Practice Quiz

CLEP Business Law

Category - Legal Envrmt

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Larry Lawyer and Dan Doctor are golfing buddies. Paul Patient was hit by a car and taken to the hospital were Dan Doctor treated him. Paul Patient mentioned that he had to find a lawyer to represent him in a lawsuit against the driver of the car that hit him. Dan Doctor called Larry Lawyer and said, "Hey, I have a great client for you. Give me 10% of your fee and I will send him your way." Larry Lawyer agreed. Is the arrangement between Larry Lawyer and Dan Doctor permissible for Larry Lawyer?
  1. Yes. Lawyers are permitted to pay referral fees.
  2. Yes. Lawyers are permitted to pay referral fees as long as the arrangement is not exclusive.
  3. Yes. Lawyers are permitted to pay referral fees as long as they are reasonable.
  4. No. The arrangement is impermissible fees plitting.
  5. No. The arrangement was not disclosed to Paul Patient.
Explanation
Answer: D. The arrangement between Larry Lawyer and Dan Doctor is not permissible for Larry Lawyer, because the arrangement is impermissible fees plitting. Rule 5.4 of the Model Rules of Professional Conduct prohibits lawyers from sharing fees with non-lawyers. Lawyers may enter into reciprocal referral arrangements with other lawyers.
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