Ethics Opinions

Opinion No. 88-3

Summary: An agreement between a law firm and a union in which the firm agrees to provide legal services for union members at reduced rates is not an improper payment to the union to solicit business for the firm under DR 2-103 because of the exception in that section for cooperation by lawyers with "qualified legal assistance organizations." The appearance of the firm at a union hall once a month to answer general questions at no fee is also permissible so long as any suggestion that the law firm handle the legal problem of any particular member comes from the member and not the law firm.

Facts: A law firm is negotiating with a union to provide legal services to union members at fees that are 20 percent less than the firm's normal rates. Initial consultations would be free, in keeping with its standard practice. It would be available at the union hall once a month at no fee "to answer any general questions." Other than the reduced legal fees for its members, the union would receive no direct benefit. The firm has inquired whether this arrangement would violate the solicitation provisions of the Disciplinary Rules.
Discussion: DR 2-103(E) and DR 1-102(A)(2) provide as follows:
DR 2-103(E) A lawyer shall not pay any person or organization to solicit professional employment for the lawyer from a prospective client. However, this disciplinary rule does not prohibit a lawyer or a partner or associate or any other lawyer affiliated with the lawyer or the lawyer's firm from requesting referrals from a lawyer referral service operated, sponsored, or approved by a bar association or from cooperating with any other qualified legal assistance organization.
DR 1-102(A)(2) A lawyer shall not....Circumvent a Disciplinary Rule through actions of another.
The term "qualified legal assistance organization" in DR 2-103(E) is defined in the "Definitions" section of the Disciplinary Rules in an unnumbered section following DR 9-102:
(8) "Qualified legal assistance organization" means a legal aid, public defender, or military assistance office; a lawyer referral service operated, sponsored, or approved by a bar association; or a bona fide organization that recommends, furnishes or pays for legal services to its members or beneficiaries, provided the office, service, or organization receives no profit from the rendition of legal services, is not designated1 to procure financial benefit or legal work for a lawyer as a private practitioner, does not infringe the individual member's freedom as a client to challenge the approved counsel or to select outside counsel at the client's expense, and is not in violation of any applicable law.
The crucial issue is the permissibility of the basic arrangement being negotiated with the union whereby the law firm would render services at a 20 percent discount to union members. We assume that this arrangement has been approved by the union in accordance with its bylaws. In our Opinion 87-3, we recently stated our view that a law firm may not permit a financial services agency to write letters to the agency's clients advising them that it had arranged for the law firm to perform services for the agency's clients at reduced rates. The letters clearly solicited business for the law firm. We concluded that the offer of reduced rates to the agency's customers conferred a sufficient benefit on the agency in the form of helping it to get business so as to constitute a "payment" to the agency within the purpose and meaning of DR 2-103(E).
It is our view, however, that the rules apply quite differently to the proposal in the present inquiry. DR 2-103(E) contains a specific exemption for cooperation between a law firm and a "qualified legal assistance organization." We believe that although the financial services agency did not fit within the definition of a "qualified legal assistance organization," the union does meet the definition of a bona fide organization recommending legal services to its members, provided of course that it complies with the stated conditions set forth in the definition section. Indeed, the definition was adapted by the Supreme Judicial Court from the language of former DR 2-103. There it had been attached to the general prohibition against solicitation to make it clear that the former anti-solicitation provisions were not to be applied to inhibit the kind of assistance in obtaining a lawyer provided by bar associations and various sorts of group legal service programs. Here the exemption has been added to DR 2-103(E) for the same purpose, albeit in the narrower context of applying the prohibition against lawyers "paying" third parties to solicit business for them.
The activities of unions in helping their members to obtain legal services at reduced rates was just the kind of activity that gave rise to the original exemption of such activities from the anti-solicitation provisions of the Disciplinary Rules. That exemption was the result of a series of decisions of the United States Supreme Court culminating in United Transportation Union v. State Bar of Michigan, 401 U.S. 576 (1971). In that case, the union had operated a lawyer referral program for its members and had secured a commitment from recommended attorneys to limit contingent fees to a maximum of 25 percent of the recovery. The Michigan State Bar obtained an injunction against the union restraining it from operating its referral program, including the fee limitation provision. The Supreme Court overturned the injunction, finding that it interfered with the First Amendment rights of union members to assist one another in enforcing their legal rights. More particularly, the Court stated, in striking down the injunction against the fee limitation provision, that it was "hard to believe that a court of justice would deny a cooperative union of workers the right to protect its injured members, and their widows and children, from the injustice of excessive fees at the hands of inadequate counsel." Id. at 585.
In light of this history, it seems clear to the committee that to the extent that there is any doubt whether offering discounted fees to union members should be viewed as protected "cooperation" with the union, the interpretation should be chosen that will avoid any serious constitutional problem of conflict with the Supreme Court's decision in the United Transportation Union case. It is our conclusion therefore that an offer by the law firm to the union of discounted rates to union members for legal services is protected cooperation under DR 2-103(E). In so advising, however, we should not be understood as also advising that a payment of cash or other items of tangible value by the law firm to the union itself would also come under the same exemption. That would present a very different case.
The second part of the inquiry involves a proposal by the law firm that it would be available at the union hall once a month at no fee to answer general questions. In our Opinion 86-3 we advised that a law firm could provide an educational seminar to a mixed audience of clients and non-clients so long as neither the seminar brochure nor the presentation contained a recommendation that the firm be hired. The proposed sessions have the potential to go further than general education because they are general question sessions. We believed, however, that such sessions fall within the general encouragement to group legal services contained in the last sentence of DR 2-103(E). The law firm, however, is still governed by the prohibition of DR 2-103(D) and therefore any suggestion that the law firm handle the legal problems of any particular member must be initiated by the member and not the law firm.
1 This word appears to be a typographical error in the current rules. In former versions this word read "designed," and that word makes much more sense in the context of the definition.


Permission to publish granted by the Board of Delegates on March 22, 1988. As stated in the Rules of the Committee on Professional Ethics, this advice is that of a committee without official governmental status.
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