Can a law firm send targeted letters to homeowners with suspected defective plumbing, and promise they owe no costs if there is no recovery?

Plain-English summary

A firm used targeted mailings to seek employment from homeowners whose homes were suspected to contain defective plumbing. The letter described the problematic system, chronicled the firm's record in similar litigation, and, with an incorporated fee agreement, told recipients they would owe no fees or advanced costs unless they recovered. The committee was asked whether the mailing was improper solicitation under Rule 7.3 and whether the firm could assure clients of no liability for costs if there was no recovery. It answered no to the first and yes to the second.

On solicitation, the committee explained that the Montana Supreme Court adopted a permissive version of Rule 7.3 (similar to Virginia's and the District of Columbia's), recognizing that informing the public about legal services outweighs a historical prohibition on advertising. Montana's Rule 7.3 bars contact only where the lawyer knows or should know the person cannot exercise reasonable judgment, has asked not to be contacted, is being coerced or harassed, or is already represented. The committee found the letter complied with these limits, noting targeted mailings are an accepted form of advertising (Shapero v. Kentucky Bar Association) and that defective plumbing does not impair a recipient's judgment, and the letter told already-represented recipients to disregard it. It added that Rule 7.1 bars communications likely to create unjustified expectations, but the firm avoided naming specific recovery amounts and warned that each case turns on its own facts, so the letter was not misleading.

On fees, the committee explained that Rule 1.8(e), unlike the predecessor DR 5-103(B), permits a lawyer to advance court costs and litigation expenses and to make their repayment contingent on the outcome. The firm's assurance that the client would owe nothing if the case was not won, and the fee agreement's provision deducting costs from net recovery, complied with Rule 1.8(e).

Currency note

This opinion was issued in 1994, before the State Bar of Montana's adoption of the 2004 revisions to the Rules of Professional Conduct. 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 Treat this page as historical context, not current guidance.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: Can a firm send targeted letters to people it thinks have a specific legal problem?

A: The opinion concludes yes, under Montana's permissive Rule 7.3, as long as the letter does not target someone who cannot exercise reasonable judgment, has asked not to be contacted, is coerced or harassed, or is already represented.

Q: Can the letter describe the firm's past successes?

A: The opinion permits it where, as here, the firm avoids naming specific recovery amounts and warns that results depend on each case's facts, so the letter is not misleading under Rule 7.1.

Q: Can a firm promise the client owes nothing if there is no recovery?

A: Yes. The opinion holds Rule 1.8(e) lets a firm advance costs and make their repayment contingent on the outcome.

Background and rules framework

The opinion interprets Montana's permissive Rule 7.3 (direct contact with prospective clients; Model Rule 7.3), Rule 7.1 (communications about a lawyer's services; Model Rule 7.1), and Rule 1.8(e) (advancing litigation costs; Model Rule 1.8), contrasting Rule 1.8(e) with the predecessor ABA Model Code DR 5-103(B).

Citations and references

Rules of Professional Conduct:

• Mont. R. Prof. Cond. 7.3 (solicitation) / Model Rule 7.3
• Mont. R. Prof. Cond. 7.1 (communications about services) / Model Rule 7.1
• Mont. R. Prof. Cond. 1.8(e) (advancing costs) / Model Rule 1.8
• ABA Model Code DR 5-103(B) (predecessor cost-advance rule)

Cases:

• Shapero v. Kentucky Bar Association, 486 U.S. 466 (1988), targeted direct-mail advertising protected

Other opinions cited:

• D.C. Eth. Op. 188 (1987): success references not misleading with a disclaimer
• State Bar of Montana Op. 870709: misleading communications about results

See also

• State Bar of Montana Ethics Op. 951230: Permissible Direct Contact With Prospective Clients

Source

• Landing page: https://www.montanabar.org/For-Attorneys/State-Bar-Resources/Ethics-Opinions
• Original PDF: https://www.montanabar.org/Portals/MONTANA/941221.pdf

Original opinion text

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

Ethics Opinion
QUESTIONS PRESENTED:

1. Do a law firm's efforts to secure professional employment by sending letters to individuals who may own homes with defective plumbing systems constitute improper solicitation in violation of Rule 7.3?

2. May a law firm assure potential clients that if they make no recovery they will not be responsible for any costs advanced for purposes of investigating, reviewing, settling, or litigating the claim?

ANSWERS:

1. No.
2. Yes.

FACT SITUATION: A law firm is using targeted mailings to seek professional employment from homeowners whose homes are suspected by members of the firm to contain defective plumbing. The firm's form letter not only describes and names the problematic plumbing system but also chronicles the firm's experience in successfully representing property owners in similar litigation. The firm's letter and incorporated fee agreement additionally state that, unless they recover, potential clients assume no responsibility for attorneys fees or costs advanced on their behalf. The fee agreement specifically provides that the firm may deduct any costs incurred in investigating, reviewing, settling, or litigating the claim from the client's net recovery.

ANALYSIS:

1. Solicitation. The law firm's form letter conforms with the proscriptions against direct contact with prospective clients contained in Montana's version of Rule 7.3 and does not constitute improper solicitation. The Montana Supreme Court chose not to adopt Rule 7.3 as proposed by the State Bar, reasoning in part that such an over-broad rule would effectively prohibit any solicitation of professional relationships with prospective clients with whom the lawyer had no family or prior professional relationship. In the Matter of the Adoption of the American Bar Association Model Rules of Professional Conduct, 84-303. Instead, the Court recognized the importance of using written materials to adequately inform the public about available legal services. Id.

