Demystifying Referral Fees

Attention, fellow lawyers and paralegals! Ever wondered about the ins and outs of referral fees? Let’s break it down:
At Virk Personal Injury Law, a significant portion of our practice is based on referrals from other lawyers who continue to entrust us with their clients. We understand the strength that comes from collaboration within the legal community. If you come across individuals seeking personal injury representation and believe our expertise aligns with their needs, we welcome and appreciate your referrals.
Referral Fee Policy:
We adhere to the guidelines set by the Law Society of Ontario (LSO) regarding referral fees. Your trust in our services is valued, and we’re pleased to reciprocate with referral fees as permitted by the LSO.
Mutually Beneficial:
Our referral fees are more than a gesture of gratitude; they represent our commitment to building mutually beneficial relationships. When you refer clients to Virk, you’re not just recommending a service — you’re becoming a part of a collaborative network dedicated to serving clients with excellence.
What’s a Referral Fee?
It’s simple: A referral fee is compensation given for the referral of a case, with full knowledge and consent by the client under a referral agreement. The referring lawyer or paralegal receives this fee from the retained lawyer, who then handles the case.
Does it Affect Client Fees?
Absolutely not! A referral fee shouldn’t inflate the legal fees paid by the client. Fees must be fair and reasonable, as mandated by the Law Society of Ontario.
Understanding Referral Agreements:
The Law Society provides a standard referral agreement, ensuring compliance with ethical standards. It must be signed by all parties involved before any referral fee exchanges hands.
Transparency Matters: The agreement must inform clients of why a referral is recommended, any existing relationships between parties, and alternatives available to the client.
Choosing the Right Referral:
Referrals are made when the recipient has the expertise to handle the case effectively. It’s all about ensuring the client gets the best possible representation.
When is a Referral Fee Not Permitted?
A referral fee is off the table if there’s a conflict of interest, if the referring party’s licence is suspended, or if legal services are provided through certain organizations.
Calculating Referral Fees:
Referral fees are either set amounts or calculated based on contingency fee agreements. There is a cap of $25,000 to ensure fairness and transparency. The Law Society of Ontario permits up to 15% on the first $50,000 in fees and 5% on the balance for lawyers, up to a maximum referral fee of $25,000.
Payment Timing:
Referral fees are only paid after the recipient of the referral has received payment for their services.
Client Protections:
Clients retain the right to terminate their retainer with a lawyer or paralegal at any time, irrespective of whether a referral agreement is in place.
Clear Communication:
Clients are informed of referral fees through signing the referral agreement, a signed acknowledgement at the time of settlement and through their statement of account, ensuring transparency in all financial transactions.
Our Commitment to You:
One of our lawyers will always provide a free consultation to the clients you have referred to us. If we are unable to assist your client, we will direct them to someone who may be able to assist. We will always advise you of the outcome.
Have questions or need further clarification? Let’s keep the conversation going! Together, we can uphold the highest standards of professionalism and transparency in our legal practices.