Can a lawyer contract with a lay membership association to represent its individual members at a discounted fee?

Plain-English summary

A proposed organization, the Merchants and Consumers Co-operative Association, planned to engage one attorney or firm in each line of business or profession to represent its individual members at a 10% reduction in fees, with a membership charge of $3.00 per year and a goal of 1,000 members. A lawyer asked whether it would be unethical to represent the members under that arrangement. The Board assumed the retainer would be paid by the organization and that the lawyer's duty would be to represent individual members in their individual affairs.

The Board concluded the arrangement would be contrary to the Rules of Professional Conduct for three reasons. First, the plan would constitute the practice of law by a lay organization, and a lay agency that cannot practice law directly cannot do so indirectly by employing licensed attorneys. Second, only active members of the State Bar may practice law (Section 46) and the unlawful practice of law is a misdemeanor (Section 48), so a lawyer who assists a lay organization in practicing law is particeps criminis. Third, the lawyer would violate Rule 29 by soliciting business by indirection through the organization, and Rule 37, under which a lawyer's services shall not be controlled or exploited by a lay agency and employment by an organization does not extend to rendering legal services to its members in their individual affairs. The Board noted its conclusion accorded with ABA Committee opinions Nos. 8, 31, and 56.

Currency note

This opinion was issued in 1933, 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. Group and prepaid legal services, lay intermediaries, and solicitation are governed today by separate, substantially changed provisions of the current Oklahoma Rules of Professional Conduct, and intervening constitutional decisions altered the law on group legal services. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific principle mentioned here.

Common questions

Q: Could a lawyer take a retainer from a lay association to serve its members at a discount?

A: No. The Board concluded the arrangement would be contrary to the Rules of Professional Conduct because it amounted to the practice of law by a lay organization.

Q: Which rules did the Board say the lawyer would violate?

A: Rule 29, for soliciting business by indirection through the organization, and Rule 37, which bars a lay agency from controlling or exploiting a lawyer's services and limits organizational employment to the organization's own matters, not its members' individual affairs.

Q: Why did it matter that a lay organization cannot itself practice law?

A: The Board reasoned that if a lay agency may not practice law directly, it may not do so indirectly by employing licensed attorneys, and a lawyer assisting it is, in the Board's words, particeps criminis given that unauthorized practice is a misdemeanor under Section 48.

Background and rules framework

The opinion applied Rule 29 (solicitation) and Rule 37 (lay control or exploitation of a lawyer's services) of the then-current Oklahoma Rules of Professional Conduct, patterned on the ABA Canons of Professional Ethics, together with Sections 46 and 48 of the State Bar Act limiting the practice of law to active State Bar members and making unlawful practice a misdemeanor. The Board treated the discount-for-members plan as a lay organization practicing law through hired attorneys.

Citations and references

Rules of Professional Conduct:

• Rule 29 (1929 Oklahoma Rules of Professional Conduct): a lawyer may not solicit business, including by indirection.
• Rule 37 (1929): a lawyer's services shall not be controlled or exploited by a lay agency; organizational employment does not extend to the members' individual affairs.

Statutes:

• Section 46 (State Bar Act): only active members of the State Bar may practice law.
• Section 48 (State Bar Act): the unlawful practice of law constitutes a misdemeanor.

Other opinions cited:

• ABA Committee on Professional Ethics and Grievances Opinions Nos. 8, 31, and 56: lay intermediaries and solicitation.
• Oklahoma State Bar Advisory Opinion No. 1 (Vol. 25, 1931 Proceedings, p. 161).

See also

• Okla. Bar Ethics Op. 31: Law Firm Managing a Lay Adjustment Bureau
• Okla. Bar Ethics Op. 30: Directory Display Ads and Lay Adjusters in the Industrial Court
• Okla. Bar Ethics Op. 25: Accountants' Incorporation and Foreign-Corporation Licenses

Source

• Landing page: https://www.okbar.org/ethics/ethics-opinion-no-49/

Original opinion text

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

Adopted February 24, 1933

The Board is in receipt of the following request for an opinion:

"The purpose of this letter is to get an advisory opinion relative to the following set of facts. The Merchants and Consumers Co-operative Association, a proposed organization, proposes to procure one individual or company, in each line of business or profession to represent the individual members of this organization for a 10% reduction in the fees. This company also proposes to obtain 1,000 members. Also the company charges $3.00 per year to belong to this organization to its individual members. Now would it be unethical for an attorney to represent these members of this company under these circumstances? I would like to get an opinion as soon as possible a I have a tentative agreement on this particular proposition."

It is assumed that the retainer would be paid by the organization and that the duty of the attorney would be to represent the individual members of the organization in respect to their individual affairs.

The Board is of the opinion that it would be contrary to the Rules of Professional Conduct, as approved by the Supreme Court, for a member of the Bar to enter into and carry out such an arrangement, for the following reasons:

(1) The consummation of the plan would constitute the practice of law by a lay organization. If a lay agency is not entitled to practice law directly, it is not entitled to do so indirectly by employing licensed attorneys to carry on that portion of its activities.

(2) Section 46 provides that only active members of The State Bar may practice law and Section 48 provides that the unlawful practice of law constitutes a misdemeanor. Therefore, a member of the Bar who assists a lay organization in the practice of law is particeps criminis in that respect, and, of course, is thus guilty of wrongdoing.

(3) The member of the Bar would be guilty of a violation of Rule 29 of the Rules of Professional Conduct because he would be guilty of soliciting business by indirection through the organization, and of Rule 37, which provides that the services of a lawyer shall not be controlled or exploited by a lay agency, and that

"A. lawyer may accept appointment from any organization … to render legal services in any matter in which the organization, as an entity is interested, but this employment shall not include the rendering of legal services to the members of such an organization in respect to their individual affairs."

The essential dignity of the profession forbids the solicitation of business by a member of the Bar or the exploitation of his professional services and it follows that he cannot properly enter into any relation with another to have done for him that which he cannot properly do for himself.

The entire subject is fully discussed in Advisory Opinion No. 1, Vol. 25, 1931, Report of the Proceedings of The State Bar at page 161.

The opinion of the Board is in accord with that of the Committee on Professional Ethics and Grievances of the American Bar Association, as evidenced by its opinions Nos. 8, 31, and 56.