Can a corporation's general counsel set up an office at the company to prepare wills and estate plans for employees who pay their own fees?

Plain-English summary

A lawyer who served as counsel to a corporation that had relocated its headquarters to New Jersey asked whether he (or a member of his firm) could be present at the corporate office at designated times to advise employees and prepare their estate plans. The corporation's personnel department had learned that many employees lacked wills or had deficient ones, and proposed to circulate information urging employees to get wills and to schedule appointments with the inquirer at a temporary office on the premises. Each employee would pay for his own services; the corporation would not subsidize any individual, but the inquirer acknowledged the corporation was an office client contributing materially to his income.

The Committee held that the plan was improper. Quoting Drinker and the Canons, it reasoned that for a corporation to provide a lawyer to advise and serve its employees implicates Canon 35, which directs a lawyer to avoid relations in which an intermediary directs the performance of his duties. The Committee considered whether the Supreme Court's group-legal-services decisions (NAACP v. Button, Brotherhood of Railroad Trainmen v. Virginia, and United Mine Workers v. Illinois Bar Ass'n) sanctioned the plan, and concluded they did not: those cases protected members who shared a common associational or social interest, whereas these employees shared only a common employer. The Committee declined to treat the arrangement as group legal services at all, viewing it instead as individual services rendered to employees "under the aegis of the corporate employer."

The Committee added that the plan might be improper as indirect advertising contrary to Canon 27, and raised a Canon 6 question of divided loyalty, since the corporation sought a benefit for itself and the employees might feel obligated to consult the designated attorney, whose name alone (with no list of alternatives) was to be presented to them. It concluded the proposed plan violated the Canons of Professional Ethics and found no sanction in Button, Trainmen, or Mine Workers.

Currency note

This opinion was issued in February 1970, before New Jersey's September 13, 1971 adoption of the Disciplinary Rules (Code of Professional Responsibility), so the Committee was applying the Canons of Professional Ethics. It also predates the 1984 Rules of Professional Conduct and all later revisions. The intermediary, advertising, and conflict principles it applied are now addressed under RPC 5.4(c), RPC 7.3, and RPC 1.7. 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: Could a company arrange for its lawyer to provide individual legal services to employees on company premises?

A: Not under this opinion. The Committee held the proposed plan violated the Canons, primarily because an employer would be acting as an intermediary directing the lawyer's services (Canon 35) and because the lawyer's loyalty would be divided between the company and the employees (Canon 6).

Q: Did the Supreme Court's group-legal-services cases permit this arrangement?

A: No. The Committee distinguished Button, Trainmen, and Mine Workers, reasoning that those decisions protected members sharing a common associational or social interest, while the corporation's employees shared only a common employer and so were not engaged in protected group legal services.

Q: Why did it matter that only one attorney's name would be given to employees?

A: The Committee observed that presenting only the designated attorney's name, with no list of other qualified lawyers, raised the concern that employees might feel obligated to consult him because the suggestion came from their employer, reinforcing the divided-loyalty and advertising problems.

Background and rules framework

The opinion applied the Canons of Professional Ethics: Canon 35 (a lawyer should avoid relations in which an intermediary directs the performance of his duties), Canon 27 (advertising and solicitation), and Canon 6 (conflicting interests and undivided fidelity). In current New Jersey terms, an employer or other third party arranging and influencing a lawyer's representation of individuals is governed by RPC 5.4(c) and RPC 1.8(f), advertising and solicitation by the RPC 7-series, and divided loyalty by RPC 1.7.

Citations and references

Rules of Professional Conduct (as applied at the time):

• Canons of Professional Ethics, Canon 35 (intermediary directing the lawyer's services)
• Canons of Professional Ethics, Canon 27 (advertising)
• Canons of Professional Ethics, Canon 6 (conflicting interests)

Cases:

• NAACP v. Button, 371 U.S. 415, 9 L. Ed. 2d 405 (1963)
• Brotherhood of Railroad Trainmen v. Virginia, 377 U.S. 1, 12 L. Ed. 2d 89 (1964)
• United Mine Workers v. Illinois Bar Ass'n, 389 U.S. 217, 19 L. Ed. 2d 426 (1967)

Other authorities:

• Drinker, Legal Ethics 162-163 (1953)
• 82 Harvard Law Review 138-143 (1968), group legal services
• 63 Columbia Law Review 973 (1963), legal services for the middle classes

See also

• NJ ACPE Op. 335: Attorney Organizing a Prepaid Legal Services Group
• NJ ACPE Op. 517: Group Legal Services Plan (Elk Grove, Illinois)
• NJ ACPE Op. 488: Furnishing Fee Information to a Group Legal Services Plan

Source

• Full text (Justia mirror): https://law.justia.com/cases/new-jersey/advisory-committee-on-professional-ethics/2004/acp172-1.html
• Issuing authority: New Jersey Supreme Court Advisory Committee on Professional Ethics, via the NJ Courts Supreme Court Committees page

Original opinion text

Reproduced from a full-text mirror of the official opinion for research purposes. The linked official source controls.

