Alabama Lawyer Referral Fee Rules: Attorney Referral Fees, Fee Splitting & Ethics Requirements (2027)

Can attorneys in Alabama legally receive referral fees for sending cases to other lawyers? Yes. Alabama permits certain fee-sharing arrangements between attorneys who practice in separate law firms, including arrangements in which a lawyer receives compensation for referring or forwarding a case without personally handling the legal work. However, these arrangements must comply with specific requirements established by the Alabama Rules of Professional Conduct.

The primary rule governing attorney-to-attorney referral fees is Rule 1.5(e) of the Alabama Rules of Professional Conduct. It establishes three permissible ways for lawyers from different firms to divide fees: proportional compensation based on services performed, a written client agreement under which both lawyers assume joint responsibility for the representation, or a referral-fee arrangement involving a contingency-fee case.

Alabama also regulates how attorneys compensate individuals and businesses that recommend their services. Rules 5.4 and 7.2 are particularly important when evaluating payments to nonlawyers, commercial marketing companies, lead-generation businesses and online lawyer referral platforms. An arrangement that is permissible between two attorneys is not automatically permissible when one party receiving compensation is a nonlawyer.

Additionally, Alabama's lawyer advertising and solicitation rules underwent significant changes effective January 1, 2026. These amendments affect how attorneys advertise their services, communicate with prospective clients and maintain records of their marketing activities.

Understanding these distinctions is important for Alabama attorneys who regularly receive referrals, refer cases outside their practice areas, collaborate with other law firms or participate in professional networking organizations.

This guide examines Alabama's attorney referral fee requirements, the circumstances under which lawyers can divide legal fees, client disclosure obligations, restrictions on payments to nonlawyers and the practical considerations involved in establishing compliant referral relationships.

It also explains how Alabama's official State Bar Lawyer Referral Service operates and how its program differs from private attorney networking and referral platforms.

The central takeaway: Alabama permits attorney-to-attorney referral fees, but the arrangement must satisfy Rule 1.5(e), including its requirements concerning the structure of the fee division, client disclosure and the prohibition against clearly excessive fees.

The following sections explain exactly how these rules work and what Alabama attorneys should consider before entering into a referral arrangement.

Alabama's rules distinguish between fee divisions involving two attorneys and payments made to nonlawyers or commercial referral organizations. Understanding which rules apply to a particular arrangement is essential before agreeing to pay or receive compensation for a referral.

The following table summarizes the principal requirements.

The Most Important Alabama Referral Fee Rules

Several provisions of the Alabama Rules of Professional Conduct should be considered together when evaluating a referral arrangement.

Rule 1.5(e) — Division of Fees: Establishes the conditions under which attorneys from separate law firms can divide legal fees, including referral fees.

Rule 1.5(a) — Clearly Excessive Fees: Prohibits attorneys from agreeing to, charging or collecting clearly excessive fees. This requirement applies even when the underlying referral arrangement is otherwise permissible.

Rule 5.4 — Professional Independence of a Lawyer: Generally prohibits sharing legal fees with nonlawyers and restricts arrangements that allow nonlawyers to influence a lawyer's professional judgment.

Rule 7.2 — Communications Concerning a Lawyer's Services: Regulates advertising and payments for recommending lawyers, including certain exceptions for qualified referral services and reciprocal referral arrangements.

Rule 7.3 — Direct Contact with Prospective Clients: Establishes restrictions on solicitation and certain communications directed toward prospective clients.

The rules address different aspects of attorney referrals. Compliance with Rule 1.5(e), for example, does not automatically establish that a payment to a commercial referral company complies with Rules 5.4 and 7.2.

For attorneys who refer cases regularly, the safest approach is to identify the parties involved, determine the actual nature of the payment, establish the appropriate fee-division structure and document the necessary client disclosures before proceeding.

Alabama Rule 1.5(e) is the primary provision governing fee divisions between attorneys who practice in different law firms.

The rule expressly recognizes divisions of fees involving referring lawyers and receiving lawyers. It allows these arrangements when specific conditions are satisfied, providing a framework for attorneys to exchange cases and collaborate on legal matters without necessarily requiring every participating lawyer to perform the same amount of legal work.

This is particularly relevant to personal injury practices, where one attorney may identify and refer a case to another attorney who has the resources, experience or litigation capabilities to handle the matter.

The rule establishes three alternative ways to structure a permitted division of fees.

What Does Alabama Rule 1.5(e) Say?

Rule 1.5(e) provides that a division of fees between lawyers who are not in the same firm, including a division of fees with a referring lawyer, may occur only if:

1. The division is proportional to the services performed by each lawyer; or the lawyers enter into a written agreement with the client under which each lawyer assumes joint responsibility for the representation; or, in a contingency-fee case, the division is between the referring or forwarding lawyer and the receiving lawyer.
2. The client is advised of and does not object to the participation of all lawyers involved.
3. The client is advised that a division of fees will occur.
4. The total fee is not clearly excessive.

These requirements are important because they establish that Alabama does not prohibit referral fees simply because the referring attorney does not personally perform the legal work.

The rule specifically identifies contingency-fee referrals as a permissible category of fee division.

Primary legal authority: Alabama Rules of Professional Conduct, Rule 1.5 — Fees.

The Three Ways Alabama Attorneys Can Divide Legal Fees

1. Proportional Division Based on Services Performed

The first permitted arrangement allows attorneys from separate law firms to divide fees in proportion to the legal services each performs.

Under this structure, each attorney receives a portion of the overall fee that reflects the work contributed to the representation.

For example, consider a commercial litigation matter involving two Alabama law firms.

The first attorney handles the initial client consultation, reviews the underlying contracts, conducts preliminary legal research and prepares the initial pleadings. A second attorney takes responsibility for discovery, depositions, motions and trial preparation.

The attorneys may agree to divide the fee based on their respective contributions to the matter.

The allocation should reflect the services actually performed rather than simply an arbitrary percentage assigned to each attorney.

This arrangement can be useful when lawyers have complementary skills or when a matter requires resources that neither firm would ordinarily provide independently.

It is important to understand that proportional division is one of the permitted alternatives under Rule 1.5(e). An attorney does not need to rely on this alternative if another applicable provision of the rule supports the arrangement.

Understanding the language of Rule 1.5(e) is important, but attorneys also need to understand how the rule applies to actual referral situations.

The following examples illustrate common circumstances involving attorney referrals in Alabama. All financial figures and arrangements are hypothetical and are provided to explain the operation of the rule, not to suggest a required or customary referral-fee percentage.

Example 1: Personal Injury Referral Between Two Alabama Attorneys

Consider a personal injury attorney practicing in Birmingham who receives an inquiry from an individual injured in an automobile accident in Jefferson County.

The attorney reviews the basic circumstances and determines that the potential case would be better handled by a Mobile personal injury firm with experience handling complex litigation.

The Birmingham attorney refers the potential client to the Mobile firm.

The receiving firm evaluates the matter, enters into a written contingency-fee agreement with the client and accepts responsibility for handling the case.

The lawyers agree that the referring attorney will receive 20% of the attorney fee collected if the case is successful.

Assume the receiving firm ultimately obtains a settlement and collects a $30,000 attorney fee.

Under their hypothetical agreement:

This arrangement may qualify under Rule 1.5(e)(1)(c), which specifically permits a division between referring or forwarding lawyers and receiving lawyers in contingency-fee cases.

The Birmingham attorney does not necessarily have to perform legal work on the case or assume joint responsibility under the written joint-responsibility alternative.

However, the client must be advised of the participation of the lawyers involved and the division of fees, and must not object. The total fee must not be clearly excessive.

The example also illustrates why attorneys should distinguish between the fee earned by the receiving firm and the fee ultimately divided between the participating attorneys.

Example 2: Referral Without Performing Legal Work

Suppose an attorney in Montgomery receives a potential medical malpractice case but does not handle medical malpractice litigation.

