Can a law firm provide arbitrator-evaluation and grievance-research legal work to two lay associations that, in turn, sell that work to their own member jurisdictions?

Plain-English summary

A Chicago law firm served as general counsel to a private, not-for-profit public-employer labor-relations association. It proposed to furnish legal services for an arbitrator-evaluation and grievance-research service to be run jointly by that association and the labor-management relations arm of the U.S. Conference of Mayors. Under the plan, the two lay organizations would offer the service directly to requesting jurisdictions: they would evaluate arbitration panels and analyze grievances against contract language, supplying applicable legal principles, cases, and precedent, and would in turn retain the law firm (or any other firm) on an as-needed basis to do the underlying research. The firm's client would be the lay organization, not the requesting jurisdiction, and the firm offered fixed prices (for example, $150 to evaluate a panel of up to seven arbitrators, or $400 for basic research the firm valued at $1,000 to $1,500 of attorney time), which the lay organization could then mark up to its members.

The committee held the proposal violated the Code. The inquiring lawyer had framed the only issues as arising under Rules 2-101, 3-101, and 3-102, but the committee found that misconceived the problem: those associating to sell legal opinions and advice are engaging in the unauthorized practice of law, and the proposal violated Rule 2-103. The committee distinguished United Mine Workers of America v. Illinois State Bar Association, 389 U.S. 217 (1967), noting that the union there employed a salaried lawyer who answered only to the members he represented and was not a lay intermediary between the lawyer and the beneficiaries of the services, and it cited Smith v. Arkansas State Highway Employees, Local 1315, 441 U.S. 463 (1979). The committee concluded that using lay intermediaries between lawyers and those for whom they render particularized legal services constitutes aiding the unauthorized practice of law and is professionally improper.

Currency note

This opinion was issued in 1980, under the Illinois Code of Professional Responsibility adopted effective July 1, 1980, and before Illinois adopted the 2010 Rules of Professional Conduct. The ISBA Board of Governors affirmed the opinion in January 2010 as generally consistent with the 2010 Rules (Rule 5.5(a)), while cautioning that the specific standards referenced may differ from the 2010 Rules. 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.

Common questions

Q: Can a law firm sell legal research to a lay association that resells it to the association's members?

A: The opinion concluded the plan was improper because it inserted lay intermediaries between the lawyers and the jurisdictions receiving particularized legal services, which aids the unauthorized practice of law.

Q: Why didn't the union's legal-services plan in the United Mine Workers case save this arrangement?

A: The committee distinguished that case: there the union employed a salaried lawyer who reported only to the members he represented and was not a lay intermediary between the lawyer and the beneficiaries.

Q: Did it matter that the law firm, not the jurisdictions, was the lay organization's client?

A: Per the opinion, that structure was the problem; selling legal opinions and advice through the lay organizations meant those organizations were engaged in the unauthorized practice of law.

Background and rules framework

The opinion applied Illinois Supreme Court Rules 2-101 and 2-103 (and discussed 3-101 and 3-102), reading them against the prohibition on aiding the unauthorized practice of law. The Board's 2010 affirmation maps the analysis to current Illinois Rule of Professional Conduct 5.5(a) (unauthorized practice), corresponding to ABA Model Rule 5.5.

Citations and references

Rules of Professional Conduct:

• Illinois Supreme Court Rules 2-101, 2-103 (applied); Rules 3-101, 3-102 (discussed)
• Illinois RPC 5.5(a) (2010 equivalent per the Board's affirmation)
• MR 5.5 (unauthorized practice)

Cases:

• United Mine Workers of America v. Illinois State Bar Association, 389 U.S. 217 (1967), distinguished; union lawyer answerable only to members was not a lay intermediary
• Smith v. Arkansas State Highway Employees, Local 1315, 441 U.S. 463 (1979)

Other opinions cited:

• The opinion does not cite other ISBA opinions by number.

See also

• ISBA Ethics Op. 705: Acting on Claims Solicited by a Lay Corporation
• ISBA Ethics Op. 684: Law Firm Employing a Nonlawyer Labor Specialist
• ISBA Ethics Op. 700: Sports-Law Player Representation

Source

• Landing page: https://www.isba.org/ethics/opinions/707