Referral fees allowed

This decision was recently approved by the Master of the Rolls. Now solicitors can be more commercial and open about their referral arrangements and will be able to pay estate agents, banks and marketing companies for introducing new clients.

This is good news for solicitors who can now enter into direct commercial arrangements with potential introducers of business. They will not have to concoct schemes and lose control of the relationship with the introducers to third parties who take a cut of the fees. Solicitors were not commercial enough to work this way in the past, but there are more commercially astute firms around these days that can make referral schemes work for the benefit of the public as well as their firm.

An important caveat to the payment of referral fees is that the introducer does not constrain the independence of the legal advice which the law firm subsequently gives, and that clients must also be told about any referral fees.

Full article in Inpractice

Consultation paper