Can a group of lawyers hire a for-profit corporation to advertise their availability and refer responding clients to them for a fixed annual fee?

Plain-English summary

The inquiry asked whether a group of lawyers could agree with a for-profit corporation under which the corporation, as agent for the participating attorneys, advertises the availability of legal services through a private lawyer referral service, refers responding persons to the participating lawyers, and is paid a fixed annual fee for its advertising and referral services.

The opinion concluded yes, if the conditions of Rule 2.2 are satisfied. The compensation to the corporate agent for administrative services must be reasonable. Advertisements placed through the agent must be paid from the fees the participating attorneys pay the agent; the agent may not spend its own funds to advertise its own referral service and may advertise only as the lawyers' agent. The agent may not profit from referring prospective clients, though fixed fees paid in advance do not violate this condition if reasonable in amount, and such fees do not materially differ from the compensation paid to the nonprofit referral service approved in CPR 359. The agent and its employees may not initiate contact with prospective clients. All advertisements must comply with Rule 2.2(c)(5) and Rule 2.1. Any participating lawyer is professionally responsible for the arrangement's operation, and a lawyer may not affiliate with a referral service that offers legal advice or otherwise engages in the unauthorized practice of law.

Currency note

This opinion was issued in 1986, before the North Carolina State Bar's adoption of the 2003 revisions to the Rules of Professional Conduct (the bar's editor's note directs readers to Rule 7.2(e) of the Revised Rules). The provisions it applies (Rule 2.2 on lawyer referral services and Rule 2.1 on advertising) have since been renumbered and revised (the corresponding Model Rules are 7.2 and 7.1). 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 Treat this page as historical context, not current guidance.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, deadline, or requirement mentioned here.

Common questions

Q: Can lawyers use a for-profit referral and advertising service?

A: Yes, subject to conditions. The opinion concluded lawyers may use a for-profit corporate agent if Rule 2.2's conditions are met.

Q: Can the referral agent profit from the referrals themselves?

A: No. The opinion concluded the agent may not profit from referring prospective clients, though a reasonable fixed advance fee for administrative services is permissible.

Q: Can the referral service contact prospective clients directly?

A: No. The opinion concluded that neither the corporate agent nor its employees may initiate contact with prospective clients, and the service may not engage in the unauthorized practice of law.

Background and rules framework

The opinion applied North Carolina Rule 2.2 on lawyer referral services (corresponding to Model Rule 7.2) and Rule 2.1 on advertising (corresponding to Model Rule 7.1). The analysis turned on keeping the agent's compensation reasonable and administrative (not a share of referral revenue), barring agent-initiated solicitation, and preserving the participating lawyers' responsibility for the arrangement.

Citations and references

Rules of Professional Conduct:

• North Carolina Rule 2.2 (lawyer referral services), including Rule 2.2(c)(5)
• North Carolina Rule 2.1 (advertising)
• MR 7.2 (advertising and referral arrangements); MR 7.1 (communications about a lawyer's services)

Other opinions cited:

• CPR 359 (North Carolina; nonprofit lawyer referral service)

See also

• NC Ethics Op. RPC 20: soliciting business clients
• NC Ethics Op. RPC 7: using a collection agency for fees

Source

• Landing page: https://www.ncbar.gov/for-lawyers/ethics-and-governing-rules/ethics-opinions/opinions/rpc-10/

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Editor's Note: See Rule 7.2(e) of the Revised Rules for additional considerations.

Inquiry:

May a group of lawyers enter into an agreement with a corporation operated for profit under which the corporation (a) as agent for the participating attorneys, advertises the availability of legal services through a private lawyer referral service; (b) makes referrals of persons who respond to the advertisement to the participating lawyers; and (c) is paid a fixed annual fee as compensation for its services as advertising and referral agent of the participating lawyers?

Opinion:

Yes, if the conditions set forth in Rule 2.2 of the Rules of Professional Conduct are satisfied:

• The compensation payable to the corporate agent of the participating lawyers for administrative services shall be reasonable in amount.

• Advertisements placed through the corporate agent must be paid from the fees paid to the corporate agent by participating attorneys. The corporate agent may not expend its own funds to advertise its own lawyer referral service. It may advertise only as the agent of participating attorneys.

• The corporate agent may not profit from its referral of prospective clients to participating attorneys. Payment of fixed fees in advance of performing the services described in the inquiry do not violate this condition provided such fees and the compensation they represent are reasonable in amount. Such fees payable to the corporate agent do not materially differ from the compensation paid to the employees and agents of the nonprofit lawyer referral service approved in CPR 359.

• The corporate agent and its employees may not initiate contact with prospective clients.

• All advertisements shall comply with the requirements of Rule 2.2(c)(5) and Rule 2.1.

Any lawyer participating in the arrangement shall be professionally responsible for its operation. Under no circumstances may a lawyer affiliate with a referral service which offers legal advice or otherwise engages in the unauthorized practice of law.