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                                             96 N.J.L.J. 745
                                             June 21, 1973


Appointed by the New Jersey Supreme Court


Labor Union Attorney
Drawing Free Wills for Members

    We have been asked if the following practice is in violation of the Disciplinary Rules of the Code of Professional Responsibility of the American Bar Association as amended by the New Jersey Supreme Court, DR 1-103 or any other canons of professional ethics.
    The inquirer represents a local branch of a labor union which for the welfare of its membership and their dependents has retained
him to draw wills for all members of the union who so desire this service, at no cost to the members. The agreement also provides for a single payment, by the union, to the attorney, which fee is not contingent upon the number of wills drawn.
    The union posted notices throughout the plant advising its membership that it was sponsoring a program to provide each member
with a will, if desired, at no charge to the member, the cost of the service being paid for by the union. The notice further informed the membership that the attorney would be available at the union hall on Wednesday of each week between the hours of 3:00 PM and 4:30 PM. for the purpose of discussing the provisions of their wills. No attorney's name appeared on the notice. When completed, the wills are to be executed at the union hall, witnessed by the

members and employees of the union and delivered to the members. The members do not come to the law office of the firm in connection
with their wills.
    In our Opinion 172, 93 N.J.L.J. 81 (1970), we held that it would be unethical for the attorney for a New Jersey corporation to
participate in a company sponsored legal program whereby general counsel for the corporation proposed that he or a member of his firm be at the corporate office at certain designated times for the purpose of advising and preparing employee estate plan. A temporary office was to be supplied to the attorney on the corporate premises for the purpose of meeting with the employees. The corporation was to advise its employees that the attorney would be available at stated times and would schedule appointments for those employees who would like individual estate plan and counseling. The inquirer, or one of his representatives, then would hold the conferences and supply whatever services were required. In each case, the employee would pay for the services rendered to him. The corporation would not directly subsidize any individual estate planning.
    Since our decision and Opinion 172, supra, the New Jersey Supreme Court has adopted the Disciplinary Rules of the Code of Professional Responsibility adopted by the American Bar Association Disciplinary Rule 2-103(D), effective September 13, 1971, now provides:
        A lawyer shall not knowingly assist a person or organization that recommends, furnishes, or pays for legal services to promote the use of his services or those of his partners or associates. However, he may cooperate in a unified manner with the legal service activities of any of the following, provided that his independent professional judgment is exercised in behalf of his client without interference or control by any organization or other person:

        (5)    Any other non-profit organization that recommends, furnishes, or pays for legal services to its members or beneficiaries, but only in those instances and to the extent that controlling constitutional interpretation at the time of the rendition of the services requires the allowance of such legal service activities, and only if the following conditions, unless prohibited by such interpretation, are met:

            (a)    The primary purpose of such organization do not include the rendition of legal services.

            (b)    The recommending, furnishing, or paying for legal services to its members is incidental and reasonably related to the primary purposes of such organization.

            (c)    Such organization does not derive a financial benefit from the rendition of legal services by the lawyer.

            (d)    The member or beneficiary for whom the legal services are rendered, and not such organization, is recognized as the client of the lawyer in that matter.

    The provisions of DR 2-103 and DR 2-104 (suggestion of need for legal services) were the result of lengthy studies, discussions and hearings representing many State Bar Associations, as well as the Special Committee on Evaluation of Ethical Standards and the Committee on the Availability of Legal Services of the American Bar Association. After intense debate between proponents of a rule that would broaden the scope of group legal services programs, and opponents, the language adopted represented a compromise. Our Court followed the recommendations of its committee that it make no change in the rule adopted by the American Bar Association.
    First we find that controlling constitutional interpretation at the present time, requires the allowance of such legal services. Although the matrix cases involve legal services directly related to the primary purposes of the sponsoring organizations, Brotherhood of R. Trainmen v. Virginia, 377 U.S. 1 (1964), and United Mine Workers v. Ill. Bar Ass'n, 389 U.S. 217 (1967), the United States Supreme Court has indicated their scope is greater. Mr. Justice Black speaking for a divided five man court, has said in United Transportation Union v. Michigan, 401 U.S. 576, (1971):
        In the context of this case we deal with a cooperative union of workers seeking to assist its members in effectively asserting claims under the FELA. But the principle here involved cannot be limited to the facts of this case. At issue is the basic right to group legal action, a right first asserted in this Court by an association of Negroes seeking the protection of freedoms guaranteed by the Constitution. The common thread running through our decisions in NAACP v. Button, Trainmen, and United Mine Workers is that collective activity undertaken to obtain meaningful access to the courts is a fundamental right within the protection of the First Amendment. However, that right would be a hollow promise if courts could deny associations of workers or others the means of enabling their members to meet the costs of legal representation. That was the holding in United Mine Workers, Trainmen and NAACP v. Button. 401 U.S. 576, at 586.

