Can a North Carolina lawyer advertise in a practice area where he lacks experience if he plans to associate experienced counsel?

Plain-English summary

A lawyer wanted to advertise for work in negligence areas (products liability, pharmaceutical, medical malpractice) in which he lacked experience, planning to associate a qualified lawyer for the resulting cases. The first inquiry asks whether he may advertise in areas he has no experience in. The opinion answers yes, but only if the lawyer intends to promptly become competent by study and investigation, or to associate an experienced lawyer to handle the cases competently.

The opinion grounds the limit in the advertising rules. Lawyer advertising is protected commercial speech (Central Hudson), but the right is not unlimited, and advertisements may not be false or misleading (Rule 7.1). Under Rule 7.1(a)(1), a communication is misleading if it materially misrepresents a fact or omits a fact needed to keep the statement from being materially misleading; the opinion illustrates with RPC 217 (remote call-forwarding numbers listed under towns where the firm has no office were misleading). Because competence comes primarily from experience (and can also be gained by study or by associating experienced counsel under Rule 1.1), a member of the public seeing the advertisement could reasonably expect the advertising lawyer to have, or to obtain himself, the competence to handle the matter. If instead the lawyer intends to associate other counsel, that fact must be disclosed in a disclaimer, because prior opinions hold an appropriate disclaimer can cure an otherwise misleading advertisement (2003 FEO 3; Rule 7.1(b) on dramatizations).

The second inquiry asks whether the lawyer may accept a portion of the fee if he associates another firm. The opinion answers yes under Rule 1.5(e), which allows division of a fee between lawyers not in the same firm if the client agrees in writing, the total fee is reasonable, and the division is in proportion to the services each performs or each lawyer assumes joint responsibility. Joint responsibility means financial and ethical responsibility as if the lawyers were partners (Comment [8]); a lawyer sharing fees must make reasonable efforts to ensure the others comply with the ethics rules (Rule 5.1), and a lawyer who accepts a referral fee remains responsible for the competent and ethical handling of the matter (RPC 205). The opinion notes joint responsibility does not require substantial services by the referring lawyer (ABA Informal Op. 85-1514) but does carry partner-like responsibility.

The third inquiry asks what proportion of the fee is reasonable. The opinion declines to opine beyond the requirements that the total fee be reasonable, the client consent to the division, and each firm assume joint responsibility.

In practice

Under the North Carolina rules as they stood at the time of the opinion, a lawyer may advertise in an area he lacks experience in only if he intends to promptly gain competence (by study and investigation) or to associate an experienced lawyer; where association is likely, the advertisement must disclose that in a disclaimer, because the public could reasonably expect the advertising lawyer to have the competence himself (Rule 7.1, Rule 1.1).

Per the opinion, a lawyer who associates another firm may receive a share of the fee under Rule 1.5(e) if the client agrees in writing, the total fee is reasonable, and the division is proportionate to each lawyer's work or each assumes joint responsibility; a lawyer who takes a fee for a referral remains responsible for competent, ethical handling (RPC 205, Rule 5.1). The committee declined to opine on what proportion of a fee is reasonable.

Common questions

Q: Can I advertise in a practice area I have no experience in?

A: Yes, only if you intend to promptly become competent through study and investigation, or to associate an experienced lawyer. The opinion concludes that if associating other counsel is likely, the advertisement must include a disclaimer disclosing it.

Q: Why would advertising experience I don't have be misleading?

A: Per Rule 7.1(a)(1), the opinion explains a communication is misleading if it materially misrepresents or omits a necessary fact; the public reasonably expects the advertising lawyer to be, or to become, competent in the advertised area himself.

Q: Can I share the fee when I associate another firm?

A: Yes. The opinion concludes Rule 1.5(e) permits the division if the client agrees in writing, the total fee is reasonable, and the division is proportionate to each lawyer's services or each assumes joint responsibility.

Q: What does "joint responsibility" require?

