Referral fees without the client's knowledge ethical?

There are specific rules about referral fees. Fees can be divided in proportion to the work involved. If there is a division of fees for any other reason (as for the referral of the case) the client needs to be informed in writing in advance and agree to the arrangement. I could cite to the specific rule in a minute if I were in my office. The disciplinary commitee has no jurisdiction over the Indian lawyer but they might discipline the NY lawyer. This specific rule rarely results in disciplinary action because clients don't complain about referral fees very often. This situation seems deceitful, so there may be some consequences. Contact the grievance committee or disciplinary committee in the district where the NY attorney has his office. The information is available on the NY Courts website. If you can't find it send me an e-mail. You don't need a lawyer for this.

NY DR Rule 2-107(a) governs this situation. It permits referral fees as long as the the client consented in advance to the division of fees, the fees are reasonably proportionate to the work conducted, and the total compensation paid is not excessive or unreasonable. The issue here is whether you could be deemed to have consented in advance to payment of the referral fee. Before making claims against your lawyer, you should check your retainer agreements with U.S and Indian counsel to determine whether it disclosed that this referral fee might be paid. In addition, you should check e-mails and correspondence concerning retention of the Indian lawyer---it is quite possible that you were told that a referral fee would be paid and/or you explicitly or impliedly consented to it. For example, It is quite possible that you agreed in advance to the total amount of fees that would be paid (or an estimated total) collectively to U.S. and New York counsel and, therefore, that you were aware that these fees would be split between counsel. Most New York lawyers are well-aware of the rules regarding referral fees and, therefore, the issue is usually covered in retainer letters or other correspondence involving the lawyer and client. Check the documents and correspondence before taking action on this. If your U.S. lawyer did not inform you in advance of the referral fee, he may have violated this ethical rule. Is this a serious ethical violation---this is not so clear. If the total amount that you paid was reasonable in the circumstances, and if the U.S attorney worked on the case and received compensation reasonably proportionate to the contribution that he made, then it would be hard to criticize your U.S. lawyer in this situation. Further, if you agreed to the total amount of fees that would be paid to the U.S. and Indian attorneys--collectively, then arguably you were aware that the total amount would be split between them based on their relative contributions to the process. On the other hand, if the amount you paid was grossly excessive and unreasonable as a result of this referral fee, you may have a very legitimate argument that your U.S. lawyer engaged in ethical misconduct. I would need to know many more details before advising you about your rights in this situation. You should know that referral fees are among lawyers who collaborate together on cases are quite common. In many states, there are essentially no ethical limitations on referral fees such as this. New York has imposed relatively strict limitations on referral fees, but even in New York referral fees are generally permitted as long as overall compensation to the lawyers was reasonable and both lawyers collaborated together in meaningful ways on the case. If your New York lawyer failed to obtain your consent in advance to the referral fee, then he may well have engaged in unethical conduct but whether this is a serious ethical breach is subject to reasonable disagreement among members of the bar.