After litigation, could a private personal-injury lawyer network operate in Tennessee as a joint advertising cooperative rather than a barred referral service?

Plain-English summary

This opinion amended 90-F-122, which had concluded that PITLA was a lawyer referral service not approved by a bar association and that lawyers could not participate in it. After the original opinion, PITLA sued the Board in the U.S. District Court for the Middle District of Tennessee, alleging that the Board's action violated its First Amendment rights and the federal antitrust laws. The Board and PITLA then entered a settlement agreement, which the Board adopted as Formal Ethics Opinion 90-F-122(a), amending the March 9, 1990 opinion.

Under the settlement, PITLA and its Tennessee member-lawyers may ethically participate as a cooperative advertising venture rather than a referral service. The opinion set out a "Tennessee Joint Advertising Cooperative Agreement" with specified enrollment, production, administrative, and advertising fees and minimum standards for participating attorneys: membership in good standing of a state bar; malpractice insurance of at least $100,000 per occurrence; participation in the resolution of at least 50 personal-injury cases; satisfactory representation of referred clients (with suspension for unsatisfactory representation); no disqualifying disciplinary history; and a bar on any attorney who owns, governs, or operates PITLA receiving cases through it.

The amendment imposed several consumer-protection conditions that distinguished the cooperative from the barred referral model. PITLA agreed to forward the name of every Tennessee personal-injury caller to a member-lawyer and, in particular, not to screen out callers because the claim did not involve negligence or lacked insurance. One Tennessee member-lawyer's name had to appear on all Tennessee advertisements; members could review ads in advance and cancel if they disapproved; and PITLA had to place, in addition to the DR 2-101(C) disclaimer, a conspicuous statement that "In some states, including Tennessee, PITLA does not function as a lawyer referral service, but as an advertising cooperative." No single lawyer could hold more than 25 percent of the rotation slots in a market area. PITLA also agreed to solicit and monitor client satisfaction, to give a dissatisfied client a way to contact PITLA, and, where the General Counsel removed a Tennessee lawyer for a significant infraction, to notify the Board.

Currency note

This opinion was issued in 1990, before Tennessee's adoption of the 2003 Rules of Professional Conduct, which replaced the former Code of Professional Responsibility (including DR 2-103(D)(3) and DR 2-101(C)) on which it relied, and before the ABA's 2002 Ethics 2000 revisions. It amended 90-F-122 (which the Board vacated on September 11, 2015). The modern advertising and referral rules are at Tennessee RPC 7.1 through 7.3. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance, and verify against the current rules before relying on any specific requirement mentioned here.

Common questions

Q: How did 90-F-122(a) change the result in 90-F-122?

A: After PITLA sued and the parties settled, the opinion allowed PITLA and its Tennessee lawyer-members to participate as a joint advertising cooperative rather than a referral service, on detailed conditions, instead of barring participation outright.

Q: What distinguished the permitted advertising cooperative from a barred referral service?

A: Per the opinion, PITLA had to forward every Tennessee personal-injury caller without screening out non-negligence or uninsured claims, name a Tennessee member-lawyer on its ads, and conspicuously disclaim that in Tennessee it functioned as an advertising cooperative, not a referral service.

Q: What standards did participating lawyers have to meet?

A: Among others, good standing in a state bar, at least $100,000 in malpractice coverage, resolution of at least 50 prior personal-injury cases, satisfactory representation of referred clients, and no disqualifying disciplinary history; no lawyer could hold more than 25 percent of the rotation slots in a market.

Background and rules framework

The opinion adopted a litigation settlement amending 90-F-122's application of DR 2-103(D)(3) (bar-association-approved referral services), reframing the arrangement as a joint advertising venture subject to the advertising-disclosure requirements of DR 2-101(C). The modern analogs are Model Rule 7.2 / Tennessee RPC 7.2 (advertising and referral arrangements) and Model Rule 7.1 / Tennessee RPC 7.1 (communications about a lawyer's services).

Citations and references

Rules of Professional Conduct (former Code):

• DR 2-103(D)(3) (lawyer referral services). Modern analog: Model Rule 7.2 / Tennessee RPC 7.2
• DR 2-101(C) (advertising disclosures). Modern analog: Model Rule 7.1 / Tennessee RPC 7.1

Other opinions cited:

• Tennessee Formal Ethics Opinion 90-F-122 (amended by this opinion)

See also

• Tenn. Ethics Op. 90-F-122: Private Lawyer Referral Service (PITLA) (Vacated)
• AL Ethics Op. 1997-01: Paying a National Attorney-Network Fee
• AZ Ethics Op. 95-13: For-Profit Referral Networks

Source

• Landing page: https://www.tbpr.org/ethic_opinions/90-f-122a

Original opinion text

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

90-F-122(a) - Private Lawyer Referral Service

BOARD OF PROFESSIONAL RESPONSIBILITY OF THE SUPREME COURT OF TENNESSEE

FORMAL ETHICS OPINION 90-F-122(a)

On March 9, 1990 the Board issued Formal Ethics Opinion 90-F-122 describing the activities of PITLA, stating that PITLA, U.S.A., Inc. (PITLA) is a lawyer referral service not operated, sponsored or approved by a bar association; and, that pursuant to DR 2- 103(D)(3) it is improper for lawyers to participate in the lawyer referral service promoted and operated by PITLA.

