Referral Fee Policy for Ontario Lawyers

Flatly is committed to operating in a manner that respects the Law Society of Ontario's requirements governing referral fees.

Under the Rules of Professional Conduct, a referral fee includes any financial or other reward for the referral of a matter, whether direct or indirect, and whether past, current, or future. If a lawyer receives something of value because a matter was referred, the arrangement may be treated as a referral fee arrangement.

Flatly's policy is that any referral fee arrangement involving Ontario lawyers must be structured with compliance in mind from the beginning. That means referral arrangements should not be casual, undocumented, hidden from the client, or treated as an afterthought. The required disclosures, client acknowledgements, referral agreement, fee limits, and billing requirements must be addressed properly.

One of the most important principles is that a referral fee must not increase the total amount of the fee payable by the client. In plain English, the client should not pay more simply because a referral fee exists.

If a lawyer receives a matter through Flatly and a referral fee is payable, the referral fee must come from the fees otherwise payable to the lawyer or legal service provider receiving the referral. It should not be added on top of the client's bill as an extra charge.

This principle protects the client and helps ensure that referral arrangements do not distort the cost of legal services.

The Law Society's rules require a referral agreement to be entered into at the time of the referral or as soon as practicable after the referral.

A proper referral agreement is not just a private agreement between lawyers. It must involve the client and must include the required information and confirmations. Among other things, the referral agreement must confirm that the client has been advised and understands that they have no obligation to accept the referral. The client must also be told that they are free to retain a lawyer or paralegal other than the one receiving the referral.

The agreement must also include full and fair disclosure of the referral fee, including when it is payable and how it is calculated.

Flatly's platform is intended to make this process easier by giving approved lawyers access to features and functionality designed to reduce the administrative burden of referral fee compliance.

A compliant referral process is not just about collecting signatures. The client must receive information about the Law Society's requirements for the payment and receipt of referral fees. The client must also be given a reasonable opportunity to review and consider that information.

Flatly's approach is based on transparency. Clients should understand that a referral fee may be involved, that they are not required to accept the referral, and that they remain free to choose another lawyer. The client should also understand why the specific lawyer is being recommended.

The lawyer who receives the referral must note the referral fee on the account sent to the client at the time the referral fee is paid or payable.

The lawyer must also obtain the client's acknowledgement of the referral fee. If the client declines to acknowledge it, the lawyer must confirm in writing to the client that the client was asked to acknowledge the referral fee but declined to do so.

Referral fees should not be invisible to the client. They should be disclosed clearly, documented properly, and handled in a way that reflects the lawyer's professional obligations.