New Jersey Supreme Court Decision – Attorney Referral Fees

On February 18, 2025, the New Jersey Supreme Court issued In re Opinion No. 745 of the Supreme Court Advisory Committee on Professional Ethics, ___ N.J. ___ (2025), addressing the issue of the payment of attorney referral fees. The Supreme Court vacated ethics Opinion 745, that had prohibited certified attorneys from paying referral fees to out-of-state lawyers who were not licensed to practice in New Jersey. The Court held that such referral fees are permissible under the Court Rules and do not raise concerns about the unauthorized practice of law.

Facts and Procedural History of the Attorney Referral Fees Case

On March 7, 2024, the Advisory Committee on Professional Ethics (ACPE) released Opinion 745, in response to legal inquiries about whether certified attorneys in New Jersey could pay attorney referral fees to out-of-state lawyers. The ACPE had concluded that referral fees constituted a division of legal fees and could only be paid to attorneys who were licensed to practice in New Jersey.

Additionally, Opinion 745 held that certified attorneys could not pay referral fees to New Jersey lawyers who had to withdraw from a case due to conflicts of interest. However, it allowed payments to attorneys who were eligible to practice at the time of the referral but later became suspended or disbarred.

Several legal organizations, including the New Jersey State Bar Association and the New Jersey Association for Justice, petitioned the Supreme Court for review of Opinion 745. The ACPE, represented by the Attorney General, argued that Opinion 745 correctly interpreted New Jersey Court Rule 1:39-6(d).

New Jersey Supreme Court’s Holding on Attorney Referral Fees

The New Jersey Supreme Court rejected the ACPE’s interpretation, finding that referral fees under Rule 1:39-6(d) are different from the legal fee divisions governed by New Jersey Rule of Professional Conduct (RPC) 1.5(e). The Court emphasized that attorney referral fees are not payments for legal services but compensation for client recommendations.

The Supreme Court found that Rule 1:39-6(d) explicitly allows certified attorneys to pay referral fees “without regard to services performed or responsibility assumed by the referring attorney.” Thus, the plain language of Rule 1:39-6(d) does not require referring attorneys to be licensed to practice in New Jersey. Additionally, because referral fees are not payments for legal services, the payment of such fees does not implicate concerns about the unauthorized practice of law.

Attorney Certification Program and Its Impact on Referral Fees

The Supreme Court examined the purpose of New Jersey’s attorney certification program. The Court found that the “demanding” certification program was established to promote access to experienced attorneys, and enabled the public to find qualified lawyers with specialized skills. To be eligible for certification in Criminal Law, attorneys must be members of the bar in good standing and have a plenary license in New Jersey for at least five years, have extensive and substantial experience in criminal law, establish professional fitness and competence in the designated area of practice, submit references, and pass a written examination, among other stringent requirements.

The Court found that allowing New Jersey certified attorneys to pay attorney referral fees supported this program by ensuring a steady flow of referrals to carefully vetted attorneys.

If the Court had upheld Opinion 745, out-of-state attorneys would have had little incentive to refer cases to New Jersey-certified attorneys, thereby restricting the intended benefits of the demanding certification program. The Court made it clear that preventing certified attorneys from paying referral fees to out-of-state lawyers would undermine the program’s objectives.

Attorney Referral Fees based on a Conflict of Interest

Although the Supreme Court vacated Opinion 745’s restrictions on out-of-state referral fees, it did not address two other issues raised in the opinion. Opinion 745 briefly addressed, and proscribed, the payment of referral fees to New Jersey lawyers who cannot accept a case, or must withdraw from a case, due to a conflict of interest. Thus, the Supreme Court left intact  the guidance contained in ACPE Opinion 613 and Eichen, Levinson & Crutchlow, LLP v. Weiner, 397 N.J. Super. 588 (App. Div. 2008), which addressed referral fees in cases involving conflicts of interest and attorneys who became suspended or disbarred after making the referral.

Attorney Certification Areas in New Jersey and Referral Fee Restrictions

New Jersey’s attorney certification program is designed to help the public identify highly qualified attorneys in specific areas of practice. Attorneys may obtain certification in one of the following five areas:

  • Criminal Law
  • Municipal Court Law
  • Matrimonial Law
  • Civil Trial Law
  • Workers’ Compensation Law

Under New Jersey Court Rule 1:39-6, referral fees are generally permitted for certified attorneys. However, it is important to note that referral fees may not be paid for matrimonial law matters when referring cases to a certified matrimonial attorney. This exception ensures that referrals in matrimonial cases remain distinct from other certified practice areas.

Conclusion: Key Takeaways on New Jersey Attorney Referral Fees

The New Jersey Supreme Court’s decision in In re Opinion No. 745 confirms that certified attorneys may pay attorney referral fees to out-of-state lawyers, even if they are not licensed to practice in New Jersey. This ruling also clarifies that referral fees are not payments for legal services and do not raise concerns about the unauthorized practice of law. The decision ensures that New Jersey’s attorney demanding certification program continues to function as intended, facilitating access to experienced attorneys and preserving the incentive structure for legal referrals.

Bianchi Law Group Partners Robert Bianchi and David Bruno are both certified criminal trial attorneys by the New Jersey Supreme Court. If you are an out-of-state lawyer or a New Jersey attorney who does not handle criminal cases, we are available to take on those matters and provide referral fees as authorized by the applicable Rule 1:39-6(d) and Opinion 745. We can provide immediate assistance and further counsel on your case at 862-225-1965.

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