Opinion #87. Structuring a Privately Operated Lawyer Referral Service

Issued by the Professional Ethics Commission

Date Issued: August 31, 1988

Questions Presented

An attorney is contemplating starting a privately operated lawyer referral service for personal injury claimants. The service would be owned and operated by individual lawyers or law firms selected throughout the State. The service would operate either from charges assessed to participating attorneys or from a fee split on referred matters. Clients in need of an attorney to handle a personal injury matter could contact the service and receive the name of one or more attorneys in their area of the State to handle the matter.

Opinion

The proposal is affected by two sections of the Bar Rules.

First, Bar Rule 3.9, governing advertising and solicitation, provides in sub‑section (f)(2) that:

A lawyer shall not compensate, or give anything of value, to a person or organization to recommend or secure his employment by a client, or as a reward for having made a recommendation resulting in his employment by a client, except that he may pay for public communication permitted by these rules and may pay the usual and reasonable fees in dues charged by a lawyer referral service operated, sponsored, or approved by a bar association. (emphasis supplied).

Second, Bar Rule 3.3(d) permits fee division with another lawyer who is neither a partner nor associate of the lawyer only if (a) the client after full disclosure consents to the division, and (b) the total fee charged does not exceed reasonable compensation for all services rendered to the client.

As structured, the proposed service appears to violate both those rules. First, Rule 3.9(f)(2) expressly prohibits a lawyer from paying a fee to anyone to recommend his/her services, except a usual and reasonable fee charged by a “bar association” referral service. While the Rules do not define the term “bar association referral service,” the ordinary meaning of that term would limit it to such types of associations as existed at the time of the adoption of the rules and presumably were within the contemplation of the draftsmen. Plainly, a privately operated organization consisting of a limited number of select members would not qualify as a “bar association referral service” within the ordinary meaning of that term. We know of no basis to argue that such an entity constitutes a “bar association” service.

A review of decisions from other jurisdictions reveals no decisions directly on point. That lack of guidance results from the fact that the provisions of both the Model Code of Professional Responsibility and the Model Rules of Professional Conduct contain limitations on participation on referral services that are materially different from those in the Maine Bar Rules.[1] Maine’s Rule is more limited than the provisions of either the Model Code or Model Rules.

Nonetheless, in all cases where the more flexible provisions of the Model Code and Model Rules have been interpreted, such interpretations have narrowly construed the provisions regarding participating in such services. ABA Committee on Ethics and Professional Responsibility. Informal Opinion 85‑1510 (2/16/85) and Informal Opinion 85‑1512 (3/26/85); Bar Association of Nassau County, N.Y., Committee on Professional Ethics, Opinion 84‑1 (2/84); So. Carolina Bar Ethics Advisory Commission, Opinion 86‑13(b) (10/9/86); D.C. Bar Committee on Legal Ethics, Opinion 170 (4/15/86); Alabama State Bar Disciplinary Commission, Opinion 86‑78 (8/14/86); California State Bar Standing Committee on Professional Responsibility and Conduct, Formal Opinion 1986‑90 (11/5/86). We conclude, therefore, that the provisions of Rule 3.9(f)(2) do not permit participation in the service as proposed.

In addition, Rule 3.3(d) prohibits fee division, unless expressly consented to by the client. Absent such conduct, the proposed referral service could not be funded by a sharing of fees with the referring organization.

In view of the fact that there may be alternate ways to structure such a private arrangement, we expressly limit this opinion to the proposal as presented.


Footnote

[1] The Model Code in DR2‑103(c) permits participating and the payment of a referral fee to bar association services, public defender programs and other non‑profit or for‑profit programs meeting specifically defined criteria. Model Rule 7.2 permits the payment of “usual charges” to participate in a not‑for‑profit lawyer referral service or other legal service operation.


Enduring Ethics Opinion