Does a California lawyer violate Rule 1-400(C) by knowingly using a private investigator to contact prospective clients and refer them to the lawyer, even when the lawyer does not pay the investigator for the referrals?

Currency note

This opinion was issued in 1993, before California's November 1, 2018 adoption of the renumbered Rules of Professional Conduct. Former Rule 1-400 (advertising and solicitation) was restructured into current Rules 7.1-7.3 (information about legal services). Subsequent rule amendments and constitutional developments may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

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Plain-English summary

The committee considered an attorney (A) approached by a private investigator (PI) with a proposal. PI would meet with a potential claimant (C) with a possible claim against a specific defendant, ascertain interest, and recommend A. A would then independently interview C and decide whether to retain. C would engage both PI and A through separate contingency-fee retainer agreements. PI might also be employed by A to assist in case preparation, with PI's case-preparation expenses borne by C as litigation costs. PI's case-preparation work was anticipated to identify other potential claimants who would receive the same arrangement.

The committee identified Rule 1-400(C) as barring solicitations "on behalf of a member" to prospective clients with whom the member has no family or prior professional relationship. Rule 1-400(B) defines "solicitation" as a communication concerning availability for professional employment, with significant motive of pecuniary gain, delivered in person or by telephone (unless constitutionally privileged). Rule 1-400(A) defines "communication" as any message or offer concerning availability for professional employment, including any use of firm name or professional designation.

The committee concluded that PI's personal contact with prospective clients would cause A to violate Rule 1-400(C). Citing Urbano v. State Bar and Kelson v. State Bar, the committee identified the knowing employment of a lay intermediary to obtain client referrals as prohibited solicitation. The committee identified that A knew PI intended to solicit; the arrangement was designed to achieve that end. PI's efforts were on A's behalf. Payment from A to PI was not required because Rule 1-400(C)'s prohibition does not depend on payment for the referral. The committee identified that no compensation arrangement may serve as a disguised inducement for a non-attorney to solicit. Citing Cain v. Burns, the committee identified arrangements that route fees indirectly as "merely subterfuge to attempt to get away from the inhibition." PI's compensation was dependent on A's prearranged cooperation, which constituted an inducement to refer.

The committee identified that PI's contemplated contact with other "victims" pursuant to investigation of C's claim would also violate Rule 1-400(C), even with an ancillary investigative motive. Citing Rose v. State Bar, the committee distinguished legitimate investigative contact (not barred from later representation) from direct solicitation (misconduct). Where there is a prior arrangement that PI will solicit, the attorney's awareness before contact justifies treating communications to potential claimants of A's availability as made "on behalf of" the attorney.

The committee identified four scenarios it does not address: First Amendment-protected public-interest solicitation (In re Primus, where the absence of financial motivation was central, but inapplicable here because the sole motive is client attraction); Jacoby v. State Bar (which addressed publication-based legitimate purposes, not live in-person solicitation; Ohralik v. Ohio State Bar Ass'n upheld state prohibition on in-person solicitation); class-action precertification communications (Atari v. Superior Court, allowed only with advance judicial review); and State Bar-approved Lawyer Referral Services (Business and Professions Code section 6155) or First Amendment-protected legal-services programs (United Transportation Union v. Michigan State Bar). The committee declined to opine whether Edenfield v. Fane's invalidation of Florida's per se rule barring CPA solicitation would extend to attorney solicitation.

In a footnote, the committee identified collateral concerns it does not address: actual or de facto partnerships with non-lawyers (Rule 1-310), fee splitting (Rule 1-320), unconscionable aggregate fees (Rule 4-200), conflict disclosures based on PI's interest in the subject matter (Rules 3-310(B), 3-500 and section 6068(m)), and conflicts from A's intent to represent other claimants if it could materially reduce C's recovery.

Common questions

Q: Can a California lawyer use a private investigator to contact prospective clients and refer them?

A: Per the opinion, no, when the attorney knows the investigator intends to solicit. The committee identified the prearranged cooperation as making the contact a communication "on behalf of" the attorney in violation of Rule 1-400(C).

Q: Does it matter if the lawyer does not pay the investigator for the referrals?

A: Per the opinion, no. The committee identified Rule 1-400(C) as not dependent on payment for the referral; no compensation arrangement may serve as a disguised inducement for a non-attorney to solicit.

Q: Can the investigator contact additional potential claimants discovered during investigation?

A: Per the opinion, no, where there is a prior arrangement that the investigator will solicit on the same basis. The committee distinguished legitimate investigative contact (which does not bar later representation if requested by the contacted person) from direct solicitation (misconduct).

Q: Does the First Amendment protect such solicitation?

A: Per the opinion, no on the facts presented. The committee identified Primus's protection as keyed to the absence of financial motivation and public-interest motivation. Here, the sole motivation was client attraction.

Q: Does the opinion address fee-splitting or partnership concerns with the investigator?

A: The committee identified (footnote 1) related potential violations (Rules 1-310, 1-320, 4-200, 3-310(B), 3-500 and section 6068(m)) but did not address them.

Background and rules framework

The opinion interprets former California Rule of Professional Conduct 1-400 (advertising and solicitation), particularly subdivisions (A), (B), and (C). Business and Professions Code sections 6151-52 (unlawful solicitation contexts), Penal Code section 549, and Insurance Code section 750 are noted as separate statutory restrictions. The committee anchored its lay-intermediary analysis in Urbano v. State Bar, Kelson v. State Bar, and Rose v. State Bar.

Citations and references

Rules of Professional Conduct (former):

• California Rule 1-400(B), (C) (solicitation)

Statutes:

• California Business and Professions Code sections 6151-52
• California Business and Professions Code section 6155 (lawyer referral services)
• California Penal Code section 549
• California Insurance Code section 750

Cases:

• Atari, Inc. v. Superior Court (Carson), 166 Cal.App.3d 867 (1985), pre-certification class communications
• Cain v. Burns, 131 Cal.App.2d 439 (1955), subterfuge arrangements for non-lawyer fees
• Edenfield v. Fane, 113 S.Ct. 1792 (1993)
• Gulf Oil Co. v. Bernard, 452 U.S. 89 (1981)
• In re Primus, 436 U.S. 412 (1978), public-interest solicitation
• Jacoby v. State Bar, 19 Cal.3d 359 (Cal. 1977)
• Kelson v. State Bar, 17 Cal.3d 1 (Cal. 1976), lay intermediary solicitation
• Leoni v. State Bar, 39 Cal.3d 609 (Cal. 1985)
• Ohralik v. Ohio State Bar Ass'n, 436 U.S. 447 (1978), in-person solicitation prohibition upheld
• Rose v. State Bar, 49 Cal.3d 646 (Cal. 1989), legitimate-investigative versus solicitation
• Urbano v. State Bar, 19 Cal.3d 16 (Cal. 1977), lay intermediary solicitation
• United Transportation Union v. Michigan State Bar, 401 U.S. 576 (1971)
• Ojeda v. Sharp Cabrillo Hospital, 8 Cal.App.4th 1 (1992)

See also

• LACBA Opinion 494: Cold Calling for Seminars; Mailing of Newsletters
• LACBA Opinion 488: Law Office Management Services by Non-Lawyer Companies
• LACBA Opinion 467: Referral Fees to Suspended Attorney

Source

• Landing page: https://lacba.org/?pg=ethics-opinions
• Original PDF: https://lacba.org/docDownload/2010969