When an injury case is referred by a lawyer to me, I list the referring attorney’s name on the retainer agreement and the referring attorney and I sign a separate agreement regarding the division of the legal fee called a “Memorandum regarding the Division of the Fee”.  The Memorandum regarding the Division of the Fee specifies how the legal fee will be shared with the referring attorney at the end of the case.

In medical malpractice cases, the “Memorandum regarding the Division of the Fee” specifies that the referring attorney will receive a referral fee that is determined by the percentage of the total legal fee to the client’s net recovery.  For example, if the total legal fee is 24% of the client’s net recovery, then the referral fee will be 24% of the totaI legal fee.  The “Memorandum regarding the Division of the Fee” gives three examples in order to show how the referral fee will be calculated.

I have never had a complaint about the Memorandum regarding the Division of the Fee at least not until the end of the lawsuit.  When a case settles, I send the Settlement Statement to the referring attorney and I explain how the referral fee was calculated. It has happened more than once that the referring attorney calls me after getting my Settlement Statement to express surprise at the calculation of the referral fee.  The comment from the referring attorney is something to the effect of, “I thought I was going to get one-third [of the total legal fee].”  I then fax the Memorandum regarding the Division of the Fee to the referring attorney and after reading the agreement, the initial surprise/anger of the referring attorney is quelled.

It is hard to believe that attorneys do not read the contract that controls their rights to a referral fee.

Practice tip for the day: When you refer a personal injury case, make sure you read the agreement that specifies the amount of your referral fee.  Do not assume anything! If the procedure for calculating your referral fee is not clear, make sure you  call the personal injury attorney for an explanation.  If you don’t do this, you may be in for a surprise at the end of the case.

If you have any questions or want more information, I welcome your phone call on my toll-free cell at 866-889-6882. You can always get more information at the Frequently Asked Question section of my website at www.protectingpatientrights.com.  Thank you for taking the time to read this.