Rutgers School of Law, OAL case acp476

107 N.J.L.J. 321
April 16, 1981

ADVISORY COMMITTEE ON PROFESSIONAL ETHICS

Appointed by the New Jersey Supreme Court

OPINION 476

Local Attorneys "Of Counsel,
The Nationwide Law Firm"

    This inquiry asks about the proposed use of the name "The Nationwide Law Firm" - in the practice of New Jersey attorneys by the designation - "Of Counsel, Nationwide Law Firm" to be printed or typed on the New Jersey law firm letterhead.
    An "Of Counsel" attorney will obtain the right to use this designation by paying a yearly fee to NLF under an agreement to pay NLF 20% of fees received on matters referred to that attorney by or through NLF. In addition, a cooperating attorney will benefit from advertising by NLF. The "Of Counsel" firm will be assigned a specific geographical area, apparently on a county zip code basis and in one or more particular fields of law.
    Further, NLF will accept affiliation of "managing partners" in addition to those presently associated with it. This status will permit a contribution to the New Jersey print advertising budget and entitle them to share in the NLF profits and losses. All "managing" partners are listed on the NLF letterhead with a New York address as the principal office. The managers presently are from Connecticut, Massachusetts, New Jersey, New York and Pennsylvania and are 20 in number. The exhibited materials include application for participation that requires identification of the malpractice insurance carrier and an agreement to provide NLF clients an initial consultation without charge. The clients' retainer form gives NLF exclusive representation and covers the division of fees with local "Of Counsel." The participation agreement promises exclusive representation of clients brought in by advertising by zip code area for one or more legal fields.
    In our Opinion 383, 100 N.J.L.J. 1205 (l977), we held that a New Jersey attorney may ethically associate with a California firm formed for the purpose of providing legal services to individual members of employment or service groups. That opinion required observance of the restrictions on associations with out-of-state firms. See R. 1:21-6 and DR 2-102. R. 1:21-6 precludes sharing fees with out-of-state lawyers unless the division complies with DR 2-107 and is made in proportion to services rendered. Since the method of fee division for NLF is an arbitrary percentage bearing no relation to services performed, it is our opinion that the proposed arrangement with NLF is improper. Cf.Opinion 220, 94 N.J.L.J. 1002 (1971). Under DR 2-103 an organization that seeks to promote the use of an attorney's services must be registered with the Supreme Court and comply with the detailed requirements of that rule. The facts offered indicate that NLF is an organization designed and operated to bring law clients to the participating lawyers through advertising on a group basis. The profits go to the managing partners and hence render NLF unable to qualify under DR 2-103.

    We, also, are of the opinion that the use of the title "The Nationwide Law Firm" in advertising and on lawyers' letterheads tends to mislead prospective clients as to the quality of legal services offered. Mere identification of an attorney with a wide network of other lawyers, whatever the name used, does not assure competence. The designation "Of Counsel" is used in New Jersey to indicate a continuing relationship with a law firm other than as partner or associate. See our Opinions 443, 104 N.J.L.J. 561 (1979), and 444, 104 N.J.L.J. 567 (1979).
    Here the use of these terms by NLF confirms the view that the relationship as used by NLF constitutes nothing more than that of a forwarder-receiver of legal business. See American Bar Association Committee on Ethics and Professional Responsibility, Informal Opinion 1315 (1975). In that opinion the relationship is further described as "being a close, personal, regular and continuing or semi-permanent relationship involving 'regular and frequent, if not daily, contact with the office' of the law firm."
    Obviously, the NLF plan cannot meet that test. We, also, observe that the above cited Informal Opinion notes that A.B.A. Formal Opinion 330 (1974) has already held that a law firm may not be "Of Counsel" to another law firm. We agree. For the above reasons we do not approve an "Of Counsel'' relationship by New Jersey attorneys or law firms with "The Nationwide Law Firm."

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