Can a New York lawyer provide legal services by phone to employees referred by an Employee Assistance Program that pays the lawyer, and later take private work from those employees?

Plain-English summary

An Employee Assistance Program (EAP) is an employer benefit that helps employees with personal problems; some EAPs include free or reduced-price legal services from lawyers the EAP contracts with. The committee was asked whether a lawyer may provide legal services by telephone to EAP-referred employees and be paid by the EAP, and whether the lawyer may accept private retention from those employees for matters the telephone consultation cannot resolve. It answers both questions yes, provided the Code is otherwise honored.

The committee identifies the salient requirements. Under DR 5-107(A) and (B), third-party payment requires full disclosure to and consent of the client, and the employer-payor may not direct the lawyer's professional judgment or compromise confidentiality. DR 2-103(F)(4) may apply to the extent the lawyer gives anything of value for referrals; most EAPs will satisfy it if they provide a procedure for relief when an employee asserts the furnished representation would be unethical, improper, or inadequate. The telephone format does not relax the conflicts duties under DR 5-101, DR 5-105, DR 5-108, and DR 5-102, and DR 5-105(E) requires conflict-identifying records. Confidentiality duties under DR 4-101 and DR 5-108(A)(2) apply despite the brevity of the contact. Under DR 2-103(A) the lawyer may solicit existing or former clients in person or by telephone but not where the employee has said they do not wish to be solicited. Under DR 6-101, the lawyer must provide competent representation; if a problem is too complex for a telephone consultation, that and any limit on the scope of advice must be communicated to the client (citing N.Y. State 664). The committee also notes, as a matter of law it does not decide, that New York's engagement-letter rules (22 NYCRR Part 1215) may require engagement letters with the employer and, for separate employee-paid work expected to reach $3,000 or more, with the employee-client. On the second question, assuming the EAP does not object and the lawyer does not seek separate payment for EAP-covered work, the committee sees no Code reason the lawyer may not accept private retention.

In practice

The opinion holds, under the former Code as it stood at the time, that the EAP arrangement is permissible because the core concern, third-party referral and payment, is addressed by compliance with the existing Code provisions. It frames the analysis as conditional: the lawyer must satisfy the third-party-payment safeguards (client disclosure and consent, no payor control of judgment or confidentiality), the referral-organization conditions of DR 2-103(F)(4), the full set of conflicts and record-keeping duties despite the telephone format, the confidentiality duties, and the competence duty, including disclosing any limit on telephone-only advice. The committee treats accepting later private retention as permissible on the same conditions, where the EAP does not object and the lawyer does not double-charge for covered work.

Common questions

Q: Can a New York lawyer be paid by an EAP to advise employees it refers?

A: Yes. The opinion concludes there is no ethical bar, provided the lawyer complies with DR 5-107's third-party-payment requirements (client disclosure and consent, and no payor interference with the lawyer's judgment or confidentiality) and the Code is otherwise honored.

Q: Does serving these clients only by telephone reduce the lawyer's duties?

A: No. The opinion concludes the conflicts duties (DR 5-101, 5-105, 5-108, 5-102), the record-keeping duty (DR 5-105(E)), the confidentiality duties (DR 4-101, 5-108(A)(2)), and the competence duty (DR 6-101) all apply despite the brief, telephone-based contact.

Q: Can the lawyer take on additional private work from an EAP-referred employee?

A: Yes. The opinion concludes that, assuming the EAP does not object and the lawyer does not seek separate payment for work the EAP covers, the lawyer may accept private retention for matters the telephone consultation cannot resolve.

Background and rules framework

The opinion interprets former Code provisions: DR 5-107(A) and (B) (third-party payment, the analogue of ABA Model Rule 1.8(f) and 5.4(c)), DR 2-103(A), (D), and (F)(4) (solicitation and bona fide referral organizations), DR 4-101 and DR 5-108(A)(2) (confidentiality, the analogue of ABA Model Rule 1.6), DR 5-101, DR 5-105, DR 5-108, and DR 5-102 (conflicts and lawyer-as-witness), and DR 6-101 (competence). It cites EC 2-34 and EC 8-3 on serving persons of limited means, and notes the engagement-letter rules at 22 NYCRR Part 1215.

Citations and references

Rules of Professional Conduct:

• MR 1.8 (third-party payment of fees); MR 5.4 (professional independence); MR 1.6 (confidentiality)
• Former Code DR 2-103(A), (D), (F)(4); DR 4-101; DR 5-101; DR 5-102; DR 5-105 and (E); DR 5-107(A), (B); DR 5-108 and (A)(2); DR 6-101; EC 2-34, EC 8-3

Other authority:

• 22 NYCRR Part 1215 (New York engagement-letter rules)

Other opinions cited:

• N.Y. State 664 (1994): competence in telephone consultations
• N.Y. State 721 (1999): payor-required research service and professional independence
• N.Y. State 810 (2007): representation through a legal services program

See also

• NY State Bar Op. 827: Paying a client's billing auditor a percentage of billings
• NY State Bar Op. 1063: Conflict when fees are paid by a third-party relative
• NY State Bar Op. 845: Lawyer-real estate broker sharing a brokerage commission

Source

• Landing page: https://nysba.org/ethics-opinion-825/