State Bar of Arizona Ethics Opinions
91-04: Advertising; Direct Contact with Prospective Clients
OVERRULED BY ETHICS OPINION 02-08
Attorney may join and participate in "professional networking group" but may not set up booth at group-sponsored "business exposition."
The inquiring attorney wishes to participate in organizations known as “professional networking groups.” Typically, these groups consist of business and professional persons who socialize over breakfast, lunch or dinner, occasionally introducing themselves to the group and explaining what they do. The inquiring attorney states that she will not engage in direct, personal solicitation of the groups' participants. However, she acknowledges that someone else in the group might initiate contact with her regarding legal representation once that person learns that she is a lawyer.
Many "professional networking groups" require a participant to pay a membership fee. This fee is in a fixed amount, and is not based on business generated for the member by membership in the group. The inquiring attorney discloses that there are no conditions for membership in a "professional networking group." For example, she would not be expected or required to refer her clients to any other members of the group in exchange for their referrals of their customers or clients to her.
At some group-sponsored events, the inquiring attorney would plan to set up a table or booth at a "business exposition," with signs, literature and business cards available to the public. Again, the inquiring attorney emphasizes that she would not personally approach anyone concerning possible legal representation, but states that other participants at the business exposition might, without prior solicitation, initiate contact with her.
1. May the inquiring attorney ethically join a "professional networking group," where she would socialize with other business and professional persons and provide them with information about her legal services?
2. May the inquiring attorney ethically participate in a "business exposition," where she would set up a booth and provide information about her legal services to other business and professional persons attending the exposition?
ETHICAL RULES INVOLVED
ER 7.2. Advertising
(a) Subject to the requirements of ER 7.1 and ER 7.3, a lawyer may advertise services through public media, such as a telephone directory, legal directory, newspaper or other periodical, outdoor, radio or television, or through written communication.
(c) A lawyer shall not give anything of value to a person for recommending the lawyer's services, except that a lawyer may pay the reasonable cost of advertising or written communication permitted by this rule and may pay the usual charges of a not-for-profit lawyer referral service or other legal service organization.
(g) A lawyer or his partner or associate or any other lawyer affiliated with him or his firm may be recommended, employed or paid by, or may cooperate with, one of the following offices or organizations that promote the use of his services or those of his partner or associate or any other lawyer affiliated with him or his firm if there is no interference with the exercise of independent professional judgment in behalf of his client:
(3) A lawyer referral service operated, sponsored, or approved by a bar association.
(h) A lawyer shall not accept employment when he knows or it is obvious that the person who seeks his services does so as a result of conduct prohibited under this rule.
Comment to ER 7.2:
A lawyer is allowed to pay for advertising permitted by this Rule, but otherwise is not permitted to pay another person for channeling professional work. This restriction does not prevent an organization or person other than the lawyer from advertising or recommending the lawyer's services. Thus, a legal aid agency or prepaid legal services plan may pay to advertise legal services provided under its auspices. Likewise, a lawyer may participate in not-for-profit lawyer referral programs and pay the usual fees charged by such programs. Paragraph (c) does not prohibit paying regular compensation to an assistant, such as a secretary, to prepare communications permitted by this rule.
ER 7.3. Direct Contact with Prospective Clients
(a) A lawyer may not solicit professional employment from a prospective client with whom the lawyer has no family or prior professional relationship in person or by telephone, when a motive for the lawyer's doing so is the lawyer's pecuniary gain.
ER 8.4. Misconduct
It is professional misconduct for a lawyer to:
(a) violate or attempt to violate the rules of professional conduct, knowingly assist or induce another to do so, or do so through the acts of another;
1. "Professional Networking Groups"
Although participation in "professional networking groups" is not specifically listed as one of the permitted forms of advertising in ER 7.2(a), the list is not exclusive, and should not restrict an attorney from employing other methods that are neither false nor misleading, of communicating to the public the existence and availability of his or her legal services. Advertising similar to that proposed by the inquiring attorney has been approved by professional ethics committees in other jurisdictions. See Ethics Advisory Panel of the Rhode Island Supreme Court, opinion 89-14 (July 20, 1989) (a lawyer practicing business law may attend social gatherings of local business people as long as he does not engage in in-person solicitation of professional employment) (ABA/BNA Lawyers' Manual on Professional Conduct, p. 901:7805); Los Angeles County Bar Association Ethics Committee, Formal Opinion 419 (August 17, 1983) (an attorney may randomly distribute to public brochures and business cards so long as they do not contain false or misleading information) (ABA/BNA Lawyers' Manual, supra, p. 801:1711); American Bar Association Standing Committee on Ethics and Professional Responsibility, Informal Opinion 85-1515 (May 20, 1985) (a lawyer may set up a booth at a state fair for the preparation of simple wills for the public. so long as there is no improper solicitation and the lawyers obligations of communication, competence and confidentiality are met) (ABA/BNA Lawyers' Manual, supra, pp. 801:375- 377). The Comment to ER 7.2 explains that advertising is permitted because “[t]he interest in expanding public information about legal services ought to prevail over considerations of tradition." The "professional networking groups" described by the inquiring attorney are an untraditional and, possibly, an effective way for her to inform the public about her legal services. However, she must take certain precautions, as discussed below.
