Ethics Opinions

 
NASSAU COUNTY BAR ASSOCIATION
COMMITTEE ON PROFESSIONAL ETHICS
Archive of Ethics Opinions
Opinion No.: 1997-8
Topics: Referrals to health care providers based on (1) mutual referrals back to lawyer, or (2) free medical reports
Digest: An attorney may not refer clients to a health care provider organization in exchange for referrals to the attorney from that organization, but may make referrals to any appropriate health care facility without a quid pro quo. An attorney may refer clients to a health care provider that promises free medical reports, provided the lawyer's professional judgment will not be adversely affected by the lawyer's own financial interests or if the client consents after full disclosure of the lawyer's interests and the advantages and disadvantages of the referral.
Code Provisions: DR 2-103(B)
DR 2-103(C)
DR 2-103(D)
DR 2-103(E)
DR 5-101(A)
DR 5-103(B)
Facts Presented: Inquirer "One" received two separate proposals for mutual referral relationships between his law firm and two chiropractors. In the first, a chiropractor sent a letter to inquirer, addressed to "Dear Mr. Attorney", in which the chiropractor described the health care treatment organization with whom he was affiliated as "satisfying" the needs of both the lawyer and the patient. In concluding the chiropractor stated,

As a very busy practitioner I am always on the lookout for excellent attorneys to represent my injured patients. Please call me ...... to discuss the (name of organization) advantage with you personally.

In the second letter, a different chiropractor stated that he welcomed attorney referrals and looked forward to a mutual referral relationship.

Inquirer "Two" received letters from a medical group recommending that inquirer's law firm refer clients to the group, which would supply a full range of tests, specialist medical evaluations, and free medical reports.

Inquiry: 1. May Inquirer "One" accept and make mutual referrals with a chiropractor?

2. May Inquirer "Two" ethically refer clients to a group that provides free medical reports rather than to the clients' own personal physicians?

Determination: 1. No, unless there is no quid pro quo.

2. Yes, subject to stated conditions.

Analysis: The Committee received these inquiries from two separate attorneys, but has joined them together because they present many common ethical issues.

Inquiry No. 1:

DR 2-103(C) prohibits a lawyer from requesting referrals to him or her (apart from authorized advertising) unless the referral is from a bar association service, a legal services organization described in DR 2-103(D) or from another attorney. Therefore, a lawyer may not request that a health services organization make referrals to him or her as the health care provider does not fall within any of the permitted categories set forth in DR 2-103(C). This Committee has previously opined that a lawyer is not permitted to solicit non-lawyer third parties (e.g. car dealers) to make referrals for him. (BANC Opinion 90-6) Similarly, in the situation described by Inquirer "One", a lawyer is not permitted to agree with non-lawyer third parties that they will make referrals to the lawyer.

Moreover, an attorney may not compensate anyone for making a referral to him or her. DR 2- 103(B) states:

A lawyer shall not compensate or give anything of value to a person or organization to recommend or obtain employment by a client, or as a reward for having made a recommendation resulting in employment by a client, except by any of the organizations listed in DR 2-103(D).

The first letter sent to Inquirer "One" implicitly suggested that the chiropractor would refer patients to the inquirer in exchange for the inquirer's referring clients to the chiropractor. Essentially the chiropractor was proposing an agreement to compensate for referrals in kind. The second letter explicitly set forth and solicited such an agreement. While a mutual referral agreement may not be as obvious a form or compensation as a referral fee, it is "of value", and a lawyer may not enter into such an agreement in order to obtain referrals.

Inquiry No. 2:

With respect to Inquiry No. 2, a lawyer may refer his clients to any appropriate health care facility whose services are desirable and which does not offer compensation to the lawyer for making such a referral. The offer of a free medical report described by Inquirer "Two" does not appear to be a quid pro quo and therefore is not the offer of "compensation" contemplated by the rule.

In determining whether a referral to a group that offers free medical reports is appropriate, a relevant provision is DR 5-101(A), which provides:

(A) Except with the consent of the client after full disclosure, a lawyer shall not accept employment if the exercise of professional judgment on behalf of the client will be or reasonably may be affected by the lawyer's own financial, business, property, or personal interests.

The lawyer's "financial" interests may be implicated by the offer of free medical reports. Under DR 5-103(B), a lawyer may advance or guarantee financial assistance to a non-indigent client for the expenses of litigation (expressly including "expenses of medical examination") "provided the client remains ultimately liable for such expenses." If a lawyer has agreed to advance or guarantee the expenses of litigation, the lawyer may have a financial interest in minimizing his or her own out-of-pocket expenses during the litigation. The client remains ultimately liable for the expenses, but as a practical matter recovering the expenses may be problematic.

Thus, a lawyer who is trying to minimize litigation expenses may have a personal financial interest in referring a client to a group that provides free medical reports. This financial interest may skew the lawyer's professional judgment. (Referring clients to appropriate experts is part of the lawyer's professional judgment.)

Therefore, if the lawyer believes that his or her professional judgment will be or reasonably may be adversely affected by the lawyer's financial interest in minimizing litigation expenses, the lawyer must not refer the client to a "free report" service without the client's consent after full disclosure. The disclosure should reveal the lawyer's financial interest in referring the client to this service rather than some other service that charges a fee for medical reports, and may also include the lawyer's views on the advantages and disadvantages of referral to the "free report" group.

In short, the main question is: What is in the best interests of the client ? In matters involving medical evaluation and medical expenses for which the client is ultimately responsible, the client ordinarily ought to be given a choice after full disclosure of the costs and benefits of a particular referral. A group that provides free medical reports may well provide substantial benefits to a client, especially if the quality of the evaluations and reports is equal to the quality of evaluations and reports by groups that charge for similar services.

This Committee's major ethical concern is to ensure that the lawyer's recommendation of a medical group is intended to serve the client's interests, not the lawyer's own financial interests. If a lawyer determines that the lawyer's financial interests will not adversely affect the lawyer's professional judgment in referring a client to a group that provides free medical reports, or if the client consents to that referral after full disclosure of the lawyer's financial interests and the advantages and disadvantages of using the "free report" group, then a lawyer may ethically refer clients to such groups.

 

[Approved by the Executive Committee on December 2, 1997; approved by the Full Committee on December 17, 1997.]
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