The attorney recognizes that the matter may require specialized legal knowledge, expert witnesses and substantial litigation resources.

Rather than declining the potential client, the attorney refers the individual to an Alabama law firm that regularly handles medical malpractice matters.

The receiving firm investigates the claim, accepts representation under a contingency-fee agreement and handles the case through resolution.

The referring attorney does not participate in discovery, depositions, motions, negotiations or trial preparation.

The two attorneys have nevertheless agreed to divide the resulting attorney fee.

Can the referring attorney receive compensation despite performing no legal work?

Yes, potentially.

The contingency-fee provision of Rule 1.5(e)(1)(c) specifically accommodates fee divisions between referring or forwarding lawyers and receiving lawyers.

The referring attorney's lack of billable time does not automatically prevent the fee division.

The Alabama State Bar's Formal Ethics Opinion 2023-01 provides particularly useful support for this conclusion. It addresses a referral in which the referring attorney performed no work on the litigation and explains why a fee division could nevertheless be ethically permissible.

The arrangement must still satisfy the other requirements of Rule 1.5(e), including client disclosure and the prohibition against clearly excessive fees.

Example 3: Two Attorneys Sharing Work on a Legal Matter

Not every attorney referral involves a forwarding lawyer who steps away from the matter.

Consider a business dispute involving a company based in Huntsville.

The company's original attorney has experience in business transactions and contract disputes but wants to bring in another attorney with specialized litigation experience.

The two attorneys agree to collaborate.

The first attorney handles client communications, reviews the underlying business agreements and assists with the initial legal strategy.

The second attorney takes the lead on litigation, including pleadings, discovery, depositions and trial preparation.

The lawyers decide to divide the legal fee based on the services each performs.

This arrangement may qualify under Rule 1.5(e)(1)(a), which permits proportional fee division based on services performed.

Alternatively, the lawyers could use the joint-responsibility alternative by entering into a written agreement with the client under which both attorneys assume joint responsibility for the representation.

The distinction matters because the proportional-services approach and joint-responsibility approach are separate permitted structures.

The attorneys should establish which alternative they are relying on, explain the fee division to the client and ensure that the total fee is not clearly excessive.

Example 4: Referral in a Noncontingency Legal Matter

Consider an attorney in Tuscaloosa who receives an inquiry concerning a commercial real estate dispute.

The attorney refers the matter to another firm that specializes in commercial real estate litigation.

The receiving firm agrees to handle the case on an hourly basis rather than under a contingency-fee arrangement.

The referring attorney and receiving attorney negotiate a payment equal to 20% of the legal fees collected.

Can the referring attorney automatically receive that payment simply because the receiving attorney agreed to it?

No.

The special forwarding-lawyer provision in Rule 1.5(e)(1)(c) specifically addresses contingency-fee cases. It should not be treated as a general authorization for referral fees in hourly or other noncontingency matters.

For the arrangement to qualify under Rule 1.5(e), the attorneys would need to satisfy another applicable alternative.

They could structure the division proportionally based on the legal services performed by each attorney under Rule 1.5(e)(1)(a).

Alternatively, they could enter into a written agreement with the client under which each attorney assumes joint responsibility for the representation under Rule 1.5(e)(1)(b).

If neither alternative is satisfied, the attorneys should not assume that their private referral agreement makes the payment permissible.

This example is particularly important for lawyers who refer business disputes, commercial transactions, estate matters and other legal work that is not handled on a contingency-fee basis.

Practical Lessons from These Examples

The examples demonstrate why identifying the type of legal matter and the structure of the fee arrangement is essential.

In a qualifying contingency-fee case, Alabama expressly permits a referring attorney to receive a portion of the fee without necessarily performing legal work or assuming joint responsibility.

In other matters, attorneys must evaluate the proportional-services and written joint-responsibility alternatives.

Regardless of which arrangement is used, the client must be informed about the participating lawyers and the fee division, must not object to the lawyers' participation, and must not be charged a clearly excessive total fee.

For Alabama attorneys who regularly exchange referrals, understanding these distinctions can help establish professional relationships while protecting both the client and the participating lawyers.

One of the most important requirements of Alabama's attorney referral fee rules is protecting the client's right to understand who will represent them and how the participating attorneys will be compensated.

Even when two attorneys have established a referral arrangement that satisfies Rule 1.5(e), they must still meet the rule's separate client-disclosure requirements.

Under Alabama Rule 1.5(e)(2), the client must be advised of, and must not object to, the participation of all lawyers involved. Rule 1.5(e)(3) separately requires the client to be advised that a division of fees will occur.

These requirements apply regardless of which of the three permitted fee-division structures the attorneys use.

What Must the Client Know About an Attorney Referral Fee?

Before proceeding with a referral-fee arrangement, attorneys should make sure the client understands the essential details of the representation.

This includes:

1. The identity of the participating attorneys

The client should know which lawyers and law firms are involved in the representation.

For example, if an attorney in Birmingham refers a personal injury matter to a firm in Mobile, the client should understand that both attorneys are participating in the referral arrangement, even if only the Mobile firm will handle the litigation.

2. The nature of each attorney's involvement

The client should understand which attorney will handle the legal work and whether the referring attorney will continue participating in the matter.

This is particularly important when the referring attorney will not be involved in the day-to-day representation.

3. That the legal fee will be divided

The client must be advised that the participating lawyers will divide the attorney fee.

The disclosure should explain the arrangement clearly enough that the client understands the financial relationship between the attorneys.

4. The client's opportunity to object

Rule 1.5(e)(2) requires that the client not object to the participation of the lawyers involved.

The rule should not be misrepresented as requiring a separate written signature approving every referral-fee arrangement. Its language is that the client must be advised and must not object.

However, other provisions may impose additional requirements, particularly when the attorneys are using a reciprocal referral agreement under Rules 7.2 and 7.3.

Does Alabama Require Written Client Consent?

Not universally.

The written-documentation requirement depends on the type of arrangement being used.

Under Rule 1.5(e)(1)(b), when attorneys rely on the joint-responsibility alternative, they must enter into a written agreement with the client establishing that each lawyer assumes joint responsibility for the representation.

That requirement is specific to the joint-responsibility alternative.

For proportional fee divisions and qualifying contingency-fee forwarding arrangements, Rule 1.5(e) does not impose the same written joint-responsibility agreement requirement.

However, attorneys should distinguish this from reciprocal referral agreements.

Under the amended Rule 7.3, a lawyer may refer clients to another lawyer or a nonlawyer professional pursuant to a reciprocal referral agreement if:

• The agreement is not exclusive.
• The client is fully informed in writing about the existence and nature of the agreement before the referral.
• The client agrees to the referral.
• The referral does not otherwise violate the Alabama Rules of Professional Conduct.

This is a separate requirement and should not be confused with the client-disclosure language governing fee divisions under Rule 1.5(e).

How Should Alabama Attorneys Document Referral Fee Arrangements?

Even when a particular arrangement does not expressly require a written interlawyer agreement, documenting the relationship is a sensible professional practice.

A written referral agreement between the participating attorneys can help prevent misunderstandings and establish how compensation will be calculated.

A comprehensive agreement should address:

• The names and contact information of the referring and receiving attorneys.
• The client or matter being referred.
• The applicable fee-division provision under Rule 1.5(e).
• The agreed referral-fee percentage or calculation method.
• Whether the referring attorney will participate in the representation.
• Whether the attorneys will assume joint responsibility.
• How the client will be informed of the arrangement.
• How expenses and court-awarded attorney fees will be handled.
• When the referral fee becomes payable.
• How disputes between the attorneys will be resolved.

The agreement should accurately reflect the actual relationship between the attorneys. For example, a referral agreement should not describe the referring attorney as assuming joint responsibility if that is not what the attorneys have actually agreed to undertake.

