In re Opinion No. 745 of the Supreme Court Advisory Committee on Professional Ethics, __ N.J. ___ (2025).  Rule 1:39-6(d) creates an exception to the general principle, embodied in Rules of Professional Conduct (“RPC”) 7.2(c) and 7.3(d), that New Jersey attorneys may not pay referral fees, with only limited exceptions.  The exception in Rule 1:39-6(d) permits only attorneys who have satisfied the requirements of becoming certified by the Supreme Court in a particular area of practice to pay referral fees.  

 As Chief Justice Rabner observed in his unanimous opinion for the Supreme Court, this appeal arose from a decision, Opinion No. 745, by the Advisory Committee on Professional Ethics (“ACPE”) that responded to “inquiries about out-of-state lawyers” who sought “payment of referral fees from New Jersey certified attorneys.” Among other things, the ACPE concluded that “certified lawyers generally may not pay referral fees to out-of-state lawyers” who are not licensed to practice law in New Jersey.

 Numerous petitions for Supreme Court review of Opinion No. 745 were filed.  The Court granted review and reversed Opinion No. 745 as regarded the ability of certified lawyers to pay referral fees.

 Chief Justice Rabner began with the language of Rule 1:39-6(d), which states that (apart from an exception for matrimonial matters) “[a] certified attorney who receives a case referral from a lawyer who is not a partner in or associate of that attorney’s law firm or law office may divide a fee for legal services with the referring attorney or the referring attorney’s estate. The fee division may be made 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.”  The Chief Justice then stated that “[t]he plain language of the Rule makes clear that (1) certified attorneys can pay referral fees (2) without regard to any legal work performed, and (3) the referral fee can be paid out of, but cannot exceed, the certified attorney’s reasonable fee for legal services rendered.”   

 The ACPE’s analysis, in contrast, proceeded from Rule of Professional Conduct 1.5(e), which states, in part, that “[e]xcept as otherwise provided by the Court Rules, a division of fee between lawyers who are not in the same firm may be made only if:  (1) the division is in proportion to the services performed by each lawyer, or, by written agreement with the client, each lawyer assumes joint responsibility for the representation . . . .”  That Rule, however, “does not relate to the attorney certification program,” the Court said.

 “Opinion 745 rests on the principle that ‘[r]eferral fees are a division of the legal fee, paid for legal services rendered.’”  But Chief Justice Rabner noted, citing a treatise, that “[r]eferral fees are payments made for a recommendation to hire an attorney,” not payments for legal services.   

That key distinction, as well as the plain language of Rule 1:39-6(d), led the Court to reverse Opinion No. 745.  “Although both [Rule 1:39-6(d) and RPC 1.5(e)] relate to a similar subject -- the division of fees -- Rule 1:39-6(d) governs referral fees, while RPC 1.5(e) addresses the division of fees for legal services.”  There was no conflict in the two Rules; they were “part of a unitary system.” 

 Among other things, Chief Justice Rabner observed that “Rule 1:39-6(d) does not state that referring attorneys must be eligible to practice law in New Jersey.”  That was in contrast to other Court Rules that do “distinguish between New Jersey and out-of-state attorneys.”  Thus, “the Rule does not require referring attorneys to be eligible to practice law in New Jersey.

Though the Rule’s plain language sufficed to decide the case, the Chief Justice looked to extrinsic evidence as well.  He provided a detailed discussion of the origins and intent of the certified attorney program, concluding that “in view of the ‘demanding’ vetting process required for certification, a lawyer’s status as a certified attorney is “an important symbol of professional competence in a specialized field.’  In re Hyderally, 208 N.J. 453, 460 (2011).  And with that recognition comes the ability to pay referral fees.” 

 In summary, “Rule 1:39-6(d) was designed, in part, both to enhance access to experienced attorneys who had been vetted with care and also to increase referrals to those lawyers.  [Citation].  Allowing certified attorneys to pay referral fees facilitates those aims.  Removing that incentive for out-of-state lawyers would have the reverse effect.”

 The Court’s opinion concluded with two other things.  First, though the parties had cited cases in other jurisdictions, the Court did not discuss those cases at length “[b]ecause we rely on the language of New Jersey’s court rules and rules of professional conduct.” 

 Second, the Court took note of the fact that “Opinion 745 also briefly addressed -- and proscribed -- the payment of “referral fees to New Jersey lawyers who cannot accept a case, or must withdraw from a case, due to a conflict of interest,” relying on prior opinions of the ACPE and the Appellate Division.  But the Court said it was not reviewing those prior opinions.  “To be clear, by vacating Opinion 745, the guidance contained in those opinions remains unchanged.”