MARYLAND STATE BAR ASSOCIATION, INC.
COMMITTEE ON ETHICS
ETHICS DOCKET NO. 2008-01
Participating in a Not-For-Profit Networking Group
You have requested an opinion of the Maryland State Bar Association Committee on Ethics concerning a Maryland lawyer’s membership in a business referral organization. Your inquiry follows our opinion in Ethics Docket 2005-11 in which we addressed various issues relating to lawyer participation with non-attorneys in a for-profit referral organization. (The conclusions reached by the Committee in Ethics Docket 2005-11 were reaffirmed in Ethics Docket 2007-16.) You state that there are differences between the organization you proposed to participate in and the organization addressed in our earlier opinion and suggest certain safeguards that will meet the problems we identified in that opinion.
One of the differences is that your organization is a local, not-for-profit corporation, whereas the entity addressed in our earlier opinion was a national, for-profit organization with local chapters. You also point out that “(w)hile the primary purpose of (your organization) is business referrals, there is no requirement that any member make any referrals at any time.” Members meet weekly and pay dues. Membership is limited to only one person or business in any particular industry. “Dues are used for advertising the organization’s existence in the form of a business directory of the members, outlining the goods and services offered by each member. The directories are distributed among the members to place in the public areas of each member’s facility, such as receptions areas.” Dues are also used to recruit new members and may be occasionally used for local charitable activities.
To resolve the problems as cited in Ethics Docket 2005-11 you propose to restrict your activity in the organization you describe by directing other members to not hand out your business cards unless specifically asked for by potential clients. Alternatively, you state that you may request only those members who are also your clients hand out your cards, again only upon request.
The Committee concludes that the not-for-profit status of the organization you describe does not resolve the problems we discussed in our earlier opinions. Rule 7.2(c) of the Rules of Professional Conduct prohibits lawyers from giving anything of value to a person for recommending the lawyer’s services. The rule permits reasonable charges for advertising or written communications otherwise permitted and provides that a lawyer may “pay the usual charges of a legal service plan or a not-for-profit lawyer referral service”. However, the organization you describe is a general business referral organization, not a legal service plan or a lawyer referral service. The primary purpose of the organization involves an implicit, if not explicit, quid pro quo, as a result of participation of members, namely, mutual referrals of business. A lawyer’s participation in the organization creates the same problems we identified in our earlier opinions.
It is also the Committee’s opinion that your proposed limits on your participation in the organization do not cure the problems we found in our consideration of the inquiries in Ethics Docket 2005-11 and Ethics Docket 2007-16. Those potential problem areas involved Rule 1.7 (lack of disclosure of the lawyer’s potentially compromised interest in making referrals); Rule 5.4 (professional independence) and; Rule 7.3 (in-person solicitation). As we stated in Ethics Docket 2005-11, the Committee is not persuaded that you can carve out a separate, ethically compliant, niche for yourself in the organization.