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Ethics Opinion

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RI-9

May 18, 1989

SYLLABUS

    A lawyer or law firm may not ethically participate in a venture for group television advertising of legal services where:
  1. The venture operates as an impermissible referral or solicitation as opposed to mere advertising;
  2. The ad alleges "no fee unless recovery" and does not mention costs to be paid by the client;
  3. The lawyer personally solicits clients who are reluctant to follow up a free telephone consultation with an appointment;
  4. The contracting lawyer's fee is allocated to an expense other than advertising.

    References: MRPC 7.1, 7.2(c); RI-7; MCLA 750.40; Ohralik v. Ohio State Bar Ass'n, 436 US 447 (1978); Shapero v. Kentucky Bar Ass'n, 108 S Ct 1916 (1988). CI-1192 is distinguished.

TEXT

An out-of-state advertising firm proposes to market specialized legal group television advertising in Michigan called "Injury Helpline." The firm prepares and broadcasts tapes containing summaries of personal injury claimants discussing their frustrations in attempting to negotiate settlement claims, interjected with how "I.H." can help them by referring them to a nearby lawyer through a toll free telephone.

The firm proposes to contract with individual lawyers for a negotiated flat annual fee, renewable at the lawyer's option. It alleges it is not a lawyer referral agency, it provides no screening or responses to calls, but acts as advertising agent for and refers telephone calls to the lawyers. The firm has complete control over the content of and number of times the tapes will be broadcast, with the one proviso that at least 70% of the fees collected from lawyers shall be used to purchase broadcast time. The tapes will not specifically mention the name of any lawyer. The firm will refer all callers from a specified area (one or more zip codes) to a contracting lawyer. The lawyer shall provide a free initial consultation and agrees there will be no fee unless there is a recovery (the advertising will so state). Possible costs are not mentioned. All terms and conditions of further legal representation will be negotiated and agreed upon between lawyer and client without involvement of the firm. Contracting lawyers represent only that they are licensed to practice law and practice in the personal injury field of law.

MRPC 7.2(c) states:

    "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 services organization."

The plan can avoid the clear prohibition of MRPC 7.2(c) only if it constitutes "advertising or written communication permitted by this Rule," if the amount paid by the lawyer is not more than a "reasonable cost" of such advertising, and if the referral is not otherwise ethically prohibited.

The first question is, does the plan constitute "advertising," or does it go beyond advertising and include improper referral or solicitation.

The plan would clearly constitute "advertising" if the tapes were custom prepared specifically for a contracting lawyer, reciting the credentials of that lawyer, etc. The listener would then have the opportunity to inquire of others regarding that specific lawyer -- to compare the named lawyer with other lawyers -- to think and reflect before deciding whether to call the listed lawyer or some other lawyer. Such is not the case here. The plan does not advertise the lawyer, but rather advertises the potential need for personal injury legal assistance and then makes a blind referral to a specific lawyer.

In CI-1192 we stated that it is improper for a lawyer to participate in a marketing scheme whereby a paid intermediary advertised professional services of varying descriptions and, upon receipt of telephonic inquiries, directly connects the caller to a provider of such professional services selected by the intermediary. The plan in CI-1192 included lawyers of different specialties - the promoters screened the calls and referred to a specific lawyer providing that type of legal services. The I.H. plan differs only in that it is limited to personal injury lawyers, but is similar in that there is a blind referral to a specific lawyer. CI-1192 concluded that telephone calls where a contract for retention of a lawyer's services could result from an initial contact, in which the client had no opportunities for reflection as to either the need for legal services or the qualifications and desirability of retaining a particular lawyer, fell within the criminal prohibition of MCLA 750.410, and were impermissible solicitations. That same rationale applies here.

There are some other minor points of the plan which deserve brief comment. The advertising advises that the lawyer will provide a free initial consultation and will not charge a fee unless there is a recovery, without any mention of costs. In C-238 we stated that such an advertisement would be misleading, and MRPC 7.1 prohibits any form of public communication which is misleading.

The I.H. plan includes a "Guide to Effective Marketing" which states:

    "If the case sounds good and the client hesitates on making an appointment send someone to them."

If the caller has not yet retained the lawyer, initiation of personal contact by the lawyer would constitute unethical pressure and coercion. Ohralik v. Ohio State Bar Ass'n, 436 US 447 (1978); Shapero v. Kentucky Bar Ass'n, 108 S Ct 1916 (1988).

The I.H. plan provides that at least 70% of the fees retained must be used to purchase broadcast time, without stating how the remaining monies are to be used. To the extent the contract fee covers more than permitted advertising, such plan would violate 7.2(c).

 
     

 

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