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Why proposed amendment to MRPC 1.5 hurts public, quality of lawyer representation in personal injury & other legal matters

May 16, 2011 by Steven M. Gursten

Michigan Lawyers Weekly interviews Michigan Auto Law attorney on proposed new rule on lawyer referral fees in accident and injury cases

I was interviewed last week by Michigan Lawyers Weekly on MRPC 1.5, a proposed Michigan Supreme Court amendment to rules governing referral fees between lawyers. Michigan Lawyers Weekly asked me for comment because my law firm does no public advertising – ie., no television, no radio, no billboards, no Yellow Pages, etc. But we have become the largest law firm in Michigan helping people injured in serious car accidents and truck accidents.

The vast majority of my cases, approximately 80 percent, are referred to me by other lawyers, including other Michigan accident attorneys, based upon our results and our focus.

What’s interesting is that the reporter thought I would be in favor of a rule change that would limit attorney referral fees. But as I explain below, the people who will get hurt by this the most is the unsuspecting public, and I believe the quality of legal representation in serious personal injury lawsuits would plummet.

If passed, this rule would limit referral fees to 25 percent. It would also require that attorneys disclose to clients how the fees would be split, and the client would have to approve the arrangement in writing.

Here’s a portion of the Lawyers Weekly story, explaining how the client benefits when a car accident case is referred to an expert accident attorney:

More than 80 percent of Gursten’s cases come to him by way of lawyer referrals.

And he said he wants to pay more than 25 percent for the referrals, in order to give other lawyers a direct incentive to give him their biggest personal injury cases.

Changing the rule would only hurt the plaintiffs, he said.

“Let’s say I take a case, and I get a $1 million recovery. I get a third, and pay the referring attorney one-third of that,” Gursten said. “To make the same amount, that lawyer could take the case, but only have to win a $500,000 recovery and keep one-third. The only person who was hurt by that was the client.”

Equally troublesome to Gursten is the client disclosure aspect, which he said would have a damaging effect on the attorney-client relationship.

“I’m aware of the reputation we have as lawyers, and, in particular, as personal injury lawyers,” he said. “People are wary of trial lawyers. Now imagine that, rather than the lawyers being able to enter a contractual arrangement, negotiated at arm’s length, the attorney has to have this awkward conversation about fee sharing with a client, who doesn’t know anything about fee sharing, and who hasn’t even retained me yet.”

Steve Gursten is one of the nation’s top accident attorneys. He is head of Michigan Auto Law and has received the highest verdict in the state for a car accident or truck accident victim in 2008, 2009 and 2010.

Related information:

Michigan Supreme Court blogs

Judging a justice by the company her campaign contributors keep

WWhat to do after a car accident in Michigan

Michigan Auto Law is the largest law firm exclusively handling car accident, truck accident and motorcycle accident cases throughout the entire state. We have offices in Farmington Hills, Detroit, Ann Arbor, Grand Rapids and Sterling Heights to better serve you. Call (248) 353-7575 for a free consultation with one of our auto accident attorneys.

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