GR 9 COVER SHEET

Suggested Amendments to

THE RULES OF PROFESSIONAL CONDUCT (RPC)

Rule 7.2(b)(2), Comment [6] to Rule 7.2, Comment [5] to Rule 5.4, and Rule 1.5(e)(2)

Submitted by the Board of Governors of the Washington State Bar Association

A.                 Name of Proponent: Washington State Bar Association

B.                  Spokespersons:

Rajeev D. Majumdar, President Washington State Bar Association

Jeanne Marie Clavere, Professional Responsibility Counsel Washington State Bar Association

C.                  Purpose:

The purpose of this proposal is to authorize not-for-profit qualified lawyer referral service organizations, including bar associations, to be paid a portion of a lawyer’s fee.

RPC 1.5(e)(2) states “a division of a fee between lawyers who are not in the same firm may be made only if: […] (2) the division is between the lawyer and a duly authorized lawyer referral service of either the Washington State Bar Association or one of the county bar associates of this state.”

In 2012, the WSBA RPC Committee interpreted the “duly authorized” language to mean “some kind of affirmative approval by the Washington Bar Association, or by one of the county bar associations of this state.” The opinion added that “This committee does not have the power to grant such approval, and it does not have any special insights to offer the inquirer on how to obtain such approval.” WSBA Ethics Advisory Op. 2227 (2012).

The WSBA does not have and never has had any mechanism in place to “authorize” lawyer referral services, and we surmise there is little interest within the WSBA to process such requests. Representatives of Spokane, Pierce and King County Bar Associations have advised they have no such mechanism.

The WSBA Committee on Professional Ethics proposes: 1) deletion of RPC 1.5(e)(2) and,

2)  relocation of the authority for lawyers to work with lawyer referral services to RPC 7.2.

The committee proposes amending RPC 7.2 as follows:

(a)  Subject to the requirements of Rules 7.1 and 7.3, a lawyer may advertise services through written, recorded or electronic communication, including public media.

(b)    A lawyer shall not give anything of value to a person for recommending the lawyer's services, except that a lawyer may

(1)  pay the reasonable cost of advertisements or communications permitted by this Rule;

(2)  pay the usual charges of a legal service plan or a not-for-profit lawyer referral service, and share a fee with a not-for-profit lawyer referral service that qualifies under Section 501 of the Internal Revenue Code or Washington’s Nonprofit Corporation Act, or is a program sponsored by a non-profit organization or a court as authorized under Rule 6.5(a);

(3) . . . .

The committee proposes amending Comment [6] to RPC 7.2:

[6] [Washington revision] A lawyer may pay the usual charges of a legal service plan or a not-for-profit lawyer referral service. A “legal service plan” is a prepaid or group legal service plan or a similar delivery system that assists people who seek to secure legal representation. A “lawyer referral service,” on the other hand, is any individual or entity that operates for the direct or indirect purpose of referring potential clients to lawyers, regardless of whether the term “referral service” is used. organization that holds itself out to the public as a lawyer referral service. Such referral services Not-for-profit lawyer referral services are understood by the public to be consumer-oriented organizations that provide unbiased referrals to lawyers with appropriate experience in the subject matter of the representation and afford other client protections, such as complaint procedures or malpractice insurance requirements. Consequently, this Rule only permits a lawyer to pay the usual charges of

a not-for-profit lawyer referral service. The “usual charges” of a legal services plan or not-for-profit lawyer referral service are fees that are openly promulgated and uniformly applied. A lawyer also may share a percentage of a fee in exchange for a referral from not-for-profit lawyer referral services, because these services help to facilitate access to justice and, if they operate under Section 501 of the Internal Revenue Code or the Washington Nonprofit Corporation Act, will use the fee only to defray reasonable operating costs. The fee paid by a client who is referred by the service, however, should not exceed the total charges that the client would have paid if the lawyer referral service was not involved.

The language of this comment draws on both comment [15] to proposed RPC 7.3(b)(2), as part of the proposed revisions to Title 7 of the RPC (November 2018 proposed rules published for comment), and Arizona RPC 7.2(b)(2).

Third, the committee further proposes new Washington Comment [5] to RPC 5.4 (Professional Independence of a Lawyer) that cross-references proposed RPC 7.2(b)(2).

RPC 5.4:

. . . .

Additional Washington Comments (3-45)

[3]        Paragraph (a)(5) was taken from former Washington RPC 5.4(a)(2).

[4]     Notwithstanding Rule 5.4, lawyers and LLLTs may share fees and form business structures to the extent permitted by Rule 5.9.

[5]  For circumstances when a lawyer can share a fee with a not-for- profit lawyer referral service, See Rule 7.2(b)(2).