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Ohio Legal Ethics Narrative
VII INFORMATION ABOUT LEGAL SERVICES
The differences between Ohio Rule 7.2 and the Model Rule are as follows:
Division (b) differs in the following respects: the introductory paragraph adds, after "may", "pay any of the following:"
Subdivision (b)(1) deletes the word "pay" at the beginning of the subdivision.
Subdivisions (b)(2) & (3) cover the subject of MR 7.2(b)(2) -- legal service plans and lawyer referral services -- in different language. Subdivision (b)(2) drops the word "pay" at the outset as well as all of the Model Rule language following "the usual charges of a legal services plan". Subdivision (b)(3) substitutes the following for the lawyer referral services language in paragraph (b)(2) of the Model Rule: "the usual charges for a nonprofit or lawyer referral service that complies with Rule XVI of the Supreme Court Rules for the Government of the Bar of Ohio;".
Subdivision (b)(4) is identical to MR 7.2(b)(3), other than the deletion of "pay" at the outset and "and" at the end.
MR 7.2(b)(4), added in 2002 and dealing with nonexclusive reciprocal referral agreements, is not included in Ohio Rule 7.2.
Ohio has added a new division (d) (dealing with matters intended to be referred to other counsel), which is not included in the Model Rule.
The following sections of the Ohio Code of Professional Responsibility are listed in the Correlation Table (Appendix A to the Rules) as related to Ohio Rule 7.2: DR 2-101, DR 2-103, DR 2-104(B).
- Primary Ohio References: Ohio Rule 7.2(a)
- Background References: ABA Model Rule 7.2(a)
- Ohio Commentary: Greenbaum, Lawyer's Guide to the Ohio Code of Professional Responsibility §§ 2.26-2.29, 2.31, 2.87
- Commentary: ABA/BNA § 81.1; Wolfram § 14.2
The material in this section is, in part, excerpted and adapted from Arthur F. Greenbaum, Lawyer's Guide to the Ohio Code of Professional Responsibility §§ 2.26-2.29, 2.31, 2.87 (1996).
Ohio Rule 7.2(a) permits a lawyer to "advertise services through written, recorded, or electronic communication, including public media," subject only to the requirements of Rule 7.1 (false, misleading, or nonverifiable communications) and Rule 7.3 (direct solicitation). (Pursuant to the 2003 amendment adopted in Ohio in conjunction with then-new OH DR 2-111 (sale of law practice), the OHCPR analog to Rule 7.2(a) (former OH DR 2-101(B)(1)) included "the sale of a law practice" in addition to "services," but that addition has not been carried forward to the new Rules.) In its Ohio Code Comparison to Rule 7.2, the Task Force provides generally instructive information about Rules 7.1, 7.2, and 7.3: After again emphasizing that Rules 7.1 and 7.3 need to be consulted, it provides a check-list of former OHCPR provisions that have not been included in Rule 7.1, 7.2, or 7.3:
The specific reference to types of fees or descriptions, such as "give-away" or "below-cost" found in DR 2-101(A)(5), although Rule 7.1, Comment  expressly states that these characterizations are misleading;
Specific references to media types and words, as set forth in DR 2-101(B)(1) and (2)[;]
Specific reference that brochures or pamphlets can be disclosed to "others," as set forth in DR 2-101(B)(3);
The list of items that were permissible for inclusion in advertising, contained in DR 2-101(D). [Now see Rule 7.2 cmt. .]
The singling out of the elimination of "others" from the 2-101(B)(3) language providing that brochures and pamphlets can be disseminated "to clients, members of the bar, or others," seems strange. Even though there is no longer any specific mention in the Rule either to brochures or pamphlets or to their distribution to specific recipients, there is of course no prohibition under the Rules against a lawyer's dissemination of such materials to anyone, including "others" – i.e., prospective clients. (Indeed, Rules 7.1-7.3 say nothing explicit about dissemination of such materials to "clients or members of the bar" either.) Comment  refers to a nonexclusive list of information that lawyers can disseminate, including matters that might very well be in a firm's brochure or pamphlet. It also expressly approves of dissemination of "other information that might invite the attention of those seeking legal assistance," a group obviously included within "others." Rule 7.2 cmt. .
Comment  states the rationale (the people's "need to know about legal services") for permitting lawyer advertising, "contrary to the tradition that a lawyer should not seek clientele." The public need for such information "ought to prevail over considerations of tradition." Rule 7.2 cmt. .
Comment  provides a noninclusive listing of information that may be publicly disseminated, similar to the "approved" lists in former OH DR 2-101(D) & (E) (without the "dignified" limitation of the former rule). Some of the information is identical to the former list (e.g., lawyer's foreign language ability; fees for specific services); some (e.g., credit agreements) were not found in the prior listings. Comment  is expressly open ended -- it specifies that the dissemination can include "other information that might invite the attention of those seeking legal assistance." Rule 7.2 cmt. . This is a very broad standard indeed; apart from false or misleading matter, pretty much "anything goes" in general advertising by lawyers, as anyone who watches television or peruses attorney advertising in the yellow pages can attest.