What Should Be Included in a Client Fee Agreement?

The client's engagement agreement should accurately describe the fee arrangement and identify the attorneys involved.

Where appropriate, it should explain:

• The identity of each participating law firm.
• Which firm will have primary responsibility for handling the matter.
• Whether another attorney will participate in the representation.
• That the attorney fee will be divided.
• How the division affects the overall fee charged to the client.
• Any other information necessary to explain the financial arrangement.

For contingency-fee cases, attorneys should also ensure that their fee agreements satisfy the applicable requirements of Rule 1.5(c).

Practical takeaway: Alabama attorneys should treat client disclosure as a substantive professional obligation, not merely an administrative formality. A properly documented referral arrangement helps establish transparency, protect the client and reduce the likelihood of disputes between participating attorneys.

One of the most important distinctions in Alabama's attorney referral fee rules is the difference between paying another lawyer for a referral and paying a nonlawyer for recommending legal services.

Alabama Rule 1.5(e) governs certain fee divisions between lawyers. Rule 5.4 addresses the professional independence of lawyers and generally prohibits lawyers and law firms from sharing legal fees with nonlawyers.

This distinction is particularly important for attorneys considering relationships with marketing companies, lead-generation businesses, online referral platforms, consultants and other organizations that help connect prospective clients with lawyers.

Alabama's General Prohibition on Sharing Legal Fees with Nonlawyers

Rule 5.4(a) states that a lawyer or law firm shall not share legal fees with a nonlawyer, except in specifically identified circumstances.

The rule provides limited exceptions involving:

1. Certain payments to a lawyer's estate or designated persons following the lawyer's death.
2. Payments to the estate of a deceased lawyer for legal services performed before death when another lawyer completes the unfinished legal business.
3. Compensation and retirement plans for nonlawyer employees, even when those plans are based partly on profit sharing.

These exceptions are specific. They should not be interpreted as general authorization for outside businesses or referral companies to receive a percentage of an attorney's legal fees.

Rule 5.4(b) also generally prohibits a lawyer from forming a partnership with a nonlawyer when any of the partnership's activities consist of practicing law.

Rule 5.4(c) adds another important protection: a lawyer cannot permit someone who recommends, employs or pays the lawyer to direct or regulate the lawyer's professional judgment.

The purpose of these restrictions is to preserve the attorney's independence and ensure that professional legal decisions remain under the lawyer's control.

Primary authority: Alabama Rule 5.4 — Professional Independence of a Lawyer.

Referral Fees vs. Advertising Expenses: Understanding the Difference

Not every payment made by a lawyer to a nonlawyer is prohibited.

Law firms routinely pay outside businesses for legitimate services, including advertising, website development, marketing, technology, administrative support and other business expenses.

The important question is whether the payment is compensation for recommending or referring legal services, an impermissible division of legal fees, or a payment for a legitimate service permitted by the applicable professional-conduct rules.

Consider the following examples.

Example 1: Paying for a website advertisement

A Birmingham law firm pays a marketing agency $1,500 per month to display advertisements promoting the firm's personal injury practice.

The agency charges a fixed fee for advertising services, regardless of how many clients contact the firm.

This is fundamentally different from paying the agency a percentage of the attorney fees collected from clients it introduces.

The payment must still comply with applicable advertising and referral rules, but a legitimate advertising expense is not automatically prohibited fee sharing.

Example 2: Paying for website development

A Montgomery law firm hires a technology company to build and maintain its website.

The company charges a fixed monthly fee for hosting, technical support and maintenance.

The arrangement is a payment for business services rather than an agreement to divide legal fees.

Example 3: Paying a percentage of collected attorney fees

A law firm agrees to pay a nonlawyer marketing company 15% of the attorney fees collected from every client introduced by the company.

This arrangement raises significant concerns under Rules 5.4 and 7.2.

The fact that the payment is described as a marketing commission does not automatically make it permissible. Attorneys must examine the actual economic arrangement and whether the payment constitutes prohibited fee sharing or compensation for recommending legal services.

Example 4: Paying for individual leads

A law firm pays a company a fixed amount for each prospective client inquiry delivered to the firm.

This arrangement requires closer examination.

The payment structure alone does not establish compliance. Attorneys must determine whether the company is simply providing advertising or lead-generation services, whether it is recommending the lawyer, whether the payment is compensation for a referral, and whether the arrangement complies with Rules 5.4 and 7.2.

A business cannot necessarily avoid the professional-conduct rules simply by describing a referral commission as a lead fee.

Can a Nonlawyer Own or Operate a Lawyer Referral Business in Alabama?

Alabama Rule 5.4 does not establish a blanket prohibition on nonlawyers operating every type of business that connects consumers with lawyers.

However, the activities performed by the business matter.

There is an important distinction between a company that provides advertising or directory services and an organization that actively recommends particular lawyers to prospective clients.

For example, a website that publishes attorney profiles, practice-area information and contact details may operate differently from a business that evaluates a consumer's legal problem and selects a specific attorney for that person.

Attorneys must consider the full structure of the relationship, including:

• Whether the business makes recommendations.
• Whether it receives compensation for those recommendations.
• Whether the payment is based on legal fees collected.
• Whether it exercises influence over the attorney-client relationship.
• Whether it controls or interferes with the lawyer's professional judgment.
• Whether the arrangement satisfies the applicable exceptions under Rule 7.2(h).

A nonlawyer-operated business is not automatically exempt from these considerations simply because it does not employ attorneys.

Can a Marketing Company Receive a Percentage of Legal Fees?

Attorneys should exercise particular caution when a marketing or referral company proposes receiving a percentage of settlements, judgments or attorney fees.

There are two separate concerns.

First, Rule 5.4(a) generally prohibits sharing legal fees with nonlawyers.

Second, Rule 7.2(h) prohibits compensating someone for recommending a lawyer's services, except under specified exceptions.

These restrictions overlap but address different professional-conduct concerns.

A payment arrangement should therefore be reviewed under both provisions rather than relying on one rule alone.

For example, a company that receives 20% of the attorney fee whenever its introductions result in a signed client may raise substantially different issues from a company charging a fixed monthly amount for maintaining an online advertising campaign.

The distinction is not simply whether a payment is fixed or percentage-based. The actual services, the nature of the recommendation, the relationship between the parties and the applicable exceptions all matter.

Practical takeaway: Alabama attorneys should distinguish legitimate marketing and technology expenses from payments that compensate a nonlawyer for recommending legal services or sharing in legal fees. When a proposed arrangement involves commissions, per-client payments or a percentage of recoveries, attorneys should obtain an ethics review before entering into the agreement.

Alabama Rule 7.2 is particularly important for lawyers who use advertising agencies, lead-generation companies, online directories and professional referral networks.

The rule addresses how lawyers communicate with prospective clients and restricts payments made to people or organizations for recommending legal services.

The Supreme Court of Alabama amended Rule 7.2 effective January 1, 2026. The amended provision provides a modern framework for lawyer advertising while maintaining restrictions designed to protect the public and preserve professional independence.

Alabama's Prohibition on Paying for Recommendations

Rule 7.2(h) establishes the general rule:

A lawyer must not compensate, give or promise anything of value to a person for recommending the lawyer's services, except where a specified exception applies.

This provision is important because it goes beyond the question of whether an attorney is sharing legal fees.

An attorney may have an arrangement that does not technically involve sharing legal fees but still raises concerns because the payment is compensation for recommending the attorney.

The rule identifies several permitted categories of payments and referral arrangements.

Understanding those exceptions is essential when evaluating commercial marketing relationships and professional networking arrangements.

Permitted Payments Under Rule 7.2(h)

The amended rule identifies five relevant exceptions.

1. Paying the usual costs of permitted communications

Attorneys may pay the usual costs of communications permitted under Rule 7.2.

This includes legitimate advertising and promotional expenses, provided the communications comply with the applicable rules.

