Can a lawyer let staff pick a court reporting service based on prizes the service awards employees who place the most business with it?

Plain-English summary

A local court reporting service offered prizes to legal secretaries who placed depositions with it, with the secretary who billed the most to his or her firm within a period winning. The inquiry asked whether a lawyer may permit the firm's use of court reporting services to be influenced by the possibility that the lawyer's employees might receive premiums, prizes, or other personal benefits.

The opinion concluded that the lawyer may not. It reasoned that court reporting services vary in cost, efficiency, and quality, that the lawyer and employees should consider those factors when purchasing the service for the client, and that the judgment of the person selecting the service could be compromised by the prospect of prizes, to the client's detriment. The opinion stated that Rule 3.3(b) requires a lawyer with direct supervisory authority over a nonlawyer to make reasonable efforts to ensure the nonlawyer's conduct is compatible with the lawyer's professional obligations, which would require the supervising attorney to direct the employee to avoid this sort of conflict. It added that a lawyer who became aware of such a practice involving his secretary and took no action to have it discontinued would be professionally responsible for the conflict under Rule 3.3(c).

Currency note

This opinion was issued in 1991, before the North Carolina State Bar's adoption of the 2003 revisions to the Rules of Professional Conduct. The supervision provisions it applies (Rule 3.3(b) and (c)) have since been renumbered (nonlawyer supervision is now Rule 5.3). 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 Treat this page as historical context, not current guidance.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 a lawyer let staff choose a court reporter based on prizes the reporter offers them?

A: No. The opinion concluded that the prospect of prizes could compromise the employee's judgment to the client's detriment, so the lawyer may not permit the choice of service to be influenced that way.

Q: What is the supervising lawyer required to do?

A: The opinion concluded that, under Rule 3.3(b), the lawyer must make reasonable efforts to ensure the nonlawyer's conduct is compatible with the lawyer's obligations, which requires directing the employee to avoid the conflict.

Q: What if the lawyer knows about the practice and does nothing?

A: The opinion concluded that a lawyer who became aware of the practice and took no action to stop it would be professionally responsible for the conflict under Rule 3.3(c).

Background and rules framework

The opinion applied North Carolina Rule 3.3(b) and (c), the rules governing a lawyer's responsibility for nonlawyer assistants under the lawyer's supervision (corresponding to Model Rule 5.3). The analysis treats the prize program as a threat to the disinterested selection of a service purchased for the client, which the supervising lawyer must guard against.

Citations and references

Rules of Professional Conduct:

• North Carolina Rule 3.3(b) (reasonable efforts to ensure a nonlawyer's conduct is compatible with the lawyer's obligations)
• North Carolina Rule 3.3(c) (lawyer responsibility for a nonlawyer's conduct)
• MR 5.3 (responsibilities regarding nonlawyer assistants)

See also

• NC Ethics Op. RPC 147: percentage bonuses for paralegals
• NC Ethics Op. RPC 176: conflict of interest involving a legal assistant

Source

• Landing page: https://www.ncbar.gov/for-lawyers/ethics-and-governing-rules/ethics-opinions/opinions/rpc-102/

Original opinion text

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

Inquiry:

A local court reporting service is offering prizes to legal secretaries who place depositions with that service. The legal secretary with the most dollars billed to his or her firm within a certain period of time wins. May a lawyer permit the employment of court reporting services to be influenced by the possibility that the lawyer's employees might receive premiums, prizes or other personal benefits?

Opinion:

Court reporting services can vary in terms of cost, efficiency and quality. Such factors should be considered by the lawyer and his employees in purchasing such services for the client. It is evident that the judgment of the person selecting the court reporting service could be compromised by the prospect of earning prizes or premiums. This could be detrimental to the client. Rule 3.3(b) requires a lawyer having direct supervisory authority over a nonlawyer to make a reasonable effort to ensure that the nonlawyer's conduct is compatible with the professional obligations of the lawyer. This provision would certainly require the supervising attorney to direct his employee to avoid conflict of interest of this sort. Indeed, a lawyer who became aware of such a practice involving his secretary and took no action to have the practice discontinued would be professionally responsible for the conflict of interest under Rule 3.3(c).