Referral Fees for Receiving Lawyers

How a referral from Neo is papered

The Law Society of Ontario’s referral fee rules bind both sides of a referral: the Paralegal Rules of Conduct (rule 5.01) bind Neo as the referring licensee, and the Rules of Professional Conduct (rule 3.6) bind you as the lawyer receiving the referral. By-Law 9 sets the records each of us keeps. We use the Law Society’s standard Referral Agreement and “What Clients Need to Know” word for word, so the referral papers you receive from us are the ones the Law Society publishes.

Neo’s principal is Mo. Farooqui, Licensed Paralegal (Law Society licence P21785). Each Referral Agreement names the licensed paralegal at Neo who makes that referral.

Step by step, for the lawyer receiving the referral

1. 1
   We recommend you, and at least one other lawyer

   We tell the client why we are recommending you for their matter and name at least one other suitable lawyer they could choose instead. When that is not reasonably possible, the reason is written into the Referral Agreement. Any relationship between Neo and you is disclosed to the client.

2. 2
   The client reads “What Clients Need to Know”

   Before anything is signed, the client receives the Law Society’s “Law Society Requirements for Referral Fees — What Clients Need to Know” and a reasonable opportunity to read it. We explain that they do not have to accept the referral and are free to retain a different lawyer.

3. 3
   You decide whether to take the matter

   You run your own conflict check, confirm that the matter is within your competence and capacity, and agree the scope with the client. You can decline the matter at any point before you accept it.

4. 4
   The Referral Agreement is signed by all three

   The Law Society’s standard Referral Agreement is signed by the client, by Neo and by you, and each keeps a fully signed copy. It records the matter, why you were recommended, the other lawyers recommended, any relationship between us, and the referral fee: a fixed amount, a percentage of your fees, or another stated basis, always within the limits below.

5. 5
   You retain the client and set your own fee

   Your retainer, fee and billing are between you and the client. The referral fee comes out of your fees. It is never charged to the client and never increases what the client pays.

6. 6
   The referral fee is paid only after the client pays you

   Nothing is paid or payable to Neo until the client has paid you for the legal services on the referred matter.

7. 7
   You note the fee on your account, and the client acknowledges it

   When the referral fee is paid or payable, your account to the client shows its amount and you ask the client to sign an acknowledgment of it. If the client declines, you confirm to the client in writing that you asked and they declined.

8. 8
   Each of us keeps the records

   You record each referral fee you pay, and Neo records each one it receives: the date, the method of payment, the amount, the other licensee and the client (for a fee you pay, also any cheque number or payment reference). Each of us keeps the signed agreement and the related documents for the period By-Law 9 sets.

When no referral fee is payable

The Law Society’s Referral Fee Checklist allows a referral fee to be paid or accepted only when each of these is true:

• The licensee receiving the referral has the expertise and ability to handle the matter. The referral was not made because the referring licensee had a conflict of interest and, as a result, was not permitted to act in the matter.
• The referral was not made because the referring licensee’s license was suspended when the referral was made and the referring licensee was not permitted to act in the matter.
• The licensee making or receiving the referral fee is not providing legal services through a civil society organization, as that term is defined under the Rules and Paralegal Rules.

In plain terms for Neo: if we refer a client to you because Neo has a conflict of interest and cannot act, no referral fee is paid on that matter.

We recommend a lawyer for their expertise and ability to handle the client’s matter. Agreeing to pay a referral fee is never a condition of receiving a referral from Neo, and receiving referrals is not a partnership or affiliation with Neo.

How much: the Law Society’s limits

In short: up to 15% of the first $50,000 of the lawyer's fees + 5% above (max $25,000). The checklist puts it this way:

• The amount of the referral fee does not exceed 15% of the legal fees paid for the first $50,000 of fees for the matter and 5% of the remaining balance of fees for the matter to a maximum referral fee of $25,000.
• The referral fee is fair and reasonable and does not increase the total amount of the fee payable by the client.
• No referral fee will be paid or payable until the licensee receiving the referral is paid by the referred client for the legal services provided.

This page describes how Neo handles referrals to lawyers. It is general information, not legal advice, and it is not the Law Society’s text: where anything here differs from the current Rules of Professional Conduct, Paralegal Rules of Conduct or By-Law 9, the Law Society’s wording governs. Each licensee is responsible for their own compliance with the Law Society’s rules. Questions about a referral? Email info@neolegalservices.com or call 647-200-3526.

Want to be one of the lawyers we refer to?

Tell us about your practice. We recommend lawyers one matter at a time, on what suits the client, so we cannot say how often a referral will come. Applying does not oblige you to accept any matter.

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