The State of Attorney-to-Attorney Referral Fees in New Jersey in 2025

Written By: Edward J. Rebenack

Referral fees play an essential role in our legal system. Sometimes, the attorney a client initially consults or retains is not the one best suited to advocate for that client. Referral fees ensure attorneys can refer clients to the attorneys most qualified to handle their legal matters without incurring a financial loss. For that reason, referral fees promote better legal outcomes for clients, reduce potential legal malpractice claims, foster a stronger sense of community among attorneys, and lead to financially healthier legal practices.

Over the last 18 months, there has been an upheaval in New Jersey regarding referral fees. Although the issue has been resolved for now, the recent unrest offers an opportunity to review how referral fees work in the Garden State.

New Jersey prohibits referral fees—except those paid by certified attorneys

New Jersey Rules of Professional Conduct (RPC) 7.2(c) and 7.3(d) generally prohibit attorneys from paying referral fees. New Jersey Court Rule 1:39-6(d), however, allows certified attorneys to pay referral fees to referring attorneys outside their law firm unless the referred case is a matrimonial law case. According to the rule, a certified attorney may divide fees “without regard to services performed or responsibility assumed by the referring attorney, provided that the total fee charged the client relates only to the matter referred and does not exceed reasonable compensation for the legal services rendered therein.”

This exception to the prohibition on referral fees reflects a policy decision by the New Jersey Supreme Court, state politicians, and the state bar to promote client access and attorney referrals to vetted, experienced attorneys who will improve the quality of trial advocacy in the state’s courtrooms. New Jersey’s attorney certification, with roots dating back almost a half-century to 1976, is supervised by the New Jersey Supreme Court and recognizes lawyers who have demonstrated sufficient levels of experience, education, knowledge, and skill in one of five areas of the law: civil, criminal, matrimonial, workers’ compensation, and municipal court. 

To qualify for certification, an attorney must, among other things, have been a licensed New Jersey attorney for at least five years, be in good standing, devote a significant portion of their practice to the specialty, complete ongoing continuing legal education, have received favorable evaluations from judges and fellow attorneys, and pass a written examination in their field. Only about 2% of active New Jersey attorneys are certified attorneys under this program.

A controversy heats up over out-of-state referrals

Over time, questions arose regarding whether New Jersey’s certified attorneys may pay referral fees to lawyers outside New Jersey who are not licensed to practice in the state. In March 2024, the New Jersey Supreme Court Advisory Committee on Professional Ethics (ACPE) provided a somewhat surprising answer to this question, which sent shockwaves through the state’s legal community.

In Opinion 745, the ACPE said out-of-state attorneys could not receive referral fees from New Jersey certified attorneys. The ACPE explained that “[r]eferral fees are a division of the legal fee, paid for legal services rendered.” It looked to RPC 1.5(e), which states that legal fees can be divided between attorneys who do not practice in the same firm if (1) the division is proportionate to the services each lawyer performs or (2) the lawyers assume joint responsibility for the representation in a written agreement with the client. Thus, the ACPE saw referral fees as payments for legal services. Because “people who are not permitted to practice law in New Jersey may not receive fees for legal services rendered,” the ACPE concluded that “the lawyer to whom the fee is payable must be . . . licensed and eligible to practice law in New Jersey.”

Unsurprisingly, the ACPE’s decision caused quite a stir. Several entities appealed the ACPE’s decision, including the New Jersey State Bar Association; the Bar Associations of Bergen, Essex, Hudson, and Middlesex Counties; the American Board of Trial Advocates (Northern New Jersey Chapter); the New Jersey Association for Justice; the Trial Attorneys of New Jersey; and Blume, Forte, Fried, Zerres & Molinari, P.C. The appellants argued that Rule 1:39-6(d) contains no language limiting referral fees only to New Jersey-licensed attorneys, and that narrowing the rule as Opinion 745 did would undercut the purpose of New Jersey’s certification program and impede established referral practices. 

On February 18, 2025, in In re Opinion No. 745 of the Supreme Court Advisory Committee on Professional Ethics, the New Jersey Supreme Court unanimously vacated ACPE Opinion 745. The court held that Rule 1:39-6(d) does authorize certified New Jersey attorneys to pay referral fees to out-of-state lawyers, even if those attorneys are not licensed in New Jersey. The court emphasized that referral fees under that rule are not payments for legal services rendered, but are instead compensation for making a referral. Thus, they are distinct from the division of fees contemplated by RPC 1.5(e), which governs the sharing of fees based on services performed or responsibility assumed. 

The court reaffirmed the plain language reading of Rule 1:39-6(d): that it allows referral fees “without regard to services performed or responsibility assumed” by the referring attorney. By rejecting the restriction in Opinion 745, the court preserved incentives for referrals from out-of-state attorneys into the New Jersey certified attorney system, supporting high-quality legal services. 

As the court observed, the rules and recommendations that created the certified attorney program in New Jersey were adopted in 1979, and Rule 1:39-6(d) was codified in 1985. For four decades, the program has recognized the experience and skills of an elite group of highly qualified attorneys and optimized access to justice for clients. In the court’s view, permitting certified attorneys to pay referral fees facilitates those priorities, and removing that incentive for out-of-state lawyers would undermine them. By vacating Opinion 745, the court not only reaffirmed the scope of Rule 1:39-6(d), but it also restored confidence in the referral system that has guided individuals to competent, respected New Jersey attorneys for decades.

Referrals ensure clients get the best opportunity to seek justice

With so many New Jersey attorneys having potential out-of-state referral partners within their professional networks, the New Jersey Supreme Court’s decision vacating Opinion 745 ensures that out-of-state attorneys remain incentivized to invest time and energy in referring someone seeking legal counsel in New Jersey to the attorney they believe is most qualified to handle their legal matter, which may be a certified attorney.

In the legal community, some attorneys wince at the idea of referral fees, viewing them as an unnecessary tax that an attorney receiving a referral must pay for an action that another attorney should have taken as a courtesy to a fellow member of the bar. Indeed, the payment of referral fees can sometimes become messy, as evidenced by the occasional disputes and litigation surrounding them.

Of course, a referral fee should never be the sole motivation for an attorney to refer a client to another attorney. Instead, it should be viewed as a reward for advising a client in a manner that supports a well-functioning legal system and increases the likelihood that the client prevails in their legal matter. 

As the New Jersey Supreme Court pointed out in In re Opinion No. 745, Rule 1:39-6(d) was designed “both to enhance access to experienced attorneys who had been vetted with care and also to increase referrals to those lawyers.” Permitting certified attorneys to pay referral fees to referring attorneys inside of the Garden State and out, without question, according to the New Jersey Supreme Court, “facilitates those aims.”

Edward J. Rebenack, a co-founding partner at RAM Law in Somerville, concentrates his practice on representing individuals injured in truck and bus crashes. He has been certified by the Supreme Court of New Jersey as a Civil Trial Attorney since 2005, is a member of the Board of Regents for the Academy of Truck Accident Attorneys, and obtained Board Certification in Truck Accident Law by the National Board of Trial Advocacy. He can be reached at erebenack@ram.law.