Short answer. North Carolina lets lawyers in different firms divide a fee only if the division is in proportion to the services performed by each lawyer or each lawyer assumes joint responsibility for the representation; the client agrees to the arrangement, including the share each lawyer will receive, and the agreement is confirmed in writing; and the total fee is reasonable (Rule 1.5(e)). The rule states no percentage limit on either lawyer’s share.
Sources read October 25, 2026; checked against LegalFlare’s research October 27, 2026. Rules text is as printed on the North Carolina State Bar’s rule pages on ncbar.gov, fetched October 25, 2026. This page is general information, not legal advice. See the disclaimer.
North Carolina’s referral fee rules at a glance
| Question | North Carolina’s answer | Source |
|---|---|---|
| Governing rule | Rule 1.5(e), North Carolina Rules of Professional Conduct | N.C. R. Prof. Conduct 1.5(e) |
| Written client consent | Required in every division: the client agrees to the arrangement, including the share each lawyer will receive, and the agreement is confirmed in writing | Rule 1.5(e)(2); Ehrenhaus v. Baker (2011) |
| Notice to the client | The client must agree to the share each lawyer will receive | Rule 1.5(e)(2) |
| Proportion to services or joint responsibility | Required: the division is in proportion to the services performed by each lawyer, or each lawyer assumes joint responsibility for the representation | Rule 1.5(e)(1) |
| Reasonable total fee | Required | Rule 1.5(e)(3) |
| Cap on the secondary lawyer’s share | None stated in Rule 1.5(e) | Rule 1.5(e) |
| Statutes | No statute on dividing fees, fee sharing with nonlawyers, paying for recommendations or choice of law was found in G.S. chapter 84 | G.S. ch. 84 (searched October 25, 2026) |
What Rule 1.5(e) says
Rule 1.5(e) of the North Carolina Rules of Professional Conduct governs the division of a fee between lawyers who are not in the same firm. Its words, as printed on the State Bar’s rule page fetched October 25, 2026 (N.C. R. Prof. Conduct 1.5(e)):
(e) A division of a fee between lawyers who are not in the same firm may be made only if:
(1) the division is in proportion to the services performed by each lawyer or each lawyer assumes joint responsibility for the representation;
(2) the client agrees to the arrangement, including the share each lawyer will receive, and the agreement is confirmed in writing; and
(3) the total fee is reasonable.
No North Carolina amending order is held, so the date these words took effect is not established in our sources. They are stated here as printed when fetched in October 2026.
What the client must agree to in writing
Every division needs the client’s agreement to the arrangement, including the share each lawyer will receive, and the agreement must be confirmed in writing (Rule 1.5(e)(2)). In Ehrenhaus v. Baker, 216 N.C. App. 59 (2011), the Court of Appeals vacated a class-action fee award and remanded for findings; among its reasons, Rule 1.5(e)(2) requires the client to agree in writing to any fee-sharing agreement, and the record held none for local counsel’s share.
North Carolina State Bar 2010 Formal Ethics Opinion 6 says a lawyer who advertises for work outside his practice areas and refers the matter out may receive part of the fee if the client agrees to the arrangement in writing. 2012 Formal Ethics Opinion 12 says Rule 1.5(e) requires a client’s written consent to a division of fees between lawyers not in the same firm, but does not apply where the client’s fee agreement preceded the lawyer’s departure from the firm.
What must be disclosed to the client
The client must agree to the share each lawyer will receive (Rule 1.5(e)(2)).
Proportionality or joint responsibility
The division must be in proportion to the services performed by each lawyer, or each lawyer must assume joint responsibility for the representation (Rule 1.5(e)(1)), and the total fee must be reasonable (Rule 1.5(e)(3)). 2010 Formal Ethics Opinion 6 says a referring lawyer may receive a fee in proportion to the services he performs in the matter, or a fee based on his assumption of joint responsibility for the representation.
Rule 1.5(e) does not reach a division of fees for work done while the lawyers were in the same firm. 2008 Formal Ethics Opinion 8 says a departure provision dividing fees between a firm and a departing lawyer is not a fee division under Rule 1.5(e), because Comment [9] says paragraph (e) does not regulate dividing future fees for work done while the lawyers were associated in a firm. 2012 Formal Ethics Opinion 12 says Rule 1.5(e) does not apply where the client’s fee agreement preceded the lawyer’s departure from the firm.
