Ethics Opinions
Iowa Supreme Court Board of Professional Ethics and Conduct
Date of Opinion:
09/06/2000
Opinion Number:
00-03
Title:
LAW LISTS -- ACEPA
Opinion:
You request an opinion concerning the propriety of your participating in a sophisticated legal services referral entity entitled ACEPA based in Taunton, Massachusetts. It is affiliated with an entity entitled Citadel Group and several other estate planning entities. You have furnished to the Board copies of documentation submitted to you in the ACEPA solicitation.
ACEPA explains, in part:
“The Citadel Group is a private membership organization offering memberships to the public. These memberships offer a variety of services and benefits through the Affiliate Network that assist the member in ‘Estate Planning’ . . . [a list of services is omitted].
The Citadel Group allows it’s members access to discounted legal services through it’s exclusive contract with ACEPA. In addition, The Citadel Group provides documentation services to the ACEPA Attorney. The Local ACEPA attorney is paid directly for the legal work requested and the documentation services.”
In its section entitled “Introduction” the ACEPA makes reference to Rule 5.4 of the American Bar Association Model Rules of Professional Ethics. This Rule has not been adopted by the State of Iowa.
DR 2-103 of the Iowa Code of Professional Responsibility for Lawyers (the Code) in paragraph (B) provides as follows:
“(B) A lawyer shall not compensate or give anything of value to a person or organization to recommend or secure the lawyer’s employment by a client, or as a reward for having made a recommendation resulting in the employment by a client, except that the lawyer may pay the usual and reasonable fees or dues charged by any of the organizations listed in DR 2-103(D).”
The ACEPA plan is in violation because the lawyer must pay to participate.
Paragraphs (C) and (D) of DR 2-103 provide exceptions for DR 2-103(A) and (B) but the entities here involved do not qualify. Thus they are not registered either with the Iowa Client Security Fund or with the Insurance Commissioner of the State of Iowa.
DR 3-102 of the Code provides as follows:
“(A) A lawyer or law firm shall not share legal fees with a nonlawyer, except that:
(1) An agreement by a lawyer with a firm, partner, or associate may provide for the payment of money, over a reasonable period of time after death, to the lawyer’s estate or to one or more specified persons.
(2) A lawyer who undertakes to complete unfinished legal business of a deceased lawyer may pay to the estate of the deceased lawyer that proportion of the total compensation which fairly represents the services rendered by the deceased lawyer.
(3) A lawyer or law firm may include nonlawyer employees in a retirement plan, even though the plan is based in whole or in part on a profit-sharing arrangement.”
The fee schedule submitted by ACEPA is predicated upon an arbitrary flat fee division between the local lawyer and ACEPA and thus violates DR 3-102(A).
Under ACEPA’s plan, it is possible that neither the client’s local lawyer nor any other lawyer might have participated in the drafting of any of the legal documentation involved in estate planning in violation of DR 3-101(A) of the Code.
On the basis of the foregoing alone it is the opinion of the Board that this ACEPA proposal is a referral system in violation of the above cited sections of the Iowa Code. In view of the foregoing, other possible violations are not addressed in this opinion.