Can a Tennessee lawyer participate in a prepaid or group legal service plan?
Apply this to your situation
This page answers the general question as of 1985. Ezel answers yours: whether it's allowed on your facts, under the current rules of professional conduct in your state, with citations.
Plain-English summary
The opinion addressed the propriety of participating in group and prepaid legal service plans, which it described as "open" (the consumer may select any attorney) or "closed" (the consumer must choose from a panel designated by the sponsoring group, organization, or insurance company, or a single designated attorney). The opinion adopted ABA Formal Opinion 332's approval of open-panel plans, conditioned on the attorneys selected remaining free to exercise independent judgment for the client and otherwise complying with the Code of Professional Responsibility, and it adopted the ABA's 1972 interim standards: the plan and its terms must be in writing and distributed to members; the plan must state the benefits, exclusions, and conditions in detail and disclose the plan's ability to meet its undertakings; the plan may not infringe on a participating lawyer's independent professional judgment or require a lawyer to act contrary to professional responsibilities; the plan must provide for objective review and resolution of disputes; the sponsoring organization must file a periodic written report, at least annually, on the plan's operations and finances with the ABA and the bar of each state where benefits are paid; and each plan should have an advisory group of bar members and beneficiaries reviewing the plan's operation.
The opinion found no impropriety in participating in open prepaid plans meeting these conditions, while noting the attorney should confirm the plan's compliance and confirm the sponsoring organization filed its annual report with the Board as required by DR 2-103(D)(4)(g). It then identified two restrictions in the Tennessee Code: DR 2-103(D)(4)(a) prohibits attorneys from participating in plans offered by for-profit organizations, such as insurance companies, that select or furnish the attorney used by plan members for all or part of the covered legal services, and DR 2-103(D)(4)(b) prohibits participating in any plan promoted by the lawyer's own partner, associate, or any other attorney or layperson affiliated with the lawyer. The opinion noted that closed plans offered by non-profit organizations, and their compliance with the line of Supreme Court cases protecting associational legal-services delivery (NAACP v. Button, Brotherhood of Railroad Trainmen v. Virginia, United Mine Workers v. Illinois State Bar Association, and United Transportation Union v. State Bar of Michigan), present matters of law rather than ethics and were not addressed.
Currency note
This opinion was issued in 1985, before Tennessee's adoption of the 2003 Rules of Professional Conduct, which replaced the former Code of Professional Responsibility. Subsequent rule amendments or 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: Is it proper for a Tennessee lawyer to participate in an open-panel prepaid legal service plan?
A: Yes, the opinion found no impropriety where the plan lets the consumer choose any attorney, the attorney's independent judgment remains unimpaired, and the plan meets the ABA's interim standards on written terms, disclosure, dispute review, and periodic reporting that the opinion adopted.
Q: Can a lawyer join a closed-panel plan run by a for-profit insurance company?
A: No. The opinion applied DR 2-103(D)(4)(a), which prohibits attorneys from participating in plans offered by for-profit organizations, such as insurance companies, where the organization selects or furnishes the attorney members use.
Q: Can a lawyer participate in a prepaid plan that his own law partner is promoting?
A: No. DR 2-103(D)(4)(b) prohibits attorneys from participating in any plan promoted by their own partner, associate, or any other lawyer or layperson affiliated with them.
Background and rules framework
The opinion construed Tennessee's then-current Disciplinary Rule 2-103(D)(4), governing group and prepaid legal services, and adopted ABA Formal Opinion 332's interim standards for open-panel plans. The modern correlate for solicitation and group-legal-services rules of this kind is Model Rule 7.3, cited here as a navigational cross-reference rather than as a rule the opinion itself applied.
Citations and references
Cases:
- NAACP v. Button, 371 U.S. 415 (1963), associational right to provide legal services
- Brotherhood of Railroad Trainmen v. Virginia, 377 U.S. 1 (1964), associational right to provide legal services
- United Mine Workers v. Illinois State Bar Association, 389 U.S. 217 (1967), associational right to provide legal services
- United Transportation Union v. State Bar of Michigan, 401 U.S. 576 (1971), associational right to provide legal services
Other opinions cited:
- ABA Formal Opinion 332 (August 1972), open-panel prepaid legal service plan standards
See also
Source
- Landing page: https://www.tbpr.org/ethic_opinions/85-F-102
Original opinion text
Reproduced from the official source for research purposes. The linked source is authoritative.
