Ethics Advisory Opinion 14-03

Utah State Bar
Ethics Advisory Opinion Committee

Opinion Number 14-03

Issued April 22, 2014

ISSUE

1.         Do the Utah Rules of Professional Conduct prohibit referral agreements between two attorneys that require one of the attorneys (the “Referring Attorney”) to refer to the other (the “Receiving Attorney”) all clients that have a certain specified type of products liability claim?

 OPINION

2.         The Committee concludes that an agreement between two attorneys which requires the Referring Attorney to refer to the Receiving Attorney all clients that have a certain specified type of claim may likely violate various provisions of the Utah Rules of Professional Conduct (the “Rules”).

FACTS

3.         The Referring Attorney, licensed to practice in the State of Utah, and the Receiving Attorney, licensed to practice elsewhere, enter into an agreement governed by Utah law (the “Agreement”) to jointly pursue certain kinds of products liability claims (the “Claims”) of individuals located in the State of Utah.  The Agreement provides in relevant part:
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Ethics Advisory Opinion 14-01

Utah State Bar
Ethics Advisory Opinion Committee 

Opinion Number 14-01

 Issued January 15, 2014

ISSUE

1.         Under what conditions is it appropriate for a personal injury lawyer to “outsource the calculation, verification and resolution of alleged health insurance liens and subrogation/reimbursement claims” and pass the outsourced resolution fee to the client as a “cost.”  There are two questions posed to the committee.  First, can the lawyer appropriately outsource the lien resolution?  Second, is the treatment of the lien resolution fee appropriately treated a “cost” to the client?

 OPINION

2.         It is ethical for a personal injury lawyer to engage the services of a lien resolution company that can provide expert advice or to associate with a law firm providing this service.
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Ethics Advisory Opinion No. 12-03

UTAH STATE BAR ETHICS ADVISORY OPINION COMMITTEE

Opinion No. 12-03
Issued December 13, 2012

ISSUE

1. May a community association management company profit from legal work performed by the company’s in-house attorney?

OPINION

2. A community association management company’s profiting from legal work performed by the company’s in-house attorney constitutes the improper sharing of fees with a non-lawyer in violation of Utah Rule of Professional Conduct 5.4(a).[1]

BACKGROUND

3. An attorney is employed as in-house counsel for a community association management company. Although the company does not profit from the legal work the attorney performs, the company believes that other community association management companies routinely profit from the legal work performed by their respective in-house attorneys. Specifically, these companies collect a fee from their clients for legal services at a rate that is higher than the cost the companies incur in employing their corporate attorneys. The issue addressed in this Opinion stems from this practice.

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Ethics Advisory Opinion No. 12-02

UTAH STATE BAR ETHICS ADVISORY OPINION COMMITTEE

Opinion No. 12-02
Issued December 13, 2012

ISSUE

  1. What are the ethical and practical considerations applicable to attorneys representing clients in the state of Utah under flat fee or fixed fee agreements (hereinafter referred to as “flat fee agreements”)?

OPINION

  1. The permissibility of flat fee agreements in Utah is well established, subject always to the requirements of the Utah Rules of Professional Conduct. Utah lawyers may use such agreements under circumstances that ensure that clients will not be charged an unreasonable fee, as prohibited by Rule 1.5, and that client funds will not be comingled with the attorney’s funds as prohibited by Rule 1.15. Whether a flat fee arrangement complies with these rules depends heavily on an analysis of the applicable facts and circumstances. Except in rare circumstances where a fee may reasonably be earned upon receipt, as described in this opinion, fee agreements should not describe such fees as “non-refundable,” as such fees are always subject to refund in the event they are or become unreasonable under the particular facts of the case. Representation that a flat fee is nonrefundable is deceptive and violates Rule 8.4.
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Ethics Advisory Opinion No. 07-01

Issued March 9, 2007
¶ 1. Issue:
May a lawyer purchase the exclusive right to referrals generated from the membership base of an organization whose members from time to time may have need of the legal services offered by that lawyer?

¶ 2. Opinion: The proposed arrangement, which contemplates the exclusive funneling of referrals to one lawyer or firm, is not permitted, as it violates Rule 7.2(b), which prohibits a lawyer from giving anything of value to a person for recommending the lawyer’s services. The fact that the recommendation is made by an organization does not change the outcome here.
¶ 3. Facts: A Utah for-profit organization provides an array of services to its members, including assistance in finding legal representation for its members for various circumstances, including immigration, criminal defense and personal injury following an automobile accident. This organization has solicited a Utah law firm to purchase the exclusive right to receive referrals generated by its membership base, for members who need legal consultation following an automobile accident. (more…)

Ethics Advisory Opinion No. 02-03

(Issued February 27, 2002)
¶ 1 Issue:
What are the ethical obligations of an insurance defense lawyer with respect to insurance company guidelines and flat-fee arrangements?