93 N.J.L.J. 81, February 5, 1970

OPINION 172

Services to Corporate Employees

The facts of the inquiry in this case are as follows: A lawyer who is counsel to a corporation states that it recently has moved its corporate headquarters from New York City to New Jersey. Because of this move, a number of employees who formerly resided in New York State have now become permanent residents of New Jersey. The corporation also has hired a number of new employees who have moved into New Jersey from other sections of the United States. The corporation has extensive employee benefit plans which are designed to provide for the well-being of its employees and their dependents. It has come to the attention of the corporation's personnel department that many of its employees now living in New Jersey do not have wills and that some have wills which are substantially deficient in protecting their families (the inquirer does not state how this information was obtained by the personnel department of the corporation). As part of the corporation's comprehensive benefit program, the personnel department intends to circulate information to the employees advising them of the necessity of having proper wills prepared by competent attorneys. Believing that many of the employees will not respond to this suggestion, general counsel for the corporation proposes that he or a member of his firm be at the corporate office at certain designated times for the purpose of advising and preparing employee estate plans. A temporary office will be supplied to the attorney on the corporate premises for the purpose of meeting with the employees. The corporation will advise its employees that this attorney will be available at stated times and will schedule appointments for those employees who would like individual estate planning counseling. The inquirer, or one of his representatives, then will hold the conferences and supply whatever services were required. In each case, the employee will pay for the services rendered to him. The corporation will not directly subsidize any individual's estate planning.

The inquirer states that the corporation is an office client which contributes materially to the over-all income of his office.

In Drinker, Legal Ethics 162 (1953), it is said that if the corporation, under the state of facts posed, paid the lawyer's fee this would be a clear violation of Canons of Professional Ethics, Canon 35, which provides that a lawyer should avoid all relations which direct the performance of his duties by or in the interest of an intermediary. With respect to the situation where the employer does not pay the fee, Drinker states as follows, at page 163:

This latter consideration is particularly forcible in the case of corporations whose direct interest, as an entity, it is to see to it that their employees are kept free from legal difficulties and entanglements. Business corporations may and do to an ever increasing extent provide free medical services for their employees, as one of their conditions of employment, in order to keep them healthy, and consequently more efficient. Why not similarly free legal service and advice? Only, it would seem, because of the Canon, and of the decisions of the courts and the unauthorized practice committees that for a corporation to provide a lawyer to advise and serve its employees constitutes the unauthorized practice of the law by it. Suppose that the union contract provided, as one of the "fringe benefits," for free legal service to union employees, how would the employer comply with this requirement? Doubtless, the corporation might agree to pay the lawyers' bills of the employees, but this would be subject to obvious abuse and would not satisfactorily achieve the desired result and advantage to the employer.

Thus, it would seem clear that, except for the cases hereinafter referred to, the inquirer should be advised that the course of conduct proposed to him by his corporate client would violate Canon 35 and should not be pursued. However, this conclusion must be examined in the light of the two more recent Supreme Court opinions dealing with group legal practice. They are Brotherhood of R. Trainmen v. Virginia, 377 U.S. 1, 12 L. Ed. 2d 89 (1964), and United Mine Workers v. Illinois Bar Ass'n, 389 U.S. 217, 19 L. Ed. 2d 426 (1967).

Before discussing these two opinions, it should be kept in mind that both of these actions were brought not to determine ethical problems but to restrain the unauthorized practice of the law.

In the United Mine Workers case, the Court, at page 431, recognized that the states have broad power to regulate the practice of the law and that this is beyond question. But, the Court went on to say that broad rules framed to protect the public and to preserve respect for the administration of justice may not significantly impair the value of associational freedoms, citing N.A.A.C.P. v. Button, 371 U.S. 415, 9 L. Ed. 2d 405 (1963).

In all three of the cited cases, there were associations or unions whose expressed object, among others, was to assist the members in their rights to plan with and advise each other, as members, for their collective and individual general welfare. The inquirer cites these cases as authority for his views that the proposed conduct is sanctioned by these opinions. We do not agree. The distinction between the situation of the members of the unions in the Trainmen and Mine Workers cases and the employees of the corporate client in the present case is too obvious to require any discussion. The employees whom the inquirer will see will be persons not connected with any union, nor with any other group so far as the facts reveal. They are merely employees of the same employer.

An interesting discussion of this problem is found at 82 Harvard Law Review 138-143 (1968), where the three cited cases are analyzed and discussed. The author of the article, at page 140, says that the underlying difficulty in Button, Trainmen and Mine Workers is "the social problem of the proper role of group legal services." We need not involve ourselves in a discussion of the ethics of group legal services, since we do not view the situation here to be one of group legal services, but one of individual services rendered to employees under the aegis of the corporate employer.

These employees do not have a common associational interest, as did the union members in Trainmen and Mine Workers, nor a common social interest as the members in Button. The only collective interest that the prospective clients have in this case is that they work for the same employer. In this connection, one might ask whether in fact the employees truly are the clients of the lawyer or whether the corporation is. Obviously, the corporation is seeking to gain benefit for itself by making these services available to its employees, even though at the employees' expense. Presumably, the employer will give the employees time off to visit the lawyer in the office provided for him at the plant.

The plan suggested also might be viewed as improper because it may be considered, if not directly then at least indirectly, to be advertising contrary to Canon 27. One might also consider under Canon 6 whether the attorney is representing the employees with undivided fidelity, or whether his primary fidelity is to the corporation. The author of the Harvard Law Review article, supra, discusses this question of divided loyalty and points out that by these plans, such as in Mine Workers where no fee was paid by the member, and in Trainmen where a fee was paid but at a lesser rate because of the volume of business which the union attorney generated, the union is in fact enhancing its own image to secure more members.

It is to be noted that the corporation in the pending inquiry does not suggest that the attorney give the names of several other qualified lawyers in the vicinity so that the employees will have a choice, but only the name of the attorney in question is to be presented. This raises the question of whether the employees may not feel obligated to see this attorney since the suggestion comes from their employer.

See also, the discussion on Legal Services for the Middle Classes, 63 Columbia Law Review 973, 983 (1963), in which the author states that, if the old legal standards are to be modified, the courts and bar associations must provide safeguards so that the essentials of the lawyer-client relationship will be maintained.

We conclude that the proposed plan violates the Canons of Professional Ethics and does not find sanction in the decisions in Button, Trainmen and Mine Workers.