ETHICS DOCKET NO. 2000-43

MARYLAND STATE BAR ASSOCIATION, INC.

COMMITTEE ON ETHICS

ETHICS DOCKET NO. 2000-43

Legal Services; Providing Legal Services to Consumer by Entity Not Controlled by Lawyers

You ask whether in-house attorneys for a national non-profit,Internet-based community financial services organization which is headquartered in Maryland (the "Organization") may provide legal services to consumers under the auspices of the company.

You state that the Organization provides programs and services, including debt management, crisis resolution, online bill management, creditor problem resolution, coaching and financial recovery counseling. Some services and programs are free or are funded through voluntary contributions, while others require a fee.

The board of directors and officers of the Organization consist of non-lawyers. There are currently two employees who are salaried attorneys who act as both in-house counsel and as a resource to the Organization. The attorneys currently have no client contact and are licensed in Maryland, D.C.and New Jersey.

The attorneys would like to be able to provide low-cost legal services to consumers under the auspices of the Organization.

Your questions concern:    

1. the establishing of a walk-in center for consumers to consult with the Organization's attorneys to receive legal advice or representation; 
2. the referral of consumers by in-house attorneys to:

1. attorneys who pay to be included on a list maintained by the Organization for 
2. specific programs provided by the Organization; and

1. the providing of legal consumer information on the Internet in an online chat or forum, free or for a small fee, whether or not limited to federal law questions. 

The Walk-In Center

Regarding the Organization's proposed Walk-In Center, you ask whether itwould be permissible for the Organization's in-house attorneys to be involved, under the following scenarios:

1. Prospective clients of the Organization could walk-in to the Center to learn more about the services offered and clients could receive face-to-face help. The Organization's attorneys would be available to talk face-to-face to consumers who reside in Maryland, the District of Columbia, and New Jersey (where the current in-house attorneys are licensed to practice law) about any consumer financial issue (such as credit reports, bankruptcy, credit practices, foreclosure, etc.). 
2. Same scenario as #1, but instead of merely talking with consumers, the attorneys would write letters or make calls on the consumer's behalf. 
3. Same scenario as #1, but the attorneys would help consumers to fill out a self-help bankruptcy kit, including actual legal forms, possibly created by the Organization that the consumer would purchase. 
4. Same as #1, but the attorneys would actually represent clients who wish to file bankruptcy from beginning to end. 
5. Can the attorneys perform the services referenced in 1-4 either: (a) for free; (b) for a voluntary contribution; (c) for a one-time nominal fee; (d) for a nominal hourly fee? Any monies would be for the sole benefit of the non-profit organization. The attorneys would not retain any portion of the fees collected. 

Preliminary, it must be noted that whether the activities delineated in the various scenarios constitute the practice of law is a legal question. Lukas v. Bar Association of Montgomery County, 35 Md. App. 442, 447 (1977); MSBA  Ethics Opinion 89-17. However, it is apparent that the in-house attorneys would be practicing law in Maryland by doing any of the activities listed, or holding themselves out to the public for that purpose. See, Lukas v. Bar Association of Montgomery County, 35 Md. App. At 448; Kennedy v. Bar Association,316 Md. 646, 663 (1989) (Advising clients by applying legal principles to clients' problems is "practicing law"). Moreover, whether or not afee is charged does not determine whether services constitute the practice of law. See Attorney Grievance Commission v. James, 355 d. 465 (1999). Accordingly,each of the attorneys would have to be members of the Maryland Bar to practice law in Maryland to advise or represent members of the general public. With certain exceptions, an individual may practice law in the State of Maryland only if she is admitted to the Bar of this State. Md. Code Ann., Business Occupations and Professions, § 10-206(a). The statutory exceptions to the general rule for employees of non-profit organizations and house counsel to a corporation do not appear to be applicable.¹

We note that courts have held that the First Amendment requires that organizations, such as labor unions and public interest groups, be permitted to represent their members. United Mine Workers v. Illinois Bar Ass'n. 389U.S. 217 (1967) (rights to free speech, assembly, and petition guaranteed by First and Fourteenth Amendments gave union right to hire lawyers on salary basis to assist members in asserting their legal rights, notwithstanding state laws regarding unauthorized practice of law); Brotherhood of R.R. Trainmen v.Virginia ex rel. Virginia State Bar, 377 U.S. 1 (1964) (union may represent members with personal injury claims); NAACP v. Button, 371 U.S. 415(1963) (organization may represent members with civil rights claims); see also Appeal of New Hampshire Dep't of Transportation, 724 A.2d 1284 (N.H. 1999) (state employees' union's provision of legal services to its members falls within constitutional exception to state law prohibiting corporations from engaging in practice of law); cf. In re Education Law Center Inc., 429 A.2d 1051(N.J. 1981) (nonprofit corporation acting as public interest law firm would not be engaged in unauthorized practice under certain conditions that minimize possibility of interference by non lawyer members of board of directors with provision of legal services by corporation's lawyers). However, the proposed Walk-In Center is aimed towards members of the general public who are prospective clients of the Organization. We are of the opinion that the proposed Walk-In Center for providing legal services to the general public would be in violation of Rule 5.4, whether or not the services were free.

