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Referral Fees

Convocation approved amendments to the Rules of Professional Conduct (“Rules”), the Paralegal Rules of Conduct (“Paralegal Rules”), and By-Law 9 with respect to referral fees on April 27, 2017. These amendments included:
  • Requiring that the referral fee be fair and reasonable and not increase the total amount of the fee payable by the client.
  • Capping referral fees based on a percentage of the legal fee: 15% for the first $50,000 of legal fees and 5% of all legal fees thereafter to an absolute cap of $25,000.
  • Prohibiting the payment of referral fees to lawyers and paralegals whose licenses were suspended at the time of referral.
  • Banning up-front referral fees.

The following transparency measures were also approved:

  • The client must be provided with the Law Society Requirements for Referral Fees – What Clients Need to Know information sheet and the opportunity to review and consider it.
  • The client, the referring lawyer or paralegal and the lawyer or paralegal accepting the referral must complete and sign a standard referral agreement, in the form provided by the Law Society. (Word).
  • The client must be provided with the referral to at least two lawyers or paralegals or, if not, the reason(s) that it is not reasonably possible to do so in the circumstances.
  • The client must be advised of the reason(s) that the referring lawyer or paralegal has recommended a specific referee to the client.
  • The client must have full and fair disclosure of the relationship between the referring lawyer or paralegal and the lawyer or paralegal receiving the referral.
  • The account to the client must clearly indicate the amount of the referral fee.
  • The client must sign an acknowledgement for the referral payment at the time the payment is payable or paid.
  • Lawyers and paralegals must record referral fees paid and received in their books and records and report on referral fee practices in the annual reports they submit to the Law Society.

The above requirements and transparency measures do not apply to enforceable referral agreements entered into before or on April 27, 2017.

On February 28, 2019, further amendments were made to the Rules, Paralegal Rules, and By-Law 7 to prohibit the acceptance or payment of referral fees to lawyers or paralegals who provide legal services through civil society organizations (CSOs), such as charities or not-for-profit corporations.

For more information about the referral fee requirements, lawyers and paralegals should review Rules 3.6-6.0 to 3.6-6.7 of the Rules, and Rules 5.01(14) to (20) of the Paralegal Rules, respectively.

Supports and Resources

For questions relating to a lawyer or paralegal’s obligations regarding the acceptance or payment of referral fees please contact the Law Society’s Practice Management Helpline.

The Law Society has developed the following resources for lawyers and paralegals:
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