    In Informal Opinion 1237, the Standing Committee on Ethics and Professional Responsibility of the American Bar Association (8/9/72) approved a union group legal services referral program whereby attorneys recommended by the union participated in a program to render legal services in accordance with established fee schedules. The A.B.A. Committee established certain guidelines for the plan set forth in that Opinion.
    At about that same time, at its August, 1972 annual meeting, the House of Delegates of the American Bar Association upon the recommendation of the Association's Special Committee on Prepaid Legal Services, adopted the following interim standards to be met by all plans providing for prepaid legal services:
        (1)    The entire plan shall be reduced to writing and a description of its terms shall be distributed to the members or beneficiaries thereof;

        (2)    The plan and description shall:

            (a)    State clearly and in detail the benefits to be provided, exclusions therefrom and conditions thereto;

            (b)    Describe the extent of the undertaking to provide benefits and reveal such facts as will indicate the ability of the plan to meet the undertaking;

            (c)    Provide that there shall be no infringement upon the independent exercise of professional judgment of any lawyer furnishing service under the plan;

            (d)    Specify that a lawyer providing legal service under the plan shall not be required to act in derogation of his professional responsibilities; and

            (e)    Set forth procedures for the objective review and resolution of dispute of disputes arising under the plan;

        (3)    There shall be a periodic written report not less often than annually disclosing to members or beneficiaries of the plan, to this association and to the bar of any state in which benefits are paid a summary of the operations of the plan including, but not limited to, all relevant financial data, the number of members or beneficiaries receiving legal services, and the kinds of benefits provided;

        (4)    Each plan should provide for an advisory group including members of the bar and beneficiaries of the plan which shall meet periodically to review and evaluate the organization and operation of the plan and to offer suggestions for its improvement.

    The August, 1972 meeting of the American Bar Association House of Delegates had before it a second recommendation of the Special Committee on Prepaid Legal Services which was amended with consent of that Committee to include the following sentence, and then was
adopted as so amended:
        The American Bar Association strongly urges that each plan provide that the members or beneficiaries have freedom of choice of attorneys (open panel) in the rendering of legal services under the plan.

