Can a company recommend its own law firm to its employees and arrange a reduced hourly rate for them?

Plain-English summary

A firm represented a corporation and occasionally did personal legal work for its officers, directors, and an employee. The corporation's president (a friend of the firm's partners) proposed to broadly recommend the firm to the corporation's employees, and asked the firm to offer those employees a guaranteed reduced hourly rate below its normal fees as an additional employee benefit. The inquiry asked whether the arrangement conformed to the Rules.

The opinion reviewed Rule 7.2(b) (no giving value for recommendations), Rule 7.3 (no solicitation for pecuniary gain, with an exception in 7.3(a)(3) for certain organizations), and prior opinions condemning in-person solicitation through non-legal organizations (Opinions 83-2, 84-1, 90-21). It concluded that, unlike those situations, here the employer rather than the attorney initiates and communicates the recommendation, so it was unnecessary to decide whether the employer is an "organization" within the Rule 7.3(a)(3) exception, because no attorney solicitation, direct or indirect, was involved.

The opinion concluded that the arrangement carried a substantial risk of conflicts of interest, between the employer and employees and among employees seeking representation from the same firm (for example workers' compensation, EEOC, or employer-employee disputes), so the firm must exercise great care to comply with Rule 1.7. It further concluded that, under Rule 7.1, the firm must take care that the "guaranteed reduced hourly rate" is genuine; unless the rate charged employees is actually less than fees charged in the locality for similar services, calling it "reduced" could be misleading.

Currency note

This opinion was issued in 1993, before Illinois adopted the 2010 Illinois Rules of Professional Conduct. The ISBA Board of Governors affirmed the opinion in January 2010 as generally consistent with the 2010 Rules (referring to Rules 1.5, 1.7, 7.1, 7.2(b), and 7.3), while noting the specific standards referenced may differ from the 2010 Rules. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule or requirement mentioned here.

Common questions

Q: Can an employer recommend its law firm to employees at a discount?

A: The opinion concluded the arrangement conforms to the Rules because the employer, not the lawyer, initiates the recommendation, so no improper attorney solicitation is involved.

Q: What conflicts does the firm need to watch for?

A: The opinion concluded the firm must comply with Rule 1.7 given the substantial risk of conflicts between the employer and employees and among employees (for example workers' compensation or employer-employee disputes).

Q: Is there a limit on advertising the "reduced" rate?

A: The opinion concluded that under Rule 7.1 the discount must be genuine; describing a rate as "reduced" could be misleading unless it is actually below local fees for similar services.

Background and rules framework

The opinion interpreted Rule 7.3 (solicitation, including the 7.3(a)(3) organization exception), Rule 7.2(b) (payment for recommendations), Rule 1.7 (conflicts of interest), and Rule 7.1 (misleading communications about fees) (Model Rules 7.3, 7.2, 1.7, 7.1).

Citations and references

Rules of Professional Conduct:

• Model Rule 7.3 (solicitation) / Illinois Rule 7.3; Model Rule 7.2 / Illinois Rule 7.2(b)
• Model Rule 1.7 (conflict of interest: current clients) / Illinois Rule 1.7
• Model Rule 7.1 (communications about a lawyer's services) / Illinois Rule 7.1

Other opinions cited:

• ISBA Opinions Nos. 83-2, 84-1, and 90-21: in-person solicitation through non-legal organizations condemned

See also

• ISBA Ethics Op. 94-04: Seminars and Marketing With a Nonlawyer
• ISBA Ethics Op. 96-02: Third-Party Solicitation on Behalf of a Lawyer

Source

• Landing page: https://www.isba.org/ethics/opinions/9208