Can a firm that represents a public-employee union also provide discounted legal services to the union's individual members under a referral program?

Plain-English summary

A law firm that represented a public-employee labor organization was asked to provide legal services to the organization's members at a 30% discount under an attorney-referral program whose guidelines the firm did not draft. The firm asked whether it could ethically participate, raising DR 2-101 (publicity), DR 2-103 (recommendation of professional employment), and DR 5-107 (avoiding influence by others than the client).

On DR 2-101, the Committee deferred, because the Supreme Court was then considering new advertising rules and the Committee was holding all advertising questions until those rules were promulgated. On DR 2-103, the Committee explained that DR 2-103(D)(4) permits a lawyer to be recommended or paid by a bona fide organization that furnishes or pays for legal services to its members, provided the listed conditions are met, including subparagraph (g)'s requirement that the organization first file a report with the Supreme Court and obtain a registration number. If the plan is properly registered, an attorney may ethically represent members of the organization.

On DR 5-107, the Committee found no bar, so long as the plan is submitted and registered and the organization does not infringe the attorney's independent professional judgment, because the client is the member who consults the attorney. The Committee added a caution drawn from Opinions 114 and 256: as a general practice, an attorney representing an organization should not be the attorney selected to render legal services to the organization's members.

Currency note

This opinion was issued in 1978, before New Jersey's 1984 replacement of the Disciplinary Rules by the Rules of Professional Conduct and the later revisions to those rules, and the advertising portion was expressly deferred pending then-pending rule changes. It applied DR 2-103(D)(4) (group legal-services plans) and DR 5-107 (independence); in current New Jersey terms the analysis corresponds to RPC 5.4 (professional independence) and RPC 1.7 (conflicts of interest). Treat this page as historical context, not current guidance.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 take part in a union's discounted legal-services referral plan?

A: Yes, if the plan is registered with the Supreme Court (with a registration number) under DR 2-103(D)(4) and the organization does not infringe the lawyer's independent judgment.

Q: Who is the client under such a plan?

A: The opinion held the client is the member of the organization who consulted the attorney, not the organization.

Q: Can the union's own lawyer be the one who serves the members?

A: The opinion repeated, as a general practice, that an attorney representing the organization should not also be the attorney selected to render legal services to its members.

Background and rules framework

The opinion applied DR 2-103(D)(4), governing bona fide organizations that furnish or pay for members' legal services (including the Supreme Court registration requirement), and DR 5-107, protecting the lawyer's independent judgment from the paying organization. It deferred the DR 2-101 advertising question. In current New Jersey terms the analysis corresponds to RPC 5.4 and RPC 1.7.

Citations and references

Rules of Professional Conduct:

• MR 5.4 / NJ RPC 5.4 (professional independence of a lawyer)
• MR 1.7 / NJ RPC 1.7 (conflicts of interest)
• DR 2-101, DR 2-103(D)(4), DR 5-107 (as in effect 1978)

Other opinions cited:

• NJ ACPE Opinion 383, 100 N.J.L.J. 1205 (1977); Opinion 114, 90 N.J.L.J. 480 (1967); Opinion 256, 96 N.J.L.J. 745 (1973)

See also

• NJ ACPE Op. 481: Lawyer Referral Service for Real Estate Clients; Corporation Advertising Program
• NJ ACPE Op. 488: Furnishing Fee Information to a Group Legal-Services Plan
• NJ ACPE Op. 472: Representing a Legal-Services Organization for an Insurance Broker's Clients

Source

• Full text (Justia mirror): https://law.justia.com/cases/new-jersey/advisory-committee-on-professional-ethics/2004/acp405-1.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.

102 N.J.L.J. 297, September 28, 1978

OPINION 405

Conflict of Interest - Labor Organization Attorney Representing Members

A law firm which represents a public employee labor organization has been asked to provide legal services for its members at a 30% discount from its normal fee. We have been furnished a copy of the "Guidelines for the ... Attorney Referral Program." The attorneys ask whether it would be ethical for them to participate in the program. They do not say who prepared the Guidelines for the program, but they apparently were not initiated or promoted by the inquiring firm. They raise questions as to the applicability of certain disciplinary rules, viz., DR 2-101 (Publicity), DR 2-103 (Recommendation of Professional Employment) and DR 5-107 (Avoiding Influence by Others Than the Client).

With respect to DR 2-101, the Supreme Court is presently considering new disciplinary rules dealing with advertising. This Committee is deferring all requests for opinions on that subject until the new rules are promulgated. DR 2-103(D) provides that a lawyer is not prohibited from being recommended, employed or paid by or cooperating with, among others, "(4) Any bona fide organization that recommends, furnishes or pays for legal services to its members or beneficiaries provided the following conditions are satisfied..." There follow several requirements in subparagraphs (a) through (g). Subparagraph (g) requires that the organization first file a report with the Supreme Court and obtain from it a registration number. We have not been informed whether such report has been filed. If the plan is properly registered in accordance with the provisions of DR 2-103(D)(4), an attorney may ethically represent members of the organization. See our Opinion 383, 100 N.J.L.J. 1205 (1977). So far as DR 5-107 is concerned, the plan clearly indicates that the organization establishing the plan must not infringe upon the independent exercise of professional judgment by the attorney. The client is the member of the organization who consulted the attorney. Accordingly, this rule is not a bar to representation of members of the organization so long as plan of operation has been submitted and a registration number obtained in accordance with the rules.

A problem remains, however, with respect to the continued representation of the organization and the representation of its individual members. This matter was alluded to in our Opinions 114, 90 N.J.L.J. 480 (1967), and 256, 96 N.J.L.J. 745 (1973). While we are aware that this is not an uncommon practice, we repeat what was said in Opinion 256, viz, as a general practice an attorney representing an organization should not be the attorney selected to render legal services to the members of the organization.