Comment  deals with matters of taste, largely by stating in a polite way that it's not a business the ethics rules should be in. Thus, as noted above, the former requirement that advertising be presented in a "dignified" manner has been dropped. In a nutshell, "[q]uestions of effectiveness and taste in advertising are matters of speculation and subjective judgment." Television advertising is approved, because to prevent it would, again, "impede the flow of information to many sectors of the public," "particularly persons of low and moderate income." Moreover, efforts to limit the kinds of things that can be advertised likewise impedes the information flow and "assumes that the bar can accurately forecast the kind of information that the public would regard as relevant." Finally, the comment states that "lawful communication by electronic mail is permitted by this rule." Ohio Rule 7.2 cmt. .
Comment  notes that neither Rule 7.2 nor 7.3 "prohibits communications authorized by law, such as notice to members of a class in class action litigation." Under the Code, the lawyer could not seek employment from those contacted, but could accept employment arising from such contacts. Former OH DR 2-104(A)(5). This authorization was limited to situations where "success in asserting rights or defenses of the lawyer's client in litigation in the nature of a class action is dependent upon the joinder of others." Id. See Bd. of Comm'rs on Grievances & Discipline Op. 92-2, Ohio Griev. Discip. LEXIS 19, at *3 (Feb. 14, 1992).
Given the greatly liberalized approach to advertising contained in Rule 7.2, together with the elimination of most of the micromanaging of what could and could not be done under the former OHCPR, opinions decided under the Code are not particularly helpful in interpreting the Rules. Thus, there is no longer any question (if there ever was) that a lawyer can advertise services through written communication, including public media; such advertisements are expressly permitted by 7.2(a) (as are recorded and electronic communication), so long as the requirements of Rules 7.1 and 7.3 are met. This obviously includes advertising in telephone directories and in brochures and pamphlets, both of which were specifically addressed in the Code. Comment [5A] expressly includes within "advertising and communications permitted by this rule," "print directory listings, on-line directory listings, newspaper ads, television and radio airtime, domain-name registrations, sponsoring fees, banner ads, and group advertising." Rule 7.2 cmt. [5A]. Inasmuch as advertising to the general public is now essentially unrestricted (again, subject to 7.1 and 7.3), advertising to other members of the profession, as by law directories or lists, and by professional announcements, is a given and is no longer encumbered by constraints limiting it to information that has "traditionally appeared" in such publications or on condition that the presentation be "dignified." "Dignity," like "taste," is no longer a relevant factor.
Two subjects that are not touched on by the new Rules are news coverage of an attorney and public speaking and writing by an attorney. They will be briefly discussed here.
As to the former, lawyers often are the focus of news coverage, whether it be in the context of representing a particular client or in a story about the legal profession itself. While the lawyer need not shun media coverage as a general rule, restrictions do at times apply to what the lawyer can say to the media. See, e.g., section 3.6:200 (concerning trial publicity). Further, under the Code, a lawyer was not permitted to buy media coverage that is not advertising. Former OH DR 2-101(G). This provision was not carried forward as such into the Rules (see Ohio Code Comparison to Rule 7.1: Rule 7.1 does not contain "the directives found in DR 2-101(D), (E), and (G)"). Be that as it may, there can be no doubt that such conduct -- essentially, bribing the media to provide professional publicity in the guise of a news item -- is ethically unacceptable. See Rules 8.4(b), (c), (d) & (h). As to the latter subject -- public speaking and writing on legal topics -- former OH DR 2-104(A)(4) stated that a lawyer could do so, "so long as the lawyer does not emphasize the lawyer's own professional experience or reputation and does not undertake to give individual advice." The first restriction seems out-of-touch with what a lawyer may legitimately do in the way of advertising today (not to mention the relevance here of the First Amendment); the second, giving individual advice, seems akin to interpersonal contact under Rule 7.3, but Comment  thereto states that none of the 7.3 requirements "applies to communications sent in response to requests from clients or prospective clients." One who chooses to attend a public presentation, whether in-person, on TV, or through the internet, seems fairly described as having requested to hear whatever the lawyer has to say, although one can imagine scenarios in which a lawyer might abuse the occasion and attempt to use it as an opportunity to engage in direct solicitation violative of Rule 7.3. (Cf. Rule 4.3, which prohibits a lawyer, dealing with an unrepresented person on behalf of a client, from giving advice other than to secure counsel, if the interests of the nonrepresented person and the client are in likely conflict and the lawyer knows or should know it.) Written publications on legal topics would be even less likely to be subject to abuse and seem as a general matter not to be an appropriate subject of ethical regulation.
