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                                         136 N.J.L.J. 1702
                                        April 25, 1994

                                        3 N.J.L. 806
                                        April 25, 1994


Appointed by the New Jersey Supreme Court


"900" Telephone Numbers

    The Committee has received an inquiry from an attorney who is interested in establishing a pay-per-call telephone service, commonly known as a "900 telephone number." As described, consumers would call the 900 number and consult with an attorney concerning a specific legal problem. The consumer would be charged a rate of $3.99 per minute and calls would be limited in duration to 15 minutes to prevent the churning or running up of fees.
    Upon calling the 900 number, the consumer would first be advised of the fee for this service and then have an opportunity to terminate the call without being charged. Although it is not clear from the inquiry whether it would be disclosed before or after the billing begins, the consumer would also be given the following disclaimer:
        Legal problems frequently involve complex issues. This service is intended to provide broad answers to questions of a general nature. It is not intended to substitute for an in depth consultation with an attorney that many legal problems require[;] therefore, the providers of this service cannot accept responsibility for the answers or advice provided. You should consult with an attorney of your choice prior to taking any action based upon the answers or advice provided.

    The Inquirer asks whether he may establish such a pay-per-call telephone service.
    The establishment of a 900 number pay-per-call service is not per se unethical. However, there are several problem areas, which, if not addressed, could result in malpractice liability and/or ethical exposure.
    By way of background we note that two aspects of such services are, to a large extent, governed by federal regulations and/or telecommunications companies standards and tariffs. The first area is advertising which, irrespective of any ethical considerations, must initially comply with the telecommunications companies' individual standards.See footnote 1 1 Minimum standards include requirements that the advertisements contain the attorney's nameSee footnote 2 2 ; disclose any limitations on the program's availability (e.g., age, calling hours, geography); advise callers under 18 to obtain parental permission before calling; accurately disclose, in Arabic numbers, the charges per-call or per-minute; and display the charges immediately above, below, or next to the 900 number in type size that can be seen as clearly and conspicuously at a glance as the 900 number.
    In all broadcast television or radio advertising, the speaker or narrator must mention the billing charges every time the 900 number is announced. In television advertising, the billing charges must also be displayed, in Arabic numbers, on the screen whenever, and for the same length of time, the 900 number is shown.
    The second area is the introductory message, or preamble, which must be given before billing may commence. For the most part, the form and content of the preamble is prescribed by statute and rules promulgated by the Federal Communications Commission.See footnote 3 3
    Among other things, the preamble, which must be spoken in a clear and understandable manner, must disclose the full name of the attorney providing the service and accurately describe the service to be provided. The preamble must also disclose all per-call charges including all rates by minute and any minimum charges that may apply. Interstate pay-per-call offerings aimed at or likely to be of interest to children must contain a statement that the caller should hang up unless he or she has parental consent. Finally, the consumer must be informed that billing will commence only after a specific identified event, such as a signal tone, following the disclosure message and be given a reasonable opportunity to disconnect before that event takes place. Callers may be provided the means to bypass the preamble on any subsequent calls to the same offering, provided that the caller is in sole control of that capability.
     However, there are numerous ethical issues that must also be considered by any attorney contemplating the establishment of such a service. The following discussion, while not exhaustive, presents some of the more important issues that should be addressed.
    Attorney-Client Relationship. The establishment of an attorney-client relationship is not necessarily dependent upon the execution of a retainer agreement or any other contract for services. United States v. Costanzo, 625 F.2d 465, 468 (3rd Cir. 1978). Rather, it may be the conduct of the parties that is ultimately the determining factor, whether or not a formal contract or fee agreement has been executed. Westinghouse Elec. Corp. v. Kerr-McGee Corp., 580 F.2d 1311, 1317 (7th Cir. 1978). For example, an attorney-client relationship may be found to exist if there is some "identifiable manifestation" that a person relied on the lawyer in his or her professional capacity. In re Palmieri, 76 N.J. 51, 60 (1978).
    Here, inquirer's advertising will solicit consumers with an offer of legal advice. Even though the proposed disclaimer to be read over the phone would limit this advice to "broad answers to questions of a general nature," consumers will not call if they do not have specific problems for which they need advice -- advice upon which they intend to rely. In order to obtain the best possible advice, they will be inclined to reveal information of a confidential nature and will expect this information to be protected by the lawyer-client privilege. They will also be paying the equivalent of $240 per hour for this advice. Consequently, they will have every reason to believe, and we conclude, that an attorney-client relationship will exist.
