Can a lawyer join a business-networking club that requires members to exchange referrals as a condition of membership?
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This page answers the general question as of 2021. Ezel answers yours: whether it's allowed on your facts, under the current Oregon Rules of Professional Conduct, with citations.
Plain-English summary
A lawyer is asked to join a local chapter of a business and professional networking association whose published purpose is to facilitate referrals of business between members. Attendance at monthly meetings is emphasized, making referrals is a condition of maintaining membership, and members must follow up on referrals received, even though the association's rules acknowledge that a profession's formal ethics standards supersede the association's rules. The opinion asks whether the lawyer may participate, and answers no.
The opinion applies Oregon RPC 7.2(b), which bars a lawyer from giving anything of value to a person for recommending the lawyer's services (with limited exceptions such as the usual charges of a legal-service plan or lawyer-referral service), and Oregon RPC 5.4(e), which bars referring a client to a nonlawyer with the understanding that the lawyer will receive something of value in exchange. The opinion concludes a business referral is a thing of value: if the lawyer refers clients to association members, the lawyer gives something of value so members will promote or secure the lawyer's employment, violating Oregon RPC 7.2(b); and if other members promise to refer clients to the lawyer, the lawyer receives value in exchange for referring clients to nonlawyer members, violating Oregon RPC 5.4(e).
The opinion is careful to limit its reach. The rules do not prohibit lawyers from joining groups where they network and learn about business opportunities, and the problem is not that the association limits membership to one person per occupation. The prohibition is specifically against giving or receiving reciprocal referrals, and substance governs over form, so a lawyer cannot join on the premise that the rules are suspended when referral requirements are in fact a condition of membership. The opinion adds that even in a group that does not require reciprocal referrals, a lawyer's follow-up on referrals received must comply with Oregon RPC 7.1 (false or misleading communications) and Oregon RPC 7.3 (solicitation).
In practice
This opinion (revised 2021) interprets the current Oregon Rules of Professional Conduct. The opinion holds that membership is prohibited where the association makes the exchange of referrals a purpose and a condition of membership, because trading referrals is giving or receiving a thing of value for recommending the lawyer. Per the opinion, the analysis turns on the reciprocal quid pro quo, not on networking itself: ordinary networking groups are permissible, legal-service plans and lawyer-referral services fall within the Oregon RPC 7.2(b)(2) exception, and the bar is on mandatory referral exchange. The opinion holds that follow-up on any referrals must still comply with the false-or-misleading rule (Oregon RPC 7.1) and the solicitation rule (Oregon RPC 7.3).
Common questions
Q: Can a lawyer join a networking club that requires members to exchange referrals?
A: No. The opinion concludes that participating in an association whose purpose and membership condition is reciprocal referrals violates Oregon RPC 7.2(b) and Oregon RPC 5.4(e), because a referral is a thing of value.
Q: Are all business-networking groups off-limits for lawyers?
A: No. The opinion concludes the rules do not prohibit lawyers from joining groups to network and learn about opportunities; the prohibition is specifically against giving or receiving reciprocal referrals.
Q: Does it help that the club's rules say professional ethics standards control?
A: No. The opinion concludes substance governs over form, so a lawyer cannot join on the premise that the rules are suspended when mandatory referral exchange is in fact a condition of membership.
Q: What about lawyer-referral services and legal-service plans?
A: The opinion concludes those are distinguishable: Oregon RPC 7.2(b)(2) expressly allows paying the usual charges of a legal-service plan or lawyer-referral service, unlike an association whose referrals are not limited to referrals to lawyers.
Background and rules framework
The opinion interprets Oregon RPC 7.2(b) (giving value for recommending a lawyer's services) and Oregon RPC 5.4(e) (referrals to nonlawyers for value), corresponding to Model Rules 7.2 and 5.4, and notes that follow-up on referrals must also comply with Oregon RPC 7.1 (false or misleading communications) and Oregon RPC 7.3 (solicitation).
Citations and references
Rules of Professional Conduct:
- Oregon RPC 7.2(b) / Model Rule 7.2 (giving value for recommending the lawyer's services)
- Oregon RPC 5.4(e) / Model Rule 5.4 (referring a client to a nonlawyer for value)
- Oregon RPC 7.1 / Model Rule 7.1 (false or misleading communications)
- Oregon RPC 7.3 / Model Rule 7.3 (solicitation)
Other opinions cited:
- OSB Formal Ethics Op. No. 2005-2 (rev 2018): reciprocal referrals between a lawyer and a trust company
- OSB Formal Ethics Op. No. 2005-79 (rev 2018); OSB Formal Ethics Op. No. 2005-168 (rev 2018): permitted legal-service plans and lawyer-referral services
See also
- OSB Ethics Op. 2005-2: Cross-Referrals and Office Sharing With a Nonlawyer
- OSB Ethics Op. 2005-168: Lawyer-Owned Lawyer-Referral Service
- ABA Formal Op. 474: Referral Fees and Conflict of Interest
Source
- Landing page: https://www.osbar.org/ethics/toc.html
- Original PDF: https://www.osbar.org/_docs/ethics/2005-175.pdf
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