85-F-102 - Prepaid Legal Service Plans
BOARD OF PROFESSIONAL RESPONSIBILITY OF THE SUPREME COURT OF TENNESSEE
FORMAL ETHICS OPINION 85-F-102
Inquiry is made concerning the propriety of participating in prepaid legal service plans.
Group and prepaid legal service plans vary in coverage and structure for the delivery of legal services. The plans are "open" or "closed" depending on the selection of who provides the legal services. Open plans allow the consumer to select any attorney. Closed plans allow the consumer to choose an attorney from a closed panel of attorneys designated by the sponsoring group, organization or insurance company, or a particular designated attorney.
The American Bar Association (ABA) at the August, 1972 annual meeting of its House of Delegates adopted a resolution strongly urging that each prepaid legal service plan provide that the members or beneficiaries have freedom of choice of attorneys (open panel) in the rendering of legal services under the plan. ABA Formal Opinion 332 approved open panel prepaid legal service plans provided that the attorneys selected by the consumer are free to exercise their independent judgment on behalf of the client and otherwise act in accordance with the Code of Professional Responsibility. ABA Formal Opinion 332 required that the plans must meet the interim standards adopted at the August, 1972 annual meeting. Those standards are adopted in this opinion, to-wit:
(1) The entire plan shall be reduced to writing and a description of its terms shall be distributed to the members or beneficiaries thereof:
(2) The plan and description shall:
(a) State clearly and in detail the benefits to be provided, exclusions therefrom and conditions thereto;
(b) Describe the extent of the undertaking to provide benefits and reveal such facts as will indicate the ability of the plan to meet the undertaking;
(c) Provide that there shall be no infringement upon the independent exercise of professional judgment of any lawyer furnishing service under the plan;
(d) Specify that a lawyer providing legal service under the plan shall not be required to act in derogation of his professional responsibilities; and
(e) Set forth procedures for the objective review and resolution of disputes arising under the plan;
(3) There shall be a periodic written report not less often than annually disclosing to members or beneficiaries of the plan, to this Association and to the bar of any state in which benefits are paid a summary of the operations of the plan including, but not limited to, all relevant financial data, the number of members or beneficiaries receiving legal services, and the kinds of benefits provided;
(4) Each plan should provide for an advisory group including members of the bar and beneficiaries of the plan which shall meet periodically to review and evaluate the organization and operation of the plan and to offer suggestions for its improvement.
There is no impropriety in an attorney participating in open prepaid legal service plans as hereinabove described. The attorney participating in such plans should investigate the plan or plans to insure compliance with the conditions described herein; and, further should ascertain that the sponsoring group or organization has filed an annual report with the Board of
Professional Responsibility of the Supreme Court of Tennessee in compliance with Disciplinary Rule 2-103(D)(4)(g) of the Code of Professional Responsibility.
Disciplinary Rule 2-103(D)(4)(a) of the Tennessee Code of Professional Responsibility prohibits attorneys from participating in plans offered by for-profit organizations, such as insurance companies, where the organization selects or furnishes the attorney to be used by plan members to receive all or a portion of the covered legal services.
Further, Disciplinary Rule 2-103(D)(4)(b) prohibits attorneys from participating in any plan that is promoted by his partner, associate, or any other attorney or lay person affiliated with him.
Participating in closed plans offered by non-profit organizations and delivery of legal services in compliance with NAACP v. Button, 371 U.S. 415 (1963), Brotherhood of Railroad Trainmen v. State of Virginia, 377 U.S. 1 (1964), United Mine Workers v. Illinois State Bar Assn., 389 U.S. 217 (1967) and The United Transportation Union v. State Bar of Michigan, 401 U.S. 576 (1971) are matters of law, not proper subjects of ethics opinions, and not addressed herein.
This 16th day of December, 1985.
ETHICS COMMITTEE:
Henry H. Hancock
W. J. Flippin
Edwin C. Townsend
APPROVED AND ADOPTED BY THE BOARD
Get today's answer for your situation
You just read a 1985 opinion on this question. Ezel checks the current rules of professional conduct in your state and answers your specific situation, with citations.
Opens in Ezel Pro. Every answer cites the rules it relies on.