Impermissible and Unwanted solicitation of professional employment
Re: Illegal/Unethical Solicitation of Professional Employment Using Third Parties
ISSUES
- Is it legal to personally (or by use a third parties) to “chase ambulances”?
- Is it legal/ethical to pay compensation to parties recommending an attorney’s services to potential clients?
- Are there any circumstances under which Betty’s husband may legally/ethically give out Adam’s business cards within the course of his employment?
answers
- No, any communication transmitted at the scene of an accident, or at, or en route to a treatment or care facility (hospital, emergency or other health care facility) is illegal
- No, compensation to third parties for recommending a lawyer’s services are prohibited except under specific limited circumstances
- No, it must not be in the course of his work as an ambulatory paramedic since “personal injury” falls under circumstances considered to render potential clients vulnerable to fraud, overreaching, intimidation or undue influence.
Statement of Facts
Betty works as a paralegal in Adam’s struggling personal injury practice, and is married to a paramedic who works for a local ambulatory service. In a bid to promote his practice, Adam decides to have Betty’s husband distribute the firm’s business cards to prospective clients. Adam undertakes to pay the couple a fee of $50 for every new client retained by the firm on the husband’s recommendation.
Analysis
Since Bates et al v. State Bar of Arizona (1977), legitimate attorney advertising became legal, but with it, emerged a range of ethical and legal difficulties, which have in turn ensured that such advertising/solicitation is only possible within very narrow limits. In Bates et al. v. State Bar of Arizona, the court held that truthful advertising is protected under the free speech provisions of the First Amendment. While there is no indication that the Adam’s business cards are untruthful, rule 1-400(E)(4) of the CA code of professional conduct, it would be in violation of rule 1-400, unless otherwise provided for as a communication defined in 1-400(a). Rule 1-400 E(4) considers any communication transmitted at the scene of an accident, or at, or en route to a treatment or care facility (hospital, emergency or other health care facility) to be contrary to rule 1-400 (f) (4). Effectively, the fact that Betty’s husband works for an ambulance company, and further that the attorney expects him to pass out the firm’s business cards to personal injury patients using the services of the ambulance company, amounts to “ambulance chasing”.
In Ohralik v Ohio State Bar Association (1978), the court held that approaching patients/accident victims or their relations in hospitals with the primary view of soliciting professional employment for an attorney’s pecuniary gain is inconsistent with the attorney-client relationship and the profession’s ideal conduct. Similarly, paid third-party recommendations are also contrary to ABA Model Rule 1.7 (2) since the attorney may find himself or herself having to balance between the interests of the recommending party and the current client.
This opened doors for bars, to constitutionally punish attorneys personally soliciting clients, for pecuniary gain, under conditions that are likely to pose harm to the client, and that the state has a responsibility to prevent. The American Bar Association Model Rule 7.3(a) generalizes the findings in Ohralik v Ohio State Bar Association (1978). It provides that attorneys may not solicit professional employment from a potential client with whom the attorney has no prior professional or family relationship (whether in person, by telephone or real-time electronic contact), when the main motive of such contact is the attorney’s monetary gain.
Even more specifically, using third parties to circumvent the spirit or substance of ABA Model Rule 7.3 is prohibited. Rule 7.2 (b) prohibits advancement of any form of compensation to any party for recommending an attorney’s services, except where such compensation is defined under the criteria 7.2 (b) (1-4). In addition, CA Business and professions code 6152(a) prohibits the use of cappers or runners in procurement or solicitation of business for an attorney in return for a consideration. Effectively, since the $50 paid to Betty and her husband for any client retained, is not intended to cover reasonable costs for the service, nor is there any indication that Betty’s husband incurs any costs in passing business cards to potential clients; the practice is on this basis alone unethical/illegal.
The definition of communications directed towards procuring professional employment within the context of rule 1-400 also prohibit any such conduct, whether or not a third party is involved. Communications may be private or public by, or on behalf of an attorney, whose primary objective is to procure professional employment for the attorney/firm. On the other hand, solicitations (except as provided under subdivision (b) of the Rule) include any solicitations or recommendations by, or on behalf of an attorney/firm targeted or directed at specific recipients or their representatives, whose primary purpose is the retention of the attorney (or his/her pecuniary gain).
