May a lawyer take a retainer from a for-profit corporation that signs up dues-paying tenants and furnishes them the lawyer's services at no separate fee?

Plain-English summary

An attorney had been asked to represent a for-profit corporation formed to organize tenants in securing legal advice and assistance. Under the plan, the corporate attorney would be available to each dues-paying subscriber at no fee to the tenant, while the attorney would be under a regular monthly retainer for rendering services to the corporation and its subscribers. The corporation would limit the legal services to tenancy matters, and a subscriber could use any attorney he chose to defend a resulting suit, with the corporation contributing a specified sum toward that defense.

The Committee found the practice clearly and patently improper and referred the inquirer to DR 2-103(D) of the Code of Professional Responsibility, which governed a lawyer's cooperation with organizations that furnish or pay for legal services. It cited Opinions 172 and 256 as further authority.

Currency note

This opinion was issued in 1974, before New Jersey's adoption of the 2004 revisions to the Rules of Professional Conduct, and predates the 1984 replacement of the Disciplinary Rules by the RPCs. It applied DR 2-103(D), which restricted a lawyer's participation in organizations furnishing legal services; the modern treatment of group and prepaid legal services, and of nonlawyer involvement in delivering legal services, is now found in RPC 5.4 and RPC 7.2, and the case law has changed substantially since 1974. Treat this page as historical context, not current guidance.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: Could a lawyer be retained by a for-profit company that furnishes legal services to its dues-paying members?

A: Under this opinion, no. The Committee found the arrangement clearly improper and pointed to DR 2-103(D).

Q: Did limiting the services to tenancy matters save the plan?

A: No. The Committee treated the arrangement as improper regardless of the subject-matter limitation, focusing on the for-profit corporation furnishing the lawyer's services to subscribers.

Background and rules framework

The opinion rested on DR 2-103(D), which limited a lawyer's cooperation with organizations that recommend, furnish, or pay for legal services to others. In current New Jersey terms, the professional-independence and group-legal-services questions implicated here are addressed by RPC 5.4 and RPC 7.2.

Citations and references

Rules of Professional Conduct:

• DR 2-103(D) (furnishing legal services through an organization), as in effect 1974; now addressed by MR 5.4 / NJ RPC 5.4 and MR 7.2 / NJ RPC 7.2

Other opinions cited:

• NJ ACPE Opinion 172, 93 N.J.L.J. 81 (1970)
• NJ ACPE Opinion 256, 96 N.J.L.J. 745 (1973)

See also

• NJ ACPE Op. 335: An Attorney Organizing a Prepaid Legal Services Group
• NJ ACPE Op. 455: A Bar Foundation Legal Services Financing Plan

Source

• Full text (Justia mirror): https://law.justia.com/cases/new-jersey/advisory-committee-on-professional-ethics/2004/acp284-1.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.

97 N.J.L.J. 363, May 16, 1974

OPINION 284

Representing Tenants' Profit Corporation Legal Services to Individual Tenants

An attorney has been asked to represent a profit corporation which has been created to organize tenants in securing legal advice and assistance. The corporate attorney will be available to each dues-paying subscriber at no fee to the tenant. However, the attorney would be under a regular retainer each month for rendering services to the corporation and its subscribers. The inquirer states that the corporation will limit the legal services to only tenancy matters, and the subscriber may use any attorney he desires for the defense of any resulting suit with the corporation contributing a specified sum for such defense.

We have been asked whether such representation is proper. Such a practice would be clearly and patently improper. The inquirer is referred to DR 2-103(D) of the Code of Professional Responsibility. See also N.J. Advisory Committee on Professional Ethics, Opinions 172, 93 N.J.L.J. 81 (1970), and 256, 96 N.J.L.J. 745 (1973).