Can a lawyer set up a for-profit group legal services plan and take the client referrals it generates?
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This page answers the general question as of 1998. Ezel answers yours: whether it's allowed on your facts, under the current Ohio Rules of Professional Conduct, with citations.
Plain-English summary
The Board considered a lawyer who wished to set up a group legal services plan for churches and their members, offered through a for-profit organization the lawyer formed, where the lawyer or the lawyer's firm would provide the services and refer to other paying lawyers. It described the plan as a group-consultation-or-referral plan governed by DR 2-103, under which a lawyer may receive referrals from a "bona fide organization" only if the conditions of DR 2-103(D)(4)(a) through (g) and DR 2-103(C)(3) are satisfied.
On Question One, the Board concluded the plan failed DR 2-103(D)(4)(a) because it was operated for profit and the organization bore no liability for its members, and failed DR 2-103(D)(4)(b) because the lawyer initiated and operated the organization in a way that appeared aimed primarily at providing financial benefit to the lawyer. It therefore was not a bona fide organization, and the lawyer could not properly receive its referrals.
On Question Two, the Board concluded that under DR 2-103(B) a lawyer may pay reasonable monthly fees to a qualifying DR 2-103(D) organization to receive referrals, but payments to this organization would not be proper because it did not qualify. On Question Three, the Board concluded that a participating lawyer may send brochures (DR 2-101(B)(3)), but under DR 2-101(A)(5) fee characterizations such as "low cost," "discounted," or "below regional cost" must be avoided, while "reasonable" and "moderate" are acceptable.
Currency note
The Ohio Board flags this opinion as a "CPR Opinion" interpreting the former Ohio Code of Professional Responsibility, which was superseded by the Ohio Rules of Professional Conduct effective February 1, 2007.
This opinion issued in 1998, before that change. Subsequent rule amendments or later opinions may have changed the analysis, including the rules governing lawyer advertising and referral arrangements. Treat this page as historical context, not current guidance. Verify against the current Ohio Rules of Professional Conduct before relying on any specific rule mentioned here.
Common questions
Q: Could a lawyer take referrals from a group legal plan the lawyer set up for profit?
A: No. The opinion concluded that a for-profit plan formed and run by the lawyer, bearing no member liability, failed DR 2-103(D)(4)(a) and (b) and was not a bona fide organization, so the lawyer could not properly receive its referrals.
Q: Could a lawyer pay dues to participate in a group legal plan?
A: Yes, if it qualified. The opinion concluded that under DR 2-103(B) a lawyer may pay reasonable fees to a qualifying DR 2-103(D) organization, but not to this non-qualifying one.
Q: Could a brochure describe the plan's fees as "low cost" or "discounted"?
A: No. The opinion concluded that DR 2-101(A)(5) bars such fee characterizations, though "reasonable" and "moderate" were acceptable.
Background and rules framework
The opinion interprets the former Ohio Code of Professional Responsibility DR 2-103(D)(4) (conditions for receiving referrals from a bona fide organization), DR 2-103(C)(3) (cooperating with a listed organization), DR 2-103(B) (paying dues to listed organizations), and DR 2-101(B)(3) and DR 2-101(A)(5) (permitted brochures and limits on fee characterizations).
Citations and references
Rules of Professional Conduct:
- Former Ohio Code of Professional Responsibility DR 2-103(B), DR 2-103(C)(3), DR 2-103(D)(4)(a)-(g), DR 2-101(B)(3), DR 2-101(A)(5)
Other opinions cited:
- C.W. Wolfram, Modern Legal Ethics (1986) (categories of group legal services plans)
See also
No sibling opinions yet indexed.
Source
- Landing page: https://ohioadvop.org/advisory-opinion-index/
- Original PDF: https://www.ohioadvop.org/wp-content/uploads/2017/04/Op-98-001.pdf
Original opinion text
Reproduced from the official source for research purposes. The linked source is authoritative.
The Supreme Court of Ohio
BOARD OF COMMISSIONERS ON GRIEVANCES AND DISCIPLINE
41 SOUTH HIGH STREET-SUITE 3370, COLUMBUS, OH 43215-6105
(614) 644-5800 FAX: (614) 644-5804
OFFICE OF SECRETARY
OPINION 98-1
Issued February 13, 1998
[CPR Opinion-provides advice under the Ohio Code of Professional Responsibility which is superseded
by the Ohio Rules of Professional Conduct, eff. 2/1/2007.]
