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ANSWER A TO QUESTION 5

The ABA Model Rules generally provide the majority ethical rule standards governing the conduct of attorneys. California has some rules which are more strict, less strict or different than the ABA rules on various issues. As to advertising, in particular, California ha$ detailed requirements requiring that ads be labelled and that any staged recreations or simulations be labelled, and also desigoating a number of practices as presumptively deceptive or misleading. That includes any guarantees or warranties of results, as one example.

1. The Television Ads

Lawyer advertising is commercial speech, which is subject to regulation that balances the First Amendment free expression rights with limitations such as ·that there is no constitutional right to make false statements.

Thus, while lawyer advertising is permitted, it musube·truthful and not·misleading.

A law firm is entitlqq ~o advertise its rbtes. The Jones & Smith (J & S) ad's statement that while most firms normally charge a 33% contingency fee, they will charge 25% is potentially misleading in that it may not pe tn,1e that most firms charge a 33% contingent fee. If that statement can be supported (and may well be true), the next problem is that the ad does not disclose that costs Jar advanced items will be recovered as well.

Californi~,requires contingent fee contracts to be in writing and tO specify not only the contingency percentage but also wtJether costs are recovered before or ilfter tfie cbntingency percentage is applied. The abseo.ce of that information (i.e., wt\ether costs are recovered before or after the 25% contingency is calculated) may tender: the aCt misleading.

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The Interest-Free Advances

The offer of interest-free advances against prospective judgments in cases of clear of up to 50% of the firm's estimated value is clearly an ethical violation, in several

rst, a lawyer is not permitted to acquire a personal financial interest in a case, apart permitted contingent fee. Lawyers may not pay to get a case. Lawyers also are not permitted to loan clients money. They may advance litigation expenses or

necessary medical expenses necessary for litigation. California does permit loans, after the representation is established and only if the client signs an IOU in writing.

The plan to send flower arrangements to hospitalized victims that say, "compliments of Jones & Smith," is not ethically permissible. As noted above, any advertising has to be labelled as such. This would be considered advertising aryd would ~ave to be labelled.

Second, tt)ere is a problem of direct solicitation. The law firm is not sending out a general mailing advising. of' its availability, but instead soliciting business from an individual.

Just as it is npt ethicalty proper for .a lawyer to fling his business card to an accident victim as he, goe.s by (without any direct discussion) it would likewise be impermissible to solicit business by a card tm a flotal display.

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~me of the activities contemplated involve the prac,ice of law, and the law firm is in 1olation if it assists in that.

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I I• leetings with clients to discuss settlements and sehlement conferences to discuss

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rn to execute Ot er OCUments InVOlVe legal functJOnS -judgments about the legal lot claims and the evaluation of legal documents iand their consequences The

I i . ~ and investigators should not be performing those functions.

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kewise, negotiations with insurance adjusters is ndt an investigatory function or a I •

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one. It involves legal evaluations and a numbet of legal judgments and legal

I. That should be done by a lawyer. Paralegal or \nvestigator involvement would

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I ~e unauthorized practice of law. The law firm ~ould be in ethical violation by

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~r allowing that to occur. !

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pervising lawyers are liable for any ethical violatioM \n,hich they direct or know about

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ANSWER B TO QUESTION 5

Jones & Smith (J & S) as a law firll'l,.ilas proposed several actions that raise potential conflicts with, and violations of, both the ABA Rules of Professional Conduct and those specific to California. Where appropriate, the· split· between the ABA and California Rules is mentioned below.

I. TELEVISION ADS

There i~ nothing inherently wrong with a firm running ads seeking to inform the public that it yvishes to offer its legal §ervices. While some may find ads seeking representation on

T.V. to encroach upon the duty of djgnity and decorum to the profession and public, commercial speech under the First Amendment is protected speech so long as it is not deceptive, false or misleading.

J & S must make clear in their T.V. ads that the·spots are ads seeking to gain clients and must not make any unverified claims or comparisons. If actors are used in the spots, the ads should clearly state the ad is a "dramatization" and contain an attorney name and contact number for the ad.

California's statu~ory cod~ prQvides a series of presumptions concerning improper lawyer advertising. Among these is that· a firm should not make any unsubstantiated guarantees, warranties or· representations.

Here, ,J .& S pl~n to. state ~hat mqst·firms handle contingency fees for a personal injury case for 33~of the eventual ,repovery •. ,J cSr. .Swill need to verify this claim before giving such an ad and also make clear how the costs are calculated. Since it is inherently difficult to offer an industry-wide praptice, particularly where the geographic scope is not mentioned, regarding cos,ts, J &:.5 tp~Y be_ e!'lgaged. in.deceptive or misleading advertising.