There is an additional restriction when one lawyer pays the communication costs of another lawyer who is not in the same firm.

That payment is permitted only when:

• The lawyers have agreed to work together and jointly represent clients in the matter referenced in the communication.
• Their agreement does not violate any other professional-conduct requirements.

This is important for co-branded advertisements and collaborative marketing campaigns involving separate law firms.

2. Paying qualified not-for-profit referral services

A lawyer may pay the usual charges of a not-for-profit lawyer referral service or a not-for-profit legal-aid agency or entity recognized as legitimate by the Office of General Counsel of the Alabama State Bar.

The wording matters.

The exception does not automatically apply to every organization that describes itself as a lawyer referral service.

A commercial referral business cannot simply claim the benefit of this exception without satisfying its specific requirements.

3. Sponsorships and charitable contributions

A lawyer may pay a sponsorship fee or contribute to a charitable or other not-for-profit organization and receive recognition or a listing as a sponsor or contributor.

This allows legitimate sponsorship arrangements while maintaining the distinction between recognition for supporting an organization and paying someone to recommend the lawyer's services.

The payment must genuinely fit the sponsorship or contribution exception.

4. Reciprocal referral agreements

Rule 7.2(h)(4) permits a lawyer to refer clients to another lawyer or a nonlawyer professional under an agreement that provides for that person to refer clients or customers back to the lawyer.

There are two express conditions:

• The agreement must not be exclusive.
• The client must be informed of the existence and nature of the agreement.

The agreement must also not otherwise violate the Alabama Rules of Professional Conduct.

This provision is particularly relevant to professional relationships between lawyers and other professionals who may encounter people needing legal services.

For example, a lawyer may establish a nonexclusive professional referral relationship with an accountant, financial professional or another lawyer, provided the applicable disclosure and ethical requirements are satisfied.

Rule 7.3 imposes additional requirements when a lawyer makes a referral pursuant to such an agreement, including advance written disclosure and client agreement, as discussed below.

5. Nominal appreciation gifts

The rule also permits nominal gifts given as expressions of appreciation when they are neither intended nor reasonably expected to constitute compensation for recommending the lawyer's services.

This exception should not be used to disguise referral commissions.

A gift that is effectively payment for generating clients may fall outside the exception.

The Not-for-Profit Lawyer Referral Service Exception

The not-for-profit referral-service exception deserves particular attention because Alabama expressly recognizes a category of organizations that can receive payment for their referral services.

Under Rule 7.2(h)(2), lawyers may pay the usual charges of a not-for-profit lawyer referral service or a qualifying not-for-profit legal-aid organization recognized as legitimate by the Alabama State Bar's Office of General Counsel.

There are two important points.

First, the organization must satisfy the applicable not-for-profit requirement.

Second, it must meet the recognition requirement identified in the rule.

An attorney should not assume that a business is eligible simply because it provides attorney introductions or advertises itself as a referral service.

Commercial directories, lead-generation companies and subscription-based professional networking businesses should be evaluated according to their actual structure and activities.

Reciprocal Referral Agreements Between Lawyers

Reciprocal referral agreements are another important component of Alabama's referral framework.

These arrangements allow professionals to establish relationships under which they may refer clients or customers to one another.

For example, a family law attorney in Birmingham may have a reciprocal referral relationship with an estate planning attorney in Huntsville.

When a family law client needs estate planning assistance, the first attorney may refer the client to the second. The estate planning attorney may, in turn, refer appropriate family law matters back.

Under Rule 7.2(h)(4), the arrangement must be nonexclusive and the client must be informed of its existence and nature.

However, Rule 7.3 provides a more specific requirement when a lawyer makes a referral pursuant to a reciprocal referral agreement.

The client must be fully informed in writing about the agreement before the referral and must agree to the referral.

This means attorneys should not rely solely on a general disclosure buried in a website's terms and conditions when a particular client is being referred under a reciprocal arrangement.

The disclosure should be provided in a manner that allows the client to understand the relationship before deciding whether to proceed.

Can Alabama Attorneys Pay for Online Attorney Directories?

This is an increasingly important question as more law firms use online directories and professional networking platforms to expand their referral relationships.

The answer depends on what the platform actually does and how it receives compensation.

An online attorney directory may provide basic advertising services by publishing attorney profiles, contact information, practice areas and other professional information.

A different platform may actively recommend a particular lawyer to a consumer based on information about the consumer's legal problem.

These activities can raise different questions under Rule 7.2.

Attorneys should consider the following distinctions:

A monthly subscription is not automatically permissible merely because it is a fixed amount. Similarly, a business cannot automatically establish that it is a permissible advertising provider by describing itself as an online directory.

The attorney should evaluate the substance of the relationship and ensure that the arrangement does not involve prohibited payments for recommendations or impermissible fee sharing.

Advertising Disclosures and Record-Keeping Requirements

Alabama's amended Rule 7.2 also establishes specific obligations concerning lawyer advertising.

One particularly important requirement is the six-year record-retention rule.

Under Rule 7.2(a), a lawyer must retain a copy of each covered communication for six years after dissemination.

The lawyer must also maintain:

• The date the communication was disseminated.
• The name of the recipient.
• The recipient's address, telephone number or email address.
• The means by which the communication was sent.

These records must be provided promptly to the Alabama State Bar's Office of General Counsel upon request.

The rule also requires certain office-location and licensing disclosures in covered communications.

If a lawyer identified in an advertisement is not licensed in Alabama, that fact must be clearly and prominently disclosed.

If the lawyer or firm does not maintain a bona fide office in Alabama, that fact must also be disclosed.

Where an attorney or law firm is identified, the advertisement must include the location of an applicable bona fide office.

Importantly, when a lawyer uses a lawyer referral service, the service must disclose the location of the referred lawyer's bona fide office when making the referral.

This requirement is particularly relevant to online referral platforms because it connects the attorney's advertising obligations with the referral process itself.

On May 13, 2025, the Supreme Court of Alabama issued an order significantly amending the Alabama Rules of Professional Conduct governing lawyer advertising and solicitation.

The amendments to Rules 7.1, 7.2 and 7.3, along with related changes to Rule 8.5 and the Alabama Rules of Disciplinary Procedure, became effective January 1, 2026.

These changes are important for Alabama attorneys who advertise online, purchase leads, participate in referral networks or use third parties to communicate with prospective clients.

They are also particularly relevant to firms that advertise in practice areas such as personal injury, wrongful death, criminal defense and family law.

The Alabama State Bar published its own explanation of the changes in June 2025, identifying several practical requirements lawyers should address before updating their marketing campaigns.

Official source: Alabama State Bar — Your Guide to Alabama's Updated Lawyer Advertising Rules.

When Did Alabama's New Advertising Rules Take Effect?

The Supreme Court of Alabama issued its amendment order on May 13, 2025.

The amendments became effective January 1, 2026.

The changes were intended to modernize Alabama's advertising rules and address the way lawyers communicate with prospective clients through websites, social media, digital advertising and other forms of electronic communication.

They also clarified that lawyers who are not licensed in Alabama may still be subject to Alabama's professional-conduct rules when providing or offering legal services in the state.

Attorneys should therefore review their current marketing materials against the amended rules rather than relying on older advertising guidance.

Rule 7.1 — Misleading Lawyer Communications

Rule 7.1 prohibits lawyers from making or causing false or misleading communications about themselves, their legal services or the services of another lawyer.

A communication may be misleading if it:

• Contains a material misrepresentation of fact or law.
• Omits information necessary to prevent the overall communication from being materially misleading.
• Creates unjustified expectations about the results a lawyer can achieve.
• Compares the quality of a lawyer's services with those of other lawyers, except as permitted under Rule 7.4.
• Improperly communicates a lawyer's certification by a certifying organization.

One important aspect of the amended rule is that a statement can be truthful in isolation but misleading when important information is omitted.

