May 1979


May a non-profit association enter into an agreement with a law firm whereby the firm will provide optional legal services to the association members and their families, provided that all charges for the legal services are paid by the members directly to the attorneys?


While an arrangement similar to the one described above was expressly prohibited in State Bar of Texas, Commission on Interpretation of the Canons of Ethics, Opinion No.346 (1969), the present State Bar of Texas, Rules and Code of Professional Responsibility permits such an arrangement.

DR 2-103 provides in pertinent part:

"D. A lawyer shall not knowingly assist a person or organization that recommends, furnishes, or pays for legal services to promote the use of his services or those of his partners or associates. However, he may cooperate in a dignified manner with the legal service activities of any of the following, provided that his independent professional judgment is exercised on behalf of his client without interference or control by any organization or other person. . . . .

5. Any other non-profit organization that recommends, furnishes, or pays for legal services to its members or beneficiaries, but only in those instances and to the extent that controlling constitutional interpretations at the time of such rendition of the services requires the allowance of such legal service activities, and only if the following conditions, unless prohibited by such interpretation, are met:

        1. The primary purposes of such organization do not include the rendition of legal services.
        2. The recommending, furnishing, or paying for legal services to its members is incidental and reasonably related to the primary purposes of such organization.
        3. Such organization does not derive a financial benefit from the rendition of legal services by the lawyer.
        4. The member or beneficiary for whom the legal services are rendered, and not such organization, is recognized as the client of the lawyer in that matter."

Constitutional interpretations controlling at the time the services are rendered require that an association be allowed to recommend specific attorneys to its members. United Transportation Union v. Michigan, 401 U.S. 576 (1971); United Mine Worker's v. Illinois Bar Association, 389 U.S. 217 (1976); Brotherhood of Railroad Trainment v. Virginia, 377 U.S. 1 (1964); N.A.A.C.P. v. Button, 371 U.S. 415 (1963).

The facts do not indicate whether the proposed arrangement violated the following additional requirements of DR 2-103:

"(1) A lawyer shall not recommend employment of himself, his partner, or associate to a non-lawyer who has not sought his advice regarding employment of a lawyer. DR 2-103(A).

(2) A lawyer shall not compensate or give anything of value to a person or organization to recommend or secure his employment by a client or as a reward for his having made a recommendation resulting in his employment by a client." DR 2-103 (b).

Pursuant to Disciplinary Rule 2-103, quoted above, direct solicitation of clients for pecuniary gain may subject an attorney to discipline. Ohralik v. Ohio State Bar Assn., 56 L.Ed.2d 444, ____U.S.____ (1978).