A CPA may accept a referral fee or commission only where the AICPA rule allows it: never for referring a client for whom the firm performs an audit or review (and certain compilations and examinations of prospective financial information), whoever pays it, and always with disclosure to the client. An attorney who accepts a fee for recommending a client to a third party may have a personal-interest conflict under ABA Model Rule 1.7, which then needs the client's informed consent, confirmed in writing; states vary, so check your state bar's rules. Registered representatives must give their firm prior written notice (FINRA Rule 3270). Bankruptcy trustees and estate professionals take no fee at all.
- CPAs: no commission, from anyone, for referring an attest client; disclose any permitted fee (AICPA 1.520.001).
- Attorneys: a fee can be a personal-interest conflict needing informed written consent (Model Rule 1.7).
- Attorneys paying for recommendations is a separate rule (Model Rule 7.2(b)), and dividing fees with other lawyers another (1.5(e)).
- You can always introduce a client and decline the fee.
CPAs: the AICPA Commissions and Referral Fees Rule (1.520.001)
The rule has two parts. Commissions: a member in public practice "shall not for a commission recommend or refer to a client any product or service" when the member or firm also performs for that client an audit or review of a financial statement, a compilation a third party is expected to use without a disclosed lack of independence, or an examination of prospective financial information. Where a commission is permitted, the member "shall disclose that fact" to the person the member refers.
Referral fees: "Any member who accepts a referral fee for recommending or referring any service of a CPA to any person or entity or who pays a referral fee to obtain a client shall disclose such acceptance or payment to the client" (AICPA Code 1.520.001). State boards of accountancy adopt their own rules and some are stricter, so check your state board as well.
| Client | May the CPA accept a fee for introducing it to a third party? |
|---|---|
| Audit or review client (and the listed compilations and examinations) | No commission while engaged and for the periods covered |
| Other client (tax, advisory, bookkeeping) | Permitted by the AICPA rule, with disclosure to the client; check your state board |
| Any client, fee declined | Yes: introduce the client and decline the fee |
Attorneys: Model Rules 1.7, 7.2(b) and 1.5(e)
Receiving a fee. A concurrent conflict exists where "there is a significant risk that the representation of one or more clients will be materially limited by ... a personal interest of the lawyer". The lawyer may still act if, among other conditions, "each affected client gives informed consent, confirmed in writing" (ABA Model Rule 1.7). A fee from a company you recommend to a client is that kind of personal interest. Some states go further, so check your state bar's rules and opinions.
Paying a fee. A lawyer "shall not compensate, give or promise anything of value to a person for recommending the lawyer's services", with exceptions such as a non-exclusive reciprocal referral agreement the client is told about (ABA Model Rule 7.2). That is why "can attorneys pay referral fees" is mostly answered no.
Lawyer-to-lawyer referral fees. A division of a fee between lawyers in different firms is allowed only if it is proportional to the work or each lawyer takes joint responsibility, "the client agrees to the arrangement, including the share each lawyer will receive", confirmed in writing, and the total fee is reasonable (ABA Model Rule 1.5).
Registered representatives and investment advisers
A FINRA-registered person may not "be compensated, or have the reasonable expectation of compensation, from any other person as a result of any business activity outside the scope of the relationship with his or her member firm, unless he or she has provided prior written notice to the member" (FINRA Rule 3270). The firm may then limit or prohibit the activity.
Investment advisers are fiduciaries: an adviser must make full and fair disclosure of a conflict such as a fee from a third party so the client can give informed consent (SEC Release IA-5248). Your firm may also require it in Form ADV Part 2A, for example Item 14, Client Referrals and Other Compensation (SEC Form ADV Part 2 instructions), and may restrict it. Follow your firm's compliance policy.
Bankruptcy trustees, assignees and estate counsel
No fee. Knowingly and fraudulently giving, offering or receiving a reward "for acting or forbearing to act in any case under title 11" is a federal crime (18 U.S.C. 152(6)), and the Code limits sharing compensation (11 U.S.C. 504). See what Origin does for trustees and assignees.
Introducing a client to a data licence
AI developers now license years of operating records from established companies. If you introduce a client to Origin, you can accept a partner share where your rules allow it, with disclosure, or decline it. The partner terms set out the share: 50% of what Origin earns on the deal, up to $100,000 per company, paid after the deal completes.
This is general information, not legal or tax advice. Rules vary by state and profession; check yours before you accept or pay a fee.
Common questions
Can a CPA accept a referral fee?
Yes for clients the firm does not audit or review (and outside the listed compilations and examinations), with disclosure to the client under AICPA 1.520.001. Never for an attest client, whoever pays. Check your state board.
Can a CPA pay a referral fee to get a client?
Under the AICPA rule, a member who pays a referral fee to obtain a client must disclose that payment to the client. State rules can add limits.
Can attorneys pay referral fees to non-lawyers?
Generally no: Model Rule 7.2(b) bars giving anything of value for recommending the lawyer's services, with narrow exceptions. State versions vary.
Can an attorney accept a referral fee from a company?
Only with care: it can be a personal-interest conflict under Model Rule 1.7, which needs the client's informed consent confirmed in writing, and some states restrict it further.
What is the rule for referral fees between lawyers?
Model Rule 1.5(e): the split is proportional to the work or both lawyers take joint responsibility, the client agrees in writing including each share, and the total fee is reasonable.
Sources and further reading
Origin Data Partners is an independent data partner. We work with buyers, and a buyer may pay us when a deal closes.
- AICPA Code of Professional Conduct, 1.520.001 Commissions and Referral Fees Rule (PDF)
- ABA Model Rules of Professional Conduct, Rule 1.7 (conflict of interest: current clients)
- SEC Release IA-5248 (2019): Commission Interpretation Regarding Standard of Conduct for Investment Advisers (PDF)
- ABA Model Rule 7.2
- ABA Model Rule 1.5
- FINRA Rule 3270: Outside Business Activities of Registered Persons
- SEC Form ADV Part 2 instructions (Item 14, Client Referrals and Other Compensation) (PDF)
- 18 U.S.C. 152 (concealment of assets; false oaths and claims; bribery)
- 11 U.S.C. 504 (sharing of compensation)