If you’ve been practicing law for more than a minute, you’ve probably come across, or participated in, fee sharing. Whether receiving a referral fee or partnering on a case that requires outside expertise, fee sharing is a common part of doing business for many law firms. When handled well, this practice not only leads to better client outcomes but can also open new revenue streams and improve efficiency across the board. So how do you make sure your firm is getting it right? Let’s dig in.

What We Mean by Fee Sharing

Fee sharing typically refers to distributing legal fees to a lawyer outside your firm, or to a non-lawyer or entity. Although lawyers within the same firm “share” fees through compensation structures, that’s not fee sharing in the professional conduct sense.

Rather, the definition focuses on whether the recipient is someone other than an in-firm lawyer. The classic example is two lawyers serving as co-counsels in a case. But fee sharing can show up in ways you might not expect:

• You use a referral service to find new clients.
• The firm had a great year so you’re giving bonuses to the support staff.
• You’ve purchased a law practice after the sole owner passed away.
• Your firm offers profit-based retirement benefits.

Depending on the specific circumstances, these examples may be “fee sharing” as contemplated by the Oregon Rules of Professional Conduct (ORPCs). For example, if you pay a referral service based on client fees, or bonuses are tied to profits, you're likely sharing fees. And yes, even retirement plans based on profits fall into this category. As we will see, you need to know when you are sharing fees so that you can verify that you’re doing it properly.

Keeping It Ethical

Like all aspects of your practice, fee sharing must align with your ethical duties. The ORPCs govern when, and with whom, you can share fees. Identifying the applicable rule depends on whether the recipient is a lawyer or not.

• Fee Division Among Lawyers. Fee division between lawyers is governed by ORPC 1.5(d). Compared with other jurisdictions, Oregon is relatively relaxed: you need the client’s informed consent, and the fee can’t be excessive. Unlike some states, Oregon doesn’t require lawyers to share ethical and malpractice responsibility. This means pure referral fees are allowed. The rule also permits fee sharing in retirement benefits and when purchasing a law practice.
• Sharing Fees with Non-Lawyers. Generally, sharing fees with non-lawyers is prohibited under ORPC 5.4. However, the rule provides a few exceptions, including payments to bar-operated not-for-profit referral services and profit-sharing retirement plans for staff.
• Licensed Paralegals.   Oregon Licensed Paralegals (LPs) are subject to similar ethical obligations under the Oregon Rules of Professional Conduct for Licensed Paralegals (ORPC-LPs). Fee sharing between LPs must comply with ORPC-LP 1.5(d), and fee sharing with nonlawyers or non-LPs is permissible in only a few situations as outlined under ORPC-LP 5.4(a). At this time, the OSB does not permit lawyers and LPs to share fees or become partners in a law firm. OSB Licensed Paralegal Program FAQs.

If you are not sure whether your fee-sharing situation implicates your ethical duties, seek guidance. Call the OSB Ethics Helpline (503.431.6475) or a private ethics attorney for help.

Striking the Right Balance

Let’s talk about getting it right for your clients, as well as your practice. Fee sharing can stem from employment decisions or firm growth strategies—think bonus structures tied to firm profits, retirement plans with profit-sharing components, or incentives that reward staff performance. Fee sharing can also come into play when considering business plans such as acquiring a law practice, structuring referral arrangements, or forging co-counsel partnerships to expand representation for clients. In each situation, the key is to align these arrangements with both your ethical obligations and your firm’s goals of supporting client outcomes, retaining talent, and strengthening your practice. While such employment and business decisions often happen behind the scenes, the fee-sharing scenario that most directly affects your clients is the one they see up close: when you introduce co-counsel. Choosing the right partner and structuring that collaboration thoughtfully can make or break the client’s experience. Let’s take a closer look.

• Put the Client First. If a case requires expertise you lack, ask yourself whether your participation benefits the client. Maybe you bring a component of trust due to an established relationship or cultural commonalities with the client. If not, a straight referral may be the better call. Fee sharing shouldn’t be a reason to stay involved if it increases the cost without adding value. The ultimate goal is to serve the client’s best interest, even if that means stepping aside.

• Pick the Right Co-Counsel. If partnering is the right move for your client, do your homework. Research the lawyer’s reputation, disciplinary history, and malpractice background. Check their website, social media, and reviews. Even if it’s someone you know, perhaps a law school friend or office neighbor, don’t assume the personal connection will translate into a productive working relationship. Meet with them. Test the chemistry.
• Get It in Writing. Even with the best intentions, things can go sideways. Draft a clear agreement outlining the scope of work, responsibilities, how fees will be calculated and split, who handles client contact and trust account funds, and how disputes will be resolved. Include a plan in case one lawyer exits the representation early. Spell out expectations around communication, deadlines, and decision-making authority. It’s much easier to prevent confusion and conflict on the front end than to untangle it mid-representation.

Final Thoughts on Fee-Sharing Success

Fee sharing isn’t just about steering clear of ethical pitfalls; it’s about making strategic, client-centered decisions that enhance your practice. Whether you’re associating with co-counsel, rewarding your team, or joining a referral service, the ORPCs provide a clear framework to guide you. The best outcomes happen when your actions align with both professional responsibility and practical business sense. Know the rules. Think ahead. Put it in writing. When done right, fee sharing supports your clients, protects your practice, and sets the stage for long-term success.