MARYLAND STATE BAR ASSOCIATION, INC.
COMMITTEE ON ETHICS
ETHICS DOCKET NO. 2019-04
Fees - Donation of Attorney’s services to be auctioned for charity
Nearly 40 years have passed since we were asked to render an opinion on whether an attorney’s services may be auctioned on behalf of charity. When the issue was first raised, the Parents Club of a local private school wished to include legal services as part of a fundraising auction.
Wishing to comply with existing Disciplinary Rules, the attorney asked us whether "a lawyer’s services [may] be auctioned on behalf of charity, and, if so, what constraints must be observed?" The attorney also sought our "guidance with regard to any limitations concerning specific areas of practice, hours or valuation of services and whether the auction should take place on an anonymous basis or for the service of a specifically named attorney."
Rather than place limitations on participation, we rejected this practice in its entirety in Ethics Docket No. 1980-43. Before Maryland’s adoption of the Rules of Professional Conduct, we expressed concern that this practice would conflict with several Disciplinary Rules embodied in the Code of Professional Responsibility. DR 2-103(C) prohibited lawyers from giving "anything of value" to a person or organization in return for the recommendation or referral of a client.
Despite the charitable intent of the proposed auction, we believed that the donation of valuable attorney time as a means of securing such a client violated this rule. If this client required services beyond those purchased at auction, we feared that this may cast doubt on the altruistic intent of the donation itself and, at a minimum, create an appearance of impropriety if viewed as an improper solicitation of clients. See also DR 2-103(D) (a "lawyer shall not request a person or organization to recommend or promote the use of his services").
Compounded by the danger that attorneys may donate services which they are not competent to provide, "the Committee conclude[d] that the provision of legal services through auction in behalf of charity does not comport with the requirements of the Code of Professional Responsibility."
Our concerns echoed those expressed by the ABA Committee on Ethics and Professional Responsibility in Informal Opinion 1250 (1972), and several other bar associations issued similar pronouncements. New York State Bar Opinion 524 (1980); Bar of the City of New York Opinion 81-22 (1981); Monroe County, NY Opinion 1 (undated); Kentucky Opinion E-239 (1981); New Hampshire Bar Ass’n, Op. 1990-91/2 (1991); Nebraska Formal Opinion 92-4 (1992); Ohio Supreme Court Opinion 2002-5 (2002) (donating legal services improperly gives “a thing of value which secures employment of the lawyer”).
As more lawyers embraced advertising and other methods of marketing, jurisdictions began to revisit blanket prohibitions on certain practices, including an attorney’s participation in charitable auctions. Only two years after we released our opinion, the California bar under different rules of professional conduct expressed the opinion that "the benefits that flow from an attorney’s donation of legal services" outweigh "the remote likelihood of abuse of fundamental public policies," and approved the practice with certain constraints. California Opinion 1982-65.
Other states began to revisit the issue as well. See, e.g., Alabama State Bar, Op. 90-51 (1990); Hawaii Supreme Court, Disciplinary Board, Op. 31 (1992); Philadelphia Bar Ass’n, Op. 80-35 (undated); South Carolina, Op. 91 35 (1991); but see Ohio Supreme Court Opinion 2002-5 (2002); Nassau County Opinion 97-11 (1998). Following this growing trend, 15 years after rejecting the practice in its entirety, the Nebraska State Bar Association and New York State Bar Association changed their opinions in favor of limitations designed to avoid some of the concerns raised earlier. Nebraska State Bar Opinion 06-11 (2007); New York State Bar Association Committee on Professional Ethics Opinion 971 (6/26/13). Each opinion included varying limitations based on the Committee’s perceived concerns as to how the donation and auction might be implemented.
Considering the merits of these opinions, we believe that the time has come to do likewise in Maryland. In reconsidering our position, we continue to express many of the same concerns that we identified nearly four decades ago. Although Maryland has since adopted Rules of Professional Conduct to replace the older Code of Professional Responsibility, the substance of provisions restricting the solicitation and referral of clients, and the competence of those serving them, remain the same.
