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01/02-03

 

Abstract 01/02-03

Summary of Facts Provided

A lawyer wishes to join a for-profit advertising organization that represents itself as "a partnership of professionals who provide fully integrated financial planning, legal services, and accounting for individuals and businesses." The lawyer would become an "associate member" for a monthly fee of $25.00. This same lawyer wishes to obtain a license to sell insurance and related products and to sell those products from the lawyer's law office.

Issues

 

  1. Whether membership in a for-profit organization for the purpose of obtaining legal work is prohibited under the Colorado Rules of Professional Conduct ("CRPC").
  2. Whether the ethical ramifications of obtaining a license to sell insurance and related products, and selling those products through the attorney's law office complies with ethical guidelines for an attorney engaging in dual practices

Conclusions

  1. Membership in a for-profit organization for the purpose of obtaining legal work is prohibited under the CRPC. CRPC 1.5(e) prohibits a lawyer from accepting or paying a referral fee. CRPC 7.2(c) states that a lawyer "shall not give anything of value to a person for recommending the lawyer's services," except as provided in CRPC 7.2(c)(1) through (3). Those exceptions, in pertinent part, provide as follows:
    1. a lawyer may pay the reasonable cost of advertisements permitted by CRPC 7.2; and
    2. a lawyer may pay the usual charges of a not-for-profit lawyer referral service or a legal service organization.

    This prohibition against a lawyer using a "feeder operation" to channel legal work to the lawyer is discussed in detail in CBA Formal Opinion 106.

    CRPC 5.4(a) prohibits a lawyer from sharing fees with a non-lawyer, and CRPC 5.4(b) prohibits the formation of a partnership with a non-lawyer that includes the practice of law. Whether a lawyer has formed a partnership with a non-lawyer is determined under the principles of law pertaining to the formation of partnerships. See CBA Formal Opinion 98 (1996), and CBA Formal Opinion 87 (1991 and addendum 1995). The advertisement of the for-profit organization at issue states that the lawyer-member joins a "partnership of professionals who provide fully integrated financial planning, legal services, and accounting for individuals and businesses." Clearly, CRPC 5.4(a) and 5.4(b) prohibit a lawyer from forming a "partnership" with the for-profit advertising organization. Further, the lawyer having legal work referred by the for-profit advertising organization contravenes the prohibition of CRPC 7.2(c) against a lawyer using a "feeder operation" to channel legal work to the lawyer. A lawyer contemplating any form of advertising should review CRPC 7.1 through 7.5.

    Finally, a lawyer who joins a for-profit advertising organization such as the one at issue risks violating CRPC 1.6. CRPC 1.6(e) says that a lawyer cannot "reveal information relating to the representation of a client," without first obtaining that client's consent. Joining such an organization could cause inadvertent waivers of the attorney-client privilege and unauthorized disclosures of client information. Such inadvertent waivers or unauthorized disclosures could result by a client having a conversation with the lawyer in the presence of a non-lawyer member of the same organization.

     

  2. A lawyer who obtains a license to sell insurance should not provide legal work for the same client that in any manner pertains to the insurance the lawyer sells the client. Further, any insurance the lawyer sells should not be sold through or on the premises of the lawyer's law firm. For a complete discussion of the issues posed by such dual practice, see CBA Formal Opinion 98 (1996). That Formal Opinion says that a lawyer may engage in a second occupation, however, any such second occupation must not provide a vehicle for improper solicitation, known as a "feeder" operation. Further, CBA Formal Opinion 98 warns that the ethical danger to the dual practice lawyer increases if the second occupation is law-related. A lawyer interested in selling insurance should note that CBA Formal Opinion 98 lists "insurance agent" and "financial planning" among examples of occupations that have been deemed to be related to the practice of law.