¶ 2 Opinion: An insurance defense lawyer’s agreement to abide by insurance company guidelines or to perform insurance defense work for a flat fee is not per se unethical. The ethical implications of insurance company guidelines must be evaluated on a case by case basis. An insurance defense lawyer must not permit compliance with guidelines and other directives of an insurer relating to the lawyer’s services to impair materially the lawyer’s independent professional judgment in representing an insured. If compliance with the guidelines will be inconsistent with the lawyer’s professional obligations, and if the insurer is unwilling to modify the guidelines, the lawyer must not undertake the representation. Flat-fee arrangements for insurance defense cases are unethical if they would induce the lawyer improperly to curtail services for the client or perform them in any way contrary to the client’s interests. Obligations of lawyers under the Utah Rules of Professional Conduct, including the duty zealously to represent the insured, cannot be diminished or modified by agreement. (more…)

Ethics Advisory Opinion No. 02-09

Issued September 24, 2002
¶ 1 Issue:
Is it ethical for an attorney to enter into a contingency-fee agreement, under which all fees, expenses and costs of litigation are unconditionally assumed by the attorney?

¶ 2 Opinion: Within broad limitations, the Utah Rules of Professional Conduct permit an attorney and a client to determine the terms of the lawyer’s compensation, and there is no per se restriction prohibiting the attorney from assuming all litigation costs and expenses under a contingency-fee agreement. Such fee agreements, however, must comply with all other applicable provisions of the Utah Rules of Professional Conduct concerning fees.
¶ 3 Analysis: We have received a request for an opinion as to the propriety of a lawyer’s entering into a contingent-fee agreement with a commercial client on collection matters that contains the following paragraph: (more…)

Ethics Advisory Opinion No. 98-13

(Approved December 4, 1998)
Issue:
What are the ethical obligations and considerations that govern a law firm’s acceptance of a financial interest such as stock in a client company in return for performing legal services for that company?

Opinion: A law firm’s acquisition of a financial interest such as stock ownership in a client, whether the investment is made directly by the law firm or through a blind trust, holding company, investment partnership or other investment vehicle, and whether the interest is acquired in exchange for legal services or whether the client’s primary attorney is involved in investment decisions concerning the client’s stock, is not per se unethical. However, in all such arrangements, counsel must comply with the requirements of Rules 1.5, 1.7(b) and 1.8(a) of the Utah Rules of Professional Conduct. (more…)

Ethics Advisory Opinion No. 97-05

(Approved April 25, 1997)
Issue No. 1: Is it ethical for an attorney to receive payment for legal services other than in money?
Opinion: The Utah Rules of Professional Conduct permit an attorney to accept payment for legal services in a form other than money. All arrangements for payment of an attorney’s fees, however, must comply with the applicable provisions of the Utah Rules of Professional Conduct concerning fees and the attorney-client relationship.
Issue No. 2: Is it ethical for an attorney to barter legal services through a barter exchange?

Opinion: Although an attorney’s bartering of legal services through a barter exchange is not prohibited per se by the Utah Rules of Professional Conduct, such bartering is unethical if the attorney’s conduct or the structure, terms, or conditions of the attorney’s arrangements with the barter exchange violate any of the Utah Rules of Professional Conduct. (more…)

Ethics Advisory Opinion No. 97-06

(Approved May 30, 1997)
Issue:
Under the Utah Rules of Professional Conduct, what are the ethical limitations that govern attorneys’ acceptance of clients’ credit cards to pay fees and costs?

Opinion: Generally, attorneys may accept payment for fees and costs by credit card in the same way that other merchants and service-providers do. This general conclusion is, in part, in conflict with Utah Ethics Advisory Opinion No. 21, which is accordingly overruled.
Background: In 1975, the Utah Ethics Advisory Opinion Committee issued Opinion No. 21, which placed significant restraints on the acceptance of credit cards by attorneys in payment of fees and cost. That opinion was issued under the then-effective Code of Professional Responsibility, which, among other differences, is at variance with the current Utah Rules of Professional Conduct in the area of attorney advertising. To the extent the world of communicating about attorneys’ services has changed, this Committee has been asked to revisit the issue of attorneys’ acceptance of credit cards under today’s Rules. (more…)