For example, an attorney may advertise extensive experience handling personal injury cases.

However, if the attorney does not actually intend to handle those cases and instead expects to refer most of them to another law firm, the advertisement may create a misleading impression.

The amended Rule 7.2(j) addresses this particular situation by requiring a clear and prominent disclosure when a lawyer or firm advertises legal services that it normally or probably will refer to another lawyer.

The required language is:

"MOST CASES OF THIS TYPE ARE NOT HANDLED BY THIS LAWYER/FIRM BUT ARE REFERRED TO OTHER ATTORNEYS"

Alternatively, where applicable:

"MOST CASES OF THIS TYPE ARE REFERRED TO OTHER ATTORNEYS FOR PRINCIPAL RESPONSIBILITY."

This is especially important for firms that advertise broadly but routinely forward certain types of cases to attorneys in other practices or law firms.

Rule 7.2 — Updated Advertising Requirements

The amended Rule 7.2 contains several requirements that Alabama attorneys should understand.

Six-year advertising record retention

Lawyers must retain copies of covered communications and the required distribution records for six years after dissemination.

This replaces the former requirement to submit advertisements to the Alabama State Bar within three days of dissemination.

The required records include the communication itself, the date it was disseminated, recipient information and the method of delivery.

Bona fide office disclosures

Covered communications must identify an applicable bona fide office location.

The rule defines the required office information according to whether the communication identifies an individual lawyer or a law firm.

A lawyer or firm that does not maintain a bona fide office in Alabama must clearly and prominently disclose that fact when required by the rule.

The concept of a bona fide office is important. It is not simply a mailing address or a virtual office used for advertising purposes. The rule's commentary describes it as a physical location, including a personal residence, maintained by the lawyer or firm where legal services are reasonably expected to be furnished in a substantial way on a regular and continuing basis.

Referral-service office disclosures

Rule 7.2(b)(5) specifically addresses lawyers who use referral services.

When a lawyer uses a lawyer referral service, the service must disclose the location of the referred lawyer's bona fide office when making the referral.

This is an important requirement for organizations that connect prospective clients with participating attorneys.

Clear and prominent disclosures

Required disclaimers and disclosures must be easy to see, read, hear and understand.

Small-print disclosures hidden at the bottom of an advertisement are not an adequate substitute for the required presentation.

For video and audio communications, required statements must be presented at an appropriate volume, cadence and duration.

Where disclosures are required, the amended rule also addresses communications delivered in multiple languages.

Specific fee advertisements

When an attorney advertises specific fees, the attorney must perform the services at the advertised rates.

The rule provides that failing to honor the advertised fees is prima facie evidence of misleading and deceptive practices.

The attorney must remain bound by the advertised fees for at least 90 days after the date of the last communication referencing those fees.

Contingency-fee advertising

If a lawyer advertises that fees are contingent on success or that no fee will be charged without a recovery, the communication must clearly and prominently disclose whether the client remains responsible for court costs or other litigation expenses if there is no recovery.

This is particularly relevant to personal injury attorneys advertising no-fee-unless-you-win arrangements.

Testimonials and case results

The amended rule permits testimonials subject to specific requirements.

The person providing a testimonial must have actual personal legal experience with the attorney and a legitimate basis for the statements made.

If the person was compensated or given something of value for providing the testimonial, that fact must be disclosed clearly and prominently.

Advertisements discussing specific case results must also identify the type of matter, use objectively verifiable information and avoid creating unjustified expectations that other clients will achieve similar results.

Paid online content and search advertising

The amended rule also addresses paid communications that may appear to be independent legal information.

Where a lawyer pays a platform or broadcaster to provide content that solicits legal employment but would not reasonably be understood as an advertisement, specific disclosures concerning the payment and advertising nature of the communication are required.

The rule also prohibits manipulating or purchasing internet search results in a way that causes prospective clients to mistakenly contact a lawyer who was not the lawyer or firm they intended to find.

These requirements are particularly relevant to modern search-engine marketing, sponsored legal content and online attorney directories.

Rule 7.3 — Restrictions on Direct Solicitation

Rule 7.3 governs how lawyers may approach prospective clients and solicit professional employment.

The amended rule is particularly important for attorneys and marketing companies that identify potential clients through accident reports, public records, court filings and other targeted sources.

Restrictions on live, in-person and real-time solicitation

Under Rule 7.3(a), lawyers generally cannot solicit professional employment through live, in-person or real-time communication directed at someone who has not requested contact when the lawyer knows or reasonably should know that the person needs legal services and the lawyer's motive is financial gain.

The rule includes communications regardless of form.

It specifically allows communications to another lawyer, a former or current client, or a family member.

The amended commentary also explains that lawyer-initiated text communications can constitute prohibited real-time solicitation.

This is important for law firms that use automated messaging systems, outsourced intake teams or marketing agencies to contact potential clients.

A lawyer cannot avoid responsibility simply by having a third party initiate a prohibited communication.

The 21-day personal injury and wrongful death restriction

Rule 7.3(b)(1) prohibits solicitation concerning personal injury or wrongful death arising from an accident, event or disaster involving the prospective client or a relative or representative unless the incident occurred more than 21 days before the communication.

In practical terms, attorneys cannot immediately send targeted solicitations to accident victims simply because their names appear in publicly available records.

The 21-day restriction applies to the relevant incident, not simply to the date the attorney learns about it.

Civil proceedings

The rule also restricts solicitation involving pending civil proceedings in state or federal court and administrative proceedings unless service of process has been obtained on the prospective client and filed with the appropriate court.

This is another important consideration for attorneys who use public court records to identify prospective clients.

Criminal proceedings

For communications concerning a pending criminal proceeding, the rule establishes a separate requirement.

The prospective client must have been served with a warrant or information more than seven days before the communication.

This is distinct from the 21-day personal injury and wrongful death restriction.

Represented individuals

A lawyer cannot solicit a person concerning a specific matter when the lawyer knows or reasonably should know that the person is already represented by an attorney in that matter.

The rule also prohibits solicitation when the individual has indicated that they do not want to receive communications.

Responsibility for third-party marketing companies

Rule 7.3(c) is particularly significant for lawyers using outside marketing and referral businesses.

A lawyer must not permit intermediaries, representatives, employees, staff or agents to solicit clients on the lawyer's behalf in violation of the rule.

The lawyer is responsible for improper solicitation carried out by those individuals or organizations.

This means an attorney cannot simply delegate prospecting to a marketing agency and assume that the agency's conduct is outside the attorney's professional obligations.

Law firms should review how their outside vendors obtain contact information, communicate with potential clients and transfer inquiries to the firm.

Additional Requirements for Targeted Solicitation

Alabama Rule 7.3 contains additional requirements for certain targeted communications that are otherwise permitted.

These include:

• Retaining samples of covered communications and applicable envelopes, together with recipient information, for two years.
• Avoiding misleading delivery methods such as restricted or registered mail.
• Not implying that the communication is approved by the Alabama State Bar.
• Avoiding documents that resemble official court filings or government notices.
• Including a prominent statement telling recipients who already have a lawyer for the matter to disregard the communication.
• Disclosing how information about a specific occurrence was obtained.
• Avoiding disclosure of the recipient's legal problem on the outside of mailed communications.
• Clearly identifying when the matter will probably be referred to another law firm.
• Prominently marking covered communications as "ADVERTISEMENT."

The applicable requirements depend on the type of communication and whether it is covered by Rule 7.3.

For example, targeted direct-mail and email communications have specific labeling and disclosure requirements. A lawyer should not assume that a message is exempt merely because it is delivered electronically rather than through traditional mail.

What the 2026 Changes Mean for Alabama Attorney Referral Platforms

The 2026 amendments are especially relevant to online platforms that connect prospective clients with lawyers.

A platform's business model, advertising practices and referral process should be evaluated against the amended rules.

