Can a lawyer sign a newspaper contract committing to a volume of legal advertising in exchange for lower rates or free firm advertising?

Plain-English summary

A newspaper approached a law firm with two proposed advertising arrangements: a contract committing the firm to a set annual volume of legal advertising in exchange for a lower rate, and a "value added" program in which placing a certain volume of paid legal advertising would earn the firm free advertising for its own use. The legal advertising included both legal notices to creditors and the firm's direct advertising to potential clients. The lawyer asked whether participating was proper.

The committee said both arrangements implicate RPC 1.7(b) and 1.8(a). The volume-commitment discount creates a pecuniary interest potentially adverse to the firm's clients, not all of whom must publish legal notices, and it could influence the lawyer to advise clients to buy unnecessary advertising; the committee said it may be reasonable if the rate reductions are substantial (below competing newspapers' cost) and the volume requirement does not exceed what the lawyer typically runs.

On the "value added" program, the committee said there is a risk it would simply shift the cost of the firm's own advertising onto its clients, and if so the arrangement would violate RPC 1.8(a), regardless of client consent, because it would not be "fair and reasonable" to the client. The committee said the inquiry lacked enough information to evaluate all the variables, and that the lawyer must first assess whether he reasonably believes the representation will not be adversely affected (RPC 1.7(b)) and whether the terms are fair and reasonable to existing and future clients (RPC 1.8(a)); if so, the lawyer must also provide written disclosure under RPC 1.8(a)(1) and obtain written consent under RPC 1.7(b)(2).

Currency note

This opinion was issued in 2004, before the Washington State Bar Association's adoption of the 2006 revisions to the Rules of Professional Conduct. 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 Treat this page as historical context, not current guidance.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 mentioned here.

In practice

Under the Washington rules as they stood at the time of the opinion, the committee treated the lawyer's commitment to buy legal advertising as a potential conflict because the lawyer gains a financial interest in placing legal notices that not every client needs. For the volume discount, the committee said the arrangement may be reasonable when the savings are real and the committed volume tracks the lawyer's normal spend. For the "value added" program, the committee said an arrangement that passes the cost of the firm's own advertising to clients would violate RPC 1.8(a) even with consent, because it would fail the rule's fair-and-reasonable requirement. The committee tied participation to written disclosure under RPC 1.8(a)(1) and written consent under RPC 1.7(b)(2).

Common questions

Q: Can a lawyer commit to a volume of newspaper legal advertising in exchange for a discount?

A: The committee said the arrangement implicates RPC 1.7(b) and 1.8(a), but may be reasonable if the rate reductions are substantial and the volume requirement does not exceed what the lawyer typically runs in advertising.

Q: What is the problem with the "value added" free-advertising program?

A: The committee said it risks shifting the cost of the firm's own advertising onto its clients, and if it does, it would violate RPC 1.8(a) even with client consent, because it would not be fair and reasonable to the client.

Q: What must the lawyer do before agreeing to such a contract?

A: The committee said the lawyer must assess whether he reasonably believes the representation will not be adversely affected (RPC 1.7(b)) and whether the terms are fair and reasonable to clients (RPC 1.8(a)), then provide written disclosure under RPC 1.8(a)(1) and obtain written consent under RPC 1.7(b)(2).

Background and rules framework

The opinion interprets RPC 1.7(b) (Model Rule 1.7, conflicts of interest with current clients, material limitation) and RPC 1.8(a) (Model Rule 1.8, the business-transaction-with-a-client rule that requires fair and reasonable terms, written disclosure, and informed written consent). The committee analyzed the newspaper arrangements as creating a lawyer pecuniary interest that could be adverse to clients who pay for legal notices, and applied the fair-and-reasonable standard of RPC 1.8(a) as the limit even where the client consents.

Citations and references

Rules of Professional Conduct:

• Model Rule 1.7 / Washington RPC 1.7(b) (conflicts of interest; material limitation and informed written consent)
• Model Rule 1.8 / Washington RPC 1.8(a) (fair and reasonable terms, written disclosure, informed written consent)

See also

• WA Ethics Op. 2055: Firm-Run Investment Sales
• WA Ethics Op. 1963: Lawyer-Agent Commission Split
• WSBA Ethics Op. 1071: Paid Lawyer Referral Service

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=1318

Original opinion text

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

Advisory Opinion: 2074
Year Issued: 2004
RPC(s): RPCs 1.7(b), 1.8(a)
Subject: Participation in an advertising program or contract offer by a local newspaper

The inquiring lawyer received an e-mail and telephone contact from the Chief Operating Officer of a newspaper. The newspaper suggested the possibility of certain business arrangements related to legal advertising, including both legal notices to creditors and lawyers’ direct advertising to potential clients. The newspaper proposes (1) a contract committing the law firm to a set volume of legal advertising on an annual basis, in exchange for a lower rate for the advertising; and/or (2) a “value added” program in which, for a certain volume of paid legal advertising placed by the firm, the newspaper would provide the firm with a certain volume of free advertising for the law firm to use for itself.

Both of these proposed arrangements implicate RPCs 1.7(b) and 1.8(a). The first arrangement creates a pecuniary interest that is potentially adverse to the lawyer’s clients, not all of whom are required to publish legal notices. It may influence the lawyer to advise clients to purchase unnecessary advertising. If the rate reductions are substantial, bringing them below the cost of competing newspapers, and the volume requirement does not exceed what the lawyer typically runs in advertising, the arrangement may be reasonable.

The second arrangement, offering “added value” for publishing legal notices, also creates a potential conflict of interest. Although the inquiry does not indicate the terms of the proposed contract, the Committee notes that there is a risk that this arrangement would simply shift the cost of the law firm’s own advertising to the firm’s clients. If so, the arrangement would violate RPC 1.8(a), regardless of whether the client consented, because it would not be “fair and reasonable” to the client.

The inquiry does not present sufficient information for the Committee to evaluate all of the variables these proposals present. Whatever the terms, the lawyer must initially assess whether he reasonably believes the representation will not be adversely affected (RPC 1.7(b)) and whether the terms of the contract will be “fair and reasonable” to his existing (and future) clients (RPC 1.8(a)). If the lawyer believes these conditions can be met, the lawyer must also provide full disclosure (in writing per RPC 1.8(a)(1)) and obtain consent from the client (in writing per RPC 1.7(b)(2)) to the arrangement.