- Primary Ohio References: None
- Background References: None
Ohio Rule 7.2 does not require the lawyer to retain copies of advertising material or maintain records of when and where it was used. (The ABA deleted this provision (former MR 7.2(b) as a part of its amendments to the Model Rules in 2002.)
- Primary Ohio References: Ohio Rule 7.2(b); Gov Bar R XVI
- Background References: ABA Model Rule 7.2(b)
- Ohio Commentary: Greenbaum, Lawyer's Guide to the Ohio Code of Professional Responsibility §§ 2.63-2.69, 2.71, 2.73
- Commentary: ABA/BNA § 81.1; Wolfram § 14.2
The material in this section is, in part, excerpted and adapted from Arthur F. Greenbaum, Lawyer's Guide to the Ohio Code of Professional Responsibility §§ 2.63-2.69, 2.71, 2.73 (1996).
Recommendation of professional employment - In general: Ohio Rule 7.2(a) addresses permissible advertising. See section 7.2:200. Rule 7.2(b) controls the recommendation process. As a general matter, recommendations are most reliable if they come from disinterested parties. Division (b) seeks to assure that the recommendations received are, for the most part, disinterested. It therefore precludes a lawyer from giving anything of value to a person for recommending the lawyer's services, other than (1) the reasonable cost of permitted advertising; (2) the usual charges of a legal-service plan or a lawyer-referral service; and (3) payment for a law practice pursuant to Rule 1.17.
Third-party referrals - In general: Through their many clients and dealings in the community, lawyers often have numerous third parties who can provide them with client referrals. This practice is not only common, but is encouraged. An individual who has had extensive dealings with a lawyer may be well situated to recommend that attorney to another.
Concern arises where the lawyer is seen as influencing the third party to make the referral. If the referral is the product of such influence, then it lacks the reliability that disinterested recommendations ordinarily carry. See e.g., under the former OHCRP, Cincinnati Bar Ass'n v. Haas, 83 Ohio St.3d 302, 304, 699 N.E.2d 919, 920 (1998) ("While many persons refer counsel to others, when such a referral is the result of monetary influence, it lacks the reliability of a disinterested recommendation."). Rule 7.2(b) regulates third-party referrals, as discussed below.
Giving anything of value in exchange for recommendation: The basic rule, as set forth in Ohio Rule 7.2(b), is that a lawyer cannot
give anything of value to a person for recommending the lawyer's services,
with four exceptions discussed below. On its face, the provision is violated when a lawyer exchanges something of value for a recommendation, whether or not the recommendation bears fruit. See, under the former OHCPR, Dayton Bar Ass'n v. Timens, 62 Ohio St.2d 357, 405 N.E. 2d 1038 (1980) (lawyer sanctioned for requesting referrals even though no referrals made). The provision speaks broadly, prohibiting, in exchange for a recommendation, not only direct payments to third parties, but also such practices as gift-giving or buying a meal, although a de minimis exception may be recognized. Also included within the prohibition are reciprocal referral agreements (exclusive or nonexclusive) between lawyers or between a lawyer and a nonlawyer. Rule 7.2 cmt. . See as well Rule 5.7(b) & (c) (lawyer involved in law-related services business cannot require customer of law-related services business to agree to legal representation by the lawyer as a condition of doing business; nor can the lawyer require a client to use the business as a condition of representation of that client). See section 5.7:200.
Examples of violation under the OHCPR, involving payment in exchange for recommendations, include Columbus Bar Ass’n v. Willette, 117 Ohio St.3d 433, 2008 Ohio 1198, 884 N.E.2d 581 (respondent paid Michigan firm to refer estate-package clients to him; violation of DR 2-103(B)); Cincinnati Bar Ass'n v. Haas, 83 Ohio St.3d 302, 699 N.E.2d 919 (1998) (splitting fees with insurance salesman for referring personal-injury claimants to lawyer); Cincinnati Bar Ass'n v. Rinderknecht, 79 Ohio St.3d 30, 679 N.E.2d 669 (1997) (monthly payments to business associate in exchange for steering business to lawyer); Bd. of Comm'rs on Grievances & Discipline Op. 2002-1, 2002 Ohio Griev. Discip. LEXIS 1 (Feb. 1, 2002) (payment of annual fee to real-estate agency for promoting law firm as part of agency's real-estate benefits program; likewise, discounting of fees to customers of program is giving thing of value).
Participation in a scheme in which outside counsel kicked back a portion of his fees in return for the referral of the company's legal work was deemed particularly reprehensible. See Ohio State Bar Ass'n v. Kanter, 86 Ohio St.3d 554, 715 N.E.2d 1140 (1999) (disciplinary action against outside counsel; condemning practice and detailing harm it causes to clients and profession). See also Office of Disciplinary Counsel v. Linick, 84 Ohio St.3d 489, 705 N.E.2d 667 (1999), and Ohio State Bar Ass'n v. Zuckerman, 83 Ohio St.3d 148, 699 N.E.2d 40 (1998), the first of which was a disciplinary action against the inside counsel involved in Kanter, and the second, a disciplinary action against another outside counsel involved with Linick in another kickback scheme. The Kanter, Linick, and Zuckerman cases are further described in section 1.5:800.