For example, a platform that publishes attorney profiles should ensure that its descriptions do not create misleading impressions about the lawyers' qualifications, office locations or practice areas.

A platform that facilitates direct referrals should ensure that participating attorneys receive the information required to comply with the applicable client-disclosure rules.

Where the platform operates as a lawyer referral service, the bona fide office disclosure requirement under Rule 7.2(b)(5) must also be considered.

Lawyers should also review:

• Whether the platform makes recommendations or merely publishes advertising.
• Whether attorney profiles accurately describe the services actually provided.
• Whether the platform clearly identifies participating lawyers and their locations.
• Whether its referral process supports the required client disclosures.
• Whether communications sent on behalf of participating attorneys comply with solicitation restrictions.
• Whether third-party marketing practices expose participating attorneys to professional-conduct concerns.

The amended rules make one point particularly clear: attorneys remain responsible for their professional obligations even when they use outside businesses to advertise, market or generate prospective clients.

Practical takeaway: Alabama attorneys should review their advertising, lead-generation arrangements, online profiles and referral procedures against the rules that became effective January 1, 2026. Older advertising practices may no longer satisfy the current requirements, particularly where they involve targeted solicitation, office-location disclosures, referral-service communications or third-party marketing activities.

Alabama has an established statewide lawyer referral program administered by the Alabama State Bar. The program, known as the Lawyer Referral Service (LRS), helps members of the public find attorneys who handle their particular legal problems.

Unlike private attorney networking arrangements, the Alabama State Bar's program operates under its own membership requirements, referral procedures and fee structure.

Understanding how the official program works is useful for attorneys considering whether to participate in the State Bar service, establish private referral relationships or join additional professional networking organizations.

How the Official Alabama Lawyer Referral Service Works

The Alabama State Bar Lawyer Referral Service is designed primarily to help individuals who have legal problems and can afford reasonable legal fees but need assistance finding an appropriate attorney.

The program connects prospective clients with participating private-practice attorneys based on their legal needs.

The process generally works as follows:

1. A prospective client contacts the Alabama State Bar Lawyer Referral Service by telephone or through its online referral form.
2. The individual provides information about the legal problem and the type of attorney needed.
3. The service identifies an appropriate participating attorney based on the relevant practice area and geographic coverage.
4. The client is referred to the attorney for an initial consultation.
5. The attorney evaluates the matter and determines whether to accept the representation.
6. If additional legal work is required, the attorney and client negotiate the fee arrangement directly.

The Alabama State Bar states that referrals are made on a rotating basis among participating attorneys.

The program is intended to provide consumers with a way to locate legal representation while helping participating attorneys receive additional potential clients.

Official resource: Alabama State Bar Lawyer Referral Service.

Alabama State Bar Referral Fees: Understanding the 5% Structure

One of the most frequently misunderstood aspects of Alabama's referral system is the 5% remittance associated with the State Bar's official Lawyer Referral Service.

Attorneys who participate in the program agree to remit 5% of qualifying fees generated by referred cases, subject to a specific minimum and maximum calculation.

The program's published terms establish the following structure:

• No referral-fee remittance is required when the attorney fee is below $1,000.
• The attorney remits 5% of qualifying fees between $1,000 and $5,000.
• The maximum remittance is $250.
• No additional remittance is required on the portion of an attorney fee exceeding $5,000.

The State Bar's application also specifies that the calculation is based on collected fees after deduction of expenses and disbursements.

The following examples illustrate the program's published calculation:

The State Bar explains that referral-fee remittances are used to support advertising and improve and expand the referral program.

Important: This 5% structure is a condition of participation in the Alabama State Bar's Lawyer Referral Service. It is not a statewide statutory referral-fee percentage, nor does it establish a maximum percentage that private attorneys may negotiate under Rule 1.5(e).

Attorneys should not confuse the State Bar's administrative program requirements with the professional-conduct rules governing private attorney-to-attorney fee divisions.

Alabama State Bar Lawyer Referral Service Membership Requirements

Attorneys interested in participating must satisfy the program's eligibility requirements.

According to the State Bar's published membership information and application, the principal requirements include:

The annual membership year runs from October 1 through September 30.

Attorneys joining on or after April 1 pay a reduced $50 membership fee for the remainder of that fiscal year, according to the published program terms.

The State Bar also requires proof of the specified professional liability insurance coverage before an attorney receives referrals.

These requirements are specific to participation in the State Bar program. They should not be mistaken for a universal set of eligibility requirements imposed on every private attorney referral network.

Initial Consultation Fee Requirements

Participating attorneys agree to charge no more than $50 for an initial 30-minute consultation with a referred client.

The attorney may waive this consultation fee but cannot charge more than the program's stated maximum.

If the client requires legal services beyond the initial consultation and the attorney agrees to accept the matter, the attorney and client negotiate the fee arrangement directly.

The State Bar strongly encourages participating attorneys to obtain a signed written fee agreement before performing additional legal work.

The consultation fee is an administrative requirement of the State Bar's referral program, not a statewide limit on what Alabama attorneys may charge for initial consultations outside that program.

Geographic and Practice-Area Coverage Across Alabama

An important feature of the Alabama State Bar's Lawyer Referral Service is the ability of participating attorneys to designate the counties in which they are willing to accept cases.

This provides flexibility for attorneys who serve multiple communities or maintain practices outside the state's largest metropolitan areas.

Alabama has 67 counties, and an attorney's willingness to accept cases may extend beyond the city where the firm's principal office is located.

For example:

• A Birmingham personal injury attorney may accept cases throughout Jefferson, Shelby and surrounding counties.
• A Montgomery family law attorney may serve clients in Montgomery, Autauga, Elmore and nearby counties.
• A Mobile criminal defense attorney may accept cases in Mobile and Baldwin counties.
• A Huntsville estate planning attorney may serve Madison and Limestone counties.
• A Tuscaloosa litigation attorney may accept matters throughout West Alabama.
• A Dothan attorney may serve clients in Houston, Geneva and Henry counties.
• An Auburn attorney may accept matters in Lee and surrounding counties.

These are illustrative examples of potential service areas, not representations of the State Bar's actual current attorney assignments.

For attorneys, the ability to identify geographic coverage is particularly useful when a prospective client needs representation outside the lawyer's usual service area.

A referral network can help connect that individual with an attorney who is both qualified for the matter and willing to serve the relevant community.

Practical takeaway: The Alabama State Bar's Lawyer Referral Service provides an established referral channel with defined membership requirements, geographic designations and a capped 5% remittance structure. Attorneys should evaluate these program-specific requirements separately from the rules governing private referral arrangements.

Online attorney referral networks have created additional opportunities for lawyers to connect with colleagues, exchange cases and develop professional relationships beyond their immediate geographic markets.

For Alabama attorneys, these platforms can be particularly useful when a potential client needs a lawyer with a different practice-area focus, specialized experience or geographic coverage.

However, the growing use of online referral platforms also raises important questions about compliance with the Alabama Rules of Professional Conduct.

The most important consideration is that the legal treatment of an online platform depends on what the platform actually does, how it operates and how participating attorneys are compensated.

Are Online Lawyer Referral Networks Legal in Alabama?

Alabama does not categorically prohibit lawyers from using online platforms to develop professional relationships or identify attorneys to whom they can refer cases.

However, participation in an online network does not exempt lawyers from their professional-conduct obligations.

Attorneys must consider Rules 1.5(e), 5.4, 7.2 and 7.3 when evaluating a platform's business model and their own participation.

For example, a platform that provides a directory of attorneys and allows lawyers to communicate directly may present different ethical considerations from a business that actively recommends a particular lawyer to a prospective client in exchange for compensation.

Similarly, a platform that facilitates attorney-to-attorney referrals must be distinguished from a company that sells recommendations to consumers.