~hen plans to compare its 25% fee to that of "most" firms at 33%. The ad is deceptive, ~ntially misleading, in that "most" is very imprecise {51% or 99%?) and does not state is involved. Then J & S attempts to state that itlwill "undertake" representation for a lee. What does undertake mean? Does it mean that all personal injury cases are for a 1 ee, or does it mean that this is a floor for negotiation or for most cases?

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rnportantly, a contingency fee arrangement is a contractual relationship between the f) and firm in which all relevant factors must be made clear to the parties. The fee ~ment should detail, inter alia, (i) what costs are included or excluded, (ii) whether the

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~age includes or excludes such costs, and (iii) what costs are involved in the event

\' is dismissed or withdraws before settlement.

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~A provides that contingency fees must not be unreasonable while California requires

~s not be unconscionable. Additionally, personal injury cases often involve medical

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rtice claims and such claims in California can be capped at a set percentage.

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also plan to mention that J & S will offer interest-free advances against prospective ~ts in "cases of clear liability" of up to 50% of the firm's "estimated value" of the

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pth standards appear to be very subjective and offer the consumer no true idea how rer a loan will be granted. I

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portantly, loans are improper under both the ABA and California Rules. The ABA \that loans may only be advanced to indigent clients lor necessary litigation expenses, 'lifornia provides that loans are per se improper unless accompanied by a signed

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1ry note.

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~lly, the loans serve to provide J & S with an improper interest in the subject of

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However, this is not fatal since contingency fee arrangements inherently involve

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hthe client's litigation.

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II. IN-MAIL SOLICITATION

It is proper for J & S to acquire the names of potential clients from the police becausE this is public information made available to the public.

While it would be improper for lawyers to use such lists for in-person solicitation of clients, sending letters is different. Lawyers are prohibited by the rules of professional conduct from in-person sQ!icitation of prospective clients for personal pecuniary gain in the absence of a· pre.existing legal or familial relationship. The rationale is that potential clients may feel coerced to assent to representation under the duress of face-to-face confrontation.

This concern is lessened with solicitation for profit through the mail. There is less pressure and the client is better able to weigh his options. The rules pertaining to such letters are similar to tho!ie for T. V. acts above·-there should be a prominent disclaimer that this is an ad for legal services and provide an attorney contact and number. Attorneys are required in California to keep a copy of all such ads for 2 years and make them available for inspection to the state bar.

The letters should not make any unverified claims, comparisons, or contacts or influence with local agencies apd pfficials. Additionally, while the firm may state that it concentrates in the area of personal injury, it should not claim any specialization unless certified by the state bar or an approved independent organization.

Flowers Attorru:!ys are f.orbidden to either personally, or through the use of runners and agents, solicit representation in person at the scene of an accident or in' the hospital. Such scenarios increase the likelihood of pressure and duress in gaining solicitation, and is a breach of the public's trust in the profession.

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may or may not be improper. However, no matter the variety, something smells

a law firm sends flowers or gifts to prospective clients. As such, the flowers may solicitation and would be improper. Even if they do not, J & S should refrain from owers.

~"-'l:l""\u:lre may not direct nor supervise the work of lawyers. Additionally, lawyers hare fees with non-lawyers for conducting legal work (with exceptions for death

S seeks to have non-lawyers conduct the following activities:

is proper, and many firms employ paralegals and even private investigators to do

interviews

may be appropriate, but attorneys owe their clients a duty of competence to fully and handle their cases. Witness interviews should only be conducted with cient firm oversight so that important factual matters giving rise to legal claims do

is prohibited. Non-lawyers may not engage in th_e providing of legal services. insurance adjusters often determine the size of the claim, attorneys should

such negotiations.

Settlement Meetings also prohibited. Lawyers have a duty to commun.icate with their clients and all proposed settlement offers. A client is owed a duty of loyalty and

confidentiality, and this entails that all such communications are to be between the client(s) and attorney(s).

Additionally, clients oversee substantive decisions (whether to settle) while attorneys oversee procedural/tactical decisions. Thus, non-lawyers should not conduct settlement conferences since it violates the above rules and duties.

v) Execute other documents Lastly, non-lawyers are not to execute any documents with legal significance that require legal analysis and professional judgment. To allow otherwise breaches duties to the client, profession, public and the courts.

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