SYLLABUS: It is improper under DR 2-103(D)(4)(a) and (b) for a lawyer to receive
referrals from a group legal services plan established by the lawyer and offered through
an organization formed and operated by the lawyer, when that organization is a for-profit
organization that bears no liability for its members. A lawyer’s participation in a group
legal services plan is proper only when the conditions set forth in DR 2-103(D)(4)(a)
through (g) and DR 2-103(C)(3) are met.
A lawyer may pay monthly fees to an organization to be eligible to receive referrals from
its group legal services plan, so long as it is a DR 2-103(D) organization. Payments to the
proposed organization would not be proper because the organization does not meet the
requirements of DR 2-103(D)(4)(a) and (b).
A lawyer who receives referrals from a group legal services plan is permitted to
participate in the advertisement of the plan by sending a group a brochure. DR 2-103(D)
allows the promotion of legal services as permitted under DR 2-101(B). Under DR 2-
101(B)(3) brochures that comply with DR 2-101 are a permitted form of communication.
Under DR 2-101(A)(5) terms such as “low cost,” “discounted,” or “below regional cost”
should be avoided, but terms such as “reasonable” and “moderate” are acceptable.
OPINION: A lawyer wishes to establish a group legal services plan for churches, church
members, and church employees. The plan would be offered through a for-profit
organization formed and operated by the lawyer. Each church would pay the organization
a one-time enrollment fee and annual renewal fees. Church members and church
employees would use the church’s group membership number to receive legal services at
the rates identified in the plan. Legal services would be provided by the lawyer or the
lawyer’s firm. The lawyer would also make referrals to other lawyers who pay the
organization a monthly fee to participate in providing legal services under the plan.
The following questions are addressed.
1. Is it proper for a lawyer to establish a group legal services plan, offer it
through a for-profit organization formed and operated by the lawyer,
and receive referrals to provide legal services to members of the plan?
2. Is it proper for a lawyer to pay monthly fees to an organization to be
eligible to receive referrals from its group legal services plan?
3. Is it proper for a lawyer to participate in the advertisement of a group
legal services plan by sending a group a brochure describing the
services as “low cost” “discounted” or “below regional cost”?
Group legal services plans provide a structure for making legal services available to
groups at affordable costs. Although group legal services plans vary, each plan shares a
common feature--a contract or agreement between a group and one or more lawyers or
law firms to represent the group members. Most plans fall into one of three basic
categories: legal clinics; group consultation or referral plans; and risk-spreading or
insurance plans. See C.W. Wolfram, Modern Legal Ethics, 901-904 (1986).
The plan proposed in this opinion is an example of a group consultation or referral plan.
In this type of plan there is a contract between a group and a lawyer or lawyers to provide
initial consultation and subsequent services at reduced fees to members of a group. There
is no prepayment of legal fees which distinguishes this type of plan from risk sharing or
insurance plans.
Attorney participation in group legal services plans is governed under DR 2-103 of the
Ohio Code of Professional Responsibility. Under DR 2-103(D), attorneys are permitted
to assist, participate with, and receive referrals from “bona fide organizations” that
recommend, furnish or pay for legal services to its members, but only under the
conditions set forth in DR 2-103(D)(4)(a) through (g).
DR 2-103(D) A lawyer shall not knowingly assist a person or
organization that furnishes or pays for legal services to others to
promote the use of the lawyer’s services or those of the lawyer’s
partner or associate or any other lawyer affiliated with the lawyer
or the lawyer’s firm except as permitted in DR 2-101(B).
However, this does not prohibit a lawyer or the lawyer’s partner or
associate or any other lawyer affiliated with the lawyer or the
lawyer’s firm from being recommended, employed or paid by, or
cooperating with, assisting, and providing legal services for, one of
the following offices or organizations that promote the use of the
lawyer’s services or those of the lawyer’s partner or associate or
any other lawyer affiliated with the lawyer or the lawyer’s firm if
there is no interference with the exercise of independent
professional judgment on behalf of the lawyer’s client:
(4) Any bona fide organization that recommends, furnishes,
or pays for legal services to its members or beneficiaries
provided all of the following conditions are satisfied:
(a) The organization, including any affiliate, is organized
and operated so that no profit is derived by it from the
rendition of legal services by lawyers, and that, if the
organization is organized for profit, the legal services
are not rendered by lawyers employed, directed,
supervised, or selected by it except in connection with
matters where the organization bears ultimate liability
of its member or beneficiary.