The relevant questions include:

• Does the platform operate as an advertising directory?
• Does it actively recommend attorneys to prospective clients?
• Does it facilitate professional referrals between lawyers?
• Does it charge a fixed membership or advertising fee?
• Does it receive compensation based on legal fees, settlements or recoveries?
• Does it have reciprocal referral arrangements?
• Does its business model interfere with an attorney's professional independence?

The answers help determine which professional-conduct provisions are relevant.

Attorney Directories vs. Lawyer Referral Services

Not every website that lists lawyers is necessarily operating as a lawyer referral service.

There are several different types of online platforms, and attorneys should understand the distinctions.

1. Online attorney directories

An online attorney directory generally provides information about lawyers, including:

• Attorney names and contact information.
• Law firm details.
• Practice areas.
• Geographic locations.
• Professional biographies.
• Educational backgrounds and experience.

A directory may charge attorneys a fixed fee for maintaining a profile or purchasing advertising.

The ethical analysis depends on the directory's actual activities and whether the communications comply with Alabama's advertising rules.

2. Online advertising platforms

An advertising platform sells exposure to attorneys or law firms through sponsored listings, search results, banner advertisements or other promotional placements.

A lawyer purchasing advertising must ensure that the arrangement complies with Rules 5.4 and 7.2 and that the advertising itself is accurate and not misleading.

3. Lead-generation companies

Lead-generation businesses collect inquiries from individuals seeking legal services and may provide those inquiries to participating law firms.

Their activities require careful examination.

An attorney should determine whether the business merely provides advertising opportunities or whether it actively recommends lawyers and receives compensation for those recommendations.

4. Lawyer referral services

A lawyer referral service generally connects members of the public with participating attorneys based on their legal needs.

Alabama Rule 7.2(h)(2) specifically addresses payments to qualifying not-for-profit referral services and legal-aid organizations recognized as legitimate by the Alabama State Bar's Office of General Counsel.

A commercial platform cannot automatically claim this exception simply because it connects consumers with attorneys.

5. Professional attorney networking platforms

Professional networking platforms allow attorneys to establish relationships with other lawyers, identify colleagues in different practice areas and exchange potential referrals.

These platforms may operate differently from consumer-facing lawyer referral services.

Nevertheless, attorneys must evaluate any compensation, recommendation or reciprocal referral arrangements under the applicable rules.

Can Alabama Attorneys Pay a Monthly Subscription to Join a Referral Network?

This is an important question for lawyers evaluating modern online professional networking services.

A monthly subscription is structurally different from an agreement to pay a percentage of settlements or collected attorney fees.

For example, an attorney might pay a fixed monthly membership fee to access:

• An attorney directory.
• Professional networking tools.
• Direct messaging.
• Practice-area listings.
• Geographic search capabilities.
• Educational resources.
• Opportunities to connect with other attorneys.

A fixed subscription does not automatically constitute a division of legal fees under Rule 5.4.

However, it is equally important to understand that a fixed payment is not automatically permissible merely because it is called a subscription.

If the platform uses the subscription to provide recommendations to prospective clients, the arrangement may also require analysis under Rule 7.2(h).

The attorney should evaluate the actual service being purchased, whether the platform recommends lawyers, and whether any applicable exception covers the arrangement.

A subscription should not be used as a disguised payment for prohibited recommendations.

Can Attorneys Use LawyerReferral.Network in Alabama?

LawyerReferral.Network is a professional networking platform designed to help attorneys connect with other lawyers and exchange potential case referrals.

Its membership structure distinguishes between attorneys who want to send referrals and attorneys who also want to receive them.

The platform's membership model provides:

Free membership

Free members can participate in the network and refer potential cases to other attorneys but cannot receive referrals through the platform.

Premium membership

Premium members can both send and receive referrals, including referrals from free members.

The premium membership is priced at $49.99 per month.

Unlike a traditional percentage-based referral-fee arrangement, the platform's membership model does not take a percentage of settlements, judgments, attorney fees or client recoveries.

This is an important business-model distinction, but it should not be confused with an official determination of ethical compliance.

Alabama attorneys considering participation should independently evaluate how the platform operates and whether their use of its services complies with Rules 5.4, 7.2 and 7.3.

In particular:

• Attorneys remain responsible for determining whether an individual referral-fee arrangement satisfies Rule 1.5(e).
• Lawyers must provide required client disclosures.
• Any reciprocal referral arrangement must satisfy applicable nonexclusivity and disclosure requirements.
• Attorneys must ensure that advertising and communications comply with Alabama's current rules.
• The platform's subscription structure should not be treated as authorization to make prohibited payments for recommendations.

LawyerReferral.Network should not be represented as an Alabama State Bar-approved lawyer referral service or as an organization that has received a formal ethics approval from Alabama regulators. No such approval is being claimed here.

The platform is intended to facilitate professional connections between attorneys, while each participating lawyer remains responsible for complying with the rules governing the actual referral and representation.

What Should Alabama Attorneys Look for When Choosing an Online Referral Network?

Before joining an online attorney referral platform, lawyers should evaluate more than its membership price.

Consider the following:

Transparency: Does the platform clearly explain how it connects attorneys and how its business model works?

Payment structure: Does it charge a fixed subscription, advertising fee or commission based on legal fees?

Referral process: Does the platform simply allow attorneys to connect, or does it independently recommend specific lawyers to consumers?

Professional independence: Does the arrangement allow attorneys to exercise independent professional judgment when deciding whether to accept or refer a matter?

Geographic coverage: Can lawyers connect with attorneys in other Alabama counties and outside Alabama when appropriate?

Practice-area coverage: Does the network make it possible to identify attorneys who handle specific types of cases?

Client protection: Does the referral process allow attorneys to provide required disclosures and address conflicts of interest?

Advertising compliance: Do the platform's public communications and attorney profiles comply with Alabama Rules 7.1 and 7.2?

A well-designed professional network can help attorneys develop relationships and identify qualified colleagues without requiring every lawyer to handle every type of legal matter.

However, the platform's business model and each attorney's actual referral activities must remain consistent with applicable professional-conduct requirements.

Practical takeaway: Online referral networks can provide useful professional connections, but Alabama attorneys should distinguish between advertising, consumer recommendations, reciprocal referral arrangements and attorney-to-attorney fee divisions. The fact that a platform charges a subscription rather than a commission is relevant to the analysis, but does not eliminate the need to review the applicable rules.

Before entering into a referral arrangement, Alabama attorneys should review the following checklist to help identify potential professional-conduct issues.

The checklist is designed for both referring and receiving attorneys.

Before Making or Accepting a Referral

• Identify whether the referral involves another attorney, a nonlawyer, a commercial business or a referral service.
• Determine whether the arrangement involves a division of legal fees or a separate payment for advertising or other services.
• Review Alabama Rule 1.5(e) when dividing fees with an attorney from another firm.
• Identify which permitted fee-division structure applies: proportional services, written joint responsibility or a contingency-fee referral.
• Confirm that the client is advised of the participating attorneys.
• Advise the client that a division of fees will occur.
• Confirm that the client does not object to the participating lawyers.
• Obtain the written client agreement required when relying on the joint-responsibility alternative.
• Ensure the total fee is not clearly excessive.

When Using a Marketing Company or Online Referral Platform

• Review Rule 5.4 before sharing legal fees with any nonlawyer.
• Review Rule 7.2(h) before paying an organization for recommending legal services.
• Distinguish legitimate advertising costs from payments for recommendations.
• Verify that any claimed not-for-profit referral-service exception actually applies.
• Ensure reciprocal referral agreements are nonexclusive.
• Provide the disclosures required by Rules 7.2 and 7.3.
• Confirm that the arrangement does not interfere with independent professional judgment.
• Review any third-party marketing or solicitation activities conducted on the firm's behalf.

