Can a lawyer join a prepaid living-trust referral network whose contract bars criticizing the network's documents or acting against it?

Plain-English summary

The Commission was asked whether a Maine lawyer would violate the Bar Rules by signing a "participating attorney agreement" with Professional Asset Planning (PAP), a Florida company that recruits clients for participating attorneys through prepaid legal-services agreements with membership organizations. Under the agreement, the participating attorney (PA) would provide "basic" services (reviewing PAP's estate-planning documents for conformity with state law, assisting with execution, and funding a revocable living trust) and, only at PAP's request, "supplemental" services (full document preparation), with PAP paying the PA at set rates. The agreement declared that the attorney-client relationship existed between PAP and each client, directed the PA not to interfere with it, and imposed numerous restrictions on the PA.

The Commission analyzed the arrangement under Bar Rule 3.4(e)(1), which bars a lawyer from letting "a person who recommends, employs, or pays a lawyer to render legal services for another" direct or regulate the lawyer's professional judgment. Because the agreement repeatedly contemplated the PA rendering legal services to the clients (not merely to PAP), it placed PAP in exactly that position. The Commission found that whether the agreement purported to create an attorney-client relationship between PAP and the clients (or to forbid one between the PA and the clients) was immaterial: rendering legal services is the predicate, and referral of clients to the PA for review and execution of documents would create a PA-client relationship absent unusual circumstances, since a lawyer cannot contract away the operation of the Bar Rules.

The Commission then identified specific terms that purported to direct the PA's judgment: agreeing not to interfere with PAP's claimed attorney-client relationship, not to request changes to the basic documents unless strictly required by state law, and not to suggest to any client that the documents were lacking or inferior, plus restrictions on representing clients in disputes with PAP, in disputes between PAP clients, and in matters of foreign law. These required the PA to forego independent professional judgment about the adequacy of critical estate-planning documents. The Commission concluded the agreement violates Rule 3.4(e)(1) on its face, so a Maine lawyer who executed it would be agreeing to prohibited restrictions. (It noted no Rule 3.9(f)(2) violation because the PA pays nothing to PAP, and flagged that performance could also threaten Rule 3.6(a)'s best-judgment requirement, though that rule needs an actual underserved client to be violated.)

Currency note

This opinion was issued in 1994, before Maine's replacement of the former Maine Bar Rules with the Maine Rules of Professional Conduct (effective August 1, 2009). 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, deadline, or requirement mentioned here.

Common questions

Q: Could a lawyer join the living-trust referral network?

A: The opinion concluded no. It held the participating-attorney agreement violated Rule 3.4(e)(1) on its face, because it let PAP, a third party that recommends and pays for legal services, direct or regulate the lawyer's professional judgment.

Q: Did it matter that the contract said the client's lawyer was the network, not the participating attorney?

A: No. The opinion concluded the predicate for Rule 3.4(e)(1) is the rendering of legal services, and that referring clients to the PA to review and execute documents would create a PA-client relationship regardless, because a lawyer cannot contract away the Bar Rules.

Q: Which contract terms crossed the line?

A: The opinion pointed to terms barring the PA from requesting changes to the documents unless strictly required by law, from suggesting the documents were inferior, and from representing clients against PAP or other PAP clients, all of which required surrendering the lawyer's independent judgment.

Background and rules framework

The opinion interprets Maine Bar Rule 3.4(e)(1) (a person who recommends, employs, or pays a lawyer may not direct or regulate the lawyer's professional judgment), and references Rule 3.6(a) (best judgment) and Rule 3.9(f)(2) (payment to secure recommendation). These correspond to ABA Model Rule 5.4(c) (a third party who recommends, employs, or pays a lawyer may not direct the lawyer's professional judgment) and Model Rule 2.1 (independent professional judgment).

Citations and references

Rules of Professional Conduct:

• Model Rule 5.4(c) (no third-party direction of professional judgment)
• Model Rule 2.1 (independent professional judgment; candid advice)
• Maine Bar Rule 3.4(e)(1), 3.6(a), 3.9(f)(2)

See also

• ABA Formal Op. 01-421: Insurer Litigation Guidelines
• Maine Ethics Op. 167: Referring Attorneys

Source

• Landing page: https://mebaroverseers.org/attorney_services/opinion.html?id=89767

Original opinion text

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

Issued by the Professional Ethics Commission

Date Issued: December 14, 1994

Facts

The Commission has been asked whether a Maine attorney would violate the Maine Bar Rules by entering into a so‑called participating attorney agreement with a Florida Limited Liability company styled Professional Asset Planning (hereafter PAP). PAP apparently proposes to recruit clients for participating attorneys through pre‑paid legal services agreements with membership organizations. Its letter inviting participation describes PAP as ?the most prestigious network of attorneys across the nation?. The letter claims that attorney members will gain ?the ability to expand your practice in many ways?. It identifies the initial client pool as members of a named incorporated ?Organization?, who are said to enhance the participating attorney?s ?client lists? and ?standing in the community? while expanding its clientele.

