The SRA referral fees rules allow solicitors to pay for, or receive payment for, introductions and referrals — but only where the arrangement is disclosed to the client, does not compromise the client's best interests, and does not undermine the solicitor's independence. There is no blanket ban on referral fees for commercial and insolvency work, unlike the specific statutory ban that applies to personal injury claims.
For firms building or reviewing an introducer network — whether with insolvency practitioners, accountants, brokers or other solicitors — the SRA Standards and Regulations set the boundaries. This article sets out what counts as a referral arrangement, when fees are permitted, what must be disclosed, and where a separate statutory ban applies.
What counts as a referral arrangement under SRA rules
A referral arrangement is any agreement where one party sends, or agrees to send, clients or business to another in exchange for payment, reciprocal work, or another benefit. It does not need to be written down, and it does not need to involve cash changing hands to fall within scope.
The SRA treats the following as referral arrangements:
- A fixed fee or percentage commission paid per introduction or per matter
- Reciprocal referral agreements between two firms (you send me work, I send you work)
- Panel membership arrangements, where a firm pays to be listed as a preferred provider
- Marketing or lead-generation arrangements with unregulated introducers, including commission-based introducers
- Fee-sharing arrangements with a third party connected to the introduction
An introducer — a person or business that refers potential clients — can be regulated (another solicitor, an insolvency practitioner) or unregulated (a broker, a lead-generation business, a commercial introducer such as Harbourfirst). The SRA's expectations differ depending on which.
The general position: SRA referral fees rules permit fees with conditions
Under the current SRA Standards and Regulations, referral fees are not prohibited outright. A solicitor may pay a referral fee to an introducer, or accept one from a third party, provided three conditions are consistently met:
- The client's best interests remain the overriding factor in any decision to act
- The client is told about the arrangement and any payment connected to it
- The solicitor's independent professional judgement is not fettered by the arrangement
This is a principles-based position rather than a fixed list of permitted fee levels. There is no SRA-set cap on referral fee amounts for commercial or insolvency introductions. Firms are expected to exercise judgement: a fee structure that effectively pays for client instructions regardless of suitability, or that incentivises accepting unsuitable matters, is likely to breach the underlying principles even if no specific rule names it.
Independence, client best interests and undue influence
The SRA Principles require solicitors to act with independence and in the best interests of each client. A referral arrangement must not compromise either. In practice, this means a firm should be able to show that:
- It would have reached the same advice or recommendation regardless of the referral fee
- It is not restricted, by the introducer agreement, from advising a client to go elsewhere if that is genuinely in their interest
- Referral volume or value targets do not influence case acceptance decisions
Undue influence is a particular risk where an introducer has ongoing control over the flow of work — for example, a licensed insolvency practitioner who refers most of a firm's caseload, or a commercial introducer whose fee structure rewards volume over suitability. The risks of routing referral fees through a solicitor in an insolvency context are worth understanding before any panel or introducer agreement is signed.
Mandatory disclosure of fees and arrangements to clients
Disclosure is not optional. Where a solicitor has paid, or will pay, a referral fee in connection with a client's matter, the client must be told:
- That a referral fee or commission has been paid or received
- Broadly what the arrangement is (who introduced them, and the nature of the payment)
- The amount of the fee, or how it is calculated, if the client asks or if it is material to their decision
This disclosure should happen before or at the point of engagement, not buried in a later document the client is unlikely to read. Good practice is to include it in the client care letter or terms of engagement, in plain language, so the client can see the connection between the introduction and the fee. A firm's introducer agreement should be built around what the SRA requires on disclosure, not just commercial terms with the introducer.
A short, plain-English disclosure line is usually enough: naming the introducer, confirming a fee was paid, and stating the fee amount or basis if the client asks. Firms that treat disclosure as a compliance checkbox rather than a genuine explanation risk complaints later, even where the underlying arrangement was permitted.
Panel and preferred-provider arrangements
Panel membership — where a firm pays an introducer, insurer or intermediary to be listed as a preferred or approved provider — is a referral arrangement in substance, even if it is not framed as a per-case referral fee. The same disclosure and independence conditions apply: clients should still be told how the firm came to be recommended, and case acceptance should not be driven by panel status alone.
Where LASPO bans referral fees (and why commercial differs)
The picture changes for personal injury work. Part 2, Chapter 2 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 introduced a statutory ban on referral fees in personal injury cases, enforced through the regulators (including the SRA) and the claims management regime. Paying or receiving a referral fee for a personal injury referral is a breach of that ban, regardless of disclosure. The Ministry of Justice's guidance on the personal injury referral fee ban sets out how the prohibition is enforced.
Commercial and insolvency referrals sit outside this statutory ban. There is no equivalent legislation prohibiting referral fees for company recovery, restructuring or insolvency introductions. That is why the SRA's principles-based conditions — independence, best interests, disclosure — are the operative test for this type of work, rather than a blanket prohibition. Firms should not assume the personal injury ban extends by analogy; it does not, but the underlying SRA Principles still apply in full. For the wider legal position on fee arrangements outside personal injury, see the overview of whether referral fees are legal in the UK.
Record-keeping and the referral register
Firms operating referral or introducer arrangements should keep clear records that would allow them to demonstrate compliance if the SRA asked. This typically includes:
- A written introducer agreement setting out the basis of the arrangement and fee structure
- A log of referral fees paid or received, matched to the relevant client matter
- Evidence that disclosure was given to each affected client, and when
- Periodic review of introducer arrangements to check they still meet the independence and best-interests tests
A simple referral register — even a spreadsheet recording the introducer, the client matter, the fee, and the disclosure date — gives a firm's compliance function something concrete to review, and gives the Compliance Officer for Legal Practice (COLP) an audit trail if questions arise.
Frequently asked questions
Can a solicitor pay a commercial introducer like a lead-generation company?
Yes, provided the same conditions apply: the client is told about the arrangement, the fee does not compromise independent advice, and the client's best interests remain the priority in any decision to act.
Does the SRA cap how much a referral fee can be?
No. There is no fixed cap for commercial or insolvency referrals under the current SRA Standards and Regulations. Firms are expected to exercise judgement so the fee does not distort case acceptance or advice.
Is a reciprocal referral arrangement between two firms treated differently?
No — reciprocal arrangements are still referral arrangements. The same disclosure and independence conditions apply, even where no cash payment changes hands and the "fee" is future work sent the other way.
What happens if a firm fails to disclose a referral fee to a client?
Failing to disclose can amount to a breach of the SRA Principles and Code of Conduct, which may lead to regulatory action. It can also undermine the client relationship if they later discover the arrangement themselves.
Does an unregulated introducer need to be registered with the SRA?
No. Unregulated introducers, such as commercial introducer businesses, are not themselves SRA-regulated. The compliance obligation sits with the solicitor's firm to disclose the arrangement and protect the client's interests.
This article is general information about the SRA referral fees rules and is not legal or regulatory advice. Firms should take their own compliance advice, or speak to their COLP, on specific introducer arrangements.
Harbourfirst introduces directors and firms to regulated insolvency practitioners and solicitors — it does not provide legal advice or act as a regulated adviser itself. If you're reviewing an introducer relationship or want to talk through how a referral arrangement fits within the SRA's rules, start an enquiry and we'll introduce you to a regulated specialist.