Opinion No. 1991-2

(Inquiry No. 308 )

Propriety of advertising reduced rate fees to certain groups.

Improper to advertise fees as dicounted unless customary fees are readily discernible and all applicable provisions of the Code of Professional Responsibility and Court Rules are complied with.

Code Provisions:
DR 2-101
EC 2-9
EC 2-10

Described Facts:
Inquiring counsel proposes to offer reduced rates in his advertising to certain groups, such as employees of a named employer, or the “elderly, etc”.

May an attorney offer to certain groups reduced rates in the attorney’s advertisements?

Provided that all applicable provisions of the Code of Professional Responsibility and Court Rules are complied with, advertising reduced rates may be permissible if the advertising attorney’s customary fees are readily discernible.

Ethical Consideration 2-9 privides that the “attorney client relationship is personal and unique and should not be established as a result of pressures and deceptions.” Ethical Consideration 2-10 directs that a “lawyer … should ensure that the information contained in any advertising … is relevant, is disseminated in an objective and understandable fashion, and would facilitate the prospective client’s ability to select a lawyer. A lawyer should strive to communicate such information without undue emphasis upon style and advertising strategies which serve to hinder rather than to facilitate intelligent selection of counsel.”

The New York Bar Association Committee on Professional Ethics considered this question in their Opinion # 563 and found that:

“The principal concern with offering a discount from customary fees is the potential that the offer may be misleading in violation of DR 2-1Ql(Al of the Code of Professional Responsibility. If the lawyer has customary fees for various services that are readily ascertainable, then it is permissible to offer to discount them. The difficulty is in determining what is a ‘customary fee’.

“It would be deceptivef and therefore improper for a lawyer advertising a discount from ‘customary fees’ to apply the discount to a fee that he does not regularly Charge …

“Another question is whether there can be ‘customary fees’ for all types of legal services. Certain routine legal services … are amenable to fixed fees which may then be discounted.

“More difficult to ascertain, and therefore to discount, would be fees that are based in part on results achieved or time spent …

” … At the very least, for a fee to be customary, it must be the fee charged by the lawyer for most of his engagements involving similar work. It is something substantially more than a majority of similar cases handled.

“In addition, if the discount is offered as available only to members of [a specific group] or only for a limited period of time, the limitations must be stated and observed …

“If a discounted fee is offered or advertised, the full customary fee which is being discounted must also be stated so that the offer of discounted fees will be intelligible and not misleading.”

This committee agrees with and adopts the reasoning of the State Bar committee as set forth above.

All of the requirements of DR 2-101 with respect to fee structure must be considered in fran1ing the advertisement and in administering the lawyer’s billing practices.

Any advertisement of discounted fees must not appear to offer “bargain basement” or “sale” fees or otherwise “cast reflection on the legal profession as a whole” as provided in DR 2-101 (A).

Thus, it is the opinion of this committee that the proposed advertisement may be proper if customary fees to be discounted are readily discernible and all applicable provisions of the Code of Professional Responsibility and Court Rules are complied with.

It should be noted that this opinion addresses only the issues of advertising discounted fees and does not deal with questions concerning different fees to different clients for the same or similar services or reduced, or no, fees for services to those unable to pay a fair and reasonable fee as, for example, in a pro bono situation.

The inquiry is answered in the affirmative.

[Approved by Executive Subcommittee on 1/15/91 Approved by Full Committee 1/23/91]