The Commission has been supplied with a ?Participating Attorney Agreement? to be executed by PAP and the participating attorney (hereafter PA). The agreement would require the PA to provide so‑called basic and supplemental services to clients referred to it by PAP. The basic services may be requested either by PAP or by a ?client in good standing?, which status must be verified with PAP before any services are provided. The basic services consist of a review of estate planning documents furnished by PAP to insure that they conform to the requirements of the state in which the PA practices, together with assistance in execution of the documents, either by mail or at an in‑office appointment, and assistance in funding a client?s ?revocable living trust? by preparing appropriate instruments transferring title to real or personal property.

The so‑called supplemental services may be provided to clients only at the request of PAP. They consist of full preparation of estate planning documents for a client by the PA, not merely a review of PAP?S product. Both basic and supplemental services are to be provided by the PA ?in a manner which conforms with applicable professional standards of legal practice.? The PA receives payment from PAP for both the basic services and the supplemental services at rates provided in the agreement. The agreement adds that the PA may provide clients with additional legal services for compensation to be paid solely by the client. The ?client? is defined as an individual ?who has been referred to the PA by PAP to receive contract legal services from the PA?, presumably a member of an organization with which PAP has a prepaid legal services contract.

Although the agreement calls for the PA to provide legal services to ?clients? it also provides that ?the attorney‑client relationship exists between PAP and each client.? The PA is directed not to interfere in any manner with that relationship. Various additional restrictions are set forth in the agreement and in exhibits to the agreement. Thus, the PA would agree not to induce any client to take an action contrary to the terms of the participating attorney agreement or to enroll in a program offering estate planning benefits during the term of the agreement and for two years thereafter. A PA would agree not to demand any changes in the client?s basic estate planning documents unless required by state law and not to suggest to a client that documents prepared by PAP are lacking or inferior in any manner. Any document modifications required to comply with applicable state law are to be made by PAP and not the PA. In addition, the PA would agree not to provide legal services to clients for the purpose of bringing any action against PAP or against any third party to whom PAP provides services, including other clients. The PA would also agree not to provide legal services to clients in any matter concerning foreign law.

Opinion

The Commission has reviewed this arrangement for compliance with Bar Rule 3.4(e)(l) [Avoiding Influence by Others].[1] The Commission?s conclusions are as follows.

Bar Rule 3.4(e)(l) provides:

Avoiding influence by others. A person who recommends, employs, or pays a lawyer to render legal services for another shall not be permitted by the lawyer to direct or regulate the lawyer?s professional judgment in rendering such legal services.

The participating attorney agreement tendered by PAP provides, among other things, ?whereas, PAP desires PA to provide legal services to certain of PAP?S clients in accordance with the terms of this agreement?. Subsequent portions of the agreement, including the description of basic and supplemental services, similarly recognize that the PA will be providing legal services to the ?clients? and not merely to PAP. The tendered agreement thus places PAP in the position of ?a person who recommends, employs or pays a lawyer to render legal services for another? under Bar Rule 3.4(e)(l).

The predicate for applying Bar Rule 3.4(e)(1) is the rendering of legal services. Accordingly, it is not material that the agreement purports to provide for an attorney‑client relationship between PAP and the clients; nor would it be material if it purported to forbid an attorney‑client relationship between the PA and the clients. The referral of clients by PAP to the PA, as apparently contemplated by the agreement, for review and execution of the PAP documents will create an attorney client relationship with the PA unless blocked by unusual circumstances not apparent from the agreement or accompanying materials.[2]

Contrary to Rule 3.4(e)(l), the agreement and its exhibits contain several provisions that purport to direct or regulate the professional judgment of the PA in rendering legal services to clients referred by PAP. Thus, the PA would agree not to interfere in any manner with PAP?S attorney‑client relationshipwith their joint client. The PA would agree not to request changes in any of the basic documents unless strictly required to conform to state law, and the PA would agree not to suggest to any client that the documents are lacking or inferior in any manner. The agreement thereby would require a PA and each referred client to forego the PA?s independent professional judgment about the adequacy or appropriateness of critical estate planning documents for that client as well as their adequacy generally. Other restrictions limit the exercise of the PA?S professional judgment in disputes between a client and PAP; in disputes between two or more PAP clients, regardless of whether the latter dispute affects PAP; and in matters involving foreign law. The Commission therefore concludes that the agreement violates Bar Rule 3.4(e)(l) on its face and that a Maine lawyer executing it would be agreeing to restrictions that violate Bar Rule 3.4(e)(l).[3]

Footnotes

[1] Since the PA apparently pays nothing to PAP to become a PA, but is paid by PAP at agreed rates for services rendered, there is no violation of Bar Rule 3.9(f)(2) [payment to secure recommendation or employment].

[2] The rendering of legal services would ordinarily be enough to create an attorney-client relationship for purposes of the Bar Rules. An attorney subject to the Maine Bar rules cannot exclude their operation by agreement with another private party.

[3] Performance of the agreement would harbor at least potential violations of Bar Rule 3.6(a), which requires a lawyer to ?apply the lawyer?s best judgment in the performance of professional services.? But Rule 3.6(a) is not violated without an actual client who has not received best judgment.