November 29, 1983
A lawyer in private practice may not accept referrals of clients from an insurance company for the preparation of wills and trusts under what amounts to a closed referral system.
A lawyer in private practice may not use the facilities of an insurance company to conduct client interviews because doing so would allow the company to exert influence on the lawyer's professional judgment under what amounts to a closed referral system.
References: MCPR DR 2-103(A) and (D), DR 5-107(B).
An insurance company asks a lawyer to take some of its customers on a referral basis. Customers would be referred to the lawyer to have their wills and trusts prepared as part of the insurance company's comprehensive investment policy. Referred customers would be the lawyer's clients and would pay the lawyer directly. The insurance company would receive no fee for the lawyer's services or for the referral. The lawyer would use the insurance company's facilities to conduct interviews of referred clients.
- Is it permissible for the lawyer to accept the referrals from the insurance company?
- If so, may the lawyer use the insurance company's facilities to conduct interviews of referred clients?
MCPR DR 2-103(A) and (D) state:
"(A) A lawyer shall not recommend employment, as a private practitioner, of himself, his partner, or associate to a nonlawyer who has not sought his advice regarding employment of a lawyer.
". . .
"(D) A lawyer shall not knowingly assist . . . [an] organization that furnishes or pays for legal services to others to promote the use of his services . . . except as permitted in DR 2-101(B). However, this does not prohibit a lawyer . . . from being recommended, employed or paid by, or cooperating with, one of the following offices or organizations . . . ."
MCPR DR 2-103(D) prohibits a lawyer from knowingly assisting the recommendation of himself by an organization that furnishes or pays for legal service to others, with the exception of categories and organizations listed under MCPR DR 2-103(D)(1)-(4).
The insurance company would refer its customers to the lawyer for wills and trusts; the customers would not be aware if the lawyer was experienced or able to properly furnish legal services. A lawyer's acquiescence to receiving wholesale referrals of clients from the insurance company would amount to knowingly accepting referrals under a closed referral system, i.e., a referral system that invites only a select group of attorneys to join, recommends no other lawyers, and gives no others opportunity to become aware of the referral system. Further, the insurance company would be furnishing legal services to its customers by making the referrals. Finally, the insurance company fails to fall within one of the categories enumerated under MCPR DR 2-103(D)(1)-(4). Therefore, the referrals are not permissible.
The second question becomes moot because the lawyer cannot accept the referrals. Even if the lawyer could accept the referrals, the using the insurance company's facilities to conduct client interviews would violate MCPR DR 5-107(B), which states:
"A lawyer shall not permit a person who recommends, employs or pays him to render legal services for another to direct or regulate his professional judgment in rendering such legal services."
Such prohibited influence would be exerted by the insurance company in deciding what facilities the lawyer could use and when.