Small Law Firms

Lawyers Shouldn't Use Other Lawyers To Cover Their Butts

Although receiving referrals is an important part of developing a practice, lawyers should be careful that they aren't being handed a pig in a poke.

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Businessman with gift boxLawyers often refer matters to other attorneys either because they do not have experience with a particular legal matter or because the matter arises in a jurisdiction in which the referring lawyer is not licensed. In many circumstances, receiving a referral is an important part of developing a lawyer’s practice and can be beneficial for both the referring attorney and the lawyer receiving the referral. However, sometimes lawyers use referrals to cover their own butts, and lawyers should keep this in mind when they decide which matters to handle.

Shortly after starting my own law firm, I accepted all types of matters while I expanded my practice. I took matters I would never accept now since I had less work, and I was always looking around for additional matters to handle. During this time, a lawyer I knew from another jurisdiction reached out to me about a potential matter. This other lawyer related that the client faced an investigation in a jurisdiction in which I practiced law, and I had experience with this particular type of investigation.

I was happy to accept the work, and I began researching the client’s situation. As it turned out, this out-of-state lawyer had performed substantial work on the investigation on behalf of the client for nearly a year. I have no idea why the out-of-state lawyer thought it appropriate to conduct an investigation under the laws of a state in which he was not licensed to practice, and I was shocked at how much the lawyer had billed for the work. In communications I was copied on, the client was clearly not happy that, after spending so much money on this out-of-state lawyer, separate counsel was needed.

It was clear to me that this other lawyer was bringing me into this matter to cover his butt in case there were improprieties with the out-of-state lawyer handling the matter without local counsel. Moreover, I got the feeling the out-of-state lawyer wanted the sign off that the investigation was solid since he was not well-versed in this state law. I decided to start from scratch on the matter since I did not think it was appropriate to rely on the out-of-state lawyer’s findings when coming to my conclusions.

When I did, I discovered that some of the conclusions of the out-of-state lawyer were not recommendations I, myself, would make. This created tension between me, the out-of-state lawyer, and the client. Eventually, we all got on the same page, and as a result of all our efforts, the client was put on a solid legal footing. However, the client did not believe that my firm should receive full compensation for all of the work we handled since the other lawyer had already performed so much work on the matter. To some extent, I understood why the client would essentially not wish to be double billed, and I eventually discounted much of my work on the matter.

This made me somewhat upset with the referring attorney, and I was hesitant to perform further work referred by that lawyer. Although I had accepted the matter, I did not know the full extent of the prior law firm’s work on the matter at that time. Had I known, I might have made different decisions about whether to accept the work. The right thing for the client, my firm, and likely standards of legal ethics would be for that lawyer to refer the entire matter to me at the onset. Indeed, I have referred numerous matters to out-of-state lawyers in my career without further involving myself significantly in the case.

In any event, not all referrals are created equal, and lawyers should not use referrals to cover their own butts if this will not be advantageous to the other lawyer. Moreover, lawyers should conduct due diligence not only about clients but about referring lawyers when deciding to accept some referrals.

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Rothman Larger HeadshotJordan Rothman is a partner of The Rothman Law Firm, a full-service New York and New Jersey law firm. He is also the founder of Student Debt Diaries, a website discussing how he paid off his student loans. You can reach Jordan through email at jordan@rothmanlawyer.com.

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