Giving a client free legal services in exchange for a referral also would violate the Rule. See, under the Code, Columbus Bar Ass'n v. Potts 65 Ohio St.3d 297, 603 N.E.2d 986 (1992). So too would paying a financial consulting firm to hand out to its clients brochures about the lawyer, Ohio State Bar Ass'n Informal Op. 90-6 (Aug. 2, 1990), or paying a sponsoring organization's expenses incurred in offering a public seminar in which the lawyer's services are to be recommended. Ohio State Bar Ass'n Informal Op. 94-2 (Oct. 25, 1994); Cincinnati Bar Ass'n Op. 94-95-05 (n.d.) (co-sponsorship or cost-sharing of a financial-planning seminar out of which a financial planner will recommend services of participating lawyer as one of a number of lawyers recommended violated former OH DR 2-103(B). Making periodic voluntary contributions to a nonprofit social-service agency that refers both pro-bono and fee-generating clients to a lawyer violated this provision as well. Bd. of Comm'rs on Grievances & Discipline Op. 91-19, 1991 Ohio Griev. Discip. LEXIS 10 (Aug. 16, 1991). Whether a lawyer and client each providing links to the other on their world-wide-web home pages is giving "anything of value" has been described as "an interesting legal question." Cincinnati Bar Ass'n Op. 96-97-01, at 6 (May 20, 1997).
In a number of situations, opinions have stressed that a lawyer's conferring even an indirect benefit on the referrer violated the Code provision. A lawyer for a corporation could not provide private legal representation to the corporation's clients on matters relating to issues on which the corporation had worked if the client was recommended to the attorney by a corporate officer or employee, in part because to do so would add value to the corporate services and thus improperly compensate the corporation for a recommendation of employment. Bd of Comm'rs on Grievances & Discipline Op. 92-17, 1992 Ohio Griev. Discip. LEXIS 4 (Oct. 16, 1992). Nor could a lawyer give a free consultation to a surviving spouse or child referred to the lawyer as part of a funeral package offered by a funeral director. Such activity was giving the funeral director something of value, the increased value the service added to the funeral package in exchange for the referral. Bd. of Comm'rs on Grievances & Discipline Op. 88-012, Ohio Griev. Discip. LEXIS 24 (June 17, 1988). This advice, however, has not been universal. Toledo Bar Ass'n Op. 93-7 (May 14, 1993) (lawyer could accept such referrals from insurance agent/financial advisor who informed seminar attendees at living-trust and insurance seminars, given by the agent/financial advisor, that he could refer them to competent attorney).
A major difference between Rule 7.2(b) and the prior law under the Code should be noted. The trigger for a 7.2(b) violation is "giving anything of value," as in former OH DR 2-103(B); the Code in DR 2-103(C) also prohibited requesting a person or organization (other than those listed in former OH DR 2-103(D), i.e., a qualified lawyer referral service) to recommend or promote the use of the lawyer's services. E.g., Cincinnati Bar Ass’n v. Mullaney, 119 Ohio St.3d 412, 2008 Ohio 4541, 894 N.E.2d 1210 (business relationship with company offering foreclosure-avoidance services, pursuant to which company referred all legal work defending foreclosure actions on behalf of its customers to respondents; DR 2-103(C) violated); Ohio State Bar Ass’n v. Jackel, 118 Ohio St.3d 186, 2008 Ohio 1981, 887 N.E.2d 340; Columbus Bar Ass’n v. Willette, 117 Ohio St.3d 433, 2008 Ohio 1198, 884 N.E.2d 581 (using out-of-state firm to market his services for living trusts and other estate packages violated 2-103(C)); Disciplinary Counsel v. Kramer, 113 Ohio St.3d 455, 2007 Ohio 455, 2007 Ohio 2340, 866 N.E.2d 498, (characterizing the 2-103(C) violation in terms of "engaging" another to promote the lawyer's services). Such a request would not violate 7.2(b), unless tied to payment therefor.
Exceptions to the prohibition against giving anything of value for recommendation or referral: Rule 7.2(b) contains four exceptions to the prohibition against paying for recommendations. a lawyer may pay
(1) the reasonable costs of advertisements or communications permitted by this rule;
(2) the usual charges of a legal service plan;
(3) the usual charges for a nonprofit or lawyer referral service that complies with Rule XVI of the Supreme Court Rules for the Government of the Bar of Ohio; [and]
(4) for a law practice in accordance with Rule 1.17.
Exception (1) - advertising: Comment [5A] provides a noninclusive list of paid items permitted by the advertising/communication exception, such as directory listings, airtime on TV and radio, newspaper ads, and group advertising. Rule 7.2 cmt. [5A]. It goes on to note that lawyers may compensate those "who are engaged to provide marketing or client-development services, such as publicists, public-relations personnel, business-development staff and website designers." Id.
