Opinion 88-5
(April 1988)

You have presented the Committee with an inquiry concerning a legal services program your firm intends to provide for members of a trade association in the automobile service and repair industry. As we understand it, the firm already represents the association as a client. The program offering is to be initiated by a mailing as attached to your letter as an exhibit.

You have inquired as to whether the proposed legal services program runs "afoul" of the applicable standards of professional conduct. Specific reference is made to rules regarding advertising and solicitation and to your preliminary conclusion that the proposed program is not at odds with the advertising and solicitation rules.

In view of the April 1, 1988 adoption in Pennsylvania of the Rules of Professional Conduct, the following comments are couched in terms of the Rules, rather than the predecessor Code of Professional Responsibility.

Advertising and solicitation by attorneys is addressed by the Rule 7 series in the Rules of Professional Conduct. The first of these is Rule 7.1 which provides that "[A] lawyer shall not make a false or misleading communication about the lawyer or the lawyer's services". A communication is "false or misleading" if it materially misrepresents facts or law, creates an unjustified expectation about results or compares one lawyer's services with another in a way that cannot be factually substantiated.

This Rule did not have any direct equivalent in the Code of Professional Responsibility. Accordingly, we must assume that although the tenor of the Rule is to protect clients against misleading descriptions of a lawyer's ability to obtain a certain result, the Rule is intended to embrace misrepresentations of any kind which could influence the formation or fulfillment of a lawyer/client relationship. In this context, the proposed program as outlined in the attachment to your letter presents some difficult questions.

The Preamble to the program states that the program will provide "a wide variety of legal services at affordable and highly competitive fees." The apparent scope of this mailing is quite broad and would appear to include, directly and indirectly, all association members, their employees, spouses and unmarried dependents. "Affordable" is a subjective term and by itself is meaningless to the layperson. Certainly some of the program's members or derivatively eligible participants might have access to not-for-profit legal services systems or law firms in their area whose rates might prove to be cheaper than those charged by your firm under the program. The phrase "highly competitive fees" is similarly meaningless to laypersons. This phrase also carries an implication of comparison of lawyer's services if one can correctly assume that one element in evaluating a lawyer's services is the relative cost of achieving a certain result. Both the phrase "affordable" and "highly competitive fees" are troublesome because they imply comparison with the services of other lawyers and have the potential to be misleading as to the cost of legal services under the plan.

We note that the Preamble also states that the fees "the Program charges are covered in III." This is not exactly true; the statements made regarding fees - apart from the description of the retainer - describe a certain percentage presumably in the form of a discount which plan participants will be charged based on the regular charges of the individual lawyers handling the matter. As there is no fee schedule attached, let alone a fee schedule which is lawyer-particular, it is not accurate to state that the fees plan participants will be charged are described in paragraph III of the plan.

The Committee also notes that while direct contact with a prospective client for the purpose of obtaining professional employment is permitted under the Rules (Rule 7.3), it is not without limitations, as spelled out in Rule 7.3. Moreover, the question of the propriety of direct mail solicitations by attorneys is presently pending before the United States Supreme Court and further direction should be provided before the end of this term. See Shapero V. Kentucky Bar Association, U.S. (No. 87-16).

We are concerned that the plan as described by you may in some measure be violative of Rule 1.7 regarding conflicts of interest. Pursuant to Rule 1.7 "A lawyer shall not represent a client if the representation of that client will be directly adverse to another client...." You specifically offer to members, their employees, spouses and dependents representation in worker's compensation cases. This offer is made to injured employees as well as to Association members. It strikes us that every injured employee eligible to be represented by the plan would, ipso facto, have as his adversary the Association member whom the plan also represents. We also note in connection with your worker's compensation representation proposal that the 20% contingent fee which is described as a reduction in normal fee is, in fact, the contingency percentage required by operation of law.

In your letter you discuss field operatives of the Association who might provide information about and/or through the plan to individual members from time to time. Presuming these field representatives to be non-lawyers, we feel the Plan should be mindful of Rule 5.5 regarding the unauthorized practice of law.

The Committee wishes to note that in a general conceptual way, the legal services plan you propose would not seem to be violative of the Rules of Professional Conduct subject, of course, to appropriate clarification of certain of the problems and ambiguities discussed above. We cannot, obviously, comment on those administrative and substantive aspects of the proposed plan which might not have been disclosed in your inquiry.

The Philadelphia Bar Association's Professional Guidance Committee provides, upon request, advice for lawyers facing or anticipating facing ethical dilemmas. Advice is based on the consideration of the facts of the particular inquirer's situation and the Rules of Professional Conduct as promulgated by the Supreme Court of Pennsylvania. The Committee's opinions are advisory only and are based upon the facts set forth. The opinions are not binding upon the Disciplinary Board of the Supreme Court of Pennsylvania or any other Court. They carry only such weight as an appropriate reviewing authority may choose to give it.