(b) Neither the lawyer, the lawyer’s partner, associate, or
any other lawyer affiliated with the lawyer or the
lawyer’s firm, nor any non-lawyer, shall have initiated
or promoted the organization for the primary purpose of
providing financial or other benefit to the lawyer,
partner, associate, or affiliated lawyer.
(c) The organization is not operated for the purpose of
procuring legal work or financial benefit for any lawyer
as a private practitioner outside of the legal services
program of the organization.
(d) The member or beneficiary to whom the legal services
are furnished, and not the organization, is recognized as
the client of the lawyer in the matter.
(e) Any member or beneficiary who is entitled to have legal
services furnished or paid for by the organization, if
such member or beneficiary so desires, may select
counsel other than that furnished, selected or approved
by the organization; provided, however, that the
organization shall be under no obligation to pay for the
legal services furnished by the attorney selected by the
beneficiary unless the terms of the legal services plan
specifically provide for payment.
Every legal services plan shall provide that any member or
beneficiary may assert a claim that representation by
counsel furnished, selected, or approved by the
organization would be unethical, improper, or
inadequate under the circumstances of the matter
involved. The plan shall provide for adjudication of a
claim under division (D)(4)(e) of this rule and
appropriate relief through substitution of counsel or
providing that the beneficiary may select counsel and
the organization shall pay for the legal services
rendered by selected counsel to the extent that such
services are covered under the plan and in an amount
equal to the cost that would have been incurred by the
plan if the plan had furnished designated counsel.
(f) The lawyer does not know or have cause to know that
the organization is in violation of applicable laws, rules
of court, and other legal requirements that govern its
legal service operations.
(g) The organization has filed with the Supreme Court of
Ohio, on or before the first day of January of each year,
a report with respect to its legal service plan, if any,
showing its terms, its schedule of benefits, its
subscription charges, agreements with counsel, and
financial results of its legal service activities or, if it has
failed to do so, the lawyer does not know or have cause
to know of the failure.
Attorney participation in group legal services plans is also governed under DR 2-
103(C)(3).
DR 2-103(C) A lawyer shall not request a person or organization to
recommend or promote the use of the lawyer’s services or those of
the lawyer’s partner or associate, or any other lawyer affiliated with
the lawyer or the lawyer’s firm, as a private practitioner, except
that: (3) The lawyer may cooperate with the legal service activities
of any of the offices or organizations enumerated in divisions
(D)(1) to (4) of this rule and may perform legal services for those
to whom the lawyer was recommended by it to do such work if
both of the following apply:
(a) The person to whom the recommendation is made is a
member or beneficiary of such office or organization;
(b) The lawyer remains free to exercise independent
professional judgment on behalf of the lawyer’s client.
Thus, an attorney who wishes to participate in a group legal services plan must determine
whether the conditions of DR 2-103(D)(4)(a) through (g) and DR 2-103(C)(3)(a) and (b)
are met. When the conditions are not met, participation is improper. Each attorney must
make this determination. This Board does not give pre-approval to group legal services
plans, but will advise upon the application of the rules to the specific questions raised.
Question One
Is it proper for a lawyer to establish a group legal services plan, offer it
through a for-profit organization formed and operated by the lawyer, and
receive referrals to provide legal services to members of the plan?
The condition set forth in DR 2-103(D)(4)(a) would not be met. The proposed plan is
operated for profit. The organization bears no liability of its group members. Therefore,
under the rule, the legal services cannot be rendered by lawyers employed, directed,
supervised, or selected by it.
The condition set forth in DR 2-103(D)(4)(b) is also not met. The rule states that
“[n]either the lawyer, the lawyer’s partner, associate, or any other lawyer affiliated with
the lawyer or the lawyer’s firm, nor any non-lawyer, shall have initiated or promoted the
organization for the primary purpose of providing financial or other benefit to the lawyer,
partner, associate, or affiliated lawyer.” The underlying ethical concern is that a group
legal services plan might be used solely as a method of improper solicitation of legal
business for the lawyer’s benefit, rather than for the intended purpose of making legal
services available to groups at affordable costs.
