Background
After John Kyles was killed during a police chase, his family retained Steven J. Morton & Associates and attorney Daniel J. Stohr to pursue wrongful-death claims. Their written retainer stated that the two attorneys would represent the estate and split any contingent fee equally.
Morton alleged that he had referred the matter to Stohr and was entitled to half of any attorney fees. The clients later discharged Morton and chose to continue with Stohr. After the underlying case produced a $10 million jury verdict, Morton sued Stohr and others, asserting, among other claims, breach of contract for the alleged referral fee.
The Court’s Holding
The appellate court affirmed dismissal with prejudice. The retainer agreement did not identify Morton as a referring attorney or state that the clients consented in writing to a referral arrangement. It therefore did not meet Illinois Rule of Professional Conduct 1.5(f)’s requirements for an enforceable referral-fee agreement.
Although the agreement provided for equal division of fees, it described both Morton and Stohr as attorneys who would represent the client. It did not establish the written client consent to a referral and fee division required for a referral arrangement. The court also held that further amendment would be futile because the pleaded claim depended on an unenforceable agreement.
Key Takeaways
- A fee-splitting retainer must expressly reflect the client-approved referral arrangement when one lawyer claims a referral fee.
- Calling an attorney a referring lawyer in later litigation cannot supply the written client consent required by Rule 1.5(f).
- The plaintiff forfeited review of the dismissal of its other claims by challenging only the breach-of-contract count on appeal.
Why It Matters
The decision underscores that attorney referral-fee arrangements must be documented with precision. A general joint-representation agreement and an equal fee split do not, without more, establish an enforceable referral agreement under Illinois ethics rules.