Mirroring the language of DR 2-103(C), Rule 7.2(c) of the Maryland Attorneys’ Rules of Professional Conduct (“MARPC”) still provides that “[a]n attorney shall not give anything of value to a person for recommending the attorney’s services.” Likewise, regardless of the circumstances under which a lawyer is retained, that lawyer must be “competent” to provide these services under MARPC 1.1, and must be free of conflicts which would preclude representation. MARPC 1.7, et seq. Although restrictions on attorney advertising and legal services information embodied in MARPC 7.1 and 7.2 also apply in the context of such auctions, we believe that appropriate constraints may ensure compliance with these provisions.1
To ensure compliance with these rules, and to avoid misunderstandings in an otherwise charitable endeavor, we conclude that attorneys may properly donate legal services to be auctioned1 in exchange for charitable contributions under the following conditions:
- To ensure competence, a lawyer may only donate legal services which the lawyer is qualified to provide; therefore, the donation should be clear as to what services are being offered.
- The lawyer’s offer of services to the high bidder, whether contained in the auction program or communicated by the auctioneer, should be expressly conditioned on a later consultation between the lawyer and high bidder, before any attorney-client relationship is formed or representation begins, to ensure that (a) there is no prohibited conflict of interest with the lawyer’s other clients; (b) the lawyer has the appropriate expertise to handle the client’s particular needs competently; and (c) the client is otherwise satisfied with the choice of lawyer. Until an attorney client relationship has been formed, the high bidder must be treated as a prospective client under Rule 1.18.
- The lawyer and charitable organization must agree in advance that if for any reason the lawyer cannot begin representation, or the client does not wish, after the initial consultation, to hire the lawyer, then either the charity or the lawyer (by pre-arrangement between themselves) will refund the client’s bid. If the agreement requires the charity to make the refund, the lawyer must ensure that the charity does so, or must do so herself.
- Often the auctioned service may be a discrete one, such as the preparation of a simple will. However, if the lawyer were to offer a service of limited scope – e.g., a set number of hours of advice concerning estate planning – the representation would have to comport with Rule 1.2(c). That is, any limitation must be "reasonable under the circumstances," which means that the services may not be too limited to be useful to the client. If the lawyer proposes to donate a limited number of hours of advice to be auctioned by the charitable organization, but to offer the client foreseeably needed additional services for a fee, the auction materials should indicate that.
- The lawyer should ensure that the lawyer has no on-going professional relationship with either the charitable organization or with other persons or entities related to the auction or organization in such a way that the lawyer’s donation of services could be seen as the "giving of a thing of value in order to recommend or secure a lawyer’s employment."
- The lawyer should review in advance, and retain the right to edit or delete, any description of the lawyer or the lawyer’s services published in any auction program, promotional materials, or advertising for the event. The lawyer must ensure that enough information is provided, including about the areas of law in which the lawyer practices, to enable prospective bidders intelligently to decide whether to bid on the lawyer’s services.
Although written retainer agreements are only required in certain circumstances under MARPC 1.5(c), we strongly recommend that the terms of representation be expressed in a written agreement at the outset of representation and that all prospective bidders be informed of the need for such an agreement to consummate an attorney-client relationship.
In approving these guidelines, the Committee understands that these stipulations may be perceived as too cumbersome to implement in the context of a “silent auction” or similar fundraiser. However, if they cannot be implemented in a feasible manner, we would strongly discourage the auction of legal services and would encourage attorneys to find other appropriate means of contributing to worthwhile charities.2
1. This opinion may also apply to charity raffles so long as they comply with applicable law. While MARPC 7.3 continues to prohibit lawyers from soliciting clients in certain circumstances, we do not believe that most charity auctions or raffles would implicate this rule.
2 The Committee renders no opinion on the tax deductible nature of a donation of services, but
cautions attorneys to be mindful of such implications.