Utah State Bar
Ethics Advisory Opinion Committee
Opinion Number 14-02
Issued January 14, 2014
1. Is an Agreement between a non-lawyer Marketer and a Law Firm where the Marketer conducts telephone marketing to solicit and refer clients to Law Firm in violation of the Rules of Professional Conduct where the payment to the Marketer matches a percentage of the fees paid to the Law Firm by the clients referred to the Law Firm by the Marketer?
2. If the Agreement is in violation of the Rules of Professional Conduct must the Attorney retained by Marketer to enforce the Agreement inform the appropriate professional authority pursuant to Rule 8.3(a)?
3. The Agreement, which requires payment to the non-lawyer Marketer to be based on a percentage of the fees paid to the Law Firm by the clients referred to the Law Firm by the Marketer, violates Rule 7.2(b) and Rule 5.4 of the Rules of Professional Conduct.
4. The question of whether it should be apparent to the Attorney retained by Marketer to enforce the Agreement, that the Agreement violates Rule 7.2(b) and/or Rule 5.4 of the Rules of Professional Conduct, in a manner that triggers a duty to inform the appropriate professional authority under Rule 8.3(a), is a fact specific inquiry undertaken by the lawyer presented with a Rule 8.3(a) question. The Committee expresses no opinion as to whether these specific facts do in fact trigger any obligation of the Attorney under Rule 8.3(a).
5. A Marketer has an agreement with a Law Firm to conduct telephone marketing to solicit and refer clients to the Law Firm. Marketer is paid by Law Firm, but Marketer receives payment which matches a percentage of the fees paid to the Law Firm by the clients who retain the Law Firm and were referred to the Law Firm by the Marketer. If the Law Firm is not paid in full by the clients referred by the Marketer, Law Firm’s payment to Marketer is reduced. An agency of another State requires the Law Firm to refund a substantial portion of fees paid to the Law Firm by residents of that State. Law Firms payments to the Marketer were reduced correspondingly.
6. Marketer then retains an Attorney to enforce payments – without reductions – under the agreement between the Law Firm and the Marketer.
7. Rule 7.2(b) states that: “A lawyer shall not give anything of value to a person for recommending the lawyer’s services[.]” The comments to Rule 7.2 indicate that: “Lawyers are not permitted to pay others for channeling professional work.” [Comment 5]. Here, the arrangement between a Law Firm and Marketer violates the plain language of Rule 7.2(b) and it is not readily apparent from the facts of this matter that any exception to the plain language of Rule 7.2(b) is applicable.
8. The comments to Rule 7.2 recognize the limited exceptions to this prohibition and mimic the language of Rule 7.2(b)(2) in indicating that: “A lawyer may pay the usual charges of a legal service plan or a lawyer referral service. . . . A lawyer referral service . . . is an organization that holds itself out to the public to provide referrals to lawyers with appropriate experience in the subject matter of the representation.” [Comment 6]. “At a minimum, Rule 7.2(b) requires that the lawyer referral service be available to the public and that it provide referrals to multiple lawyers and law firms, not to a single lawyer or a single law firm.” [Opinion 07-01]. Here, there is no indication that the Marketer is in fact a “lawyer referral service.”