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Ethics Opinion

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RI-7

February 10, 1989

SYLLABUS

    A lawyer may not participate in a prepaid legal service plan offered by a financial organization, wherein the president of the organization, a nonlawyer, has control over handling any disputes between the lawyer and the member who seeks a legal service.

    A lawyer participating in a prepaid legal services plan, who becomes aware that the marketing plan of the organization makes representations about the lawyer's legal services plan participation which are improper under the Rules, has a duty to bring the matter to the attention of the organization for correction, and to correct the representation for any member who has relied on the improper information.

    References: MRPC 5.4(c), 5.4(d), 7.1, 7.3; C-233; CI-1132, CI-1209.

TEXT

A lawyer desires to participate in the legal services plan offered through a financial organization. The organization will assess a set fee for each member which would entitle the member to both accounting and legal services. A contract between the lawyer and the organization to provide routine legal services for organization members will expressly state that the organization has no right of control over the lawyer. Marketing of the legal services plan will be the sole responsibility of the organization without participation by the lawyer.

The organization will pay the lawyer from the set fee paid by its members. The members will be advised that though the lawyer is being paid by the organization from the member's fee, the member is the client of the lawyer.

The president of the financial organization, who is not a lawyer, will handle any problems or disputes that arise between the lawyer and the member. If the problem cannot be resolved through intervention by the president, the member's fee is refunded.

The issue is whether the proposed legal access program and the requesting lawyer's connection with the program would violate the Michigan Rules of Professional Conduct.

First, a legal services program must assure that the professional judgment of the lawyer will not be interfered with by the underlying organization. MRPC 5.4(c) and (d) state:

    "(c) A lawyer shall not permit a person who recommends, employs, or pays the lawyer to render legal services for another to direct or regulate the lawyer's professional judgment in rendering such legal services.

    "(d) A lawyer shall not practice with or in the form of a professional corporation or association authorized to practice law for profit if:

      ". . .

      "(3) A nonlawyer has the right to direct or control the professional judgment of a lawyer."

The Rules safeguard against any interference with the professional judgment of a lawyer who is rendering the legal services by the entity which is to pay the lawyer for those services. The Comment accompanying MRPC 5.4 reemphasizes this charge:

    "A lawyer does not violate this rule by affiliating with or being employed by an organization such as a union sponsored prepaid legal services plan, provided the structure of the organization permits the lawyer independently to exercise professional judgment on behalf of a client." Emphasis added.

In the fact situation presented, a lawyer faced with the potential of the president of the organization which hired him to control client disputes, could not be expected to exercise his professional judgment independently.

Second, under the plan here, the lawyer would permit the organization to be responsible for marketing without review by the lawyer. Although the lawyer could not be expected to review the entire marketing plan of the organization, a lawyer has a duty to assure that communications about the lawyer's services are not false, fraudulent, deceptive or misleading, do not contain a material misrepresentation of law or fact, are not likely to create an unjustified expectation, and are not improper solicitation. MRPC 7.1 and 7.3. If the lawyer becomes aware of improper communications, therefore, the lawyer should bring the matter to the attention of the organization for correction. Further, the lawyer should not accept any employment from a plan member, when the employment was obtained in reliance on the improper communications, without first correcting the information and verifying that the member wishes to proceed.

For these reasons, the lawyer may not ethically participate in the legal services plan described.

 
     

 

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