In a 2001 opinion, under the former OHCPR, the Board clearly enunciated the factors to be considered in drawing the line between permissible advertising and impermissible payments for referrals in the context of a web site steering potential clients to the attorney. Bd. of Comm'rs on Grievances & Discipline Op. 2001-2, 2001 Ohio Griev. Discip. LEXIS 2 (Apr. 6, 2001). The Board stressed three factors that distinguish the two situations: (1) The payment arrangement -- Advertising generally involves a fixed fee for services performed over a set period of time. Referrals generally involve payments based on the actual number of people that contact or hire the attorney or a percentage of the fees generated from the third-party's efforts. (2) The services provided by the third party -- With advertising, the services performed by the third party provider are largely ministerial, basically placing information before the public. In a referral, the third party will go beyond the ministerial function of merely placing the lawyer's information before the public. (3) Public perception -- In advertising, the third party will make clear that the material presented is an advertisement and not a referral or recommendation. In a referral, the third-party provider will not clarify that the information is an advertisement, but will instead make the information appear as if the provider is referring and recommending the lawyer. ABA, Annotated Model Rules of Professional Conduct 527 (6th ed. 2007) (commentary) cites to Opinion 2001-2 as "clearly sett[ing] out" the difference between payment for advertising and payment for referrals:
The opinion explains that payments for advertising involve a "fixed amount of money for a fixed period of time" during which the information is available to the public; the information is provided in a ministerial fashion with no recommendation given. Payments for referrals involve an amount "based upon the actual number of people who contact or hire the attorney or based on a percentage of the fee obtained."
(Quoting from Opinion 2001-2, 2001 Ohio Griev. Discip. LEXIS 2, at 10, 11.)
Exceptions (2) & (3) - Payment of usual charges to legal-service plans and to lawyer referral services: As set forth in Comment , a legal-service plan "is a prepaid or group legal service plan or a similar delivery system that assists prospective clients to secure legal representation," whereas a lawyer referral service "is any organization that holds itself out to the public as a lawyer referral service." Ohio Rule 7.2 cmt. . Rule 7.2(b)(3) permits a lawyer to pay the usual charges only "of a nonprofit or qualified lawyer referral service. A qualified lawyer referral service is one that is approved pursuant to [Gov Bar R] XVI." Rule 7.2 cmt. . Note that this limitation to "usual charges" raises the question whether this includes both membership or representation fees and the percentage of legal fees that such a service could require the lawyer to pay under former OH DR 2-103(C)(2)(a), discussed below. Note further that the reference to "nonprofit or qualified lawyer referral service" appears to be inconsistent with Rule 5.4(a)(5), which permits the sharing of fees with a qualified legal referral service only if it is "a nonprofit organization." See section 5.4:200.
Comment  obligates a lawyer accepting legal-service-plan or lawyer-referral-service referrals to "act reasonably to assure that the activities of the plan or service are compatible with the lawyer's professional obligations." For example, the plan or service may communicate with prospective clients, but such communication cannot be false or misleading, "as would be the case if the communications of a group advertising program or a group legal services plan would mislead prospective clients to think that it was a lawyer referral service sponsored by a state agency or bar association. Nor could a lawyer allow in-person, telephonic, or real-time [electronic] contacts that would violate Rule 7.3." Ohio Rule 7.2 cmt. .
Legal-service plans under the Rules: References to legal service plans, in addition to those in Comments  and  noted above, occur in Rule 7.3(f) and Rule 7.3 cmts. , , & . Division (f), further discussed in section 7.3:500, permits a lawyer to participate in a plan operated by an organization that uses interpersonal contact to solicit memberships in such a plan, so long as the persons contacted are not known to be in need of legal services. Comment  emphasizes that a lawyer may participate in such plans of "public or charitable legal service organizations or bona fide political, social, civic, fraternal, employee, or trade organizations whose purposes include providing or recommending legal services to its members or beneficiaries." Rule 7.3 cmt. . See section 7.3:210. Comments  and  contain, respectively, an explanation of why lawyer contact of organizations interested in establishing a group or prepaid legal plan is not prohibited by Rule 7.3, and further elaboration on lawyer participation regarding such plans pursuant to division (f). Both Rule 7.2 cmts.  &  are further discussed in section 7.3:500.
A comprehensive definition of a legal-service plan is found in Gov Bar R XVI 4(A):
A plan of prepaid legal services insurance authorized to operate in Ohio or a group or prepaid legal plan, whether operated by a union, trust, mutual benefit or aid association, corporation or other entity or person, that provides unlimited or a specified amount of telephone advice or personal communication at no charge, other than a periodic membership or beneficiary fee, to the members or beneficiaries and furnishes to or pays for legal services for its members or beneficiaries.