In Teague & Glover, P.A. v. Kane & Silverman, P.C., 263 N.C. App. 712 (2019), the Court of Appeals held that, even if a fee agreement between two firms violated Rule 1.5(e), that would not make the agreement void as against public policy. Alleged Rule violations are for the State Bar, not a basis for civil liability. It affirmed the agreement’s enforceability.
Referring a case out of North Carolina, or into it
North Carolina’s choice-of-law rule, Rule 8.5(b), tracks ABA Model Rule 8.5(b), safe harbor included. It says which jurisdiction’s rules of professional conduct apply when North Carolina exercises its disciplinary authority (N.C. R. Prof. Conduct 8.5(b)):
(b) Choice of Law. In any exercise of the disciplinary authority of North Carolina, the rules of professional conduct to be applied shall be as follows:
(1) for conduct in connection with a matter pending before a tribunal, the rules of the jurisdiction in which the tribunal sits, unless the rules of the tribunal provide otherwise; and
(2) for any other conduct, the rules of the jurisdiction in which the lawyer’s conduct occurred, or, if the predominant effect of the conduct is in a different jurisdiction, the rules of that jurisdiction shall be applied to the conduct. A lawyer is not subject to discipline if the lawyer’s conduct conforms to the rules of a jurisdiction in which the lawyer reasonably believes the predominant effect of the lawyer’s conduct will occur.
As with Rule 1.5(e), the date these words took effect is not established in our sources.
2007 Formal Ethics Opinion 4 (Opinion #8) says a North Carolina lawyer may be disciplined for conduct unethical under North Carolina’s Rules if it occurred in North Carolina or its predominant effect is there (Rule 8.5(b)).
Which state’s rules govern a particular cross-border referral is not settled by an authority we hold. No North Carolina decision applying Rule 8.5(b) was found (searched October 25, 2026).
Paying for referrals, and nonlawyers
- Payment for referrals. “A lawyer shall not compensate, give, or promise anything of value to a person for recommending the lawyer’s services except that a lawyer may” (1) “pay the reasonable costs of advertisements or communications permitted by this Rule”; (2) “pay the usual charges of an intermediary organization that complies with Rule 7.4, or a prepaid legal services plan that complies with 27 N.C. Admin. Code 1E.0301 et seq.”; (3) “pay for a law practice in accordance with Rule 1.17”; and (4) “give nominal gifts as an expression of appreciation that are neither intended nor reasonably expected to be a form of compensation for recommending a lawyer’s services” (Rule 7.2(b)).
- Nonlawyers. “A lawyer or law firm shall not share legal fees with a nonlawyer,” except as Rule 5.4(a)(1)–(6) allows: payment of money, over a reasonable period of time after a lawyer’s death, to the lawyer’s estate or to one or more specified persons, under an agreement by the lawyer with the lawyer’s firm, principal or associate; payment, under Rule 1.17, of the agreed-upon purchase price to the estate or other representative of a deceased, disabled or disappeared lawyer whose practice the lawyer purchases; payment, by a lawyer who undertakes to complete unfinished legal business of a deceased lawyer or a disbarred lawyer, to the deceased lawyer’s estate or to the disbarred lawyer of that portion of the total compensation that fairly represents the services the deceased or disbarred lawyer rendered; including nonlawyer employees in a compensation or retirement plan even though the plan is based in whole or in part on a profit-sharing arrangement; sharing court-awarded legal fees with a nonprofit organization that employed, retained or recommended employment of the lawyer in the matter; and paying a portion of a legal fee to a credit card processor, group advertising provider or online marketing platform if the amount paid is for payment processing or for administrative or marketing services, and there is no interference with the lawyer’s independent professional judgment or with the client-lawyer relationship (Rule 5.4(a)). In The North Carolina State Bar v. Livingston (2017), the Court of Appeals affirmed the conclusion that a lawyer who contracted with a nonlawyer entity contemplating the sharing of legal fees violated Rule 5.4(a), though no fees were paid.