Based on the foregoing, it is our opinion that in-house attorneys for the Organization may not perform the services in scenarios 1-4, whether or not fees are charged or for a voluntary contribution to the Organization.

Referrals

You also inquire about the propriety of making of referrals to consumers, as follows: 

1. Can the Organization maintain a list of attorneys nationwide and refer consumers to attorneys who have paid the Organization to be listed? Can an Organization who is speaking with a consumer in the walk-in center tell that consumer about a particular service the Organization offers that may be helpful to that consumer. The attorney would refer the consumer to another Organization employee who would discuss the program further. If the consumer decided to participate in a program where a fee is charged, the consumer would be responsible for payment of the fee. Likewise, can an employee of the Organization refer a walk-in consumer to consult with an Organization attorney either for fee, for a nominal fee or voluntary contribution? 

In response to your question whether lawyers may pay the Organization to be listed by it for referral purposes, Rule 7.2(c) provides, in pertinent part:

"A lawyer shall not give anything of value to a person for recommending the lawyer's services except that a lawyer may…
  (2) pay the usual charges of a not-for-profit referral service or legal service organization…  

Accordingly, in response to your Question No. 6, it would be permissible fora lawyer to pay the Organization its usual charges for the listing. It would be impermissible for an attorney to give or pay anything else, as a quid pro quo for a listing. MSBA Ethics Opinion 90-44.

In answer to your inquiry No. 7, there would be no impropriety, per se,in the attorneys recommending programs or services of the Organization to members of the public who would come to the walk-in center as described.However, for the reasons already stated, it would not be permissible for employees of the Organization to recommend to prospective clients the in-house attorneys for legal services.

Internet Issue

Finally, you ask the following questions regarding providing of information on the Internet: 

1. Can the Organization's attorneys provide general consumer information nationally, not tailored to a particular fact pattern, in an online chat or forum in response to a particular question proposed by a consumer on the Organization's Web site (similar to the service offered by the web sitewww.uslaw.com, a Maryland-based organization)?
2. Same as in #8 except limited solely to federal law? 

We understand your question No. 8 to be whether the Organization may provide general consumer information on the Internet, and do this through salaried in-house attorneys. The Rules of Professional Conduct would only be applicable under such a scenario if the activity constituted the practice of law of by the Organization, thereby implicating attorneys in assisting in the unlawful practice of law, in contravention of Rule 5.5. The dissemination of general consumer information as proposed may not constitute the practice of law.However, as noted above, what does constitute the practice of law is a legal,not ethical, question.

As for question No. 9, whether or not the consumer information relates to federal law is irrelevant, provided the activity does not constitute the practices of law. If your question is whether house counsel for a Maryland corporation who is not admitted to practice law in Maryland may give legal advice to clients in Maryland, other than to the employer corporation, if she only deals with federal law, the answer is no. In Kennedy, the court said: 

 

"When Kennedy, who is un admitted n Maryland, set up his principal office for the practice of law in Maryland and began advising clients and preparing legal documents for them from that office, he engaged in the unauthorized practice of law. This is so whether the legal principles he was applying were established by the law of Montgomery County, the State of Maryland, some other state of the United States, the United States of America, or a foreign nation." 

Kennedy v. Bar Association, 316 Md. at 663.

¹ § 10-206. Admission required; exceptions

1. Admission required. - Except as otherwise provided by law, before an individual may practice law in the State, the individual shall:   
   1. be admitted to the bar; and 
   2. meet any requirement that the Court of Appeals may set by rule:
2. Exceptions - In general. - This section does not apply to:
    Y Y  Y   
   1. a person while representing a tenant in a summary ejectment proceeding the District Court of Maryland if the person is:
       Y Y  Y   
      1. employed by a nonprofit organization receiving grants from the Maryland Legal Services Corporation…   
         1. the person has training and experience; 
         2. the person is supervised by a lawyer;
             Y Y  Y

1. Same - House counsel. - (1) Subject to paragraph (2) of this subsection, this section does not apply to an individual while giving legal advice to a corporation in this State if the individual is:   

2. 1. employed by the corporation; and 
   2. admitted to the bar of any other state. 

   1. An individual who gives legal advice under this subsection:   
      1. is subject to disciplinary proceedings as the Maryland Rules provide; and 
      2. may not appear before a unit of the State government or of a political subdivision unless a court grants the individual a special admission in accordance with § 10-215 of this subtitle.