OPINION 178
May 1958

INTERMEDIARIES - Attorney's acceptance of employment from lay intermediary and members thereof to perform legal services offered to its members by the intermediary is improper.

 INTERMEDIARIES - Attorney's acceptance of employment where lay intermediary profits on lawyer's professional services is improper.

SOLICITATION - Attorney's acceptance of employment from lay intermediary to perform legal services to it's members by the intermediary is improper.

Canons 24, 32, 43.

Question

The following provisions are contained in the certificate of membership issued by an Automobile Association, which is a private Texas corporation, to its members:

"Legal Expenses. In the event it is necessary or he member to employ legal counsel in connection with an accident involving the automobile belonging to the member, the Association will pay his attorney, except where the member is under the influence of intoxicating beverage or narcotics or leaving the scene of an accident or any felony of any kind, as follows:

(a) An amount not to exceed $25.00 which may be necessary to be paid by the member to an attorney for the purpose of recovering damages for injury to the person of the member.

(b) An amount not to exceed $100.00 which may be necessary to be paid by the member to an attorney in connection with a charge of assault by motor vehicle which may be made against the member arising out of an accident involving the automobile belonging to the member.

(c) An amount not to exceed $25.00 which may become necessary to be paid by the member to an attorney to defend the member for the violation of traffic ordinances, involving the use of the automobile belonging to the member.

(d) An amount not to exceed $50.00 which may become necessary to be paid by the member to an attorney for defending the member in any civil suit which may be filled against him for damages as a result of an accident involving the automobile belonging to the member.

"Legal Aid. In reference to moneys paid to the Member's attorney as stated under General Services, the Association reserves the right to approve selection of said attorney. Without the approval the Association shall not be obliged to render any benefit or service set out herein."

The member of the Association who needs representation contacts the attorney and counsels with him in the attorney's office, and each case is handled on its own merits. The Association does not charge the members for the fees paid to the attorney for his services. The attorney has no financial interest in the Association. The member pays a membership fee to the Association.

1. Will an attorney by accepting employment by such Automobile Association to perform the services mentioned in the certificate referred to above violate
Canon 32 or any other Canons of Ethics?

2. If the answer to (1) is "no," then would there be any violation by the attorney of Canon 32 or any other Canon, if he accepted employment in connection with other legal work than that covered by the provisions of the certificate issued by the Automobile Association which might be tendered to him by members of the Association?

Opinion

It is the opinion of the Committee that there is a violation of Canons 24, 32 and 43 of the Canons of Ethics of the State Bar by reason of the attorney accepting the employment from the Automobile Association to represent its members in connection with matters referred to in the certificate issued by the Automobile Association to its members and by reason of his accepting employment from the members of the Automobile Association in other matters.

The attorneys are not employed by the Automobile Association for the purpose of advising it on matters affecting its interests its interest or of advising it or its members on matters of collective interest to its members as a whole. The attorneys are employed for the purpose of advising the members of the Association in respect of their individual affairs and of handling matters affecting only the individual member. This is done in return for the payment by the member to the Association of a membership fee. The Association holds itself out to pay attorneys selected by it to perform legal services to its individual members. It in effect holds itself out to furnish legal services to its members. By reason thereof attorneys accepting employment through such Association to perform such services are permitting their professional services to be used in aid of the practice of law by a lay intermediary in violation of Canon 43. Further, Canon 32 states that the professional services of a member shall not be controlled or exploited by any lay agency and that an attorney shall avoid all relations which direct the performance of his duties by or in the interest of such intermediary. The acceptance of employment by an attorney through the said Automobile Agency to perform the services mentioned would violate such Canon.

An attorney is forbidden to solicit business by Canon 24. He cannot do so by entering into the relationship discussed above with the Automobile Association.

A similar situation was condemned in Opinion No. 8 of' the Opinions of the Committee on Professional Ethics and Grievances of the American Bar Association. (8- 1)