- Referral, matching and networking companies. State Bar ethics opinions bar paying a matching, networking or referral company a share of fees, or paying for referrals (2004 Formal Ethics Opinion 1, 2011 Formal Ethics Opinion 4, 2012 Formal Ethics Opinion 10). A percentage charged by a group-coupon website is an advertising cost if it is reasonable compensation for the advertising (2011 Formal Ethics Opinion 10). These opinions were written before Rule 5.4(a)(6) was adopted.
- Statutes. No North Carolina statute on dividing fees, fee sharing with nonlawyers, paying for recommendations or choice of law was found in G.S. chapter 84 (searched October 25, 2026). G.S. 84-38 (runners; solicitation of legal business) goes to solicitation. This page does not quote it.
North Carolina cases
We state what each decision held, in the words of our research. Later treatment of these decisions has not been searched, so do not read this list as a statement that each one remains good law.
| Case | Citation | Year | What it held |
|---|---|---|---|
| Ehrenhaus v. Baker | 216 N.C. App. 59; 717 S.E.2d 9 | 2011 | North Carolina Court of Appeals vacated a class-action fee award and remanded for findings. Among its reasons: Rule 1.5(e)(2) requires the client to agree in writing to any fee-sharing agreement, and the record held none for local counsel’s share. |
| The North Carolina State Bar v. Livingston | 257 N.C. App. 121; 809 S.E.2d 183 | 2017 | North Carolina Court of Appeals affirmed the Disciplinary Hearing Commission’s conclusion that a lawyer who contracted with a nonlawyer entity contemplating the sharing of legal fees violated Rule 5.4(a) and attempted to violate the Rules (Rule 8.4(a)), though no fees were paid. |
| Teague & Glover, P.A. v. Kane & Silverman, P.C. | 263 N.C. App. 712; 822 S.E.2d 788 | 2019 | North Carolina Court of Appeals held that, even if a fee agreement between two firms violated Rule 1.5(e), that would not make the agreement void as against public policy. Alleged Rule violations are for the State Bar, not a basis for civil liability. It affirmed the agreement’s enforceability. |
North Carolina State Bar formal ethics opinions
As with the cases, later treatment of these opinions has not been searched. The words of Rule 5.4(a) before its September 22, 2016 and March 27, 2019 amendments, and of Rule 7.2(b) before October 2, 2014 and between September 28, 2017 and April 21, 2021, are not held. Opinions issued before those dates construed earlier wording, and each holding is stated as the opinion’s. Opinions on paying online platforms were written before Rule 5.4(a)(6) was adopted. The year shown is the year the opinion was issued.
| Opinion | Year | What it said |
|---|---|---|
| 2000 Formal Ethics Opinion 9 | 2001 | A lawyer who also practices accounting may not share legal fees with the CPA firm (Rule 5.4(a)). |
| 2001 Formal Ethics Opinion 2 | 2001 | A firm that contracts with a management company to administer the office may not split legal fees with it (Rule 5.4(a)). |
| 2003 Formal Ethics Opinion 10 | 2004 | On fee sharing with a nonlawyer claimant’s representative in a Social Security case: Rule 5.4(a) should not be applied in a way that makes it difficult or impossible for a claimant to switch to a lawyer representative. |
| 2004 Formal Ethics Opinion 1 | 2004 | A lawyer taking part in an online legal matching service may not pay the company any portion or percentage of legal fees earned from clients obtained through it (Rule 5.4(a)). |
| 2005 Formal Ethics Opinion 6 | 2005 | On paying a nonlawyer employee who represents Social Security claimants: Rule 5.4(a) governs fees that only a lawyer may earn, but nonlawyers may lawfully represent disability claimants before the SSA and be awarded fees for it. |
| 2006 Formal Ethics Opinion 7 | 2006 | On joining a for-profit networking organization: a lawyer may not give anything of value to a person for recommending the lawyer’s services (Rule 7.2(b)). |
| 2007 Formal Ethics Opinion 4 | 2008 | On solicitation after a seminar, gifts to clients and others, and business cards: Opinion #3 answers no, because Rule 7.2(b) prohibits giving anything of value to a person for recommending the lawyer’s services. Opinion #8: a North Carolina lawyer may be disciplined for conduct unethical under North Carolina’s Rules if it occurred in North Carolina or its predominant effect is there (Rule 8.5(b)). |
