In Kentucky, may lawyers form a separate mediation corporation under a trade name and solicit mediation business from attorneys, insurers, and the public?

Plain-English summary

A lawyer proposed forming Corporation X to provide mediation services, including domestic-relations mediation, to the public, with separate phone and address from the law firm, though the mediation would be provided by lawyers from the firm. The Committee answered three questions: forming the corporation would not violate SCR 3.020 (no), using a trade name would not violate the rules (no), and the corporation could solicit mediation business from attorneys, insurers, and the public (qualified yes).

The opinion reasoned that mediation, as defined to exclude giving any legal advice, is not the practice of law and does not violate SCR 3.020, and that because Corporation X is not practicing law it may use a trade name. A mediator is not prohibited from soliciting business for the mediation service, but a lawyer who also engages in mediation and wishes to advertise must avoid violating Rules 7.01 through 7.60; any advertisement of mediation services that identifies a participant as a lawyer requires compliance with all advertising rules under SCR 3.130. Given the separateness of the entities, the Committee thought this could be accomplished, but cautioned that the attorney and firm must take care to avoid conflicts of interest under Rules 1.7, 1.8, 1.9, and 2.2, citing E-335 and the ABA's Standards of Practice for Divorce and Family Mediation (1984).

Currency note

This opinion was issued in 1995 and predates the Kentucky Supreme Court's substantial 2009 revisions to the Rules of Professional Conduct (SCR 3.130); the Kentucky Bar Association notes the 2009 amendments added Rule 2.4 ("Lawyer serving as third-party neutral") addressing nonrepresentational mediation, and deleted former Rule 2.2 ("Intermediary"), replacing it with amended Rule 1.7 and Comments. Lawyers should consult the current version before relying on this opinion. Treat this page as historical context, not current guidance. Verify against the current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Could lawyers form a separate mediation corporation without violating the unauthorized-practice rule?

A: Yes. The opinion concluded that mediation, defined to exclude legal advice, is not the practice of law and does not violate SCR 3.020.

Q: Could the mediation corporation use a trade name?

A: Yes. Because Corporation X is not engaged in the practice of law, the opinion concluded it may use a trade name.

Q: Could the corporation solicit mediation business?

A: Qualified yes. A mediator may solicit, but any advertising identifying a participant as a lawyer must comply with all of the lawyer-advertising rules under SCR 3.130.

Background and rules framework

The opinion interprets SCR 3.020 (unauthorized practice) and the lawyer-advertising rules SCR 3.130(7.01) through (7.60) (corresponding to Model Rules 7.1 and 7.5), and notes the conflict rules (1.7, 1.8, 1.9, and former 2.2). The conduct it describes is now addressed by Rule 2.4 (Model Rule 2.4) on lawyers serving as third-party neutrals.

Citations and references

Rules of Professional Conduct:

• MR 7.1 / KRPC 7.01 et seq. (lawyer advertising)
• MR 7.5 / KRPC (trade names and firm names)
• MR 2.4 / KRPC 2.4 (lawyer serving as third-party neutral; added 2009)
• SCR 3.020 (unauthorized practice of law)

Other opinions cited:

• KBA E-335: conflicts of interest in mediation
• Indiana Op. 5 (1992): mediation is not the practice of law; trade-name use
• ABA Standards of Practice for Divorce and Family Mediation (1984)

See also

• KBA Ethics Op. E-365: Client Party Contact, Rule 4.2, and a Divorce Mediator
• KBA Ethics Op. E-389: Practicing Under a False Partnership Name
• KBA Ethics Op. E-376: Selling Insurance to Clients and Taking Commissions

Source

• Landing page: https://kybar.org/For-Members/Rules-Ethics-Information/Ethics-Opinions
• Original PDF: https://kybar.org/Portals/0/Admin/Ethics%20Opinions/KBA_E-377.pdf

Original opinion text

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

KENTUCKY BAR ASSOCIATION
Ethics Opinion KBA E-377
Issued: March 1995

Since the adoption of the Rules of Professional Conduct in 1990, the Kentucky Supreme Court has adopted various amendments, and made substantial revisions in 2009. For example, the 2009 amendments include Rule 2.4, entitled "Lawyers serving as thirdparty neutral," addressing the type of nonrepresentational mediation described in this opinion. This opinion refers to former Rule 2.2, entitled "Intermediary," which addressed conflicts of interest in representational mediation. That rule was deleted and replaced by amended Rule 1.7 and Comments 26 through 33. Lawyers should consult the current version of the rules and comments, SCR 3.130 (available at http://www.kybar.org), before relying on this opinion.

Attorney wants to form Corporation X, which will provide mediation services, including domestic relations mediation, to the general public. Corporation X will have separate phone facilities - a separate phone and a separate address - apart from Attorney' s law firm, although the mediation services would be provided by lawyers from Attorney's firm. Question 1:

Will this violate SCR 3.020?

Answer:

No.

Question 2:

Will the use of a trade name by Corporation X violate the Rules of Professional Conduct?

Answer:

No.

Question 3:

Can Corporation X solicit mediation business from other attorneys, from insurance carriers, and from members of the general public?

Answer:

Qualified Yes.

References:

Indiana Op. 5 (1992); KBA E-335 (1989).
OPINION

Mediation is not the practice of law, and does not violate SCR 3.020. Accord, Indiana Op. 5 (1992). Since Corporation X is not engaged in the practice of law, it may use a trade name. Indiana Op. 5 (1992). A mediator is not prohibited from soliciting business for his or her mediation service. However, an attorney who practices law and also engages in the delivery of medication services and who wishes to advertise and solicit mediation business must avoid violating Rules 7.01 - 7.60. Mediation, as defined for the purpose of this opinion, is defined to exclude specifically the giving of any legal advice in the course of such mediation. Advertisement of mediation services which identifies any participant as a lawyer shall mandate compliance with all advertising rules pursuant to SCR 3.130. Given the separateness of the entities, we think this can be accomplished. We note that Attorney and Attorney's firm must take care to avoid conflicts of interest. See Rules 1.7, 1.8, 1.9 and 2.2. Conflicts are addressed in KBA E-335 (1981) and in the Standards of Practice for Divorce and Family Mediation of the ABA (1984).
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Note to Reader
This ethics opinion has been formally adopted by the Board of Governors of the Kentucky Bar Association under the provisions of Kentucky Supreme Court Rule 3.530 (or its predecessor rule). The Rule provides that formal opinions are advisory only.