Can a lawyer consent to having his name appear in an investment promoter's advertising as the author of a tax opinion when state regulators require counsel to be named?

Currency note

This opinion was issued in 1969, before the State Bar of California's adoption of the November 1, 2018 revisions to the Rules of Professional Conduct. The opinion interprets former California Rule 2, the predecessor to the current advertising and solicitation rules (current Rules 7.1-7.2; Model Rules 7.1-7.2). It also predates Bates v. State Bar of Arizona (1977), which struck many categorical advertising restrictions. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule or requirement mentioned here.

Disclaimer: This is an advisory ethics opinion. Advisory opinions are not binding; they interpret the State Bar of California's rules of professional conduct and are persuasive authority. This summary is for research purposes only and is not legal advice. Verify current rules before acting on any specific guidance.

About this page: The plain-English summary and Q&A below were written by Ezel based on the official opinion. The opinion text is reproduced at the bottom; the official source (linked) controls.

View original opinion

Plain-English summary

A real estate syndicator seeking investor-participants obtained a negotiated permit from the California Commissioner of Corporations and prepared advertising describing the tax advantages of the proposed investment. Under Administrative Code, title 10, section 260.302(e), any advertisement referring to a tax exemption or reduction had to be based on an opinion of counsel, and that counsel had to be named. The attorney who gave the tax opinion asked whether consenting to the use of his name in the material violated the Rules of Professional Conduct.

The committee concluded that the consented use of the attorney's name was not improper and did not violate former Rule 2, section (a). It reasoned that the rule against advertisement is aimed at preventing solicitation of professional employment, the ideal being that employment should come through a deserved reputation, and that the rule cannot be read to forbid all public exposure of an attorney's name and professional status. Where public attention is directed to a lawyer's name for reasons unconnected with soliciting employment, no violation occurs.

Applying that principle, the committee found it in the investing public's interest that syndicators document claimed tax advantages by reference to an opinion of counsel, and that naming the lawyer who rendered the opinion was appropriate given differing levels of expertise in the field. Any benefit to the attorney was incidental at most. The committee grounded its conclusion in the ABA Committee on Professional Ethics and Grievances' Opinion No. 290 (1956) (law firm named in a municipal bond circular) and the test stated there: whether furthering the lawyer's employment is the primary purpose of the advertisement, or merely a necessary incident of a legitimate objective of the client that does not unduly advertise the lawyer.

Common questions

Q: Can a lawyer let his name appear in an investment promoter's advertising as the author of a tax opinion?

A: Yes, on these facts. The committee held that consenting to the use of his name was not improper and did not violate former Rule 2, because a Commissioner of Corporations regulation required counsel to be named and the disclosure served the public interest.

Q: What test did the committee use to decide it was not improper solicitation?

A: Following ABA Opinion No. 290 (1956), it asked whether furthering the lawyer's employment was the primary purpose of the advertisement, or merely a necessary incident of a legitimate objective of the client that did not unduly advertise the lawyer. Here the naming was incidental.

Q: Did the regulatory requirement to name counsel matter?

A: Yes. The committee noted that section 260.302(e) required the name of counsel to be stated, and treated that mandated disclosure as evidence the naming was made in the public interest rather than for solicitation.

Background and rules framework

The opinion interprets former California Rule 2, section (a) (no solicitation of professional employment by advertisement), against the backdrop of Administrative Code, title 10, section 260.302(e), which required tax-related investment advertising to be based on, and to name, an opinion of counsel. The advertising and solicitation restrictions now appear, in altered form, in Model Rules 7.1-7.2 and the California analogs (Rules 7.1-7.2).

Citations and references

Rules of Professional Conduct:

• Former California Rule 2, section (a)
• Current analogs: Model Rules 7.1-7.2 / California Rules 7.1-7.2

Regulations:

• California Administrative Code, title 10, section 260.302(e) (counsel named in tax-related investment advertising)

Other opinions cited:

• ABA Committee on Professional Ethics and Grievances Opinion No. 290 (1956): law firm named in a municipal bond circular
• ABA Committee on Professional Ethics and Grievances Opinion No. 285; Opinion No. 100 (1933); informal opinion No. 421 (1961)

See also

• CA Ethics Op. 1969-17: Lawyer Hosting a Radio Program
• CA Ethics Op. 1969-18: Lawyer Joining a Nonlawyer Consulting Firm
• CA Ethics Op. 1967-08: Attorneys in Paid Political Advertisements

Source

• Landing page: https://www.calbar.ca.gov/legal-professionals/ethics-compliance-practice-resources/ethics/ethics-opinions
• Original opinion: https://www.calbar.org/ethics/Opinions/1969-19.htm

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Is it ethical for a lawyer to consent to or permit his name to be used in advertising material to potential investors, indicating the lawyer's opinion of tax benefits to potential investors, when so required by rules of the commissioner of corporations?

