Can a lawyer appear in a 'team approach' radio advertisement paid for by a real estate company that refers closings to the lawyer's firm?

Plain-English summary

A real estate company that routinely refers clients to the lawyer's firm for closings proposed to pay for a radio advertisement promoting a "team approach," and asked the lawyer, an insurance agency, and a lender to participate. The ad would name the lawyer and the firm, with the lawyer making a statement about working with the company. The lawyer asked whether the Rules prohibit participating in an advertisement paid for by the company, and, if not, whether the advertisement must comply with the lawyer-advertising rules.

The committee concluded the lawyer may participate as long as the lawyer pays the reasonable costs of the advertisement and ensures the ad complies with the advertising and communications rules. It applied Rule 7.2(c)(1), which bars a lawyer from giving anything of value for recommending the lawyer's services unless the lawyer pays the reasonable costs of advertisements. The committee observed that although the apparent intent is for the "team," including the lawyer, to recommend the company's services, the effect would be an indirect advertisement of the lawyer's services, and that by providing time to record the advertisement the lawyer might be considered to be giving something of value for a referral. So long as the lawyer pays the reasonable costs of the advertisement, the committee found no ethical prohibition on participating.

The committee directed that all of a lawyer's advertisements comply with the advertising and communications rules, specifically Rules 7.1 and 7.2. It cautioned the lawyer to ensure the company's advertisement makes clear that, although there may be a "team approach," the lawyer is not in a partnership with a nonlawyer in violation of Rule 5.4.

In practice

Under this opinion, a lawyer may appear in a referral source's "team approach" advertisement if two conditions are met: the lawyer pays the reasonable cost of the advertisement (Rule 7.2(c)(1)), and the advertisement complies with Rules 7.1 and 7.2. The committee held the arrangement could otherwise look like giving something of value for a referral, which the payment cures, and cautioned that the ad must not portray the lawyer as in a partnership with a nonlawyer in violation of Rule 5.4.

Common questions

Q: Can a lawyer be in an ad paid for by a company that sends the firm business?

A: The committee concluded yes, provided the lawyer pays the reasonable cost of the advertisement. Otherwise, supplying time for the ad could be treated as giving something of value for a referral, which Rule 7.2(c)(1) addresses by allowing payment of the reasonable costs of advertisements.

Q: Does the ad still have to follow the advertising rules?

A: Yes. The committee directed that the advertisement comply with the lawyer-advertising and communications rules, specifically Rules 7.1 and 7.2.

Q: What is the Rule 5.4 concern with a "team approach" ad?

A: The committee cautioned that the ad must make clear the lawyer is not in a partnership with a nonlawyer; portraying such a partnership would violate Rule 5.4.

Background and rules framework

The opinion applies South Carolina Rule 7.2(c)(1) (paying the reasonable costs of advertisements as an exception to the bar on giving value for recommending the lawyer's services), Rule 7.1 (no false or misleading communications), Rule 7.2 (advertising), and Rule 5.4 (professional independence; no partnership with a nonlawyer). These correspond to the like-numbered Model Rules.

Citations and references

Rules of Professional Conduct:

• MR 7.2 / SC Rule 7.2, 7.2(c)(1) (advertising; paying the reasonable costs of advertisements)
• MR 7.1 / SC Rule 7.1 (no false, misleading, deceptive, or unfair communications)
• MR 5.4 / SC Rule 5.4 (professional independence; no partnership with a nonlawyer)

See also

• SC Bar Ethics Op. 06-13: Referrals From a Trade Group
• SC Bar Ethics Op. 05-10: Advertising a Title Business
• SC Bar Ethics Op. 06-12: Lawyer Supervised by a Nonlawyer

Source

• Landing page: https://www.scbar.org/for-lawyers/quicklinks/legal-resources/ethics-advisory-opinions/ethics-advisory-opinion-07-08/

Original opinion text

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

UPON THE REQUEST OF A MEMBER OF THE SOUTH CAROLINA BAR, THE ETHICS ADVISORY COMMITTEE HAS RENDERED THIS OPINION ON THE ETHICAL PROPRIETY OF THE INQUIRER’S CONTEMPLATED CONDUCT. THIS COMMITTEE HAS NO DISCIPLINARY AUTHORITY. LAWYER DISCIPLINE IS ADMINISTERED SOLELY BY THE SOUTH CAROLINA SUPREME COURT THROUGH ITS COMMISSION ON LAWYER CONDUCT.

Ethics Advisory Opinion 07-08

SC Rules of Professional Conduct: 5.4, 7.1, 7.2, 7.2(c)(1)

Facts
Real Estate Company (“Company”) routinely refers clients to Lawyer’s firm for closings. Company proposes to pay for a radio advertisement that they provide a “team approach” and have requested Lawyer, Insurance Agency and Lender to participate in the advertisement. The advertisement would give the name of Lawyer and his firm with Lawyer making a statement about working with Company.

Questions
Do the S.C. Rules of Professional Conduct prohibit Lawyer from participating in an advertisement paid by Company?
If the S.C. Rules of Professional Conduct do not prohibit Lawyer’s participating in the advertisement, must the advertisement conform to the S.C. Rules of Professional Conduct’s provisions on lawyer advertising and communications?

Summary
Lawyer may participate in Company’s advertisement as long as Lawyer pays the reasonable costs of the advertisement and ensures that the advertisement complies with the S.C. Rules of Professional Conduct’s provisions on lawyer advertising and communications.

Opinion
S.C. Rule of Professional Conduct 7.2(c)(1) provides that a lawyer “shall not give anything of value…for recommending the lawyer’s services…” unless the lawyer pays “the reasonable costs of advertisements.” It would appear that the intent of the Company’s proposed advertisement is for the “team” including Lawyer to recommend the services of the Company. However, the effect of the advertisement would be an indirect advertisement of the Lawyer’s services. By providing time for the recording of the advertisement, the Lawyer may be considered to be giving something of value for a referral. Thus, as long as Lawyer pays the reasonable costs of the advertisement, there does not appear to be an ethical prohibition against participating in Company’s advertisement.

All advertisements of a Lawyer must comply with the S.C. Rules of Professional Conduct’s provisions on lawyer advertising and communications. The Committee directs Lawyer to ensure compliance with Rules 7.1 and 7.2 specifically. The Committee would caution Lawyer to ensure that it is clear in Company’s advertisement that although there may be a “team approach,” the Lawyer is not in partnership with a nonlawyer in violation of Rule 5.4.