A: Per Comment [8] and RPC 205, the opinion explains it means financial and ethical responsibility as if the lawyers were partners, with reasonable efforts to ensure the others comply (Rule 5.1); ABA Informal Op. 85-1514 adds it does not require substantial services but does carry partner-like responsibility.

Q: How much of the fee can the referring lawyer keep?

A: The opinion declines to opine on the proportion, beyond requiring a reasonable total fee, client consent, and joint responsibility.

Background and rules framework

The opinion applies North Carolina Rule 7.1 (false or misleading communications, including Rule 7.1(a)(1) and Rule 7.1(b), the analogue of Model Rule 7.1), Rule 1.1 (competence, including gaining competence by associating experienced counsel), Rule 1.5(e) (division of a fee between lawyers not in the same firm) with Comment [8] on joint responsibility, and Rule 5.1 (responsibility to ensure associated lawyers comply with the rules). It situates lawyer advertising within commercial-speech protection while subjecting it to the no-misleading-communications limit.

Citations and references

Rules of Professional Conduct:

• MR 7.1 / NC Rule 7.1, Rule 7.1(a)(1), Rule 7.1(b) (false or misleading communications; disclaimers; dramatizations)
• MR 1.1 / NC Rule 1.1 (competence; associating a competent lawyer)
• MR 1.5 / NC Rule 1.5(e), Comment [8] (division of fees between lawyers; joint responsibility)
• MR 5.1 / NC Rule 5.1 (responsibility for associated lawyers' compliance)

Cases:

• Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557 (1980), commercial speech protection and its limits.

Other opinions cited:

• NC RPC 217: listing remote call-forwarding numbers under towns where the firm has no office is misleading without a disclaimer.
• NC RPC 205: a lawyer who accepts a referral fee remains responsible for competent and ethical handling of the matter.
• NC 2003 FEO 3: an appropriate disclaimer may cure an otherwise misleading advertisement.
• Colorado Bar Ass'n Ethics Comm. Op. 76 (1987); ABA Comm. on Ethics and Prof'l Responsibility, Informal Op. 85-1514 (1985) (joint responsibility does not require substantial services).

See also

• NC State Bar 2003 FEO 3: Advocates Forum Ads
• ABA Formal Op. 487: Fee Split With Prior Counsel
• ABA Formal Op. 10-457: Lawyer Websites

Source

• Landing page: https://www.ncbar.gov/for-lawyers/ethics-and-governing-rules/ethics-opinions/opinions/2010-formal-ethics-opinion-6/

Original opinion text

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

Inquiry #1:

Lawyer would like to advertise for legal employment in several areas of negligence law including products liability, pharmaceutical, and medical malpractice. Lawyer does not, however, have practice experience in these legal areas. For cases involving these areas of practice, Lawyer plans to associate another lawyer who is qualified in the particular area of law.

May Lawyer advertise for legal employment in an area of practice in which Lawyer lacks experience?

Opinion #1:

Yes, but only if Lawyer intends to promptly become competent in such representation by study and investigation in the advertised area of law or intends to associate an experienced lawyer to competently handle the resulting cases.

Lawyer advertising represents commercial speech protected as a constitutional right. Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557 (1980). Such commercial expression serves not only the interests of lawyers, but also assists consumers and furthers the societal interest in the fullest possible dissemination of information. Id. at 561-62. The rights of lawyers to advertise, however, are not unlimited. Legal advertisements may not be false or misleading. See Rule 7.1.

Pursuant to Rule 7.1(a)(1), a communication is misleading if it contains a material misrepresentation of fact or omits a fact necessary to make the statement considered as a whole not materially misleading. For example, in RPC 217, the Ethics Committee determined that it was misleading for a law firm to include in its advertisements remote call forwarding telephone numbers under the names of towns in which the law firm did not have an office. The opinion provides that listing what appears to be a local telephone number in an advertisement circulated in communities where the law firm does not have an actual presence, without including an explanation in the advertisement that the number is not a local telephone number and that there is no law office in that community, will mislead readers as to the actual location of the offices.

