite competence. Allowing referral agreements solves this by financially incentivizing the attorney to route the client to a trusted, competent expert. The proposed Rule 1.0(q) defines a referral fee as compensation paid to a person not in the same firm “for the sole purpose of referring a legal matter”. Banning this completely, as outlined in proposed Rule 5.8(a) and Rule 5.4(c), will simply reduce the likelihoo that clients are efficiently matched with the best practitioner for their needs.

Disparate Impact on Smaller Law Firms

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.

Because proposed Rule 1.0(q) specifies that a referral fee is compensation paid to someone “who is not in the same firm,” there is no prohibition in these rules against 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 an unfair competitive advantage to larger firms.

Existing Rules Already Address the Committee’s Concerns

The usual objections to referral fees—such as the fear that they treat clients as commodities or create financial conflicts of interest—are exaggerated. There is an inherent financial tension in any attorney-client relationship.
For instance, hourly billing naturally rewards inefficiency, yet Rule 1.5 permits and even encourages it.
Furthermore, the proposed rules already contain robust mechanisms to protect clients from abuse without needing a blanket ban:

Competence: Proposed Rule 5.8, Comment [1] explicitly states that a lawyer should only refer a matter to another lawyer whom they reasonably believe is competent to handle it diligently.

Reasonable Fees: Rule 1.5(a) clearly states that a lawyer must not make an agreement for, charge, or collect an unreasonable fee.

Proposed Alternative: Regulation Over Prohibition

If the committee believes actual abuse is occurring, the solution is targeted regulation, not prohibition. I urge the committee to strike the blanket bans in Rule 5.8(a) and Rule 5.4(c). Instead, the committee should treat referral fees similarly to how it proposes treating “fee sharing” under Rule 5.8(b). Referral fees could be permitted provided they meet the same transparency standards, specifically:

The arrangement does not result in an increase of the total legal fee.

The client agrees to the arrangement, and the agreement is confirmed in writing.

Enforcing these transparent, consent-based rules—alongside the duties of competence and reasonable communication—is a far better and more direct way to prevent abusive practices than eliminating referral fees altogether.

Thank you for considering my comments. I remain happy to provide additional thoughts if the committee believes they may be helpful.