Ethics Committee Advisory Opinion #2005-06/06
By the NHBA Ethics Committee
October 2006
ABSTRACT:
The participation by a lawyer in a networking organization whose members are required to engage in exclusive or quid pro quo referrals with other members (e.g., distributing the lawyer’s business cards or other literature to non-members with whom the lawyer likely has no prior relationship and who may be in need of legal services) implicates several Rules of Professional Conduct, including Rules related to competency, conflict of interests, advertising, and communications with prospective clients.
Rule 1.1’s requirement of competency would be implicated if the lawyer feels obligated to take a case that the lawyer is not competent to handle. Conversely, the lawyer would create a conflict of interest under Rule 1.7 if the lawyer refers a client to a particular specialist, whom the lawyer is obligated to refer as a member of a networking organization, such as a real estate agent, rather than a more appropriate specialist. In these scenarios, the lawyer would not be exercising independent judgment, which is required by Rule 2.1.
The networking organization’s requirements would also violate Rule 7.3(a) because it would result in other members, i.e., third parties, soliciting business for the lawyer from individuals with whom with whom the lawyer has no family or prior professional relationship. This solicitation also violates Rule 7.2(c), which prohibits a lawyer from giving anything of value to a person for recommending the lawyer’s services. Finally, this solicitation implicates Rule 8.4(a) because a third-party agent of the lawyer would be contacting prospective clients in a manner that violates the Rules.
ANNOTATIONS:
Exclusive and mandatory cross-referrals constitutes paying value to a person for recommending the lawyer’s services in violation of Rule 7.2(c), which prohibits a lawyer from giving anything of value to a person for recommending the lawyer’s services. Rule 7.2(c) has two exceptions that are not applicable to the networking organization in question.
Exclusive or quid pro quo implicates Rule 1.1’s competency requirement because a participating lawyer may feel obligated to accept a case the lawyer is not competent to handle.
Exclusive or quid pro quo implicates Rule 1.7 because the lawyer may feel obligated to refer a client to particular service providers, e.g. real estate agents, financial planning specialist, etc., when another such specialist may be more appropriate, thereby putting the client’s interests at risk.
Participation in a networking organization, as described herein, challenges an essential quality in a good lawyer, i.e. independent judgment.
The networking arrangements would result in exclusive and mandatory referrals of the lawyer’s services being directed to individuals with whom the lawyer does not have a prior family or professional relationship, thereby implicating Rule 7.3(a), which prohibits a lawyer from soliciting in-person or by live telephone contact or recorded telephone contact professional employment from a prospective client except under those two circumstances.
Rule 8.4(a) prohibits a lawyer from violating or attempting to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another. Although the lawyer is not having a direct contact with potential client, a third-party, through an agency relationship, is having contact.
NOTE: At the time of publication, the Supreme Court was considering extensive proposed revisions to the Rules of Professional Conduct. This opinion is issued under the Rules as presently in effect.