Ethics Opinion 1976-1

February 11, 1976



An attorney is offered an opportunity to participate in a group legal service program whereby an organization is established offering memberships to the public at a $10.00 fee. By so joining, the member receives a discount on a variety of services, including dental and eye care, accounting services, discount prices on automobiles and furniture and discount coupons for use in Las Vegas. Legal services "where permissible by State Bar Associations" and "not available through military sources" are also offered at "reduced fees."

The plan provides that a member may call the organization and receive the name of an attorney who is participating in the program. Although not stated in the request, presumably the attorney would, by joining the plan, agree to provide certain services at reduced rates to members.

The organization does not pay any portion of the attorney's fees nor does the attorney pay any portion of his fees to the organization. If a member is not satisfied with the attorney to whom he is referred, he may go to another attorney of his choosing, but with no "discount price."

May the attorney ethically participate in such a plan?


No. Although information submitted is incomplete in specifying all of the particulars of the plan, that information submitted appears to be in direct conflict with the California State Bar Act and Rules of Professional Conduct.


Section 6152 of the Business & Professions Code prohibits running or capping for attorneys or the solicitation of any business for attorneys by anyone.

Business & Professions Code §6154 provides:

"Any contract for professional services secured by any attorney at law in this state through the services of a runner or capper is void."

Rule 2-104 of the Rules of Professional Conduct prohibits an attorney from recommending himself, his partner or associate to a nonlawyer who has not sought his advice regarding employment. Subdivisions (D) and (E) of Rule 2-104 speak directly to the question of group legal services. Because of the length of those sections and due to the fact that insufficient information was presented in order to fully evaluate the proposed plan, reference is made only to those portions of the subdivisions of Rule 2-104 insofar as this Committee believes that the proposed plan violates said rule.


Rule 2-104(D) prohibits a group legal service if the group, its agents or any member thereof derives a profit from or receives a part of the consideration paid to the attorney. Rule 2-104(D)(2)(b). It appears as if the group, by selling the attorney's "discount", in net effect is obtaining a portion of the discount through the $10.00 membership fee.

Rule 2-104 requires that a group qualifying for sanctioned group legal services be a professional association, trade association, labor union or other nonprofit organization or a 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 services. It seems apparent that one of the primary purposes of the organization would be to secure the rendering of legal services at a discount and that the organization would not qualify as a group. Rule 2-104(D).

Prepaid legal services are authorized under Rule 2-104(E) only if the organization qualifies under Rule 2-104(D) or the organization is nonprofit and the panel of attorneys furnishing legal services consists of at least 20% of the attorneys actively practicing in the area. Rule 2-104(E) Section a(2)(b)(i). A qualified organization for the administration of prepaid legal services under Rule 2-104(E) must open the panel of attorneys to any active member of the Bar in the area. Rule 2-104(E) Section a(2)(b)(ii).

A provision similar to 2-104(D) is applicable to prepaid legal services whereby a third party may not receive any part of the consideration paid to the attorney for the furnishing of services. Rule 2-104(E) Section a(2)(c)(ii).

Section b of Rule 2-104(E) requires the specifics of such a plan to be submitted to the State Bar as therein specified. In fact, the State Bar has solicited questions from attorneys regarding the interpretation of the foregoing rules and the requirements therefor. Inquiries should be made to:

State Bar of California
Office of Legal Services
540 Van Ness Avenue, Suite 300
San Francisco, California 94102

For further information on this problem, attention is respectfully directed to the February 1975 issue of State Bar Reports containing a summary of Rule 2-104 and the November/December, 1974 issue of the California State Bar Journal containing a complete text of the revised Rules of Professional Conduct.


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.