Sharing fees with an accountant who introduces company clients (Code 5.1)

Paragraph 5.1 of the Code applies where a third party introduces business to a solicitor or the solicitor shares fees with it. The solicitor must ensure that: clients are informed of any financial or other interest an introducer has in referring them (5.1(a)); clients are informed of any fee sharing arrangement relevant to their matter (5.1(b)); the fee sharing agreement is in writing (5.1(c)); no referral payments are made for clients who are the subject of criminal proceedings (5.1(d)); and the client was not acquired in a way that would breach the SRA's regulatory arrangements (5.1(e)). Linwood receives a share of the firm's fees on matters it introduces, so this is a fee sharing arrangement with an introducer. The oral agreement does not meet 5.1(c) and must be put in writing. Ardent must be told about the arrangement and Linwood's interest, so that it can judge the independence of the introduction and the advice. Corporate work is not one of the prohibited areas. The ban on referral fees in personal injury cases is not engaged, because this is not a personal injury matter.

Why A is wrong: Paragraph 5.1 requires a written fee sharing agreement and that the client is informed, however the payment is funded.

Why C is wrong: Paragraph 5.1 regulates fee sharing and referral arrangements; the express prohibition in para 5.1(d) concerns clients who are the subject of criminal proceedings.

Why D is wrong: The Code requires that the client is informed of the arrangement and the introducer's interest; it does not substitute a consent requirement for that information.

Why E is wrong: The Code contemplates unregulated introducers; para 5.1(e) only requires that the client was not acquired in a way that would breach the SRA's rules if the introducer were regulated.