Rule 2 of the Rules of Professional Conduct of the State Bar.

Administrative Code, Title 10, section 260.302(e).

Inquiry has been made of the Committee as to the propriety of use of an attorney's name under the following circumstances. A real estate syndicator seeking investor-participants in a group formed to acquire and develop specific properties obtained a negotiated permit from the California Commissioner of Corporations. In connection with these proceedings he has prepared advertising material for approval by the Commissioner's office and subsequent distribution to potential investors. Such material described the advantages of the proposed investment under current income tax laws and states that the description of these tax benefits is based upon the opinion of counsel. The attorney rendering this opinion consents to the use of his name in such material in accordance with section 260.302(e), title 10, of the Administrative Code, which provides:

"Any advertisement which refers to an exemption from or reduction in taxation under any law should be based on an opinion of counsel, and the name of such counsel should be stated in the advertisement."

The question put to the Committee is whether the attorney, in consenting to the use of his name, has violated the Rules of Professional Conduct. Rule 2, section (a), of the Rules of Professional Conduct states:

"A member of the State Bar shall not solicit professional employment by advertisement or otherwise."

It is the opinion of the Committee that a consented use of the attorney's name under the circumstances described is in no way improper and, specifically, it is not violative of rule 2, section (a), of the Rules of Professional Conduct. The thrust of the proscription against advertisement by an attorney is prevention of "solicitation" of professional employment, the ideal being that such employment should come through a deserved reputation for professional ability and trustworthiness. This rule cannot logically be construed to forbid all exposure to the public of the attorney's name and professional status. There will necessarily occur some instances in which public attention is directed to an attorney's name and capacity for reasons wholly unconnected with solicitation of employment, either direct or indirect.

The case presented by the facts here is illustrative of this principle. It is clearly in the best interest of the investing public that syndicators and promoters be required to fully disclose all aspects of a proposed investment and to document, to the extent possible, any claimed special advantages. This interest is well served by reference in publicly circulated material to an opinion of counsel on tax aspects of a real estate scheme. Since levels of expertise in this area differ rather markedly within the profession, it is entirely appropriate that counsel rendering the opinion is identified. Disclosure of his name and capacity to the investing public manifestly is made in the public interest, and any benefit which might be realized by the attorney is incidental, at most. Examples of disclosure under similar circumstances--many of which are required by statute, regulation, or administrative practice--are numerous. We note such requirements (including the reference to Admin. Code, tit. 10, Section 260.302(e), above) to emphasize the public interest involved.

The principles upon which this opinion is grounded have been articulated several times by the American Bar Association's Committee on Professional Ethics and Grievances. Its most comprehensive statement of the issue was Opinion No. 290 (1956), in which acquiescence by a law firm in the use of its name in a municipal bond circular approving the legality of the issue was unqualifiedly considered to be proper. The opinion observed:

"The value of municipal bonds is peculiarly dependent on the assurance of compliance with all the required legal formalities and it is hence most important for purchasers of them to be confident that the legal steps in their issuance have been in charge of competent lawyers. For the municipality to give such assurance is primarily in its interest and in that of the purchasers. Although some advantages to the law firm may result, this is incidental."

In summation, the Committee on Professional Ethics and Grievances highlighted the essential issue in these matters as follows:

"The question is always, as we said in Opinion 285, whether under the circumstances the furtherance of the professional employment of the lawyer is the primary purpose of the advertisement, or is merely a necessary incident of a proper and legitimate objective of the client which does not have the effect of unduly advertising him."

We are fully in accord with that reasoning. (See also ABA Committee on Prof. Ethics and Grievances, opn. No. 100 (1933) and informal opn. No. 421 (1961).)