New Jersey’s Appellate Division, in Weiner & Mazzei, P.C., and Phillip A. LaPorta, Esq. v. The Sattiraju Law Firm, P.C., recently released an opinion that clarifies the obligations of the attorneys when memorializing the referral arrangement in a particular case. This opinion is required reading for all practitioners to ensure that referring attorneys receive the attorney fees that they are entitled to.
In Weiner, the potential client reached out to Phillip LaPorta, an attorney and a family friend. The potential client alleged a workplace injury and a chance in employment. Mr. LaPorta did not handle that kind of law, and so he referred the potential client to Weiner & Mazzei. Weiner & Mazzei declined representation, but referred the client on to the Sattiraju Law Firm. The Sattiraju Law Firm eventually undertakes to represent the client as a plaintiff.
At this point, it is important to note that there was a dispute between Mr. LaPorta and the client as to whether Mr. LaPorta would ever be entitled to a referral fee. It is undisputed that there was no written fee agreement between Mr. LaPorta and the client. It is undisputed that Mr. Laporta had never engaged in any prior representation of the client. Finally, it is undisputed that the client had never even heard of the Weiner & Mazzei firm being involved in his case.
The Sattiraju Law Firm eventually prosecutes the case successfully to a verdict and a confidential settlement. Mr. LaPorta and the Weiner & Mazzei firm sought a 1/3 referral fee, which the Sattiraju firm refused to pay, leading to this litigation.
The trial court granted judgment to the Sattiraju Law Firm, and the Appellate Division affirmed, holding that there was no valid referral agreement because the client never consented to any fee sharing with any other firm besides the Sattiraju Law Firm.
New Jersey Rule of Professional Conduct 1:39-6(d) allows certified attorneys to pay referral fees “without regard to services performed or responsibility assumed by the referring attorney.” Importantly, that rule does not abrogate two specific provisions of Rule of Professional Conduct 1.5(e), which requires that the client must be notified of any fee division and that the client must consent to the participation of all the lawyers involved.
Without client notification and consent, if a dispute among the attorneys arises, the court will not honor the referral relationship. Therefore, referring attorneys must make sure that they are protected by having the client sign off on any fee sharing agreement that is reached with the firm actually prosecuting the case.
Please note that the Locks Law Firm boasts a New Jersey certified civil trial attorney, which allows us to pay referral fees without regard to time spent, services performed, or responsibility assumed.
We at the Locks Law Firm ensure that referring counsel are always protected by having the client sign off on any fee sharing arrangement at the time of the initial intake.
Please consider us for any dangerous pharmaceutical, complex personal injury, consumer class-action, and wage-and-hour litigation.