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Referral fees can be received if there is a conflict as long as the client agrees.

I am being conflicted out of a personal injury case. I have requested the client go to a good friend of mine who is an excellent lawyer to represent him in the personal injury case. May that lawyer pay me a one-third referral fee, assuming the client does not object?

The question is an interesting one and has been discussed before. If this question was asked 20 or 30 years ago, the answer normally would be no. A lawyer can receive a referral fee under Rule 1.5(e) of the Rules of Professional Conduct which allows a referral fee as long as the client has been advised and does not object to the participation of the lawyer's involved and the total fee is not illegal or excessive. There is no quantum meruit requirement like there used to be before 1979.

In days of old when a lawyer referred a client, a lawyer would usually still have responsibilities. As a result, if the lawyer had a conflict and could not continue to represent a person, then the lawyer usually was allowed to be paid a referral fee.

Although there's been no definitive opinions yet, legal ethics have changed and there is an argument that one can get a referral fee even if they are conflicted out of a case.

The reason is that the lawyer no longer has responsibility for the case since there is no longer a quantum meruit requirement. If I refer a case to another lawyer, that's the last thing I have to do if the lawyer agrees to pay me a referral fee and the client doesn't object. Oftentimes, that is what lawyers do. They call a lawyer, who accepts the case. The clients is advised there will be a referral fee and doesn't object. Then the lawyer does nothing else until he hears a few years later that there is a referral payment from either a settlement or a judgment. Because the lawyer doesn't have any further responsibility or quantum meruit, then the argument is there is no referral fee prohibition even if a lawyer is conflicted out as long as the lawyer is not participating.

A classic example is that of a judge who is elected or appointed and refers his private practice out to other lawyers. Although the judge obviously is no longer involved, the judge can still receive referral fees. This happens many times when lawyers are elected or appointed to the bench. Obviously, if a judge has referral arrangements with lawyers, such as a buy-out of the law practice or whatever, those lawyers should not be appearing before the judge, at least until all the referral arrangements are taken care of.

In the excellent book, “Pennsylvania Ethics Handbook,” 5^th Edition by Michael Temin and Thomas Wilkinson, Jr., the authors note that the issue of receiving referral fees when there is a conflict, “has been reviewed by Ethics Committees in Pennsylvania, but is sufficiently controversial that no consensus view has emerged.” The book, “Pennsylvania Ethics Handbook,” does cite a District of Columbia Bar Association Ethics Opinion 326 (2004) that essentially allows referral fees when there is a conflict.

The whole purpose of Pennsylvania's referral rule which is located in Rule 1.5(e) is to encourage referrals to competent lawyers. The Pennsylvania Supreme Court, in 1979, was upset with what was soft corruption where lawyers were making up hours to justify referral fees under the old quantum meruit arrangement. The old concept of one sins once, it's easier to sin twice was really the underlying basis for the change. So, the court abolished the quantum meruit requirement and allowed straight referrals without any need of the lawyer who was referring the case to do any work as long as the client did not object and the referral fee wasn't excessive. Obviously, when one enters into a referral fee, a wise lawyer will do more than just a phone call or a handshake. There should be a letter or agreement signed. Unfortunately, failure to do that could create problems two or three years later when the lawyer discovers the case was settled and the referral fee was conveniently forgotten or ignored.

Failure to pay referral fees or to hold the lawyer's referral fee in escrow until the dispute is resolved is very serious and is treated as a conversion. Therefore, if a lawyer agreed to a referral fee and chooses not to pay it or takes the fee, then the lawyer could face substantial discipline as in any conversion-type of case.

To answer the question, it appears that referral fees can be received even if there's a conflict of interest. The only prohibition is if the client does not agree or objects. Wise lawyers will get the client agreement early on so the client can't object when the referral fee is to be paid.

Withholding Brady evidence could result in professional discipline.

If a prosecutor fails to turn over Brady material but the court does not find it material enough to warrant a new trial, can the prosecutor still be disciplined in the attorney disciplinary system?

The answer is yes, because there are two different standards. Under Pennsylvania Rules of Professional Conduct 3.8(d), it is noted: “A prosecutor in a criminal case shall make timely disclosure to the defense of all evidence or information known to the prosecutor, that tends to negate the guilt of the accused or mitigates the offense and in connection with sentencing, disclosed to the defense and to the tribunal all privileged mitigating information known to the prosecutor, except when the prosecutor is relieved of the responsibility by a protective order of the tribunal.”

This rule sets forth special responsibilities for a prosecutor.

Further, for an attorney who represents criminal defendants, it is clear that Rule 3.8(d) has a broader requirement than requirement under what is known as Brady v. Maryland, 373 U.S. 83 (1963). The failure of a prosecutor to turn over what would be considered Brady material will result in a new trial only if there is the reasonable probability that the result would have been different if it had been timely disclosed.

Therefore, if the withheld Brady material does not create the reasonable probability that would undermine the outcome, then a new trial is not going to be granted. Every lawyer should make the request before trial for Brady material pursuant to Pennsylvania Rules of Criminal Procedure 573.

But, a review of the above quoted Rule 3.8 of the Rules of Professional Conduct does not have that reasonable probability requirement. Therefore, it would appear in the disciplinary system the assistant district attorney or Assistant U.S. Prosecutor could be disciplined for not providing Brady material or for withholding it even though the withholding did not cause a new trial. Rule 3.8 is broader than the Brady requirement.

Therefore, while a prosecutor's misconduct by withholding Brady evidence may not result in a new trial, it certainly could result in professional discipline if it was brought to the attention of the Office of Disciplinary Counsel.