Can a lawyer provide legal services to a prepaid legal services plan owned by the lawyer's spouse or family that markets through in-person or telephone solicitation?

Plain-English summary

Prepaid Legal Service Plan A marketed through in-person solicitation, telemarketing, and targeted direct mail, and planned to hire an attorney to draft its documents. The inquiry asked whether a lawyer could provide legal services to the plan if it was owned by the lawyer's spouse, a relative, or a trust for the lawyer's children.

The opinion explained that Rule 2.4(d) permits a lawyer to participate in a prepaid service plan that uses in-person or telephone solicitation only so long as the lawyer does not own or direct the plan. Where the plan is owned and operated by the lawyer's spouse, there is a substantial likelihood the lawyer may exert some control or direction, and even absent actual control the close connection could create an appearance of impropriety, so the lawyer may not participate in a spouse-owned plan that uses in-person solicitation or telemarketing. That flat prohibition does not extend to targeted direct mail: Rule 2.4 permits targeted direct mail solicitation except where it involves coercion, duress, harassment, compulsion, or threats, where the prospective client has said they do not wish to be solicited, or where the communication is false, misleading, or deceptive; so the lawyer may participate in a spouse-owned plan that uses compliant targeted direct mail. The opinion concluded the answer is the same if the plan is owned by any immediate family member (parent, sibling, or child). Finally, if the plan is owned and operated by a trust over which the lawyer has no control or influence, the lawyer may provide legal services even if the plan's nonlawyer employees promote it by in-person solicitation, telemarketing, and targeted direct mail, but the lawyer may not personally engage in in-person solicitation or telemarketing.

Currency note

This opinion was issued in 1989, before the North Carolina State Bar's adoption of the 2003 revisions to the Rules of Professional Conduct. The solicitation provisions it applies (Rule 2.4 and 2.4(d)) have since been renumbered and revised (the corresponding Model Rule is 7.3). 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 Treat this page as historical context, not current guidance.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 lawyer serve a prepaid plan owned by the lawyer's spouse?

A: Not if it solicits in person or by phone. The opinion concluded a lawyer may not participate in a spouse-owned plan using in-person solicitation or telemarketing, because the lawyer may control or direct it or appear to.

Q: Does the rule reach other family members?

A: Yes. The opinion concluded the answer is the same for any immediate family owner, such as a parent, sibling, or child.

Q: What about a plan owned by a trust for the lawyer's children?

A: The opinion concluded the lawyer may serve a plan owned by a trust the lawyer cannot control, even if its employees solicit in person, by phone, or by mail, but the lawyer may not personally solicit in person or by phone.

Background and rules framework

The opinion applied North Carolina Rule 2.4 and Rule 2.4(d), the solicitation and prepaid-plan provisions (corresponding to Model Rule 7.3). The analysis turns on the lawyer's ownership or control of a plan that uses live solicitation, and on the distinct, more permissive treatment of compliant targeted direct mail.

Citations and references

Rules of Professional Conduct:

• North Carolina Rule 2.4 (solicitation; targeted direct mail)
• North Carolina Rule 2.4(d) (participation in prepaid service plans using live solicitation)
• MR 7.3 (solicitation of clients)

See also

• NC Ethics Op. RPC 242: direct mail solicitation of a newly formed corporation
• NC Ethics Op. RPC 115: sponsorship of legal information

Source

• Landing page: https://www.ncbar.gov/for-lawyers/ethics-and-governing-rules/ethics-opinions/opinions/rpc-71/

Original opinion text

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

Prepaid Legal Service Plan A markets its services by 1) in-person solicitation, 2) telemarketing, and 3) targeted direct mail advertisements. It plans to hire an attorney to draft the necessary legal documents used by the Plan.

Inquiry #1:

May a lawyer properly provide legal services to Prepaid Legal Service Plan A if the Plan is owned by the lawyer's spouse?

Opinion #1:

Rule 2.4(d), which was recently adopted by the N.C. State Bar and approved by the North Carolina Supreme Court, provides that a lawyer may participate in a prepaid service plan which uses in-person or telephone solicitation to market its services, so long as the lawyer does not own or direct the plan.

Where the plan is owned and operated by the lawyer's spouse, there is a substantial likelihood that the lawyer may exert some control or direction of the plan. Moreover, even if the lawyer exerted no actual control over the Plan, the close connection between the lawyer and the spouse-owner could create an appearance of impropriety. Therefore, the lawyer may not participate in a plan owned and operated by the lawyer's spouse and which uses in-person solicitation and/or telemarketing.

This flat prohibition does not extend to the use of targeted direct mail, however. Rule 2.4 permits attorneys to engage in targeted direct mail solicitation except where such practice involves coercion, duress, harassment, compulsion or threats or where the prospective client has indicated a desire not to be solicited or where the communication includes false, misleading, or deceptive statements. Consequently, the attorney may participate in a plan owned and operated by the attorney's spouse and which employs targeted direct mail, so long as the plan meets the foregoing requirements.

Inquiry #2:

Would the answer be different if the attorney providing the legal services for the Plan is a relative of the owner, but not the owner's spouse?

Opinion #2:

The answer will not change if the plan is owned by any members of the attorney's immediate family, such as a parent, sibling, or child.

Inquiry #3:

Would the answer be different if the Plan was owned by a trust, the beneficiaries of which are the children of the attorney who will be providing legal services for the Plan's participants?

Opinion #3:

If the plan is owned and operated by a trust over which the attorney has no control or influence, the attorney may provide legal services to the plan, even if the nonlawyer employees of the plan promote the plan by in-person solicitation, telemarketing, and targeted direct mail. The attorney may not, however, personally engage in in-person solicitation or telemarketing.