Disclosing a referral arrangement to a client on your file

If there is one thing the SRA cares about in a referral arrangement, it is that the client understands it. Independence and best interests matter, but they are delivered in practice through disclosure. A referral the client knows about, has agreed to, and understands does not compromise your independence in their eyes. A hidden one does, even if your judgement was never actually influenced.

So disclosure is not a formality to be buried in the small print. It is the mechanism by which the whole arrangement becomes proper. Treating it as central rather than incidental is what separates a compliant referral from a risky one.

Effective disclosure is specific. Vague reassurance does not do the job. The client should understand the shape of the arrangement in plain terms.

• That you have a referral arrangement with the firm you are introducing them to.
• That you may receive a fee or share of fees for the introduction, where that is the case.
• That the arrangement does not affect your independent, professional judgement or their freedom to choose.
• That they are under no obligation to use the firm you introduce.

Plain language beats legalistic hedging here. The test is whether the client genuinely understood, not whether a form was technically served.

Disclosure has to come before the client acts on the introduction, not afterwards. A referral revealed only once the client has already engaged the other firm is not really a disclosure; it is a notification, and it fails the purpose. The client needs the information while the decision is still theirs to make freely.

In practice that means raising the arrangement at the point you suggest the introduction, so the client weighs it with full knowledge. On a probate distribution, that is at the distribution stage. On a conveyancing protection referral, it is around completion. Whatever the matter, disclosure sits at the front of the referral, never the back.

Disclosure and consent travel together. Having told the client about the arrangement, you then need their agreement to be introduced, and you need both captured on the file. The consent protects the client's autonomy; the record protects you.

A file that shows what was disclosed, when, and that the client agreed, answers almost any question a reviewer or the client themselves might later raise. A file that shows an introduction with no trace of what the client was told is a problem waiting to happen, regardless of how proper the underlying conduct was. If it is not recorded, from a compliance standpoint it may as well not have happened.

The reason disclosure so often goes wrong is that, done manually, it depends on a busy fee-earner remembering to have the right conversation and note it correctly on every file. That is fragile. A structured referral process removes the fragility by making disclosure and consent standard, captured steps rather than acts of memory.

Referring through a network means the destination firms are vetted and regulated, and the disclosure and consent are recorded as part of the routine, producing exactly the evidence trail the SRA expects. It also makes the commercial side clean: on non-PI work a disclosed arrangement can return a share of the fee, typically a 60-70% member share, with the disclosure already handled. Good disclosure stops being a thing you hope you remembered and becomes a thing your process guarantees.