Q. Solicitors can now pay referral fees. Is this limited to arrangements with referral agencies and business contacts? If one of my regular clients recommends my firm to family and friends, could I pay him a referral fee?

A. Yes, subject to the Solicitors Introduction and Referral Code 1990. The conditions in section 2A apply when a solicitor pays referral fees whether he receives work from the introducer on a regular basis or occasionally. Your introducer would have to give an undertaking to comply with the code if you enter into a referral agreement with him. Section 2A requires the disclosure of relevant information to the client. If you will be paying the introducer a fixed fee per client, that figure must be disclosed to the client. This must be done by the introducer before the referral, and by you as soon as you receive the referral and before you begin acting for the client. You should also check that the introducer has given the information to the client.


There are other conditions in section 2A. In particular, you must be satisfied that the introducer has not found the client using marketing practices which are not open to you such as 'cold calling' (see section 2A(4)(b)). These restrictions will apply even though your introducer will be making referrals in a personal rather than a business capacity. He could not make what would be regarded as unsolicited visits or telephone calls. The former would include approaching a friend or relative at a social function and offering to put him in touch with a solicitor.


Question of ethics is compiled by the Law Society's professional ethics guidance team. Send questions for publication to Austin O'Malley, the Law Society, Ipsley Court, Berrington Close, Redditch B98 0TD; DX 19114 Redditch