Ethics Opinon 1976-11
October
15, 1976
SUBJECT:
ADVERTISING OF LEGAL SERVICES IN CONNECTION WITH MEMBERSHIP
IN A SENIOR CITIZENS GROUP
I
QUESTIONS PRESENTED
A nonprofit
association of senior citizens issued a mailing to senior
citizens soliciting membership in the association. The mailing
stated that for the payment of $12.00 per year per family,
a number of benefits would be available to the members of
the association including "Group Legal Services - Complete
professional wills drawn $35." Is the senior citizens
association a permissible "group" under the applicable
ethical guidelines authorizing and regulating group legal
services and if so, then is their statement "Group
Legal Services - Complete professional wills drawn $35,"
a proper method by which to advertise?
II
CONCLUSION
The
senior citizens association appears to be a permissible
group which may provide the legal service advertised to
its membership in that it is a nonprofit association offering
numerous services to its membership of which the legal service
appears to be a small portion of the total package of services.
However, the method of advertising the legal service is
improper under both the existing and proposed rules of professional
conduct.
III
ANALYSIS
In the
instant inquiry, certain facts are not stated that need
to be ascertained. For this reason, the Committee will make
the following assumptions in order to fully answer the inquiry:
1.
The senior citizens association is a nonprofit group (as
stated in their mailing) whose primary purpose is not that
of securing the rendering of legal services (as appears
from their mailing).
2.
The $35.00 fee charged the individual members of the association
for the drafting of a will is not shared by the lawyer with
any other person or organization.
Assuming the above, the Committee finds the association
to be a permissible group that may provide group legal services
to its members.
State
Bar Rule 2-104(D) controls and reads in pertinent part:
(D)
The furnishing of legal services by a member of the State
Bar pursuant to an arrangement for the provision of such
services to the individual member of a group, as herein
defined, at the request of such group, is not of itself
in violation of these Rules of Professional Conduct if the
arrangement:
. .
. .
(2)
is so administered and operated as to prevent
(a)
such group, its agents or any members thereof from interfering
with or controlling the performance of the duties of such
member of the State Bar to his client.
(b)
such group, its agents or any member thereof from directly
or indirectly deriving a profit from or receiving any part
of the consideration paid to the member of the State Bar
for the rendering of legal services thereunder.
. .
. .
As
used in this rule, a group means a professional association,
trade association, labor union or other nonprofit organization
or combination of persons, incorporated or otherwise and
including employees of a single employer, whose primary
purpose and activities are other than the rendering of legal
service.
Applying
Rule 2?104(D) to the facts of the inquiry, the Committee
determines that the association is a nonprofit organization
whose primary purpose is to provide for its members the
opportunity to acquire a wide range of goods and services
for reduced prices. It appears that the legal service, in
the form of drafting wills, is only a small part of the
many services that are available to a member. Thus, the
association's primary purpose is not that of providing legal
services for its members. This committee considers salient
the limited scope of the legal services rendered (i.e.,
will drafting). The committee does not express an opinion
on whether it would be proper to offer a wide range of legal
services through this group.
It is
assumed that the association merely directs its members
to certain lawyers in the area for the purpose of obtaining
a will. It is important to assume that at that point the
association has no further input into what transpires between
the attorney and his client. If the above is true, the association
complies with the appropriate parts of Rule 2-104.
The
committee has assumed that no part of the actual fee charged
by the lawyer for the drafting of a will will be shared
with the association. In this regard, Rule 2-104(D)(2)(b)
is not violated.
The
committee finds San Diego Ethics Opinions 1975-13 and 1976-1
distinguishable in that in those cases the group offering
the legal services was not a nonprofit group and a primary
purpose of the organization was to secure the rendering
of legal services at a discount. The facts appear to the
contrary in the instant case.
The
1976 Amendments to the ABA Code of Professional Responsibility
DR 2-102(A)(6), provide, in part, that:
A statement
of legal fees for an initial consultation or the availability
upon request of a written schedule of fees or an estimate
of the fee to be charged for the specific services may be
included in a law list or directory listing.
The
new amendments also add a final proviso that encourages,
if not requires, local regulation of listings:
provided
all such published data shall be disseminated only to the
extent and in such format and language uniformly applicable
to all lawyers, as prescribed by the authority having jurisdiction
by state law over the subject.
California
Rule of Professional Responsibility, 2-102(B)(3), as proposed
by the State Bar, provides that the following information
may be given:
(n)
Fee(s) or range(s) of fee(s) charged by the member or the
member's firm for specific types of services, together with
all of the variables and other relevant factors that could
affect the amounts of the stated fee(s). . . .
There
have been no cases yet interpreting the proposed changes,
but at this time, it would appear that fees may be stated
only when all of the variables and other relevant factors
are also stated.
The
current California Rules 2-101 through 2-104, in effect
since January 1, 1975, would not allow fees to be stated
at all. Rule 2-104(D)(2) prohibits:
(d)
All publicizing and soliciting activities concerning the
[group] arrangement except by means of simple, dignified
announcements setting forth the purposes and activities
of the group or nature and extent of the legal services
or both. . . .
The
fee advertisement in question clearly goes beyond the limitations
of this section.
Notwithstanding
claims by commentators that advertising should be "expanded"
(See e.g. 50 L.A.B. Bull 209 (1975); G2 ABA Journ 735 (1976)),
the statement of a flat fee without a statement accompanying
it regarding variables that might affect the fee violates
both the current and proposed Rules of Professional Responsibility
of the State Bar of California.
CONCURRING
I concur
with the majority's opinion that this group may legally
advertise this legal service, however, under a different
analysis.
Until
recently, it was widely thought that advertisements were
not protected by the First Amendment. The Supreme Court
altered that opinion by holding that advertisements were
indeed constitutionally protected. Virginia State Board
of Pharmacy v. Virginia Citizens Consumer Council, 44 U.S.L.W.
4686 (May 24, 1976); Bigelow v. Virginia, 421 U.S. 809,
818, 95 S.Ct. 2222, 44 L.Ed. 2d 600 (1975). Rule 2?101 and
other implementing rules constitute an illegal prior restraint.
Near v. Minnesota, 283 U.S. 697 (1931). Similar laws purporting
to restrict the senior citizen association's right to advertise
are defective under the same reasoning.
Ethical,
criminal and/or civil violations by both the attorneys and
the association may occur if the $35.00 fee is a "bait
and switch" or other unauthorized tactic. It should
be noted that the sanctions for fraudulent advertising apply
to attorneys as well as everyone else.
Disclaimer:
This opinion was issued by the Legal Ethics Committee of
the San Diego County Bar Association. It is advisory only
and is not binding upon any member of the SDCBA, any other
member of the State Bar of California, the State Bar of
California or its Board of Governors, or any persons or
tribunals charged with regulatory responsibilities. The
SDCBA, its officers, directors, agents, and the Legal Ethics
Committee members assume no responsibility or liability
in rendering this opinion.
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