This language was formerly found in the Lawyer Referral and Information ("LRIS") Regulations at LRIS Reg 100(C)(1); simultaneously with the adoption of revised Gov Bar R XVI effective April 30, 2007, which now includes the provisions of the former LRIS Regulations, the Regulations were repealed.
See also Gov Bar R XVI 5 for a more extensive discussion of the requirements applicable to legal-service plans.
Lawyer referral services under the Rules: Rule 7.2(b)(3) speaks of lawyer referral services that comply with Gov Bar R XVI. While there previously was a disconnect between the Professional Conduct Rule and the Governing Bar Rule, (the compliance provisions were in the LRIS Regulations, not the Bar Rule), that has now been cured by amended Rule XVI, effective April 30, 2007, which now contains the compliance provisions that had been set forth in the repealed Regulations. See Gov Bar R XVI (1)(B)-(4).
The background of this change was set forth by the Task Force in its Report at 27:
The provisions contained in [former] DR 2-103 have the salutary purpose of ensuring that Ohioans who are in need of legal services will receive appropriate and quality referrals from an entity that satisfies or exceeds certain minimum standards. However, because these provisions focus on the operation of the referral services themselves, rather than the conduct of participating lawyers, the Task Force suggests that these provisions are misplaced in the Rules of Professional Conduct.
In addition, the Task Force recommends that in adopting Rule 7.2, which addresses the obligation of an Ohio lawyer when participating in a lawyer referral service, the Court include a cross-reference to the requirements of Gov. Bar R. XVI. The Task Force further recommends that the Supreme Court amend Gov. Bar R. XVI to incorporate the provisions currently found in DR 2-103(C) [comparable to the repealed LRIS Regulations] that regulate the manner in which the lawyer referral services operate.
With the adoption of amended Gov Bar R XVI, these recommendations have now been effected.
Permissible conduct: There are two types of organizations as to which the Rule 7.2(b) payment-of-anything-of-value restriction with respect to referrals does not apply. They are:
a nonprofit or lawyer referral service that complies with Gov Bar R XVI, and
a legal service plan.
Rule 7.2(b)(2) & (3).
(There were other organizations listed in former DR 2-103(D) -- a legal aid or public defender's office, and a military legal assistance plan. Presumably, lawyers can continue to obtain referrals from such organizations so long as, consistent with Rule 7.2(b), nothing of value is given by the lawyer in return.)
Requirements of legal-service plans: As is set forth in Gov Bar R XVI 5, a legal-service plan – i.e., "[a]ny bona fide organization that recommends, furnishes, or pays for legal services to its members or beneficiaries," must satisfy all of the following:
(A) The organization, including any affiliate, is organized and operated so that no profit is derived by it from the rendition of legal services by lawyers, and that, if the organization is organized for profit, the legal services are not rendered by lawyers employed, directed, supervised, or selected by it except in connection with matters where the organization bears ultimate liability of its member or beneficiary.
(B) Neither the lawyer, the lawyer's partner, associate, or any other lawyer affiliated with the lawyer or the lawyer's firm, nor any nonlawyer, shall have initiated or promoted the organization for the primary purpose of providing financial or other benefit to the lawyer, partner, associate, or affiliated lawyer.
(C) The organization is not operated for the purpose of procuring legal work or financial benefit for any lawyer as a private practitioner outside of the legal services program of the organization.
(D) The member or beneficiary to whom the legal services are furnished, and not the organization, is recognized as the client of the lawyer in the matter.
(E) Any member or beneficiary who is entitled to have legal services furnished or paid for by the organization, if such member or beneficiary so desires, may select counsel other than that furnished, selected, or approved by the organization; provided, however, that the organization shall be under no obligation to pay for the legal services furnished by the attorney selected by the beneficiary unless the terms of the legal services plan specifically provide for payment.
(F) Any member or beneficiary may assert a claim that representation by counsel furnished, selected, or approved by the organization would be unethical, improper, or inadequate under the circumstance of the matter involved. The plan shall provide for adjudication of a claim under division (E) of this section and appropriate relief through substitution of counsel or providing that the beneficiary may select counsel and the organization shall pay for the legal services rendered by selected counsel to the extent that such services are covered under the plan and in an amount equal to the cost that would have been incurred by the plan if the plan had furnished designated counsel.
(G) The lawyer does not know or have cause to know that the organization is in violation of applicable laws, rules of court, and other legal requirements that govern its operations.
(H) The organization has filed with the Supreme Court Office of Attorney Services, on or before the first day of March each year, a report with respect to its legal service plan, if any, showing its terms, its schedule of benefits, its subscription charges, agreements with counsel, and financial results of its legal service activities.
Lawyer referral services: One way for a prospective client to locate an attorney who takes cases in the client's area of need is through a lawyer referral service. Under such a system, the lawyer can pay the service, acting as a clearing house, a fee for such referrals.
