Can a lawyer pay a nonlawyer tax representative marketing or consulting fees for referring property-tax assessment cases?

Plain-English summary

A nonlawyer "tax representative" did preliminary work on property-tax assessment reductions for owners (including completing and filing assessment-reduction complaints), then referred matters needing a hearing to a lawyer, distributing his own and the lawyer's cards and receiving compensation and benefits, candidly described as including "below market or non-existent rent." The inquiry asked whether the lawyer's participation, and the payment of marketing or consultation fees, were proper.

The opinion concluded the relationship violated several Rules. A lawyer may not share legal fees with a nonlawyer or form a partnership with a nonlawyer for the practice of law (Rule 5.4(a), (b)), may not assist a nonlawyer in the unauthorized practice of law (Rule 5.5), and may not give anything of value for a recommendation beyond permitted advertising costs (Rule 7.2(b)); Rule 7.3 bars soliciting employment for pecuniary gain. It characterized the arrangement as an ongoing "feeder" operation in return for euphemistic "marketing" or "consulting" fees.

The opinion concluded that the nonlawyer's completion of valuation complaints and appearance before tax boards was itself the unauthorized practice of law, relying on In re Yamaguchi (disciplining a lawyer who condoned a layperson doing strikingly similar work) and Chicago Bar Association v. Friedlander (enjoining nonlawyers representing owners in valuation proceedings), and on the ISBA's adopted Policy on Real Estate Taxation Practices. It rejected the argument that widespread acquiescence by local assessing officials made the conduct permissible, quoting Quinlan & Tyson that widespread disregard does not change what requires a lawyer's training, and concluded that a lawyer who knowingly participates assists the unauthorized practice of law, so the described practices are professionally improper.

Currency note

This opinion was issued in 1994, before Illinois adopted the 2010 Illinois Rules of Professional Conduct. The ISBA Board of Governors affirmed the opinion in May 2010 as generally consistent with the 2010 Rules (referring to Rules 5.4(a) and (b), 5.5(a), 7.2, 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 Treat this page as historical context, not current guidance.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 a lawyer pay a nonlawyer for referring cases?

A: The opinion concluded a lawyer may not give anything of value for referrals beyond permitted advertising costs under Rule 7.2(b), so paying "marketing" or "consultation" fees for referrals is improper.

Q: Why was the tax representative's work the unauthorized practice of law?

A: The opinion concluded that completing valuation complaints and appearing before a tax board involve legal analysis and advocacy, which (per Yamaguchi and Friedlander) is the practice of law, not mere clerical form-filling.

Q: Does it matter that local officials let nonlawyers do this?

A: No. The opinion concluded that widespread disregard of the requirement does not change the result, quoting Quinlan & Tyson, so the lawyer who knowingly participates still assists unauthorized practice.

Background and rules framework

The opinion interpreted Rule 5.4(a) and (b) (no fee-splitting with or law-practice partnership with a nonlawyer), Rule 5.5 (aiding unauthorized practice), Rule 7.2(b) (no payment for recommendations beyond advertising costs), and Rule 7.3 (solicitation for pecuniary gain) (Model Rules 5.4, 5.5, 7.2, 7.3).

Citations and references

Rules of Professional Conduct:

• Model Rule 5.4 (professional independence) / Illinois Rule 5.4(a), (b)
• Model Rule 5.5 (unauthorized practice) / Illinois Rule 5.5
• Model Rule 7.2 / Illinois Rule 7.2(b); Model Rule 7.3 / Illinois Rule 7.3

Cases:

• In re Yamaguchi, 118 Ill. 2d 417, 515 N.E.2d 1235 (1987), lawyer disciplined for furthering layperson's tax-complaint work
• Chicago Bar Association v. Friedlander, 24 Ill. App. 2d 130 (1st Dist. 1960), nonlawyers enjoined from valuation representation

Other opinions cited:

• ISBA Opinions Nos. 91-18, 91-3, 91-10; ISBA Policy on Real Estate Taxation Practices (Apr. 3, 1992)

See also

• ISBA Ethics Op. 94-04: Seminars and Marketing With a Nonlawyer
• ISBA Ethics Op. 93-11: Lawyer Hired and Paid by a Third Party
• ISBA Ethics Op. 97-04: Fee for Referring Clients to Nonlawyer Professionals

Source

• Landing page: https://www.isba.org/ethics/opinions/9408