PITLA filed litigation against the Board in the U.S. District Court, Middle District of Tennessee alleging that the actions of the Board violated their First Amendment Rights and violated the Federal Anti-Trust Laws.

The Board and PITLA have entered into a settlement agreement wherein PITLA U.S.A., Inc. and its lawyer/members may ethically participate as a cooperative advertising venture as follows, to-wit:

A. PITLA agrees to employ with its Tennessee member/lawyers the following Tennessee Joint Advertising Cooperative Agreement with minimum standards for participating attorneys:

• The attorneys hereby form an advertising cooperative to jointly advertise their services.

• The joint advertising cooperative shall apply to Tennessee only.

• Each attorney shall meet the attached standards.

• The number of attorneys participating in the joint advertising cooperative shall be limited to (to be determined by market area).

• The total term of this agreement shall be one year.

• The initial term of this agreement shall be four months.

• This agreement may be terminated by either party with a fifteen (15) day written notice to the other party at any time after the initial term has expired.

• Each attorney agrees to pay a one time enrollment fee of $25.00.

• Each attorney agrees to pay a one time production fee of $300.00 per position.

• Each attorney agrees to pay a monthly administrative fee of $50.00 per position.

• Each attorney agrees to pay a monthly advertising fee of $650.00 per position.

• Each attorney agrees to pay the initial term expense in advance for a total of $3,100.00 per position.

• Each attorney agrees that he/she will abide by the attached minimum standards.

• PITLA and each attorney agree that this agreement is the entire agreement between them and that there are no other obligations or representations whatsoever.

• This agreement is considered legal and binding under the laws of Louisiana. If any part of this agreement is deemed invalid, it will not invalidate any other part of this agreement.

PERSONAL INJURY TRIAL LAWYERS ASSOCIATION USA, INC.

MINIMUM STANDARDS FOR PARTICIPATING ATTORNEYS

1. Each participating attorney must be a member in good standing of a bar of one of the states, Puerto Rico, or the District of Columbia.

2. Each participating attorney must maintain malpractice insurance in the minimum amount of $100,000.00 per occurrence.

3. Each participating attorney must have participated in the resolution of at least 50 personal injury cases.

4. Each participating attorney must satisfactorily represent the clients referred to him; in the event that a participating attorney does not, in the judgment of PITLA's general counsel, satisfactorily represent a client, PITLA shall suspend the attorney from PITLA participation.

5. No participating attorney may have been convicted of any bar disciplinary infraction which would, in the opinion of the general counsel of PITLA, adversely impact upon the attorney's ability to represent clients received through theefforts of PITLA.

6. No participating attorney may own, govern or operate PITLA nor may any attorney who owns, governs, or operates PITLA receive cases through the efforts of PITLA.

B. PITLA will forward the names of every person from Tennessee who calls the telephone number(s) which appear in its Tennessee advertisements with a personal injury claim to a PITLA Tennessee member/lawyer. In particular, PITLA agrees not to screen out callers because the caller's claim is found not to be one involving negligence or one in which there is no insurance.

C. The name of one Tennessee member/lawyer shall appear on all PITLA advertisements originating in Tennessee.

D. All Tennessee member/lawyers shall be provided an opportunity to review all PITLA advertisements originating in Tennessee before they are released to the public. Any Tennessee member/lawyer who disapproved of a PITLA advertisement to originate in Tennessee may cancel his agreement with PITLA upon giving the notice provided in that agreement.

E. PITLA shall clearly and conspicuously place in its advertisements originating in Tennessee, in addition to the disclaimer required by DR 2-101(c), a statement that "In some states, including Tennessee, PITLA does not function as a lawyer referral service, but as an advertising cooperative."

F. In any Tennessee market area, no more than 25 percent of the rotation slots may be acquired by any one Tennessee member/lawyer.

G. The initial letter sent out to all PITLA callers shall include a clause requesting the caller to contact PITLA if he or she is in any way dissatisfied with the representation received from a PITLA attorney.

H. PITLA shall mail to a random selection of Tennessee callers a questionnaire seeking an assessment of the PITLA member/lawyer's performance and the caller's level of satisfaction.

I. In the event PITLA receives complaints or information that a client is dissatisfied with the actions of any Tennessee PITLA member/lawyer, the General Counsel of PITLA, after giving the lawyer involved an opportunity to respond, shall determine whether to remove that lawyer from PITLA membership after giving the notice provided in PITLA's agreement with the lawyer. It is the intent of PITLA that any single significant infraction by a lawyer will be grounds for removal.

J. When a Tennessee lawyer is removed from PITLA membership on the basis of a significant infraction as determined by the General Counsel, notice of the removal shall be given to the Board.

The Board's agreement with PITLA is hereby adopted as Formal Ethics Opinion 90-F- 122(a), thereby amending its prior opinion on March 9, 1990.

This 23rd day of October, 1990.

ETHICS COMMITTEE:

Barbara J. Moss

Harris A. Gilbert

Cecil D. Branstetter

APPROVED AND ADOPTED BY THE BOARD