New Jersey has issued an opinion allowing lawyers to pay referral fees to lawyers licensed in other states. This is an important development as the practice of law gradually comes to recognize that much law practice is across state lines. Denying a referral fee based on a formality (where the lawyer is licensed) is bad policy.

The Advisory Committee on Professional Ethics (ACPE or Committee) released Opinion 745 on March 7, 2024. The opinion 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.

We find that the Court Rules allow certified attorneys to pay referral fees to lawyers in other states even if they are not licensed here. We also note that the payment of referral fees does not raise concerns about the unauthorized practice of law. We therefore vacate Opinion 745.

In Re Opinion No. 745 of the Supreme Court Advisory Committee on Professional Ethics. (A-44/45/46/47/48/49/50/51/52-23) (089278). I’m not sure whether Illinois allows such payments of referral fees to out-of-state lawyers.