Ethics Opinions

Opinion 08-01

Summary: A lawyer may not participate in a private business networking organization that requires members to cross-refer potential clients to one another. Under Rule 7.3(f), a lawyer may not “give anything of value to any person or organization to solicit professional employment for the lawyer from a prospective client,” provided that he or she may “request[] referrals from a lawyer referral service operated, sponsored, or approved by a bar association” or “cooperat[e] with any qualified legal assistance organization.” A for-profit business networking organization, however, is not an authorized “lawyer referral service” or a “qualified legal assistance organization” for purposes of the Massachusetts Rules of Professional Conduct, and a lawyer’s commitment to provide business referrals to other organization members in return for their agreement to refer potential clients to him or her represents the “giv[ing] … of value” to those other members in contravention of Rule 7.3(f).

Facts: A lawyer (“Lawyer”) wishes to participate in a private business networking organization (the “Networking Club”), in which members attempt to help one another through professional networking and marketing. The Networking Club is a national, for-profit organization with local chapters. Networking Club members meet on a regular basis and exchange business referrals. The policies of the Networking Club provide, in relevant part, that:

1. Only one person from each profession is permitted to join a chapter of the Networking Club;

2. All participants in the Networking Club must represent their primary occupation, not a part-time business; and

3. Participants in the Networking Club are required to bring a minimum number of bona-fide referrals and/or prospective new members to each chapter meeting.

The question arises whether Lawyer may participate in the Networking Club without violating the Massachusetts Rules of Professional Conduct.

Discussion: Subsection (f) of Rule 7.3 of the Massachusetts Rules of Professional Conduct, titled “Solicitation of Professional Employment,” provides that a lawyer “shall not give anything of value to any person or organization to solicit professional employment for the lawyer from a prospective client,” provided that a lawyer may seek and receive client referrals from a “lawyer referral service operated, sponsored, or approved by a bar association,” or from a “qualified legal assistance organization.” A “qualified legal assistance organization” is defined in Rule 9.1(i) as,

a legal aid, public defender, or military assistance office; 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 designed 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 Networking Club plainly is not a lawyer referral service operated, sponsored, or approved by a bar association. In the Committee’s opinion, the Networking Club also is not a “qualified legal assistance organization” for purposes of the Massachusetts Rules of Professional Conduct because it is neither “a legal aid, public defender, or military assistance office,” nor an organization that “recommends, furnishes or pays for legal services to its members or beneficiaries.” It is, rather, a for-profit entity that is “designed to procure [a] financial benefit” for its members and, ultimately, for the Networking Club itself. Indeed, the explicit raison d’etre for the Networking Club and other similar organizations is to procure additional business opportunities for their members through mandatory cross-referrals.

The Committee further believes that it would not be permissible for Lawyer to accept client referrals from other Networking Club members because Lawyer’s commitment to provide business referrals in return would constitute the “giv[ing] … of value” to those other members within the purpose and meaning of Rule 7.3(f). The rules of the Networking Club expressly require all participating members, including lawyers, to provide business referrals to one another as the quid pro quo for the business referrals that they receive. While the precise benefits that members gain from such cross-referrals may not be immediately apparent, they nonetheless are sufficiently “valuable” to justify the existence of, and participation in, the Networking Club in the first instance. See Opinion No. 87-3 (a law firm may not permit a financial services agency to solicit business for the firm by writing letters to the agency's clients because such an arrangement would violate the prohibition on paid solicitation contained in Disciplinary Rule 2-103(E), a precursor to Rule 7.3(f)).

For these reasons, we conclude that the Massachusetts Rules of Professional Conduct prohibit Lawyer from participating in the Networking Club, or any other similar business networking organization that requires or mandates cross-referrals of potential clients among its members.

 

This opinion was approved for publication by the Massachusetts Bar Association’s House of Delegates on March 6, 2008.

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