To avoid misleading the public, lawyers should be competent, or intend to promptly obtain competence, in the areas of law in which they advertise. Rule 1.1 addresses the subject of lawyer competence:

A lawyer shall not handle a legal matter that the lawyer knows or should know he or she is not competent to handle without associating with a lawyer who is competent to handle the matter. Competent representation requires the legal knowledge, skill, thoroughness, and preparation reasonably necessary for the representation.

In advertising, lawyers should not claim to have experience in areas of law in which they lack experience. Such claims are false and misleading. Competence in particular areas of law primarily arises from experience. In addition to experience, lawyer competence may be gained from study and investigation. Rule 1.1 acknowledges that lawyers can obtain competence in a particular area of law by associating a lawyer experienced in that area of law to work with them in representing a client. When a member of the public sees a lawyer’s advertisement, however, that person could reasonably expect that the advertising lawyer has or will have, at the time of the representation, personally obtained the competence necessary to handle the legal matter that is the subject of the advertisement. If this is not the case, and the lawyer instead intends to associate another lawyer to provide the competent representation, members of the public could be misled by the advertisement. Thus, if at the time the advertisement is placed it is likely that the lawyer will later associate more experienced lawyers to handle the resulting cases, that fact should be disclosed to the public in the form of a disclaimer in the advertisement. See Co. Bar Assoc. Ethics Comm. Op. 76 (1987).

Previous ethics opinions have determined that an appropriate disclaimer may cure an otherwise misleading advertisement. See, e.g., 2003 FEO 3 (lawyer may advertise membership in organization with self-laudatory title, but when the membership information may create unjustified expectations, a disclaimer must be included in the advertisement); see also Rule 7.1(b) (communication by lawyer that contains dramatization depicting fictional situation is misleading unless it contains statement explaining that communication contains a dramatization and does not depict actual events or real persons). Likewise, an appropriate disclaimer will preclude a finding that Lawyer’s proposed advertisements are likely to mislead prospective clients. If, at the time an advertisement is placed, it is likely that Lawyer will associate a more experienced lawyer to handle the resulting cases, that fact must be disclosed to the public in a disclaimer in the advertisement.

Inquiry #2:

If Lawyer associates another law firm in connection with a legal matter, may Lawyer accept a portion of the legal fees?

Opinion #2:

Yes. Rule 1.5(e) allows for the division of a legal fee between lawyers who are not in the same firm. Lawyer may receive a portion of the legal fees associated with the referred matter so long as the client agrees to the arrangement in writing, the total fee is reasonable, and the fee division is in proportion to the services performed by each lawyer or each lawyer assumes joint responsibility for the representation. Rule 1.5(e).

The assumption of joint responsibility is an alternative to a division of fees in proportion to the services performed. Comment [8] to Rule 1.5 explains that “[j]oint responsibility for the representation entails financial and ethical responsibility for the representation as if the lawyers were associated in a partnership.” Therefore, a lawyer who agrees to share legal fees must make reasonable efforts to ensure that the other lawyers who are parties to the arrangement comply with the ethics rules. See Rule 5.1. As stated in RPC 205, “whenever a lawyer accepts a fee for referring a case to another lawyer, the lawyer remains responsible for the competent and ethical handling of the matter.”

The ABA Committee on Ethics and Professional Responsibility has opined that joint responsibility does not require substantial services to be performed by the lawyer. ABA Comm. on Ethics and Prof’l Responsibility, Informal Op. 85-1514 (1985). However, joint responsibility does include the same financial and ethical responsibility and the same responsibility to ensure adequate representation and communication as one partner would have for another partner’s client in similar circumstances. Id.

Lawyer may receive a fee in proportion to the services he performs in the matter or he may receive a fee based on his assumption of joint responsibility for the representation. See Rule 1.5(e).

Inquiry #3:

If Lawyer is entitled to receive a portion of the legal fees, what amount/proportion of the legal fee is reasonable?

Opinion #3:

Apart from the requirements that the total fee be reasonable, that the client consent to the fee division, and that each law firm assume joint responsibility for the representation, the Ethics Committee declines to opine on the division of fees between lawyers or law firms.