| 2008 Formal Ethics Opinion 6 | 2008 | A lawyer may not pay a nonlawyer independent contractor who organizes and speaks at estate-planning seminars based on the legal fees the seminars generate (Rule 5.4(a)). |
| 2008 Formal Ethics Opinion 8 | 2008 | A departure provision dividing fees between a firm and a departing lawyer is not a fee division under Rule 1.5(e). Comment [9] says paragraph (e) does not regulate dividing future fees for work done while the lawyers were associated in a firm. |
| 2010 Formal Ethics Opinion 4 | 2010 | A percentage fee paid to a barter exchange manager is a transaction surcharge, like a credit card discount, not fee sharing with a nonlawyer (Rule 5.4(a)). A barter exchange that lists all participating lawyers impartially, does not recommend or select a lawyer, and does not limit the number of lawyers is not a lawyer referral service (Rule 7.2(b)). |
| 2010 Formal Ethics Opinion 6 | 2011 | Rule 1.5(e) allows a lawyer who advertises for work outside his practice areas and refers the matter out to receive part of the fee, if the client agrees to the arrangement in writing. The lawyer’s fee is in proportion to his services or based on his assuming joint responsibility for the representation. |
| 2011 Formal Ethics Opinion 10 | 2011 | A lawyer may advertise on a deal-of-the-day or group coupon website: the fee the website keeps is the cost of advertising, not fee sharing under Rule 5.4(a), and Rule 7.2(b)(1) allows it if the percentage is reasonable compensation for the advertising service. |
| 2011 Formal Ethics Opinion 4 | 2012 | The referral arrangement proposed amounts to improper compensation for referrals in violation of Rule 7.2(b). |
| 2012 Formal Ethics Opinion 10 | 2013 | A network lawyer may not pay the support company an administrative fee for every legal service regardless of the services the company provides (Rule 5.4(a)). Participation is prohibited if payments are made to the company for referrals (Rule 7.2(b)). |
| 2012 Formal Ethics Opinion 12 | 2013 | Rule 1.5(e) requires a client’s written consent to a division of fees between lawyers not in the same firm, but it does not apply where the client’s fee agreement preceded the lawyer’s departure from the firm. |
| 2013 Formal Ethics Opinion 7 | 2013 | Unless nonlawyers may legally represent taxpayers before the taxing authority and be awarded fees for it, sharing a tax-appeal fee with a nonlawyer is improper fee sharing under Rule 5.4(a). |
| 2013 Formal Ethics Opinion 10 | 2013 | An online group advertising service with territorial exclusivity is group advertising, not a for-profit lawyer referral service, if its disclosures are truthful and there is no sharing of legal fees with it (Rule 7.2(b)). |
| 2017 Formal Ethics Opinion 1 | 2017 | On text-message advertising: Rule 7.2(b) permits a lawyer to pay the reasonable costs of permitted advertisements or communications. |
| 2018 Formal Ethics Opinion 1 | 2018 | A lawyer may take part in website directories and rating systems with third-party reviews, as long as there is no quid pro quo for a recommendation (Rule 7.2(b)). |
| 2018 Formal Ethics Opinion 7 | 2018 | A lawyer may use an online review solicitation service, subject to conditions; there can be no quid pro quo for a revised review (Rule 7.2(b)). |
| 2019 Formal Ethics Opinion 6 | 2019 | A lawyer who offers social media users an entry in a prize giveaway in exchange for “liking” the practice’s account violates Rule 7.2(b). |
| 2022 Formal Ethics Opinion 3 | 2022 | On being included on an allied professional’s list of recommended lawyers: Rule 7.2 prohibits a lawyer from compensating, giving or promising anything of value to a person for recommending the lawyer’s services. |
What our research did not find
- No North Carolina amending order is held, so every current rule version on this page is undated. Rule 7.2(b), (b)(2) and (b)(3) each have two undated versions; this page uses the current words on ncbar.gov. Earlier words are held only for Rule 7.2(b), as of December 9, 2016.