The Court ultimately adopted a permissive version of Rule 7.3 similar to that approved in both Virginia and the District of Columbia. The District of Columbia actually eliminated Rule 7.3, instead incorporating some of its concepts into Rule 7.1 which permits organized informational advertising campaigns. The Comment to the District of Columbia's Rule 7.3 recognizes, as did the Montana Supreme Court, that the need to provide information about legal services to the public outweighs the importance of a historical prohibition on advertising.

Although it adopted a liberal version of Rule 7.3, the Montana Supreme Court did acknowledge the need for certain restrictions to "deter those who would otherwise seek to represent people whose physical, emotional, or mental states prevent them from exercising reasonable judgment in employing a lawyer." Rule 7.3 therefore prohibits an attorney from contacting or sending a written communication to a prospective client for the purpose of obtaining professional employment if:

 (a) the lawyer knows or reasonably should know that the physical, emotional, or mental state of the person is such that the person cannot exercise reasonable judgment in employing a lawyer;
 (b) the person has made known to the lawyer a desire not to receive a communication from the lawyer; or
 (c) the lawyer reasonably should know that the communication involves coercion, duress or harassment;
 (d) the lawyer reasonably should know that the person is already represented by another lawyer.

The letter in question in the instant case complies with the permissive requirements of Rule 7.3. Targeted mailings are generally accepted as a proper form of advertising. Shapero v. Kentucky Bar Association, 486 U.S. 466 (1988). The controversial letter targets individuals who may own homes with defective plumbing. Such a structural defect in their homes would not render these targeted individuals physically, emotionally, or mentally incapable of exercising reasonable judgment in employing an attorney as contemplated by Montana's Rule 7.3. Nor is it apparent that any of the targeted individuals informed any member of the law firm responsible for sending the letters that they did not wish to receive such a communication. Finally, there is no indication that the attorneys involved reasonably should have known that their letters in any way coerced or harassed the targeted individuals or that the targeted individuals had previously retained counsel. In fact, letter's initial paragraph advises individuals already represented by a lawyer to disregard the letter.

Although the letter in question does not violate the permissive provisions of Rule 7.3, additional consumer protections appear in Rule 7.1 which governs communications concerning a lawyer's services. The Montana Supreme Court imposed few restrictions on direct contact with prospective clients in part because of the protections against misleading communications contained in Rule 7.1. Rule 7.1 provides in relevant part that a communication is false or misleading if it "is likely to create an unjustified expectation about results the lawyer can achieve." This provision generally prevents an attorney from referring to the amount recovered for other clients because such a representation would create the misleading impression that the targeted individual will receive similar results regardless of the specifics of his or her case. Montana Ethics Opinion 870709.

Although the letter in this case chronicles the law firm's successful record in prosecuting cases involving the same plumbing system for other clients, such a discussion does not violate the provisions of Rule 7.1. The law firm carefully refers to several "large" settlements and jury verdicts without mentioning their specific amount. The law firm additionally warns its potential clients that "each case must be evaluated on its own facts," thus minimizing any potentially misleading effect of its representations.

The Legal Ethics Committee of the District of Columbia Bar, whose permissive rule regarding solicitation Montana emulated, has concluded that an advertisement referring to "thousands of successful claims" brought against a specific manufacturer was not misleading because it did not lead the public to believe that claimants had recovered any specific amount. D.C. Eth. Op. 188 (1987). The Committee further noted that a disclaimer, such as the one used in the instant situation, stating that recovery depends on the facts of each case may prevent the public from developing unjustified expectations.

Here, the law firm's description of its experience in successfully representing property owners in similar litigation is not false or misleading. The firm properly avoids reference to the exact size of former settlements and jury verdicts and reminds potential clients that their results will depend on the facts of the case.

2. Fees. Both the Model Rules and their predecessor, the ABA Code, limit the extent to which an attorney may provide financial assistance to a client in litigation. Under ABA Code DR 5-103(B), a lawyer could advance court costs and litigation expenses on the client's behalf provided the client remained ultimately liable for those expenses. Rule 1.8(e) differs in one important respect from the old rule, DR 5-103(B). Rule 1.8(e) similarly provides that a lawyer may advance the court costs and litigation expenses, but adds that repayment of court costs and litigation expenses by the client may be made contingent on the outcome of the case.

The law firm's letter and incorporated fee agreement establish a fee arrangement which complies with the requirements of Rule 1.8(e). Rule 1.8(e) states in part that:

 A lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation, except that: (1) a lawyer may advance court costs and expenses of litigation, the repayment of which may be contingent on the outcome of the matter.

In the last paragraph of its letter, the law firm in the instant situation assures the potential client "that you will not be responsible for attorney's fees or for any costs we may advance on your behalf if we do not win your case." Rule 1.8(e) clearly allows a law firm to make repayment of advanced costs contingent upon a favorable resolution of the case.

 The fee agreement attached at the end of the letter gives the potential client a more detailed explanation of the fee arrangement. The potential client is asked to sign a statement which reads in part as follows: I further agree and understand that my attorneys will incur costs in investigating, reviewing, settling or litigating my claim, and I agree and understand that my attorneys may deduct such costs from my net recovery. In the event no recovery is made, I understand that I will not be indebted to my attorneys for any sum whatsoever as attorneys' fees and/or costs. (emphasis in original).

This portion of the fee agreement simply clarifies the general statement in the body of the letter itself and complies with the provisions of Rule 1.8(e).

THIS OPINION IS ADVISORY ONLY