Forwarding Fee

A payment of money made by one attorney who receives a client to another attorney who referred the client.

The Code of Professional Responsibility, which has been established by the AMERICAN BAR ASSOCIATION to regulate the professional conduct of attorneys, proscribes the payment of forwarding fees—sometimes called referral fees—to an attorney who has merely secured the employment of another attorney without rendering any services or assuming any responsibility to the client in the matter. An apportionment of reasonable fees between attorneys is proper only when the client is cognizant of, and consents to, this arrangement, and when the allocation is in proportion to the services rendered and the responsibility assumed by each attorney.

The Code of Professional Responsibility has been adopted by many state bar associations. If an attorney accepts a forwarding fee without providing any services, or undertaking any responsibility, the bar association may institute disciplinary proceedings against the individual for his or her unethical behavior.