- The words of Rule 5.4(a) before its September 22, 2016 and March 27, 2019 amendments, of Rule 7.2(b) before October 2, 2014 and between September 28, 2017 and April 21, 2021, and of Rule 7.3 before 2021 are not held. Ethics opinions issued before those dates construed earlier wording, and their holdings are stated as theirs. Opinions on paying online platforms were written before Rule 5.4(a)(6) was adopted.
- Former Rule 7.2(d) (lawyer referral service conditions, now in Rule 7.4) is not in our research.
- No North Carolina decision under Rule 7.2(b) or Rule 8.5(b) was found (searched October 25, 2026). The CourtListener query of the three federal district courts timed out once and was not retried.
- No North Carolina statute on dividing fees, fee sharing with nonlawyers, paying for recommendations or choice of law was found in G.S. chapter 84 (searched October 25, 2026).
- Later treatment of every North Carolina authority on this page has not been searched. This page states what each authority held, not that it remains good law.
Frequently asked questions
Can I share a referral fee with a lawyer in North Carolina?
Yes, under Rule 1.5(e) of the North Carolina Rules of Professional Conduct. A division of a fee between lawyers who are not in the same firm may be made only if the division is in proportion to the services performed by each lawyer or each lawyer assumes joint responsibility for the representation; the client agrees to the arrangement, including the share each lawyer will receive, and the agreement is confirmed in writing; and the total fee is reasonable. North Carolina State Bar 2010 Formal Ethics Opinion 6 says a lawyer who advertises for work outside his practice areas and refers the matter out may receive part of the fee if the client agrees to the arrangement in writing; the lawyer’s fee is in proportion to his services or based on his assuming joint responsibility for the representation.
Is there a cap on referral fees in North Carolina?
Rule 1.5(e) states no percentage limit on either lawyer’s share. It requires that the division be in proportion to the services performed by each lawyer or that each lawyer assume joint responsibility for the representation, and that the total fee be reasonable. No North Carolina statute on dividing fees was found in G.S. chapter 84.
Does the client have to agree to a fee division in writing in North Carolina?
Yes. Rule 1.5(e)(2) allows a division only if the client agrees to the arrangement, including the share each lawyer will receive, and the agreement is confirmed in writing. In Ehrenhaus v. Baker (2011), the North Carolina Court of Appeals said Rule 1.5(e)(2) requires the client to agree in writing to any fee-sharing agreement.
Can a North Carolina lawyer divide a fee with a lawyer from another state?
Rule 1.5(e) sets the conditions for dividing a fee between lawyers who are not in the same firm. Which state’s rules govern a particular cross-border referral is not settled by an authority we hold. North Carolina’s Rule 8.5(b) applies, for conduct in connection with a matter pending before a tribunal, the rules of the jurisdiction in which the tribunal sits, unless the rules of the tribunal provide otherwise; for any other conduct, the rules of the jurisdiction where the conduct occurred, or of the jurisdiction where its predominant effect is. 2007 Formal Ethics Opinion 4 says a North Carolina lawyer may be disciplined for conduct unethical under North Carolina’s Rules if it occurred in North Carolina or its predominant effect is there. No North Carolina decision applying Rule 8.5(b) was found.
Sources
- North Carolina Rules of Professional Conduct (Rules 1.5, 5.4, 7.2, 8.5), from the North Carolina State Bar’s rule pages on ncbar.gov fetched October 25, 2026: Rule 1.5, Rule 5.4, Rule 7.2, Rule 8.5
- Cases and ethics opinions: linked in the tables above.
More states: Referral fee rules by state.
Disclaimer
This page summarizes a state’s rules on dividing fees between lawyers, from the primary sources it cites, as of the dates shown. It is general information for lawyers, not legal advice, and reading it does not create an attorney-client relationship with Rose Law Firm, PLLC dba LegalFlare. Rules and the way courts and bar authorities read them change. Read the cited sources, and check with the state bar or your own counsel, before relying on anything here.