Gov Bar R XVI 1 imposes a number of requirements on lawyer referral services that must be met before a lawyer ethically can participate in them. On the whole, these requirements serve to protect both clients and participating lawyers.
As a threshold requirement, a lawyer referral service has to be operated "in the public interest." Id. at 1(A)(1). Referrals can be made not only to lawyers, but also to pro bono and public service programs as well as government and other agencies that can provide needed assistance. In making referrals, the service was to take into account the client's "financial circumstance, spoken language, any disability, geographical convenience, and the nature and the complexity of their problem." Id. The core idea underlying this provision was that referral services must be responsive to client needs rather than simply serving as a mechanism to churn cases for participating lawyers.
The Bar Rule goes on to require that any such service has to call itself "a lawyer referral service or a lawyer referral and information service." Id. at 1(A)(2). This requirement assists prospective clients in finding a service when they need one.
Several provisions within the Bar Rule speak to eligibility requirements for participating attorneys. All attorneys who meet those requirements have to be allowed to participate in the service if they choose to do so. Id. at 1(A)(3). This subsection imposes five requirements that have to be met before a lawyer can participate in a qualified lawyer referral service. The first involves licensure. The participating lawyer has to be licensed and admitted to practice law in the state of Ohio. The second restriction is geographical. The lawyer has to have an office in the area served by the service. The third restriction relates to the lawyer's qualifications. The lawyer has to meet any reasonable, objectively determined experience requirements established by the service. The fourth restriction pertains to fee requirements for participation in the service. The lawyer has to pay any reasonable registration and membership fees established by the service. The fifth restriction speaks to the ability of the lawyer to satisfy any claims that might arise out of the representation. The lawyer has to maintain a policy of errors and omissions insurance in an amount established by the service. To the extent the service establishes subject-matter panels, it can set eligibility criteria for them as long as they are based on "experience and other substantial, objectively determinable criteria." Id. at 1(A)(7).
One special concern involves the potential for misconduct that can arise if the lawyers receiving paying referrals have an ownership or operational interest in the lawyer referral service. To meet this concern, Gov Bar R XVI 1(A)(6) provides that lawyer referral services must promulgate "rules that prohibit the making of a fee generating referral to any lawyer who has an ownership interest in, or who operates or is employed by the lawyer referral service, or who is associated with a law firm that has an ownership interest in, or operates or is employed by the lawyer referral service." Rule XVI 1 also affirmatively states that the referral service cannot make a fee-generating referral to any such lawyer. Id. at 1(A)(9).
Built into the rule are several additional safeguards for clients. It requires the lawyer referral service to establish rules that would prohibit a lawyer from charging a referred client fees and costs in excess of those that have been charged had the lawyer referral service not been involved. Id.at 1(A)(4). This is intended to keep the lawyer from passing on the costs of participation in the service to the client. Procedures also have to be in place to admit, suspend, and remove lawyers from the lawyer referral service's rolls, id. at 1(A)(6), as well as procedures to investigate and act upon consumer complaints about the service, its employees, or participating lawyers. Id. at 1(A)(5). Lawyer referral services also are required to establish procedures to survey clients periodically to determine client satisfaction with the service. Id.
A new lawyer referral service must register with the Supreme Court Office of Attorney Services 90 days before beginning operation, and all lawyer referral services must file an annual report with that Office. Id. at 1(B).
In addition to these mandatory provisions, the rule also provides three optional requirements that lawyer referral services may impose on participating lawyers. First, in addition to the payment of a membership or registration fee, a lawyer can be required to pay to the referral service a percentage of the legal fees the lawyer earns on referred matters. Id. at 1(C)(1). See, under the Code, Bd. of Comm'rs on Grievances & Discipline Op. 2000-5, 2000 Ohio Griev. Discip. LEXIS 5 (Dec. 1, 2000) (DR 2-103(C) requirements applicable to online referral services). See also former OH DR 3-102(A)(4) (providing that such payments are an exception to the rule against dividing legal fees with a nonlawyer), now set forth in Ohio Rule 5.4(a)(5), which limits the exception to sharing with nonprofit organizations that are in compliance with Gov B Rule XVI. See generally section 5.4:200. However, Gov Bar R XVI 1(C)(1) restricts the use the lawyer referral service can make of such percentage fees. The income shall be used only to pay the reasonable operating expenses of the service and to fund public service pro bono activities of the service or its sponsoring organization. A second requirement that a lawyer referral service can impose as a condition of participating in the service is the lawyer's agreement to submit any fee disputes with a referred client to mandatory fee arbitration. Id. at 1(C)(2). Third, the service may require participating lawyers to "[p]articipate in moderate and no-fee panels and other panels established by the service that respond to the referral needs of the consumer public." Id. at 1(C)(3).