First, the inquiring attorney must not participate in a "professional networking group" if its sole purpose is that of referring prospective clients to her. ER 7.2(c) prohibits an attorney from giving anything of value to another for recommending his or her services, and the Comment to ER 7.2 reinforces this prohibition when it admonishes that a lawyer, although allowed to pay for advertising permitted by that Ethical Rule, "is not permitted to pay another person for channeling professional work." Such a "channeling" arrangement also violates ER.7.2(g)(3), which, by inference, prohibits an attorney from cooperating with a lawyer referral service which is not operated, sponsored or approved by a bar association. One State Bar ethics committee has ruled that a lawyer may not ethically join an organization similar to a professional networking group" where the members of the organization specifically agree to refer matters to the lawyer. General Counsel, Alabama State Bar, Opinion 86-79 (August 1, 1986) (lawyer may not join "referral club" in which club members, consisting of members of business and professional communities, refer legal business to him) (ABA/BNA Lawyers' Manual, supra, p. 901:1010). However a fixed membership fee, in itself, does not violate this prohibition. ER 7.2(c) allows a lawyer to pay the reasonable cost of any advertising permitted by ER 7.2. If the membership fee is unrelated to revenue derived from any clients generated by the “professional networking group,” it is a "reasonable cost of advertising” for the purposes of ER 7.2(c). Of course, it is important that the membership fee be fixed in amount: no part of the fee may be based on the number of referrals the inquiring attorney receives from other members of the group. Similarly, the inquiring attorney may not agree to accept referrals of clients in exchange for referring her clients to other group members. The purpose of the "professional networking group" must simply be that of providing the inquiring attorney with an opportunity to make her legal services known to other business and professional people.
Secondly, the inquiring attorney must not engage in personal solicitation of the group's participants, in violation of ER 7.3. Although participation in "professional networking groups," in itself, does not violate this prohibition, there is much potential for abuse where an attorney participates in social gatherings with other business and professional people, for the purpose of "networking" and informing others about his or her legal services. The impermissible forms of solicitation the inquiring attorney must avoid are described in our Opinion No. 87-23 (October 26, 1987):
ER 7.3 is designed to prevent the "potential for abuse" inherent in "a direct, interpersonal encounter" wherein a layperson is subject to "the private importuning of a trained advocate." Comment to ER 7.3. The Committee interprets ER 7.3's ban on solicitation as applying to a personal contact directly between an attorney and a specific potential client with whom the attorney has had no prior relationship, where the contact is initiated by the attorney for pecuniary gain.
Opinion No. 87-23 at 5. In that opinion, we addressed the solicitation issue in the context of a financial planner-faculty member of an estate planning seminar encouraging the seminar participants to visit a specific attorney (the attorney-faculty member of the seminar) for a free consultation. We decided that making an offer to provide a free consultation to all seminar participants generally, unaccompanied by any pressure or coercive conduct, does not constitute a prohibited solicitation under ER 7.3 if two requirements are met: (1) the offer must be extended to a general group rather than to a specific person; and (2) there must be no pressure on or importuning of the seminar participants to accept the offer. Opinion No. 87-23 at 6. We believe that the same restrictions should apply to the inquiring attorney here with respect to her participation in "professional networking groups." She may discuss in a general way what she does with the group, but she must not exert any pressure on the participants of the group individually to retain her as an attorney. The inquiring attorney also must not direct or permit other members of the group to solicit clients on her behalf. Such conduct would constitute an improper solicitation of professional employment through the acts of another. See ER 7.3(a) and ER 8.4(a).
In conclusion, we hold that the inquiring attorney may ethically participate in the "professional networking groups" described in her inquiry. She may not give the members of a group anything of value in exchange for referrals of clients to her. Additionally, the inquiring attorney must not engage in in-person solicitation of members of a group, and must not allow others to engage in such conduct on her behalf.
2. "Business Expositions"
The committee does not reach the same result, however, with respect to the "business expositions" proposed by the inquiring attorney. As discussed above, prohibited solicitations involve a direct, personal encounter between a trained advocate and a prospective client. Such personal encounters offer such a potential for abuse and overreaching that the United States Supreme Court has held that they may be constitutionally regulated by means no less strict than an outright ban. See Ohralik v. Ohio State Bar Ass'n, 436 U.S. 447, 98 S. Ct. 1912, 56 L. Ed. 2d 444 (1978).
When an attorney sets up a booth at a "business exposition" almost every encounter with the public will be a one-on-one conversation with a person who, because he or she approached the booth, is likely to be in need of legal services. The requirement imposed in our Opinion No. 87-23 -- that an offer for a free consultation must be made generally to a substantial group – was clearly intended to lessen the potential for abuse inherent in such in-person encounters. This requirement is not present in the context of the "business exposition," where individuals will approach the inquiring attorney directly.
Therefore, we conclude that the inquiring attorney may not ethically establish a booth at a “business exposition,” with signs, literature and business cards available to the exposition participants, since to do so would violate ER 7.3.
Formal Opinions of the Committee on the Rules of Professional Conduct are advisory in nature only and are not binding in any disciplinary or other legal proceedings.
©State Bar of Arizona 1991