Can a group legal service plan set a fee schedule in advance with participating lawyers, with the fees paid by plan members rather than the sponsor?

Plain-English summary

The committee was asked whether a group legal service plan may include a fee schedule at rates agreed in advance between the lawyer and the sponsoring organization, and provide that those fees are paid by each beneficiary who uses the service rather than by the sponsor. It answered that a plan meeting all conditions and requirements may properly include such a fee schedule (cf. EC 2-19), without regard to whether the organization or the user pays for the service, provided the agreed fees satisfy the reasonableness standards of EC 2-17, EC 2-18, and DR 2-106.

The committee added that the Code places no restrictions on plans that provide for all fees to be paid by each individual member or beneficiary using the plan rather than by the plan sponsor.

The committee situated the answer in the 1975 Code amendments. The requirements specifically applicable to group legal service plans were substantially amended effective April 19, 1975, and appear in EC 2-33 and DR 2-101(B), DR 2-103, and DR 2-104(A)(3), with the general guidelines set out in N.Y. State 416 (1975).

Currency note

This opinion was issued in 1975, before New York replaced the Code of Professional Responsibility with the Rules of Professional Conduct in 2009 (fees are now governed by Rule 1.5, professional independence and fee-sharing arrangements by Rule 5.4, and referral and plan arrangements by Rule 7.2). 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 Treat this page as historical context, not current guidance.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 plan and its participating lawyers agree on a fee schedule in advance?

A: Under this opinion, yes, where the plan meets all applicable conditions and the agreed fees are reasonable under EC 2-17, EC 2-18, and DR 2-106 (cf. EC 2-19).

Q: Can the plan require members, rather than the sponsor, to pay the fees?

A: Per the opinion, yes. The committee found no Code restriction on plans where each individual member or beneficiary using the plan pays the fees rather than the sponsor.

Q: Where do the rules for these plans come from?

A: The committee pointed to the April 19, 1975 Code amendments, EC 2-33 and DR 2-101(B), DR 2-103, and DR 2-104(A)(3), with general guidelines in N.Y. State 416 (1975).

Background and rules framework

The opinion applies the then-current New York Code's fee and group-plan provisions, EC 2-17, EC 2-18, EC 2-19, EC 2-33, DR 2-101(B), DR 2-103, DR 2-104(A)(3), and DR 2-106, as amended in 1975, with N.Y. State 416 (1975) as the general guideline. The current analogues are Rule 1.5 (fees), Rule 5.4 (professional independence), and Rule 7.2 (advertising and plan arrangements).

Citations and references

Rules of Professional Conduct:

• MR 1.5 (fees)
• MR 5.4 (professional independence of a lawyer)
• MR 7.2 (advertising; plan and referral arrangements)
• NY EC 2-17, EC 2-18, EC 2-19, EC 2-33; DR 2-101(B), DR 2-103, DR 2-104(A)(3), DR 2-106

Other opinions cited:

• N.Y. State 416 (1975): general guidelines for group legal service plans

See also

• NY State Bar Op. 416: Group legal service plan guidelines
• NY State Bar Op. 428: A prepaid legal service plan brochure
• NY State Bar Op. 441: A fee-schedule brochure for office visitors

Source

• Landing page: https://nysba.org/opinion-417/