Attorney Helping to Organize Prepaid Legal Services Group

99 N.J.L.J. 588
July 1, 1976

ADVISORY COMMITTEE ON PROFESSIONAL ETHICS
 
Appointed by the New Jersey Supreme Court
 

OPINION 335

Attorney Helping to Organize
Prepaid Legal Services Group

This inquiry is directed to this Committee by the New Jersey State Bar Association Committee on Prepaid Legal Services. The question posed is whether an attorney who helps a group form a prepaid legal aid program can thereafter be employed by that group to provide legal services under the program.
The inquirer points to a notice from the Clerk of the Supreme Court, 99 N.J.L.J. 177 (1976), which cautions members of the bar that attorneys who participate in advising or assisting groups to establish prepaid legal services, which ultimately results in the attorney becoming counsel to the group, might be considered as acting improperly under DR 2-103(D)(4)(g). That rule provides in subsection (D) that a lawyer shall not knowingly assist a person or
organization that furnishes or pays for legal services to others to promote the use of his services, except as permitted by DR 2-101(B). He is not prohibited, however, from being recommended, employed or paid by organizations listed in DR 2-103(D)(1) to (4), if there is no interference with the exercise of independent professional judgment on behalf of his client.
Subsection (D)(4) says that he may represent any bona fide organization that recommends, furnishes or pays for legal services to its members or beneficiaries, provided certain conditions are satisfied. Seven conditions are then listed in (D)(4)(a) to (g). Subsection (g) requires that all such plans must be filed with the
Supreme Court and approved by it. The other pertinent section, as far as this inquiry is concerned, is (D)(4)(b), which provides as follows:
(b) Neither the lawyer, nor his partner, nor associate, nor any other lawyer nor any non-lawyer affiliated with him or his firm directly or indirectly which have irked or promoted such organization which initiation or promotion shall result in financial or other benefit to such lawyer, partner, associate, affiliated lawyer, or non-lawyer. (Emphasis added)
 
There can be little doubt that, if a lawyer is requested to organize a group of persons who will pay money into an organization fund so that their legal services can be prepaid, the lawyer will expect to represent the group. The quoted subsection would seem to proscribe a lawyer soliciting a group to form such an organization
so that he could become counsel.
We believe that the admonition contained in the Supreme Court's Notice to the Bar, above cited, was intended to call attention to the fact that it is unethical to solicit a group of persons to organize in order to become counsel to the group but was not intended to prevent a lawyer from representing the organization if he is approached to formalize the group and get necessary approval from the Supreme Court and any other regulatory bodies. Obviously, a lawyer should not, under these circumstances, be then
required to relinquish representation of the organization.

The use of organizations for prepaid legal services has been recognized and approved by the United States Supreme Court in United Mine Workers v. Illinois Bar Ass'n., 389 U.S. 217, 19 L. Ed. 2d 426 (1967); Railroad Trainmen v. Virginia Bar, 377 U.S. 1, 12 L.Ed 2d 89 (1964); and N.A.A.C.P. v. Button, 371 U.S. 415, 9 L.Ed 2d 405 (1963).
It is our conclusion that a lawyer may properly represent a group organized to pay for legal services for its members, provided he does not initiate or promote the organization of the group but only, upon the request of the organizers, furnishes the legal services necessary to make it a legally functioning entity. In so
doing, he is not precluded thereafter from representing its membership. We emphasize, however, that, if the lawyer helps solicit the group, he may be in violation of DR 2-103. His initial contact with the group must be one of furnishing legal services to organize it and to secure permission for it to operate.
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