Advertising and Solicitation Compliance

• Ensure attorney profiles and marketing communications are truthful and not misleading.
• Include applicable bona fide office and licensing disclosures.
• Ensure referral services disclose the referred lawyer's bona fide office location.
• Review the 21-day personal injury and wrongful death solicitation restriction.
• Review the applicable restrictions involving pending civil and criminal proceedings.
• Ensure third-party marketers comply with solicitation requirements.
• Retain covered Rule 7.2 advertising communications and required records for six years.
• Retain applicable Rule 7.3 targeted solicitation records for two years.

Documentation and Ongoing Review

• Maintain written referral agreements where appropriate.
• Ensure the client engagement agreement accurately describes the fee arrangement.
• Keep records of client disclosures and applicable agreements.
• Document how referral fees are calculated and when they become payable.
• Periodically review reciprocal referral arrangements.
• Seek guidance from the Alabama State Bar's Office of General Counsel when the ethical treatment of a proposed arrangement is uncertain.

The checklist is a practical compliance aid, not a substitute for reviewing the actual rules and the facts of an individual arrangement.

The following questions address common issues Alabama attorneys encounter when referring cases, receiving referrals, dividing legal fees and participating in online referral networks.

1. Are lawyer referral fees legal in Alabama?

Yes. Alabama permits certain referral-fee arrangements between attorneys from different law firms under Rule 1.5(e) of the Alabama Rules of Professional Conduct. The fee division must satisfy one of the rule's permitted structures, the client must be advised of the participating attorneys and fee division, and the total fee cannot be clearly excessive.

2. Can an Alabama attorney receive a referral fee without working on the case?

Yes, in a qualifying contingency-fee matter. Rule 1.5(e)(1)(c) expressly permits fee divisions between referring or forwarding attorneys and receiving attorneys. The referring lawyer does not necessarily have to perform legal work or assume joint responsibility for the representation. The other requirements of Rule 1.5(e) still apply.

3. What is Alabama Rule 1.5(e)?

Rule 1.5(e) governs fee divisions between lawyers who are not in the same firm. It permits divisions based on proportional services, a written client agreement establishing joint responsibility, or a referral or forwarding arrangement in a contingency-fee case. It also requires client disclosure and prohibits clearly excessive total fees.

4. Does Alabama have a maximum attorney referral fee percentage?

No universal maximum referral-fee percentage is established by Rule 1.5(e). Attorneys may negotiate appropriate fee divisions when the applicable requirements are satisfied. However, the total fee cannot be clearly excessive under Rule 1.5(a). The Alabama State Bar's 5% referral remittance is specific to its own Lawyer Referral Service.

5. Does Alabama require a written referral fee agreement?

Rule 1.5(e) specifically requires a written agreement with the client when attorneys rely on the joint-responsibility alternative. It does not impose that same written joint-responsibility requirement on every proportional-services or contingency-fee referral. Nevertheless, a separate written agreement between the lawyers is a sound practice.

6. Must a client consent to an attorney referral fee?

Under Rule 1.5(e), the client must be advised of the participation of all lawyers involved and must not object. The client must also be advised that a fee division will occur. Separate written client agreement requirements apply when relying on joint responsibility and when making referrals under certain reciprocal referral agreements.

7. Can two Alabama attorneys from different firms split legal fees?

Yes. Rule 1.5(e) expressly permits fee divisions between attorneys who are not in the same firm, provided the arrangement satisfies one of the three permitted alternatives and the client-disclosure and reasonable-fee requirements.

8. Can a lawyer pay a nonlawyer for referring clients?

Generally, payments for recommending a lawyer's services are restricted under Rule 7.2(h), while Rule 5.4 generally prohibits sharing legal fees with nonlawyers. Specific exceptions exist, including certain advertising expenses, qualified not-for-profit referral services and nonexclusive reciprocal referral arrangements. The actual structure of the payment must be evaluated.

9. Can Alabama attorneys pay for online lawyer referral services?

Potentially, depending on the service and payment arrangement. Alabama expressly permits usual charges for qualifying not-for-profit referral services recognized by the Alabama State Bar's Office of General Counsel. Other commercial platforms must be evaluated under Rules 5.4 and 7.2. Not every online directory or lead-generation business qualifies for the not-for-profit exception.

10. Are monthly lawyer referral network subscriptions permitted?

A fixed subscription is different from a percentage-based division of legal fees, but its permissibility cannot be determined by the payment label alone. Attorneys should examine what the platform actually provides, whether it recommends lawyers to consumers and whether the arrangement complies with Rules 5.4 and 7.2.

11. What is the Alabama State Bar's 5% referral fee?

It is the remittance participating attorneys agree to pay the Alabama State Bar Lawyer Referral Service on qualifying fees generated through its program. The remittance is 5% of fees between $1,000 and $5,000, with a maximum payment of $250. No remittance is required on fees below $1,000 or on the portion exceeding $5,000.

12. What is the maximum referral fee payable to the Alabama State Bar's referral service?

The maximum remittance under the published program structure is $250 per qualifying referred matter. This is a program-specific payment cap, not a statewide limit on private attorney-to-attorney referral fees.

13. What are Alabama's 2026 lawyer advertising requirements?

Amendments to Rules 7.1, 7.2 and 7.3 became effective January 1, 2026. They address misleading communications, office-location disclosures, licensing disclosures, referral-service disclosures, advertising record retention, testimonials, paid communications and restrictions on direct solicitation. Attorneys should review the amended official rules before updating marketing campaigns.

14. How long must Alabama attorneys retain advertising records?

Under Rule 7.2(a), covered communications and specified records concerning their dissemination must be retained for six years. Rule 7.3 separately establishes a two-year retention requirement for specified targeted solicitation communications and related records. The applicable requirement depends on the type of communication.

15. Can Alabama attorneys enter into reciprocal referral agreements?

Yes. Rule 7.2(h)(4) permits nonexclusive reciprocal referral arrangements, provided clients are informed of the agreement's existence and nature. Rule 7.3 also requires full written disclosure before the referral and the client's agreement to the referral when a lawyer makes a referral under such an arrangement.

16. Does an attorney have to be licensed in Alabama to accept an Alabama case?

Generally, a lawyer must be authorized to practice in Alabama to handle Alabama legal matters, subject to applicable exceptions such as admission pro hac vice for qualifying proceedings. Alabama Rule 7.2 also requires covered communications to disclose when an identified lawyer is not licensed in Alabama. A referral to an out-of-state lawyer does not itself authorize that lawyer to practice Alabama law.

17. What happens if an attorney violates Alabama's referral fee rules?

A violation can result in professional-conduct scrutiny and disciplinary proceedings. The consequences depend on the specific conduct, applicable rules and circumstances. Potential issues include prohibited fee sharing, improper referral payments, failure to disclose fee divisions, misleading advertising and improper solicitation. Attorneys should obtain ethics guidance before entering into arrangements that raise questions under the Alabama Rules of Professional Conduct.

Alabama permits attorneys to develop referral relationships and divide legal fees under specific circumstances established by the Alabama Rules of Professional Conduct.

Rule 1.5(e) provides three permitted structures for fee divisions between attorneys from different firms, including contingency-fee referrals in which the referring lawyer does not necessarily perform legal work.

However, attorneys must also consider client-disclosure obligations, the prohibition against clearly excessive fees, restrictions on payments to nonlawyers under Rule 5.4 and the advertising and referral-payment requirements of Rule 7.2.

The amendments effective January 1, 2026, make it particularly important for Alabama lawyers to review their advertising, solicitation practices and relationships with third-party marketing and referral organizations.

For attorneys looking to expand their professional networks, connect with lawyers in other practice areas and develop additional referral relationships, LawyerReferral.Network offers a platform designed to facilitate those connections.

The key is to build referral relationships that are transparent, professionally appropriate and consistent with Alabama's ethical requirements.

By understanding the rules before making or accepting a referral, Alabama attorneys can develop valuable professional relationships while protecting their clients and maintaining the integrity of the legal profession.