Florida Firm Loses Again in Dispute Over Referral Fee Agreement

In a decision from the U.S. District Court for the District of Maryland, Florida law firm Michael E. Criden P.A. lost for the second time in its long-running effort to recover a share of $10 million in fees that another firm, Joseph Saveri Law Firm Inc., received in an antitrust litigation in California. Judge Richard D. Bennett’s decision held, among other things, that a fee sharing agreement with a lawyer’s former firm is not enforceable against his new firm.

Criden, who had established a fee-sharing arrangement with Saveri’s former firm, argued that Saveri should be bound by the terms of the agreement with that firm. Criden also claimed that Saveri agreed to abide by the fee-sharing arrangement when he left his former firm and founded his new and current firm.

However, the court held that Criden’s claims failed under basic principles of California corporate law and the legal ethics rules of the state of Maryland; specifically, Maryland Rule of Professional Conduct 19-301.5(e), which governs attorney fee-sharing arrangements.

Among other things, the court held that the 12.5 percent referral fee Criden sought to enforce violated the proportionality mandate in rule 19-1.5(e). This rule requires fee-sharing to be proportionate to each lawyer’s services, unless each assumes joint responsibility for the representation. What’s more, the client did not consent in writing to the purported fee-sharing arrangement as required by the rule. The opinion also noted that the rules of California and Florida would likewise prohibit Criden from enforcing the purported referral fee agreement.

Read the full opinion here.