Some personal injury lawyers are worried the Law Society of Upper Canada’s new referral fee rules have added an unnecessary layer of bureaucracy for boutique firms and their clients.
At its April Convocation, the regulator’s benchers imposed a sliding scale for referral fees, with a limit of 15 per cent on the first $50,000 in legal fees paid by clients, plus a further five per cent on anything over that amount, up to a hard cap of $25,000.
Darcy Merkur, a partner at Toronto boutique Thomson Rogers, says he supports the crackdown on excessive referral fees, but he would have preferred a simpler cap, such as the 10-per-cent flat rate advocated by the Ontario Trial Lawyers Association in advance of the LSUC vote.
However, his real beef is with the standardized referral agreement prepared by the LSUC as part of its move to increase transparency in the process, which must be signed in every case by the client and the referring licensee, as well as by the law society member taking the referral.
“This is going to add an element of extra work and complication that is not welcome,” Merkur says.
“By implementing these additional hurdles, it may encourage some people to hold on to files which they would have referred out in the past.
That’s contrary to the original goal of referral fees, which was to have the most qualified lawyers dealing with the most complicated cases.
In my view, it will significantly reduce the number of people who would otherwise have accepted or engaged in referral fee situations,” he adds.
Read full article written by Michael McKiernan which originally ran on June 12, 2017, in Law Times: Crackdown on referral fees – New rules mean added bureaucracy?
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