Under the facts presented, the attorney initiated and formed the organization for the stated
purpose of providing church groups with legal services by Christian lawyers. The Board
does not question this as a purpose. However, when a for-profit organization is formed
by a lawyer to provide group legal services and it is the lawyer who receives referrals
from the plan and who profits from providing the legal services, then it appears that the
primary purpose is “providing financial or other benefit to the lawyer, partner, associate,
or affiliated lawyer.”
It is the Board’s view that the proposed organization does not meet these conditions and
would not be considered a “bona fide organization” under the rule. Because these
conditions are not met, the Board goes no further in addressing other conditions within
the rule.
Therefore, in answer to Question One, the Board advises that it is improper under DR 2-
103(D)(4)(a) and (b) for a lawyer to receive referrals from a group legal services plan
established by the lawyer and offered through an organization formed and operated by the
lawyer, when that organization is a for-profit organization that bears no liability for its
members. A lawyer’s participation in a group legal services plan is proper only when the
conditions set forth in DR 2-103(D)(4)(a) through (g) and DR 2-103(C)(3) are met.
Question Two
Is it proper for a lawyer to pay monthly fees to an organization to be
eligible to receive referrals from its group legal services plan?
Under DR 2-103(B), lawyers are permitted to pay reasonable fees or dues to an
organization that makes recommendations resulting in the lawyer’s employment by a
client, so long as the organization is listed in DR 2-103(D).
DR 2-103(B) A lawyer shall not compensate or give any thing of value to
a person or organization to recommend or secure the lawyer’s employment
by a client, or as a reward for having made a recommendation resulting in
the lawyer’s employment by a client, except that the lawyer may pay the
usual and reasonable fees or dues charged by any of the organizations
listed in DR 2-103(D).
Thus, the Board advises that a lawyer may pay monthly fees to an organization to be
eligible to receive referrals from its group legal services plan, so long as it is a DR 2-
103(D) organization. Payments to the proposed organization would not be proper
because the organization does not meet the requirements of DR 2-103(D)(4)(a) and (b).
Question Three
Is it proper to for a lawyer to advertise a group legal services plan by
sending a group a brochure describing the services as “low cost”
“discounted” or “below regional cost”?
Under DR 2-103(D), a lawyer is permitted to participate in the advertisement of a group
legal service plan, but such permission is granted as an exception to a restriction. The
rule states “[a] lawyer shall not knowingly assist a person or organization that furnishes or
pays for legal services to others to promote the use of the lawyer’s services or those of the
lawyer’s partner or associate or any other lawyer affiliated with the lawyer or the lawyer’s
firm except as permitted in DR 2-101(B).”
The dissemination of brochures is permitted under DR 2-101(B)(3).
DR 2-101(B) Subject to limitations contained within these rules:
(3) Brochures or pamphlets containing biographical and
informational data that is acceptable under these rules may be
disseminated directly to clients, members of the bar, or others.
Limitations are set forth in DR 2-101(A)(5) as to how fees can be described.
DR 2-101(A) A lawyer shall not, on his or her own behalf or that of a
partner, associate, or other lawyer affiliated with the lawyer or the lawyer’s
firm, use, or participate in the use of, any form of public communication,
including direct mail solicitation, that:
(5) Contains characterizations of rates or fees chargeable by the
lawyer or law firm, such as “cut-rate,” “lowest,” “giveaway,”
“below cost,” “discount,” and “special;” however, use of
characterizations of rates or fees such as “reasonable” and
“moderate” is acceptable.”
The proposed brochure describes fees for the group legal services plan as “low cost”
“discounted” or “below regional cost.” Although brochures are permitted under the rules,
such descriptions of fees is not permitted.
In answer to Question Three, the Board advises that a lawyer who receives referrals from
a group legal services plan is permitted to participate in the advertisement of the plan by
sending a group a brochure. DR 2-103(D) allows the promotion of legal services as
permitted under DR 2-101(B). Under DR 2-101(B)(3) brochures that comply with DR 2-
101 are a permitted form of communication. Under DR 2-101(A)(5) terms such as “low
cost,” “discounted,” or “below regional cost” should be avoided, but terms such as
“reasonable” and “moderate” are acceptable.
Advisory Opinions of the Board of Commissioners on Grievances and Discipline are
informal, nonbinding opinions in response to prospective or hypothetical questions
regarding the application of the Supreme Court Rules for the Government of the
Bar of Ohio, the Supreme Court Rules for the Government of the Judiciary, the
Code of Professional Responsibility, the Code of Judicial Conduct, and the
Attorney’s Oath of Office.
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