Can a New York lawyer hire a marketing firm to solicit clients for a prepaid legal plan and pay it a share of the legal fees?
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This page answers the general question as of 1984. Ezel answers yours: whether it's allowed on your facts, under the current New York Rules of Professional Conduct, with citations.
Plain-English summary
A lawyer proposed to employ a public relations and marketing firm to solicit potential clients for prepaid legal services, paying the firm a salary, commission, or percentage of the annual fee charged to those clients. The firm would handle advertising, inquiries, and initial correspondence, and would seek out corporations, nonprofit organizations, and various groups. The committee was asked whether this was proper.
The committee first noted that DR 2-103(A) bars soliciting employment in violation of any statute or court rule, and that Judiciary Law section 479 makes certain solicitation unlawful, but said it lacks jurisdiction to decide whether the plan violates section 479 (though if it did, the conduct would be unethical). Apart from the legal question, the committee found the plan violated several Code provisions. The lawyer would request the marketing firm to promote the lawyer's services and compensate it to obtain client employment, contrary to DR 2-103(B) (a lawyer shall not compensate a person to recommend or obtain employment) and DR 2-103(C) (a lawyer shall not request a person to recommend or promote the lawyer's services as a private practitioner).
As to the firm's presentation and marketing of legal services, the committee applied the ethical concerns about in-person solicitation, the potential for false, deceptive, or misleading statements, pecuniary interest, puffery, and over-commercialization, citing Ohralik v. Ohio State Bar Ass'n and New York cases (Koffler, Greene, Alessi). In-person solicitation may produce a one-sided presentation and pressure quick, uninformed decisions, and is not practicably subject to oversight or public scrutiny; the dangers are lessened but not removed when the targets are corporations and executives, and heightened for less sophisticated groups. Those problems were enhanced because the solicitation would be carried out by a third party of nonlawyers, who lack the lawyer's training in and tradition of the ethical limitations on solicitation. The committee also held a lawyer may not divide legal fees with a nonlawyer (DR 3-102), so paying the firm a percentage of the legal fee was independently improper.
Currency note
This opinion was issued in 1984, before New York replaced the Code of Professional Responsibility with the Rules of Professional Conduct in 2009 (advertising and payment for recommendations now appear at Rule 7.2, solicitation at Rule 7.3, and the bar on sharing fees with nonlawyers at Rule 5.4). Lawyer advertising and solicitation rules have changed substantially since this opinion. 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: Could the lawyer pay a marketing firm to solicit clients for a prepaid legal plan?
A: No. The committee held that compensating a third party to recommend or obtain client employment violates DR 2-103(B) and (C).
Q: Could the lawyer share a percentage of the legal fees with the firm?
A: No. The committee held a lawyer may not divide legal fees with a nonlawyer under DR 3-102.
Q: Why was in-person solicitation by the firm a problem?
A: The committee held it carries the dangers the rules guard against, one-sided, pressured, unsupervised solicitation, and is worse when conducted by nonlawyers who lack training in the ethical limits on solicitation.
Background and rules framework
The opinion read DR 2-101 (advertising), DR 2-103(B) and (C) (compensating or requesting third parties to recommend the lawyer), and DR 3-102 (dividing fees with nonlawyers), against the backdrop of Judiciary Law section 479 and the solicitation case law. The closest current Model Rule analogues are Rule 7.2 (advertising; payment for recommendations), Rule 7.3 (solicitation of clients), and Rule 5.4 (sharing fees with nonlawyers).
Citations and references
Rules of Professional Conduct:
- MR 7.2 (advertising; payment for recommendations)
- MR 7.3 (solicitation of clients)
- MR 5.4 (sharing fees with nonlawyers)
- NY DR 2-101; DR 2-103(B); DR 2-103(C); DR 3-102
Statutes:
- Judiciary Law section 479 (unlawful solicitation; not decided here)
Cases:
- Ohralik v. Ohio State Bar Ass'n, 436 U.S. 447 (1978): dangers of in-person solicitation
- Matter of Koffler, 51 N.Y.2d 140 (1980): solicitation through third parties
- Matter of Alessi, 60 N.Y.2d 229 (1983): upheld Judiciary Law section 479 and DR 2-103(A)
Other opinions cited:
- N.Y. State 467 (1977): compensating a third party to obtain employment is improper
- N.Y. State 524 (1980): DR 2-103(B) and (C) proscriptions remain substantially intact
See also
- NY State Bar Op. 566: Paid third-party recommendations in advertising
- NY State Bar Op. 597: Advertising service plans versus referral
- NY State Bar Op. 590: Serving on a lawyer referral committee
Source
- Landing page: https://nysba.org/opinion-565/
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