Ethics Opinon 1976-11

October 15, 1976

SUBJECT: ADVERTISING OF LEGAL SERVICES IN CONNECTION WITH MEMBERSHIP IN A SENIOR CITIZENS GROUP

I
QUESTIONS PRESENTED

A nonprofit association of senior citizens issued a mailing to senior citizens soliciting membership in the association. The mailing stated that for the payment of $12.00 per year per family, a number of benefits would be available to the members of the association including "Group Legal Services - Complete professional wills drawn $35." Is the senior citizens association a permissible "group" under the applicable ethical guidelines authorizing and regulating group legal services and if so, then is their statement "Group Legal Services - Complete professional wills drawn $35," a proper method by which to advertise?

II
CONCLUSION

The senior citizens association appears to be a permissible group which may provide the legal service advertised to its membership in that it is a nonprofit association offering numerous services to its membership of which the legal service appears to be a small portion of the total package of services. However, the method of advertising the legal service is improper under both the existing and proposed rules of professional conduct.

III
ANALYSIS

In the instant inquiry, certain facts are not stated that need to be ascertained. For this reason, the Committee will make the following assumptions in order to fully answer the inquiry:

1. The senior citizens association is a nonprofit group (as stated in their mailing) whose primary purpose is not that of securing the rendering of legal services (as appears from their mailing).

2. The $35.00 fee charged the individual members of the association for the drafting of a will is not shared by the lawyer with any other person or organization.
Assuming the above, the Committee finds the association to be a permissible group that may provide group legal services to its members.

State Bar Rule 2-104(D) controls and reads in pertinent part:

(D) The furnishing of legal services by a member of the State Bar pursuant to an arrangement for the provision of such services to the individual member of a group, as herein defined, at the request of such group, is not of itself in violation of these Rules of Professional Conduct if the arrangement:

. . . .

(2) is so administered and operated as to prevent

(a) such group, its agents or any members thereof from interfering with or controlling the performance of the duties of such member of the State Bar to his client.

(b) such group, its agents or any member thereof from directly or indirectly deriving a profit from or receiving any part of the consideration paid to the member of the State Bar for the rendering of legal services thereunder.

. . . .

As used in this rule, a group means a professional association, trade association, labor union or other nonprofit organization or 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 service.

Applying Rule 2?104(D) to the facts of the inquiry, the Committee determines that the association is a nonprofit organization whose primary purpose is to provide for its members the opportunity to acquire a wide range of goods and services for reduced prices. It appears that the legal service, in the form of drafting wills, is only a small part of the many services that are available to a member. Thus, the association's primary purpose is not that of providing legal services for its members. This committee considers salient the limited scope of the legal services rendered (i.e., will drafting). The committee does not express an opinion on whether it would be proper to offer a wide range of legal services through this group.

It is assumed that the association merely directs its members to certain lawyers in the area for the purpose of obtaining a will. It is important to assume that at that point the association has no further input into what transpires between the attorney and his client. If the above is true, the association complies with the appropriate parts of Rule 2-104.

The committee has assumed that no part of the actual fee charged by the lawyer for the drafting of a will will be shared with the association. In this regard, Rule 2-104(D)(2)(b) is not violated.

The committee finds San Diego Ethics Opinions 1975-13 and 1976-1 distinguishable in that in those cases the group offering the legal services was not a nonprofit group and a primary purpose of the organization was to secure the rendering of legal services at a discount. The facts appear to the contrary in the instant case.

The 1976 Amendments to the ABA Code of Professional Responsibility DR 2-102(A)(6), provide, in part, that:

A statement of legal fees for an initial consultation or the availability upon request of a written schedule of fees or an estimate of the fee to be charged for the specific services may be included in a law list or directory listing.

The new amendments also add a final proviso that encourages, if not requires, local regulation of listings:

provided all such published data shall be disseminated only to the extent and in such format and language uniformly applicable to all lawyers, as prescribed by the authority having jurisdiction by state law over the subject.

California Rule of Professional Responsibility, 2-102(B)(3), as proposed by the State Bar, provides that the following information may be given:

(n) Fee(s) or range(s) of fee(s) charged by the member or the member's firm for specific types of services, together with all of the variables and other relevant factors that could affect the amounts of the stated fee(s). . . .

There have been no cases yet interpreting the proposed changes, but at this time, it would appear that fees may be stated only when all of the variables and other relevant factors are also stated.

The current California Rules 2-101 through 2-104, in effect since January 1, 1975, would not allow fees to be stated at all. Rule 2-104(D)(2) prohibits:

(d) All publicizing and soliciting activities concerning the [group] arrangement except by means of simple, dignified announcements setting forth the purposes and activities of the group or nature and extent of the legal services or both. . . .

The fee advertisement in question clearly goes beyond the limitations of this section.

Notwithstanding claims by commentators that advertising should be "expanded" (See e.g. 50 L.A.B. Bull 209 (1975); G2 ABA Journ 735 (1976)), the statement of a flat fee without a statement accompanying it regarding variables that might affect the fee violates both the current and proposed Rules of Professional Responsibility of the State Bar of California.


CONCURRING

I concur with the majority's opinion that this group may legally advertise this legal service, however, under a different analysis.

Until recently, it was widely thought that advertisements were not protected by the First Amendment. The Supreme Court altered that opinion by holding that advertisements were indeed constitutionally protected. Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, 44 U.S.L.W. 4686 (May 24, 1976); Bigelow v. Virginia, 421 U.S. 809, 818, 95 S.Ct. 2222, 44 L.Ed. 2d 600 (1975). Rule 2?101 and other implementing rules constitute an illegal prior restraint. Near v. Minnesota, 283 U.S. 697 (1931). Similar laws purporting to restrict the senior citizen association's right to advertise are defective under the same reasoning.

Ethical, criminal and/or civil violations by both the attorneys and the association may occur if the $35.00 fee is a "bait and switch" or other unauthorized tactic. It should be noted that the sanctions for fraudulent advertising apply to attorneys as well as everyone else.

 

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.