Can a Washington lawyer pay a nonlawyer nonprofit a 'donation' in exchange for case referrals that produce a recovery?

Plain-English summary

The inquirer, a law student who managed a "Wage Claims Program" for the nonprofit CASA Latina, asked whether the nonprofit could ask attorneys who receive its case referrals to make a donation if the referred case produced an award. The proposal framed the request as voluntary, with the amount left to the attorney.

The committee concluded that the arrangement would violate WRPC 7.2(c) on the part of the lawyer paying the referral "donation." Rule 7.2(c) bars a lawyer from giving anything of value to a person for recommending the lawyer's services, with an exception for the reasonable cost of permitted advertising and for the usual charges of a not-for-profit lawyer referral service or other legal service organization. The committee reasoned that CASA Latina would have to qualify as a legal service organization or a not-for-profit lawyer referral service for the conduct to be permissible, and that it did not. A lawyer working for CASA Latina who requested a donation in return for a referral would violate RPC 7.2, and a lawyer who paid such a fee would similarly violate it.

The committee pointed to ABA Comment 6 to Model Rule 7.2 for the requirements of a qualified legal services organization, noting that a not-for-profit lawyer referral service must have complaint procedures or malpractice-insurance requirements for referred attorneys and must take a much more direct role in selecting and supervising the lawyers than the proposal contemplated. The committee added that CASA Latina may receive unconditional donations from anyone, including lawyers, but those donations cannot be linked to a fee, conditioned on a result tied to a referred case, or linked to past or future referrals.

In practice

Under this opinion, and under RPC 7.2 as it stood in 2006, the line the committee drew turns on whether the payment is tied to a referral. The opinion holds that a donation a lawyer makes because a referred case produced a recovery is "anything of value" given for recommending the lawyer's services, which RPC 7.2(c) prohibits unless the recipient is a qualified not-for-profit lawyer referral service or legal service organization. The opinion treats an unconditional gift differently: a lawyer may donate to the nonprofit so long as the donation is not linked to a fee, conditioned on a referred case's result, or linked to past or future referrals. Washington restructured its advertising rules (RPC 7.1 through 7.5) in a comprehensive 2006 revision, so the current rule numbering should be checked.

Common questions

Q: Can a Washington lawyer pay a nonprofit for a referral if the payment is called a donation?

A: No, where the donation is tied to the referral. The committee concluded that a donation conditioned on a referred case producing an award is value given for a recommendation and violates RPC 7.2(c).

Q: Does it matter that the donation was voluntary and the amount was left to the lawyer?

A: The committee did not treat that as curing the problem. What mattered was that the donation was requested in return for, and conditioned on the result of, a referred case.

Q: Can the lawyer donate to the nonprofit at all?

A: Yes. The committee said the nonprofit may receive unconditional donations from anyone, including lawyers, as long as the donation is not linked to a fee, conditioned on a referred case's result, or tied to past or future referrals.

Q: What would let the nonprofit charge for referrals?

A: The committee said the nonprofit would have to become a qualified not-for-profit lawyer referral service, which (citing ABA Comment 6 to Model Rule 7.2) requires complaint procedures or malpractice-insurance requirements for referred attorneys and a direct role in selecting and supervising the lawyers.

Background and rules framework

The opinion interprets Washington RPC 7.2 (the counterpart to Model Rule 7.2), and specifically RPC 7.2(c), which prohibited a lawyer from giving anything of value for recommending the lawyer's services, except the reasonable cost of permitted advertising and the usual charges of a not-for-profit lawyer referral service or other legal service organization. The committee relied on ABA Comment 6 to Model Rule 7.2 to define what a qualified legal services organization or not-for-profit lawyer referral service must do.

Citations and references

Rules of Professional Conduct:

• Model Rule 7.2 / Washington RPC 7.2, 7.2(c) (payment for recommending a lawyer's services; lawyer-referral-service exception)

Other opinions cited:

• ABA Comment 6 to Model Rule 7.2 (requirements for a qualified legal services organization or not-for-profit lawyer referral service)

See also

• WSBA Ethics Op. 1071: Paid Lawyer Referral Service
• WSBA Ethics Op. 1276: Free Services for Referrals
• WSBA Ethics Op. 1150: Group Advertising Referral Line

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=1550

Original opinion text

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

Advisory Opinion: 2110
Year Issued: 2006
RPC(s): RPC 7.2
Subject: the ethical implications of a non-profit, community based organization requesting a donation from attorneys to whom cases were referred and produced financial results

The inquiring law student, soon to be an attorney, asked about the propriety of her nonprofit community-based organization seeking a donation from lawyers to whom she refers cases. The nonprofit organization is CASA Latina. CASA Latina provides a variety of services including a “Wage-Claims Program” which provides screening of potential claims against employers involving wage disputes. The Wage Claims Program initially screens the cases, attempts to work out a voluntary solution with the employer, and currently refers all cases which cannot be resolved to the King County Bar Association Pro-Bono Lawyer Referral Office. In the course of intake in the Wage Claims Program, other legal claims are often discovered which the nonprofit organization refers to individual attorneys after some initial screening.

The inquiring law student manages the Wage Claims Program for CASA Latina. She wishes to know if the CASA Latina can request attorneys who receive referrals to make a donation if the referred case produces an award. The inquiring law student proposes that the requests for donation would merely be a request and that the amount donated would be up to the particular attorney.

In our view, such an arrangement would violate WRPC 7.2(c) on the part of the lawyer paying the referral “donation.” WRPC 7.2(c) provides:

“A lawyer shall not give anything of value to a person for recommending a lawyer’s services, except that a lawyer may pay the reasonable cost of advertising or written communication permitted by this rule and may pay the usual charges of a not-for-profit lawyer referral service or other legal service organization.” [emphasis added.]

WRPC 7.2(c) requires that CASA Latina qualify as either a legal service organization or as a not-for-profit lawyer referral service in order to engage in the conduct which you propose. It is the Committee’s opinion that CASA Latina cannot qualify as such an organization and that a lawyer working for CASA Latina who requested a donation in return for referral of a case would be in violation of WRPC 7.2, and a lawyer who paid such a fee would similarly be in violation of 7.2.

Please Note ABA Comment No. 6 to WRPC 7.2 in the Model Rules which further defines the requirements for such a legal services organization. In order to proceed as you propose, CASA Latina would need to become a qualified not-for-profit lawyer referral service which is currently not proposed by you. Such a not-for-profit lawyer referral service would have to have complaint procedures and/or malpractice insurance requirements for the referred attorneys and would have to assume a much more direct role in the selection of the lawyers and supervision of them than your proposed course of conduct contemplates.

While CASA Latina may receive unconditional donations from anyone, including lawyers, as can any other not-for-profit organization, those donations can not be linked to a fee, conditioned on any result linked to a referred case, or linked to past or future referral of cases.