    In its Formal Opinion 332, the Standing Committee on Ethics and Professional Responsibility of the American Bar Association (2/73), approved a plan of prepaid legal services which met the interim A.B.A. standards and provided for an "open panel" whereby the
members had freedom of choice of attorney.
    Conversely in Formal Opinion 333, (2/73), the Committee held that where there is a "closed panel" or one designated lawyer a question of fact will be presented in each case as to whether the plan promotes the lawyer's professional status in violation of the Disciplinary Rules.
    We need not reach such questions here since the inquiry is deficient in meeting even the interim standards.
    First and foremost, there is no written description of the plan to judge compliance with the interim standards. There is no statement of the amount of compensation to the attorney. On the facts stated, it appears that he is not a full time retained attorney for the union and for these estate planning services he will receive a flat fee no matter how many or how complex are the family and legal problems that he faces. It will be recalled that in the Brotherhood of R. Trainmen case, the counsel fee was agreed at 25% of the recoveries as opposed to potential 50% fees and in the United Mine Workers case, the union retained a full-time workmen's compensation claimant's counsel at an annual salary which appeared reasonable for that time and place. The comments of the Standing Committee on Ethics and Professional Responsibility of the American Bar Association in Informal Opinion 1236 (8/24/72), disapproving a plan proposed by a proprietary social and fraternal savings club are appropriate. There an attorney proposed to render services to members at a discount. DR 2-103(B) states that except for situations that are here irrelevant, "a lawyer shall not give anything of value to a person or organization to recommend or secure his employment by a client." That committee found that the attorney under the proposed arrangement in exchange for its recommendation of him to its members, would be giving the club a thing of value; namely, the ability to provide its members with another type of "savings" - legal services at a discount. Ethical Consideration 2-17 of the Code of Professional Responsibility adopted by the American Bar Association says that "adequate compensation is necessary in order to enable the lawyer to serve his client effectively and to preserve the integrity and independence of the profession." In its Informal Opinion 1236, the Standing Committee on Ethics and Professional Responsibility of the American Bar Association held it to be improper for a lawyer to agree in advance that services rendered to members of a group will be provided for fees less than those customarily being charged. Because of the wide variation and services required in particular types of work, any such agreement could not help but leave an attorney bound by such an agreement either to perform services for some of the club members at a substantial loss or not to take the time required to perform them properly.
    Absent a statement of the fees proposed to be charged for the estate planning services, we cannot sanction such a plan in vacuo.
    In addition, we recommend that, as a general practice the attorney representing the association not be the attorney selected to render legal services to the association members. In our Opinion 114, 90 N.J.L.J. 480 (1967), we set forth the reasons why counsel for a corporation or association should not represent individual members or groups. Inherent in such a situation is the difficulty in representing multiple clients. In order to represent his individual clients adequately, the attorney might find the compensation for the wills inadequate and yet to retain his representation of the union, he might be unwilling to seek a change in the fee schedule.
    Finally, we question the proposed system of execution of wills, whereby the officers of the union attend to the execution and delivery of the wills. This appears to be a simple procedure but a review of 5 Clapp, Wills and Administration, sec 54 (1962), will show the degree of professional care that is required.
    In conclusion then we find that controlling constitutional interpretation now requires the sanctioning of group legal service programs even though not related to the primary purposes of nonprofit organizations. However, each such program will have to be established consistent with the interim standards established by the American Bar Association and with other ethical and professional standards required of attorneys. While it will be difficult for this Committee to examine each plan, attorneys participating in them will find guidance in the decisions of the Standing Committee on Ethics and Professional Responsibility of the American Bar Association and in the Ethical Considerations adopted by the American Bar Association in connection with the Code of Professional Responsibility Ethical Consideration 5-1 counsels that the professional judgment of a lawyer should be exercised within the bounds of the law solely for the benefit of his client and free of compromising influences and loyalties EC 5-14 points out that a problem with respect to the maintenance of independent professional judgment arises whenever a lawyer is asked to represent two or more clients who have different interests.
    Finally, EC 5-24 sets forth certain specific guidelines to help an attorney. "To assist a lawyer in preserving his professional independence, a number of courses are available to him. ...A lawyer should not accept employment from such an organization unless the board sets only broad policies and there is no interference in the relationship of the lawyer and the individual client he serves. Where a lawyer is employed by an organization, a written agreement that defines the relationship between him and the organization and provides for his independence is desirable since it may serve to prevent misunderstanding as to their respective roles. Although other innovations in the means of supplying legal counsel may develop, the responsibility of the lawyer to maintain his professional independence remains constant, and the legal profession must insure that changing circumstances do not reset in the loss of professional independence of the lawyer."
    Canon 2 of the Code of Professional Responsibility adopted by the American Bar Association states that "[a] lawyer should assist the legal profession in fulfilling its duty to make legal counsel available." If properly prepared, a written plan with a reasonable fee schedule and a written agreement between the participating attorneys and the union, could be adopted to make legal counsel available to the members of the union at reasonable fees. The dangers inherent in closed or "one man" panels should be observed. But we cannot find under the facts presented to us that the plan presented meets the criteria established by either the Standing Committee on Ethics and Professional Responsibility of the American Bar Association or the prior decisions of this Committee. We therefore disapprove of the plan as proposed.

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