Page 16 - Multidisciplinary Organizatons - Law and Accounting
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boards, in particular, the Agricultural Department. Approximately 30% of his work comes from PSI, in
which he is listed as an expert in these areas.
John is regulated by the Kansas Bar Association because: (I) the state or local association has a vested
interest in protecting the public; (2) local rules or conditions may be unique; (3) the local professional
association may want to protect itself from outside professionals to assure a level or quality or
professionalism; and (4) some local professionals would like to limit competition in the jurisdiction.
Kansas’s rule 5.5(a) states that a lawyer must not practice law in a jurisdiction where doing so would
violate regulations of the profession in that jurisdiction. When John does practice in other jurisdictions,
Kansas could penalize John for his practice. These rules would seem to be in opposition to both clients’
interests (to have the best possible legal representation) and the objective of multidisciplinary practices
(ton use the best professional for the job). John is open to sanctions both in the state in which he is
practicing without a license and in Kansas. However, the bar has tended to ignore unauthorized practice
of law by attorneys from other jurisdictions, particularly corporate counse1,45 absent some egregious
circumstances.46
[3] Referral Fees47
Referral fees for work are suspect and viewed as unprofessional. In the case of the medical field, they can
be illegal.48 While the rules are very strict in the medical field, attorney rules have substantially changed
to permit advertising. The restrictions seem to be aimed at referral fees that are outright solicitation or
are fee splitting. States have their own statutes.
Referral fees are permitted when they are reasonable and not related to a particular transaction or
matter.49 For example, firms lending funds to other firms and accepting referrals as payment and payment
of a bonus for each referral by an employee are prohibited. The service provider, such as PSI, cannot
charge a transactional fee for each referral but it can charge a percentage of the overall transaction. If the
amount is excessive, the fee may be suspect.
PSI offers the possibility of referrals both from the public and from other professionals. WSG offers
professionals the opportunities to get to know others, share information and, in particular, place
information about them in the database. Each receives a fee. Are these referral fees prohibited by bar
regulations?
In Alabama State Bar Association v. R.W. Lynch,50 the court dealt with facts similar to PSI. In that case a
number of independent attorneys created a commercial for legal services. When clients called a telephone
number, they were referred to the attorneys who had paid for the ad. This was held not to be a referral
45 The best example is that of in-house counsel who do practice in virtually every jurisdiction without any sanctions. The same result is generally
true for lawyers practicing in a different state. Vigil, Regulating In-house Counsel: A Catholicon or a Nosy 78 Marg. L. Rev., 307 (1994); Pull
admission Reciprocity Is In-house Lawyers’ Goal, 9 Laws. Man. on Prof. Conduct (ABA/BNA) Current Reports at 352 (1993).
46 “Standing alone, unauthorized practice out-of-state by an attorney in-state may not be considered sufficiently noteworthy to excite prosecution
efforts from disciplinary authorities in the lawyer’s home state.” Wolfram infra n 14 at 686.
47 7 Martin, Not So Fast, It’s Regulated — Some Warnings for the B-health Business, Bus. Law Today
(Sept./Oct. 2000); Braender and McCarthy-Perry, Making a Virtual House Call, Nat. L.J. Cl (Aug. 21, 2000); Meek, "Telemedicine: How an Apple
(or Another Computer) May Bring Your Doctors Goser," 29 Cumb. L. Rev, 173 (1999).
48 There is an anti-referral statute, 42 U.S.C. § 1320a-7(b), which pertains to Medicare and Medicaid
49 ABA Model Rule 7.2(c).
50 655 So. 2d 982 (Ala. 1995).
which he is listed as an expert in these areas.
John is regulated by the Kansas Bar Association because: (I) the state or local association has a vested
interest in protecting the public; (2) local rules or conditions may be unique; (3) the local professional
association may want to protect itself from outside professionals to assure a level or quality or
professionalism; and (4) some local professionals would like to limit competition in the jurisdiction.
Kansas’s rule 5.5(a) states that a lawyer must not practice law in a jurisdiction where doing so would
violate regulations of the profession in that jurisdiction. When John does practice in other jurisdictions,
Kansas could penalize John for his practice. These rules would seem to be in opposition to both clients’
interests (to have the best possible legal representation) and the objective of multidisciplinary practices
(ton use the best professional for the job). John is open to sanctions both in the state in which he is
practicing without a license and in Kansas. However, the bar has tended to ignore unauthorized practice
of law by attorneys from other jurisdictions, particularly corporate counse1,45 absent some egregious
circumstances.46
[3] Referral Fees47
Referral fees for work are suspect and viewed as unprofessional. In the case of the medical field, they can
be illegal.48 While the rules are very strict in the medical field, attorney rules have substantially changed
to permit advertising. The restrictions seem to be aimed at referral fees that are outright solicitation or
are fee splitting. States have their own statutes.
Referral fees are permitted when they are reasonable and not related to a particular transaction or
matter.49 For example, firms lending funds to other firms and accepting referrals as payment and payment
of a bonus for each referral by an employee are prohibited. The service provider, such as PSI, cannot
charge a transactional fee for each referral but it can charge a percentage of the overall transaction. If the
amount is excessive, the fee may be suspect.
PSI offers the possibility of referrals both from the public and from other professionals. WSG offers
professionals the opportunities to get to know others, share information and, in particular, place
information about them in the database. Each receives a fee. Are these referral fees prohibited by bar
regulations?
In Alabama State Bar Association v. R.W. Lynch,50 the court dealt with facts similar to PSI. In that case a
number of independent attorneys created a commercial for legal services. When clients called a telephone
number, they were referred to the attorneys who had paid for the ad. This was held not to be a referral
45 The best example is that of in-house counsel who do practice in virtually every jurisdiction without any sanctions. The same result is generally
true for lawyers practicing in a different state. Vigil, Regulating In-house Counsel: A Catholicon or a Nosy 78 Marg. L. Rev., 307 (1994); Pull
admission Reciprocity Is In-house Lawyers’ Goal, 9 Laws. Man. on Prof. Conduct (ABA/BNA) Current Reports at 352 (1993).
46 “Standing alone, unauthorized practice out-of-state by an attorney in-state may not be considered sufficiently noteworthy to excite prosecution
efforts from disciplinary authorities in the lawyer’s home state.” Wolfram infra n 14 at 686.
47 7 Martin, Not So Fast, It’s Regulated — Some Warnings for the B-health Business, Bus. Law Today
(Sept./Oct. 2000); Braender and McCarthy-Perry, Making a Virtual House Call, Nat. L.J. Cl (Aug. 21, 2000); Meek, "Telemedicine: How an Apple
(or Another Computer) May Bring Your Doctors Goser," 29 Cumb. L. Rev, 173 (1999).
48 There is an anti-referral statute, 42 U.S.C. § 1320a-7(b), which pertains to Medicare and Medicaid
49 ABA Model Rule 7.2(c).
50 655 So. 2d 982 (Ala. 1995).
