The Business Attorney's Guide to Funding Referrals

Business attorneys sit closer to their clients' capital problems than almost anyone. You draft the purchase agreement that needs funding behind it, chase the receivable that hasn't been paid, paper the buyout the client can't finance yet. The referral itself is easy. The part that makes attorneys hesitate — correctly — is everything around it: conflicts, confidentiality, and whether being compensated for an introduction is something you can do at all. This is the honest version of that analysis. It is not legal advice, and you already know why that disclaimer matters more here than on most pages.

Where the funding need shows up in your practice

You are rarely hired to solve a capital problem, but you run into one constantly:

• Formation and transactional work — the LLC is formed, the deal is drafted, and the client is short on the money to execute it.
• Commercial leasing and build-out — the lease is signed and tenant improvements need funding before the doors open.
• Construction and collections — the work is done, the pay app is approved, and the money is 60 days out while payroll is Friday.
• Tax controversy — a client with an installment agreement or an offer needs working capital to actually perform on it.
• Succession and buyouts — one owner is leaving and the remaining owner needs the buyout funded.

In each of those, the legal work is finished or stalled, and the client says some version of: "I just need to figure out the money." That sentence is the entire referral moment.

Start with the rule that binds hardest: confidentiality

Before conflicts, before compensation, the first constraint is information. Your duty covers information relating to the representation — not just documents, but the fact of the situation itself. That your client is short on cash, behind on a tax bill, or about to lose a job over cash flow is confidential. You do not forward a client's financials, describe their situation to a funding contact, or pass along a name "to have someone reach out" without the client's informed consent.

The conflict is a personal-interest conflict

Attorneys often go looking for the fee-splitting rule here, and that's the wrong shelf. Rules against sharing legal fees with non-lawyers, and against paying someone to recommend your legal services, address different problems. Being compensated by a third party for introducing a client to a non-legal service is analyzed as a personal-interest conflict: does your own financial stake create a significant risk that your representation of that client will be materially limited?

That analysis is fact-specific and it is yours to make, not a funding company's. And this is where jurisdiction matters — state rules and bar ethics opinions differ on compensated referrals to non-legal businesses, and some address them directly with consent and disclosure requirements. Read your own state's rules and opinions before you accept anything. Any program that waves this off is not one to work with.

Disclosure: do more than the minimum

Whatever your jurisdiction's floor is, the practical standard is higher, because the risk you're managing isn't only disciplinary — it's the client wondering later why you sent them somewhere. Say it plainly, in writing, before the introduction:

• That you may receive compensation from the funding partner if the client proceeds and a deal funds
• That the client is free to use any other source, including their own bank, and that you have no objection if they do
• That your advice on their legal matter is unchanged either way, and you are not advising them on the financing
• That they can decline the introduction with no effect on your representation

Then get the client's agreement in writing. A one-paragraph confirming email is usually enough. The test is simple: if you would not want the client to read your referral agreement, don't sign it.

Stay out of the advice lane

The sharpest line for an attorney is the one between introducing a source of capital and advising on the financing. You can review a financing document as the client's lawyer if that's within your engagement — that's ordinary legal work. What you should not do is recommend a product, opine on whether the pricing is good, tell the client the terms are fair, or push them toward accepting an offer. The moment your compensated introduction becomes a recommendation to take a specific deal, your personal stake and your advice are sitting in the same sentence.

Vetting the partner (your name is on the introduction)

1. Contact discipline. How many touches does a referred client get, and by whom? Is client data ever resold or shared with other funders? The only acceptable answer is never.
2. How declines are handled. "Not yet, and here's what would change that" comes back to you fine. A client hard-sold on a bad product remembers who sent them.
3. Product honesty. A partner worth using will tell a client when their bank is the cheaper route and send them there.
4. Written agreement. Compensation structure, what triggers payment, attribution, confidentiality obligations, and how either side ends it — signed before the first referral.
5. Visibility. You should be able to learn where a referral stands without chasing anyone.

How compensation actually works

Compensation varies by product, deal size and quality. It's paid on deals that actually fund — never for submitted names — and it's set out in a written referral agreement before anything is sent. Nobody can honestly quote you a number before they know what you'd be referring, and any program that does is telling on itself. The mechanics are broken down in how partner compensation actually works.

Uncompensated referrals are a real option

Worth saying, because it often gets left out: if your firm's policy or your read of your state's rules makes a compensated referral more trouble than it's worth, make the introduction anyway and take nothing. The client still gets funded, the deal you drafted still closes, and the analysis gets much shorter. A serious funding partner will not push back on that.

The bottom line

Attorneys don't need a new business line. They need one good answer to a question clients already ask — delivered without touching confidentiality, without a hidden stake, and without stepping into financial advice. Get consent, disclose in writing, stay out of the product conversation, and make the introduction. Related reading: how referral partnerships work end to end, referring without risking the relationship, and the seven moments clients need capital.

Common questions