BAR ASSOCIATION OF NASSAU COUNTY
COMMITTEE ON PROFESSIONAL ETHICS
Opinion No. 1996-5
(Inquiry No. )
Providing reduced-fee legal services through a corporation.
A lawyer may not practice in a corporate form except according to applicable statutes and rules; the name of the attorney must be disclosed in the corporation’s name and on papers to be used by pro se clients. Any participation by the corporation in the functions of civic and religious organizations must not be for the solicitation of business; and limitations on scope of representation, the consequences thereof and fee reductions must be fully and accurately disclosed to clients.
DR 1-102(A) (4)
EC 2-9, 10, 11, 32
2-102 (B) , 2-103 (A) , (B) and (C)
EC 6-1, 6-4, 6-6
A lawyer and her lawyer husband propose to set up a “non-profit” corporation which would employ attorneys and which, for a “nominal” fee, would provide a client with an attorney to discuss the client’s case and provide the client with detailed written instructions about how to proceed as a pro se litigant. The client would also be provided with a fee schedule listing flat fees for specified services which the client could use or not use as desired.
The attorney’s name would not appear on the client’s file or on any of the papers used in the litigation; and the attorney would have no further responsibility with respect to the client’s matter. The names of the attorneys employed by the corporation would not appear with the name of the corporation.
The corporation would initially offer assistance with matrimonial matters and personal bankruptcies. The corporation would eventually organize events with local civil and religious organizations so that participants would have easy access to discounted wills, powers of attorney, etc.
The inquiring attorney would like guidance as to the propriety of such a corporation.
It is not permissible to practice law in a corporate form unless:
a) the applicable statutes and rules are followed
b) the names of the participating lawyers are clearly set forth in the corporation’s name and the fact of their participation is set forth on papers generated by the lawyers;
c) any participation by the corporation in events of civil and religious organizations is limited to general legal education and not to the solicitation of business;
d) clients are fully advised in advance of the limited scope of the consultations and the consequences thereof; and
e) all advertising of fee discounts provides full and accurate disclosure.
In addition, it should be understood that the corporation’s lawyers would be under the same obligation to the clients, including pro se clients, as lawyers in ordinary practice.
Also, the use of such corporation to promote use of the lawyers, services would be prohibited.
Analysis: It appears from the inquiry that the proposed business arrangement would be a legal service business in which the participating lawyers would be employees of the corporation.
Section 495 of the Judiciary Law prohibits corporations from the practice of law except:
a) where specifically authorized by statute (4) ;
b) where the corporation is organized under article fifteen of the business corporation law (6); or
c) where the corporation offers prepaid legal services to non-profit organizations whose primary purpose is not the provision of legal services, or whose purpose is the provision of legal services to indigent persons (7).
Further, DR 2-103(D) provides in part:
“A lawyer … may be…employed or paid by … one of the following offices or organizations which promote the use of the lawyer’s services…
1. A legal aid or public defender office 2. A military assistance office; 3. A lawyer referral service operated, sponsored or approved by a bar association; 4. Any bona fide organization which recommends, furnishes or pays for legal services to its members or beneficiaries….” (emphasis added).
The business arrangement described in the inquiry would not be a legal aid or a public defender’s office nor would it be a military assistance office or a referral service operated, sponsored or approved by a bar association. Moreover the proposed business organization for which the lawyers would be working would be separate and distinct from any organization which recommends, furnishes or pays for legal services to its members or beneficiaries.
Accordingly, the proposed corporation would not qualify as a Qualified Legal Assistance organization; and the operation of such corporation to promote the use of the lawyers’ services would be prohibited under DR 2-103(D)
In addition, the following activities of the proposed corporation would be improper:
1. The name of the proposed corporation, which omits the names of the attorneys, would violate Disciplinary Rule 2-102 (B) The use of a trade name or assumed name could mislead non-lawyers concerning the identity, responsibility and status of the lawyers in the firm. (Ethical Consideration EC 2-11).
Names such as “Home Legal Care P.C.”; “Law Center for Divorce Mediation”: and “Long Island Will Services” have been considered improper. (See Nassau County ethics opinions #90-16, #82-8 and #88-22).
2. Whether the corporation qualifies as “non profit” under NFCL § 102(10 (5) (a question we do not address) is irrelevant.
3. With limited exceptions, the omission of the attorney’s name or the fact of his Assistance from the client’s file or any of the papers used in the litigation, would violate DR 1- 102(A)(4).
“A lawyer may not prepare pleadings or documents for a pro se litigant, or must withdraw from assisting such litigant, if the litigant fails to disclose the lawyer’s assistance to opposing counsel and the court. Nondisclosure of such active and substantial assistance would constitute a misrepresentation to the court and opposing counsel. … Disclosure would not be required if the lawyer merely assisted the pro se litigant in filling out standard forms devised for use only by such litigants. … It would be appropriate to endorse pleading as “prepared by counsel”, without disclosing the lawyer’s name. If the litigant chooses to disclose the lawyer’s name, the lawyer cannot prevent such disclosure.” (See New York City Bar ethics opinion 1987-2 (3/23/87.)
4. The organization of events with local civil and religious organizations for the purpose of soliciting business would violate DR 2-103 (C) See Nassau County opinions 89-35 and 93-29. However, it would be permissible for the lawyer to limit his or her law related activities in such events to general legal education; and the lawyer may accept employment which results from participation on such activities. (DR 2-104) See Nassau County opinion 25/87.
The proposed corporation should also carefully observe the following:
1. While it is permissible to limit cine’s work for a pro se client, such limitation and its consequences must be clearly expressed to the client in advance. Further, when counseling a client, even on a limited basis, a lawyer-client relationship is formed; and there is no lessening of the lawyer’s liability in such counseling. (EC 2-32, 6-1, 6-4, 6-6 and DR 6-102 (A)).
2. The advertising of reduced fees for representing clients on a limited basis may be permissible, provided that all Applicable provisions of the Code of Professional Responsibility and Court Rules are complied with, and provided that the advertising attorney’ s customary fees are readily discernible. (EC 2-9, 2-10 and DR 2-3.01.) (See Nassau County ethics opinion 91-2.)
(Approved by Executive Committee on 3/5/96; Approved by Full Committee on 4/24/96)