It is however critical to appreciate the fact that the prohibitions under ABA 7.3 are geared at preventing circumstances that may expose a prospective client to the private importuning of attorneys in direct interpersonal ways. It is natural that individuals that are, or may reasonably feel overwhelmed by circumstances that necessitate legal assistance, will find it difficult to evaluate the alternatives available to them, and come to a reasoned judgment. The insistence by an attorney (or Betty’s husband recommending an attorney or simply issuing business cards) that the clients are retained immediately imposes undue influence, over-reaching and intimidation. This is why in re Primus, 436 U.S. 412, 426-31 (1978) among others, there is a clear distinction from Ohralik v Ohio State Bar Association (1978). In fact, an amendment of ABA 7.3 (effective from January 2015) sets out clear circumstances under which solicitations may be unacceptable. These include among others, 7(b) (2) fraud, overreaching, intimidation or undue influence; solicitations concerning actions for wrongful death or personal injury/disaster; or other solicitations involving specific matters that an attorney knows, or should reasonably know, that the individual solicited is physically, emotionally or mentally incapable of making a reasoned judgment.
In Ohralik v Ohio State Bar Association (1978). the court emphasizes a distinction from Bates et al v. State Bar of Arizona (1977), in terms of the balance of power between prospective clients and the attorney. In Ohralik, experienced attorneys aggressively and personally prey on accident victims, effectively bring direct and one-sided pressure to berar on the potential clients so that they would sign up. Effectively, for as long as the court feels that in the client is not renderedvulnerable when making a judgment to engage the services of an attorney due to an attorney’s solicitations, then the attorneny’s communication/solicitation is legitimate. Similarly, the use of clearly marked as advertising cards or engaing the services of a marketing firm would also be legitimate, for as long as it is not in the context of the ambulatory care services. Even so, any solicitations or referrals must not have any connatations of quality, guarantees, or other forms of endorsement or predictions of quality, as this would be in contradiction to the CA Code of Professional Conduct Code Rule 1-400E(1), which bans “communications”, which contain guarantees, warranties, or predictions regarding the result of the representation.
In this case, the attorney uses business cards, which are in the reasonable understanding of many people, to be solicitations, and it is possible to conceive of limited circumstances under which such cards may be handed out to prospective clients in line with the requirements of ABA 7.3 (a). This is possibility is however superseded by the fact that personal injury, in which Adam’s law firm specializes, falls among the specific circumstances under which prospective clients may be vulnerable under ABA 7.3(a). This is emphasized in the court’s observation in Ohralik v Ohio State Bar Association (1978), that aversion of harm from impermissible or unwanted solicitation where it is likely to occur is imperative, even in the absence of explicit findings or proof of injury or harm to the individual solicited.
Conclusion
It is illegal for Betty’s husband to hand out Adam’s business cards to his patients or other persons in his care as a paramedic. It is considered unauthorized for an attorney to transmit communications (whether personally or through third parties) about their services at the scene of an accident, or at, or en route to a treatment or care facility (hospital, emergency or other health care facility) is contrary to the California Rules of Professional Conduct 1-400(f)(4). Similarly, any compensation to third parties in return for recommendations for an attorney’s services is prohibited, which makes employing the services of runners illegal. While the factual circumstances of the case have to show abuse or possibility of abuse, the responsibility of the state to prevent possible harm is paramount to the existence of actual evidence of abuse.
References
Bates et al. v. State Bar of Arizona. No. 433 U.S. 350. U.S. Supreme Court. 27 June 1977. Web.
American Bar Association. American Bar Association Model Rules of Professional Conduct. 2014. Web. Retrieved from http://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_7_3_direct_contact_with_prospective_clients.html. 4 Oct 2014.
American Bar Association CPR Policy Implementation Committee. Variations of the ABA Model Rules of Professional Conduct - Rule 7.3. 18 Sept 2014. Web. Retrieved from http://www.americanbar.org/content/dam/aba/administrative/professional_responsibility/mrpc_7_3.authcheckdam.pdf. Oct 2014.
Ohralik v Ohio State Bar Association 436 U.S. 477(1978)
CA Rules of professional conduct, Rule 1-400(f)(4) CA Business and professions code 6152(a)
