Can a lawyer who helps a group set up a prepaid legal services plan then be hired by that group as its counsel under the plan?

Plain-English summary

The New Jersey State Bar Association Committee on Prepaid Legal Services asked whether an attorney who helps a group form a prepaid legal aid program can thereafter be employed by that group to provide legal services under the program. The inquiry pointed to a Notice from the Clerk of the Supreme Court cautioning that attorneys who advise or assist groups in establishing prepaid legal services, ultimately becoming counsel to the group, might be acting improperly under DR 2-103(D)(4)(g).

The Committee examined DR 2-103(D)(4), which permits a lawyer to represent a bona fide organization that recommends, furnishes, or pays for legal services to its members or beneficiaries if certain conditions are met, including (g) that the plan be filed with and approved by the Supreme Court, and (b), which bars the lawyer, his partners, associates, or affiliated non-lawyers from having initiated or promoted the organization where that initiation or promotion would result in financial or other benefit to them. It observed that a lawyer asked to organize such a fund would expect to represent the group, and that subsection (b) would seem to proscribe a lawyer soliciting a group to form such an organization so he could become its counsel.

The Committee read the Supreme Court's Notice to the Bar as intended to flag that it is unethical to solicit a group of persons to organize in order to become counsel to the group, but not to prevent a lawyer from representing the organization if he is approached to formalize the group and obtain approval from the Supreme Court and any other regulatory bodies. It concluded that a lawyer in that latter situation should not be required to relinquish representation of the organization.

Currency note

This opinion was issued in 1976, before New Jersey's adoption of the 2004 revisions to the Rules of Professional Conduct, and predates the 1984 replacement of the Disciplinary Rules by the RPCs. Solicitation and group-legal-services questions, then governed by DR 2-103, are now analyzed under RPC 7.3 and RPC 7.2, and the rules on prepaid and group plans have changed substantially. Treat this page as historical context, not current guidance.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 set up a prepaid legal plan and then become its counsel?

A: Under this opinion, not if he solicited the group to organize so he could become counsel; that is improper under DR 2-103(D)(4)(b).

Q: Can a lawyer ever represent a group whose plan he helped formalize?

A: Yes. The Committee held a lawyer approached to formalize the group and obtain Supreme Court approval may represent it and need not give up the representation.

Q: What approval did the plan require?

A: Under DR 2-103(D)(4)(g), the plan had to be filed with and approved by the Supreme Court.

Background and rules framework

The opinion construed DR 2-103(D)(4)(b) and (g), with the Supreme Court's Notice to the Bar, to draw the line between soliciting a group to become its counsel and representing a group that approaches the lawyer. In current New Jersey terms, the questions are analyzed under RPC 7.3 and RPC 7.2.

Citations and references

Rules of Professional Conduct:

• DR 2-103(D)(4)(b) and (g) (representing organizations furnishing legal services; no improper initiation or promotion; Supreme Court approval), as in effect 1976; now analyzed under MR 7.3 / NJ RPC 7.3 and MR 7.2 / NJ RPC 7.2

Other authorities:

• Notice from the Clerk of the Supreme Court, 99 N.J.L.J. 177 (1976)

See also

• NJ ACPE Op. 488: Furnishing Fee Information to a Group Legal Services Plan
• NJ ACPE Op. 457: Advertising a Legal-Fee Reduction to Large-Group Members

Source

• Full text (Justia mirror): https://law.justia.com/cases/new-jersey/advisory-committee-on-professional-ethics/2004/acp335-1.html
• Issuing authority: New Jersey Supreme Court Advisory Committee on Professional Ethics, via the NJ Courts Supreme Court Committees page

Original opinion text

Reproduced from a full-text mirror of the official opinion for research purposes. The linked official source controls.

99 N.J.L.J. 588, July 1, 1976

OPINION 335

Attorney Helping to Organize Prepaid Legal Services Group

This inquiry is directed to this Committee by the New Jersey State Bar Association Committee on Prepaid Legal Services. The question posed is whether an attorney who helps a group form a prepaid legal aid program can thereafter be employed by that group to provide legal services under the program.

The inquirer points to a notice from the Clerk of the Supreme Court, 99 N.J.L.J. 177 (1976), which cautions members of the bar that attorneys who participate in advising or assisting groups to establish prepaid legal services, which ultimately results in the attorney becoming counsel to the group, might be considered as acting improperly under DR 2-103(D)(4)(g). That rule provides in subsection (D) that a lawyer shall not knowingly assist a person or organization that furnishes or pays for legal services to others to promote the use of his services, except as permitted by DR 2-101(B). He is not prohibited, however, from being recommended, employed or paid by organizations listed in DR 2-103(D)(1) to (4), if there is no interference with the exercise of independent professional judgment on behalf of his client.

Subsection (D)(4) says that he may represent any bona fide organization that recommends, furnishes or pays for legal services to its members or beneficiaries, provided certain conditions are satisfied. Seven conditions are then listed in (D)(4)(a) to (g). Subsection (g) requires that all such plans must be filed with the Supreme Court and approved by it. The other pertinent section, as far as this inquiry is concerned, is (D)(4)(b), which provides as follows:

(b) Neither the lawyer, nor his partner, nor associate, nor any other lawyer nor any non-lawyer affiliated with him or his firm directly or indirectly which have initiated or promoted such organization which initiation or promotion shall result in financial or other benefit to such lawyer, partner, associate, affiliated lawyer, or non-lawyer. (Emphasis added)

There can be little doubt that, if a lawyer is requested to organize a group of persons who will pay money into an organization fund so that their legal services can be prepaid, the lawyer will expect to represent the group. The quoted subsection would seem to proscribe a lawyer soliciting a group to form such an organization so that he could become counsel.

We believe that the admonition contained in the Supreme Court's Notice to the Bar, above cited, was intended to call attention to the fact that it is unethical to solicit a group of persons to organize in order to become counsel to the group but was not intended to prevent a lawyer from representing the organization if he is approached to formalize the group and get necessary approval from the Supreme Court and any other regulatory bodies. Obviously, a lawyer should not, under these circumstances, be then required to relinquish representation of the organization.