In Reeve v. Meleyco, 2020 WL 1429362 (no official citation yet), the California Court of Appeal overturned a ruling in favor of a lawyer seeking an agreement on the removal tax. The court found that a client`s written confirmation (which he received and included a letter in which transfer fees would not be derived from the percentage of the client`s transaction) did not constitute written consent to the referral contract under Rules 2-200 of Act 2-200. As long as the current rules on transfer fees are followed, a lawyer may in any event receive a removal fee. Therefore, transfer fees are not prohibited in family or criminal proceedings. For example, a lawyer may receive transfer fees in a divorce case as long as the lawyer is working on the case and is paid for the services provided by the lawyer, or the lawyer enters into a written agreement with the other lawyer and the client, where each lawyer assumes joint legal responsibility, agrees to be available for consultation with the client and specifies how the costs are distributed. It is customary for lawyers to pay one third (1/3) of the total amount recovered by a client as a transfer fee (according to the lawyer). In December 2014, Reeve sued Meleyco for breach of contract on the basis of the recommendation royalty agreement and later added ways to bring legal action against Quantenmeruit and Solawechsel. The jury found in Reeve`s favor for $78,750, based on the breach of contract and the quantum causes of the action. The court granted Reeve`s application for early conviction and interest and awarded him approximately $50,000. Meleyco appealed.
A lawyer who receives a referral fee must sign the royalty agreement if it is a case of contingency costs or, if not a contingency fee, the transfer fee is not paid in proportion to the work done by each lawyer. The transfer fee agreement must be written and signed by each lawyer in accordance with Rule 4-1.5 (g) (2). In the event of an unforeseen event, Rule 4-1.5 (f) (2) also provides that each lawyer signs the agreement on transfer fees. If the referral system is contemplated at the beginning of the case, it is likely that counsel and the client would proceed with this part of the pricing agreement in advance. If the referral agreement is reached at a later date, the agreement on transfer fees must still be made in writing and should be made within a reasonable time after the referral agreement. It is customary for lawyers to refer cases to other lawyers, and if this happens, the referring lawyer may receive legal fees in return. The manner in which legal fees are ordered can be complex, but it must always be regulated by the rules of lawyers. Here are some examples of when there may be a recommendation agreement between lawyers: acquiring new businesses is one of the most difficult (and often costly) aspects of running a successful law firm.