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Specialization, Referral Fees and Professional
Responsibility
The practice of referring cases to specialists
and dividing the fee is widespread and beneficial to the clients and
attorneys involved. The concepts of specialization and fee referral,
however, present possible conflicts with the present Canons of Ethics.
Disciplinary Rule 2 - 107, which is part of the Code of Professional
Responsibility, promulgated by the American Bar Association, states:
| A lawyer shall not divide a fee for legal
services with another lawyer who is not a partner or associate
of his firm or law offices unless: (1) the client consents to
employment of the other lawyer after a full disclosure that
a division of fees will be made. (2) The decision is made in
proportion to the services performed and responsibility assumed
by each..." |
Thus the code of ethics has made it possible for attorneys to refer
matters out of their field of experience to attorneys who specialize
in a particular area. It acknowledges by implication that attorneys
do specialize and that cases are referred to specialists. It hardly
needs stating that in a profession as many - faceted as the law that
individuals would concentrate upon particular subject matters. Yet
DR2 - 104 forbids lawyers to hold themselves out as specialists except
in a few specified areas such as patents or admirability. Discrete
announcements may be made to other attorneys.
The area of medical malpractice presents a common example of the opportunity
and need for referral. Almost every case receives its first legal
attention from an attorney who does not regularly handle medical malpractice
and might see ten possible malpractice suits in a lifetime. The attorney
has little or no knowledge of medicine, the accepted standards of
medical practice, the law dealing with medical malpractice or the
trail techniques peculiar to this area, where almost all evidence
must come from the defendant doctor, who was the only informed witness
to the treatment. Except for cases where a surgical instrument is
left in a patient's body or the wrong leg is amputated, most non-malpractice
attorneys are not even in a position to know whether a case exists.
The license to practice law permits any attorney to handle almost
any matter. Lawyers are also permitted to place advertisements in
the news media. An inexperienced lawyer undertaking to represent a
client in an area such as medical malpractice, however, will almost
surely commit legal malpractice before the case is concluded. Even
if the attorney manages to thread the way through the morass of medical
terminology, hidden records, interminable motion practice, and finding
experts, the defendant's insurance carrier is unlikely to settle any
case for more than nuisance value with an attorney who is an unknown
commodity & who will almost certainly fare poorly against defendant's
attorneys (who, as a group, are probably the most skillful adversaries
practicing in the courts.)
Available to the general practitioner, however, are "specialists"
whose entire practices are limited to medical questions, who have
taken medical training, have access to highly qualified medical experts,
who are excellent trial lawyers, and who are known to insurance companies.
When handled by one of these individuals, the value of a case may
be more than triple its value if prosecuted by the general practitioner.
It is customary in the medical malpractice field for the referring
attorney to receive one-third of the contingent fee (which is usually
one-third of the recovery). To satisfy ethical considerations, the
forwarding attorney usually arranges and participates in the initial
conference, handles relations between the trial lawyer and the client,
and helps in the preparation of discovery and trial.
This participation by the forwarding attorney is frequently impossible
because of other commitments and most often is not essential to the
success of the case. Religious adherence to referral fee arrangements
is the rule, however. The assurance that a referral fee will be paid
to the originating attorney is the strongest guaranty that the client
will be well represented and not the victim of on-the-job training
of an attorney who is reluctant to lose control of a valuable piece
of business.
Medical malpractice is just one example of an area beyond legal common
competence. Practically every area of legal practice involves specialization
of some type. General practitioners develop a competence in family
matters such as wills, divorces, house sales, and simple business
matters. A Wall Street lawyer is probably just as incompetent to do
a good job on a one-family house sale, as a general practitioner would
be to represent a client in a large corporate bankruptcy.
The legal profession must recognize that specialization is a fact
of life, is necessary for the proper practice of law, and must be
encouraged by liberalization of the referral fee structure and fostered
by special training and certification programs of specialists. |
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ARTICLES:
Throwing the Book at Doctors
- This article, published in Sunday Newsday, profiles Bruce G. Clark
and his profession.
Million Dollar Verdicts -
Written by Bruce G. Clark, this article is a discussion on large
verdicts in malpractice lawsuits. Clark details which aspects of
a case lead to large verdicts, and provides illustrations from his
experience.
Specialization, Referral Fees and Professional
Responsibility - An examination of specialization
in law. This article, also written by Bruce G. Clark, describes
the importance of specialization and its mechanics, paying particular
attention to referral fees and their role in ensuring that plaintiffs
are properly represented.
Lawyer Duty -
Bruce G. Clark describes his experience when he is called upon for
jury duty.
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