Under R.G.L § 5-3.1-16(l)(3):
- Any licensee, practice unit, or affiliated entity who accepts a referral fee for recommending or referring any service of a licensee to any person or entity or who pays a referral fee to obtain a client shall disclose the acceptance or payment to the client. The disclosure must be made, in writing, contemporaneously with or prior to the referral or recommendation.
The purpose of the statute is to ensure that the CPA practitioner affirmatively discloses to a client in unmistakable terms the nature and existence of any payment by the practitioner to any another person, which resulted in the client's referral to the practitioner.
Your proposed transaction would require that you provide any client who is referred by any lawyer a written disclosure of the fact that you paid or will pay a referral fee and its amount to the prospective client, at the time that client is referred to you. As a practical matter, this would require that the referring lawyer contact you at the time of the recommendation so that you can immediately make the written disclosure to the prospective client.
This may be a clumsy business
model -- but, that's what you would have to do to satisfy your obligation under Rhode Island law.
Re the lawyer's responsibilities, R.G.L § 5-3.1-16(b) prohibits any unlicensed practitioner from providing "...attest or compilation services...." It is arguable that by providing referrals to a CPA in exchange for valuable consideration
, the attorney thereby becomes the CPA's agent and thus an unlicensed practitioner who violates the statute.
This could pose a significant impediment, since your clients are lawyers, because some of them may come to the conclusion that the risk of being prosecuted is not worth the benefit. There is no bright-line answer here, for accountancy purposes. However, were the same transaction being performed by a nonlawyer for a lawyer, that would be deemed "running" or "capping," which is a prohibited activity. So, as I said, there are good reasons why your attorney-clients may balk at the potential risk in this proposed transaction.
Hope this helps.