Under this regime a lawyer can request referrals and may of course undertake representation based on referrals from such an organization, but the lawyer must make sure that he or she remains free to exercise independent professional judgment on the client's behalf. Ohio Rule 5.4(c). See section 5.4:400, at "Third-party direction of the lawyer's legal judgment - Organizational intermediaries in the provision of legal services." A requirement that a lawyer may co-counsel only with other lawyers on the referral panel would undermine this principle. Bd. of Comm'rs on Grievances & Discipline Op. 92-1, 1992 Ohio Griev. Discip. LEXIS 20 (Feb. 14, 1992). As a consequence, lawyer referral services are prohibited from imposing such a requirement. Gov Bar R XVI 1(A)(8).
In Bd. of Comm'rs on Grievances & Discipline Op. 2000-5, 2000 Ohio Griev. Discip. LEXIS 5 (Dec. 1, 2000), the Board opined that (1) if an online referral service was in compliance with former OH DR 2-103 and LRIS regulations, an Ohio attorney could enter into a referral agreement with an out-of-state law firm operating the service, and (2) the applicable provisions of former OH DR 2-103 and 3-102 expressly permitted payment by an attorney of a membership or registration fee to a qualified online referral service as well as a fee calculated on a percentage of the legal fee earned. See, under the OHRPC, Rules 7.2(b)(3) and 5.4(a)(5).
Pursuant to the terms of Rule 7.2(b)(3), if the lawyer referral service is both for-profit and not qualified under Gov Bar R XVI, a lawyer is subject to the 7.2(b) prohibition against giving anything of value for a referral. See Rule 7.2 cmt. .
In addition to the foregoing, Gov Bar R XVI now includes (from the former LRIS Regulations) provisions that must be set forth in agreement governing lawyer participation, id. at (2)(A)-C (e.g., professional-liability insurance requirements; provisions for removing from further participation disbarred or suspended lawyers and lawyers charged with a crime "involving moral turpitude or dishonesty"; notice obligations of the participating attorney; and arbitration or mediation of lawyer-service fee disputes. See section 2 for the complete listing. Section 3 deals with notice of and possible disclosure of information relating to the client's case. Finally, Section 4 of Gov Bar R XVI makes clear that the provisions of sections 1-3 do not apply to legal services plans, attorney-to-attorney individual referrals, attorney joint advertising solely to solicit clients for themselves, or pro bono assistance programs not accepting fees from attorneys or clients for referral.
Exception (4) - Paying for a law practice: Nationally there has been significant debate over the propriety of a lawyer selling his practice to another. See Bd. of Comm'rs on Grievances & Discipline Op. 92-19, 1992 Ohio Griev. Discip. LEXIS 2 (Oct. 16, 1992) (acknowledging the debate within the profession). To the extent that entailed the sale of client files and client lists, the practice was prohibited in Ohio, Lake County Bar Ass'n v. Patterson, 64 Ohio St.2d 163, 413 N.E.2d 840 (1980) (purchase of law practice violated former OH DR 2-103(B)), but that was changed by the adoption of OH DR 2-111, effective February 1, 2003. It permitted the purchase and sale of a law practice, including the good will of the practice, on certain conditions specified in the disciplinary rule; those provisions have been incorporated in Ohio Rule 1.17. See sections 1.17:200-:300.
Although such a transaction was not included in the exceptions to the prohibition against giving anything of value for a recommendation in former OH DR 2-103(B), an express exception is made in the new Rules, in Rule 7.2(b)(4), presumably to ward off any argument that the purchase of a law practice constitutes or involves an improper payment for referrals.
- Primary Ohio References: Ohio Rule 7.2(c)
- Background References: ABA Model Rule 7.2(c)
- Commentary: ABA/BNA § 81.1; Wolfram § 14.2
Like MR 7.2(c), Ohio Rule 7.2(c) requires that any communication made pursuant to this rule must "include the name and office address of at least one lawyer or law firm responsible for its content." There was no comparable provision under the former OHCPR.
- Primary Ohio References: Ohio Rule 7.2(d)
- Background References: None
- Commentary: Greenbaum, Lawyer's Guide to the Ohio Code of Professional Responsibility § 2.17
The material in this section is, in part, excerpted and adapted from Arthur F. Greenbaum, Lawyer's Guide to the Ohio Code of Professional Responsibility § 2.17 (1996).
In a provision not found in the Model Rules, division (d) carries forward the prohibition of former OH DR 2-101(A)(2) against a lawyer's advertising for matters that he or she intends to refer to another lawyer or firm. Under division (d), a lawyer cannot
seek employment in connection with a matter in which the lawyer or law firm does not intend to participate actively in the representation, but that the lawyer or law firm intends to refer to other counsel.
Ohio Rule 7.2(d).
Typically, a lawyer would do so with the expectation of a referral fee. Limitations on referral fees are set forth in Rule 1.5(e).
There are two exceptions to the Rule 7.2(d) prohibition: First, "it does not apply to organizations listed in Rules 7.2(b)(2) or (3)"; second, it does not apply "if the advertisement is in furtherance of a transaction permitted by Rule 1.17."