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.
¶ 4. Analysis: Rule
7.2(b) of the Utah Rules of Professional Conduct sets out the basic
rule that applies to the issue presented:
(b)
A lawyer shall not give anything of value to a person for recommending
the lawyer’s services; except that a lawyer may:
(1)
pay the reasonable costs of advertisements or communications permitted
by this Rule;
(2)
pay the usual charges of a legal service plan or a lawyer referral
service;
(3)
pay for a law practice in accordance with Rule 1.17; or
(4)
divide a fee with another lawyer as permitted by Rule 1.5(e).1
This fundamental rule is elaborated upon by Comment [5] to the Rule,
which further states: “Lawyers are not permitted to pay
others for channeling professional work.”2 Under
the plain language of this Rule and the explanatory comment, a lawyer
would be prohibited from purchasing exclusive referral rights from
the organization, because that would constitute paying another person
for recommending the lawyer’s services.3
¶ 5. Rule 7.2(b) contains several
exceptions to this blanket prohibition. Subsection 7.2(b)(2) permits a lawyer to “pay the usual charges of a legal service
plan or lawyer referral service.” This provision of the
Utah Rules of Professional Conduct differs from the American Bar Association
Model Rule, which permits a lawyer to pay the usual charges of a legal
service plan or a “not-for-profit or qualified” lawyer
referral service.4 It
would be inappropriate to conclude, however, that the difference between
the Utah Rule and the ABA Model Rule was intended to permit a lawyer
to avoid the prohibition of Rule 7.2(b) through the use of an organization
that is not, in fact, a “lawyer referral service” in even
the most colloquial sense of the term.
¶ 6. Comment [6] to Rule 7.2 defines
a lawyer referral service as “an organization that holds itself
out to the public to provide referrals to lawyers with appropriate
experience in the subject matter of the representation.” At
a minimum, Rule 7.2(b)(2) 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.
¶ 7. Comment [6] to Rule 7.2 also
defines a legal service plan as “a prepaid or group legal
service plan or similar delivery system that assists prospective clients
to secure legal representation.” Thus, the “plan” under
Rule 7.2(b)(2) must be a provider of legal services to plan members
using the services of licensed lawyers.5 The
organization at issue provides no legal services to its members; the
lawyers do not provide legal services “through the plan.”
¶ 8. Conclusion: The
organization in this case is not operated as a public service, but
rather channels legal work to a single lawyer or firm who has paid
the organization for that privilege. The organization is not,
therefore, a “legal service plan” or a “lawyer referral
service” within the meaning of Rule 7.2(b)(2), and the proposed
exclusive funneling of referrals to one lawyer or firm that has paid
for the privilege violates Rule 7.2(b)’s prohibition against
giving anything of value to another person for recommending a lawyer’s
services.6
Footnotes
1 Utah
Rules of Professional Conduct 7.2(b) (2006).
3 “Person” in
Utah is generally defined to include any “individual, firm,
company, association or corporation.” See, e.g., Utah
Code Ann. §§ 48-2a-101(12); 76-1-601 and 78-27-23 (2006).
4 ABA
Model Rules of Professional Conduct 7.2(b)(2) (2002).
5 Utah
Rules of Professional Conduct, Rule 7.3, Cmt. [8]. Comment
[8] describes lawyers participating in a group or prepaid legal
services plan as “provider[s] of legal services through the
plan.”
6 As
we have concluded that the organization at issue is neither a prepaid
or group legal services plan nor a lawyer referral service for
which a lawyer may pay the “usual charges” pursuant
to Rule 7.2(b), we do not reach the issue of whether this organization
violates rule 7.3(a) through its use of in-person or other real-time
communications to solicit memberships to the organization.
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