You have asked for an opinion on the following facts: You represent a pedestrian who was involved in an automobile accident when a car jumped the sidewalk and struck her as she was waiting for a bus. The automobile also hit two other pedestrians, a father and his son, while the daughter was an onlooker. These three pedestrians are represented by another law firm, since when the case came in the potential conflict was obvious. The father of the two children involved is a practicing lawyer who sent the case to you on the advice of the lawyer who is representing him.
Full policy limits of $100,000 have been paid, and there is disagreement between all the parties as to how the money should be divided. You have indicated that your client is more seriously injured than the other three plaintiffs. There is not enough money available to adequately compensate all four plaintiffs. The lawyer who represents the father/pedestrian/lawyer insists that his client is entitled to a referral fee from you with respect to your client's recovery. Your client has told you that she objects to any such payment. You ask if you could ethically pay such a referral fee.
Pennsylvania Rule of Professional Conduct 1.5e provides that:
(e) A lawyer shall not divide a fee for legal services with another lawyer who is not in the same firm unless:
1. The client is advised of and does not object to the participation of all the lawyers involved, and
2. The total fee of the lawyers is not illegal or clearly excessive for all legal service, they rendered the client.
Pennsylvania Rule of Professional Conduct 1.7b provides in part that:
(b) A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer's responsibilities to another client or to a third person, or by the lawyer's own interests, unless:
1. The lawyer reasonably believes the representation will not be adversely affected; and
2. The client consents after full disclosure and consultation....
The Committee is of the opinion that payment of a referral fee in this case would violate both Rules 1.5(e) and 1.7(b). As the client objects to payment of the referral fee, to proceed would violate Rule 1.5e1. However, to pay the fee in this situation would also constitute a violation of Rule 1.7b. Clearly, since there is an insufficient amount of money to adequately compensate all the parties, your client and the father are arguing over how much of that fund each shall have. If you are paying a referral fee to the father, you are in fact having allegiance to both your client and the father, who have adverse financial interests in the fund to be divided. Even if you are able to comply with Rule 1.7b(1) you nevertheless cannot comply with the requirement of Rule 1.7b(2) as your client objects to the payment of the referral fee.
As a collateral issue, the Committee notes that if there was no oral agreement for payment of a referral fee at the time the client was referred to you, there would appear to be no contractual basis upon which such a claim could be based.