May a lawyer provide legal services to members of an automobile club under a membership plan where the club pays for and limits the fee?

Plain-English summary

A member of the bar asked whether a lawyer could properly render legal services under an automobile club membership certificate. The certificate provided that, where legal advice was needed arising out of the ownership or operation of the member's vehicle, the club's attorneys would advise the member, with the club assuming the cost subject to a cap (no more than thirty percent of the amount involved, and a maximum of $100), and with the club reserving the right to determine a reasonable fee.

The committee read the plan against Canon 35, which provides that a lawyer's professional services should not be controlled or exploited by any lay agency that intervenes between client and lawyer, and that a lawyer may accept employment from an organization to render legal services in matters in which the organization as an entity is interested, but that such employment should not include rendering legal services to the members in respect to their individual affairs. Applying that distinction, the committee said legal services could be rendered to the club where they were applicable to problems common to all members, but not where the club purchased advice for an individual member about his own particular problem, often without the full and free disclosure of facts essential to a proper attorney-client relationship.

The committee then identified a second problem: whether the automobile club itself would be practicing law. It cited decisions from North Carolina and Illinois holding that similar arrangements constituted the unauthorized practice of law.

Currency note

This opinion was issued in 1951, decades before Oklahoma replaced its original Rules of Professional Conduct (patterned on the ABA Canons of Professional Ethics) with the Oklahoma Rules of Professional Conduct (adopted 1988) and the later Ethics 2000 revisions. Canon 35, the lay-intermediary rule applied here, belongs to that superseded canon-era code; the modern treatment of group and prepaid legal services and of a lawyer's professional independence is governed by different rules today. Subsequent rule amendments and 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 Treat this page as historical context, not current guidance.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 a lawyer serve an organization like an automobile club at all?

A: Yes. The committee said legal services could be rendered to the club where they were applicable to problems common to all members, drawing on Canon 35's allowance for employment in matters in which the organization as an entity is interested.

Q: What was the line the plan crossed?

A: The committee concluded that furnishing legal services to individual members about their own peculiar affairs, with the club intervening and paying, fell within Canon 35's prohibition on a lay agency controlling or exploiting a lawyer's services, and was distinguished from advice on problems common to all members.

Q: Did the opinion raise any concern beyond the lawyer's conduct?

A: Yes. The committee noted the further problem of whether the club itself would be practicing law, citing North Carolina and Illinois decisions holding that comparable arrangements constituted the unauthorized practice of law.

Background and rules framework

The opinion applied Canon 35 of the Canons of Professional Ethics, adopted in Oklahoma, which barred a lawyer from allowing his services to be controlled or exploited by a lay agency intervening between client and lawyer and limited organizational employment to matters in which the organization as an entity is interested. The opinion predates the Model Rules and made no Model Rule citation. It also referenced ABA Committee on Professional Ethics Opinions Nos. 8 and 56.

Citations and references

Rules of Professional Conduct:

• Canon 35 (ABA Canons of Professional Ethics, adopted by the Oklahoma Bar): a lawyer's professional services should not be controlled or exploited by a lay intermediary; organizational employment should not extend to members' individual affairs.

Cases:

• State ex rel. Seawell v. Carolina Motor Club, 209 N.C. 624, 184 S.E. 540 (1936), automobile club arrangement as unauthorized practice of law
• People ex rel. Chicago Bar Association v. Motorists Association of Illinois, 354 Ill. 595, 188 N.E. 827 (1933), same
• People ex rel. Chicago Bar Association v. Chicago Motor Club, 362 Ill. 50, 199 N.E. 1 (1935), same

Other opinions cited:

• ABA Committee on Professional Ethics Opinions Nos. 8 and 56
• Oklahoma Advisory Opinion No. 143 (cross-reference in the opinion's footnote)

See also

• Okla. Bar Ethics Op. 126: Collection agencies and law lists as lay intermediaries
• Okla. Bar Ethics Op. 31: Law firm managing a lay adjustment bureau
• Okla. Bar Ethics Op. 19: Real estate corporation publishing legal advice

Source

• Landing page: https://www.okbar.org/ethics/ethics-opinion-no-153/

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Adopted May 9, 1951

The Legal Ethics and State-wide Disciplinary Committee is in receipt of an inquiry from a member of the bar as to the professional propriety of a lawyer rendering legal services to an automobile club, which membership certificate provides for legal services as follows:

“In the event legal advice is needed, arising out of the ownership and/or operation of the herein described vehicle, our attorneys will give legal advice as to the rights and responsibilities thereunto arising. The cost of this service shall be assumed by the Club according to stipulations and limitations as outlined in the general provisions.

“In the event the member has occasion to use the legal services set forth in Sections No. 5 and No. 6, the Club shall in no event assume an expense for legal service exceeding thirty per cent (30%) of the amount involved, provided further, that the maximum expense shall be $100.00, and the Club hereby expressly reserves the right to determine what is a reasonable attorney’s fee.”

The facts submitted are not complete, however the committee is of the opinion that the proposed services are within the inhibitions of Canon 35 of Professional Ethics of the American Bar Association and Oklahoma Bar Association, which is as follows:

“The professional services of a lawyer should not be controlled or exploited by any lay agency, personal or corporate, which intervenes between client and lawyer. A lawyer’s responsibilities and qualifications are individual. He should avoid all relations which direct the performance of his duties by or in the interest of such intermediary. A lawyer’s relation to his client should be personal, and the responsibility should be direct to the client. Charitable societies rendering aid to the indigent are not deemed such intermediaries.

“A lawyer may accept employment from any organization, such as an association, club or trade organization, to render legal services in any matter in which the organization, as an entity, is interested, but this employment should not include the rendering of legal services to the members of such an organization in respect to their individual affairs.”

The committee is not informed whether the club is or is not organized for profit, but it is believed that the furnishing of these legal services is a substantial inducement to membership. It is our view that legal services may be rendered to a club where they are applicable to problems common to all members of the club. This service is clearly distinguished from the purchase by the club of advice for an individual member concerning his own peculiar problems and frequently without the full and free disclosure of the factual situation essential to the proper relation of attorney and client. A. B. A. Com. of Prof. Ethics Opinions, Nos. 8 and 56 1.

This inquiry presents another problem of importance. Would the automobile club be practicing law? The following courts have held that similar facts constitute the unauthorized practice of law: State ex rel. Seawell, Attorney-General, v. Carolina Motor Club, 1936, 209 N.C. 624, 184 S.E. 540; People ex rel. Chicago Bar Association v. Motorists Association of Illinois, 1933, 354 Ill. 595, 188 N.E. 827; People ex rel. Chicago Bar Association v. Chicago Motor Club, 1935, 362 Ill. 50, 199 N.E. 1.

1 For an advisory opinion on related question see Advisory Opinion No. 143 and opinions cited therein.