    Confidentiality of Information. An attorney-client relationship having been established, the confidential nature of information received from callers cannot be overemphasized. With the exception of certain extraordinary circumstances set forth elsewhere in the rule, RPC 1.6 prohibits a lawyer from "reveal[ing] information relating to representation of a client unless the client consents after consultation[.]" This fiduciary relationship extends to preliminary consultation by a prospective client, even though actual employment of the attorney may not result. Westinghouse Elec. Corp. v. Kerr-McGee Corp., supra, 580 F.2d at 1319. See also Opinion 356, 99 N.J.L.J. 1065 (1976) (attorney may not represent husband in matrimonial matter after having been consulted by wife; confidences reposed in the attorney may be used to wife's disadvantage). Accord Opinion 86, 88 N.J.L.J. 773 (1965).     The attorney-client relationship, insofar as client confidences are concerned, "hinges upon the client's belief that he is consulting a lawyer in that capacity and his manifested intention to seek professional legal advice." Westinghouse Elec. Corp. v. Kerr-McGee Corp., supra, 580 F.2d at 1319, citing McCormick on Evidence (2d ed. 1972), § 88, p. 179. "The deciding factor is what the prospective client thought when he made the disclosure, not what the lawyer thought." R. Wise, Legal Ethics (1970).
    Consumers calling a 900 telephone number such as this undoubtedly will believe that they are retaining the services of an attorney, even if only for a consultation. They will therefore repose in attorneys providing the service information that they will have every right to expect will be held in strictest confidence. Consequently, regardless of the attorney's design or understanding, and disclaimers to the contrary notwithstanding, information received from callers must be kept strictly confidential and may have an impact upon future representations.
    Screening of Conflicts. Information received from a caller also could have an impact upon current representations. Unless the attorney providing the service employs some kind of preliminary screening device sufficient to identify the caller and potential adverse parties, if any, information received from callers adverse to existing or former clients could compel withdrawal or result in disqualification of the attorney. Similarly, the attorney will not be able to represent any individual or entity adverse to the caller in the subject matter of the inquiry if later solicited to do so.
    We should also point out that time spent on conflicts screening should not be billed directly or indirectly to the client.
    Prospective Limitation of Liability. Inquirer intends to limit his liability for the legal advice rendered through the use of a disclaimer. Given the scope of the proposed disclaimer, it bears repeating.
    Legal problems frequently involve complex issues. This service is intended to provide broad answers to questions of a general nature. It is not intended to substitute for an in depth consultation with an attorney that many legal problems require[;] therefore, the providers of this service cannot accept responsibility for the answers or advice provided. You should consult with an attorney of your choice prior to taking any action based upon the answers or advice given. (emphasis added).
We are of the view that such a disclaimer would be in contravention of established law and public policy.
    In Procanik By Procanik v. Cillo, 226 N.J. Super. 132 (1988), certif. denied, 113 N.J. 357 (1988), the Appellate Division held that an attorney need give no reason at all when declining a representation. However, should the attorney voluntarily undertake to give a reason, whatever the attorney does say must be professionally reasonable in the circumstances. Id. at 147. In discussing the scope and nature of the duty owed by an attorney to a client or prospective client, the court held that when the attorney undertakes to state the law and the law is settled, the attorney is expected to know what it is and to state it accurately. Id. at 150. It is only if the law is unsettled, debatable or doubtful that an attorney is not required to be correct. In those circumstances, the attorney need only exercise an informed judgment based on a reasoned professional evaluation. Ibid.
    Once an attorney decides to render legal advice to a client or prospective client, the attorney must assume that the recipient will rely and act upon the information provided, whether it is given as legal advice or simple information. Kansas Bar Association Ethics/Advisory Services Committee Opinion 93-08 (1993). A fiduciary relationship is established when there is reliance, Ibid., and an attorney ought not be able to avoid malpractice liability or ethical responsibility by claiming that no attorney- client relationship exists or that the advice rendered is intended to be nothing more than "broad answers to questions of a general nature."
    While RPC 1.2(c) permits a lawyer to "limit the objectives of the representation if the client consents after consultation," here the client is to be neither consulted nor given an opportunity to consent. The terms of the disclaimer are simply to be imposed upon the client on a take it, but not necessarily leave it, basis. In any event, the terms of the disclaimer would also appear to be violative of RPC 1.8(h), which prohibits an attorney from making an agreement prospectively limiting the lawyer's liability to a client for malpractice unless two conditions, neither of which is applicable, are met. Consequently, we hold that an attorney who undertakes to render legal advice through a 900 number pay-per-call telephone service cannot refuse to accept responsibility for the advice given or otherwise prospectively limit liability for malpractice.
    Churning of Fees. Even though advertising and the preamble must disclose all per-call charges, including all rates by minute and any minimum charges that may apply, not all legal questions are amenable to short answers. It may well be that at the conclusion of the prescribed period of time for the telephone call it is determined that more discussion, preliminary research and/or follow-up contact is necessary. The attorney may also determine that the caller's legal problem is too complex for handling in this format.
    Whatever the reason, absent limitations on the duration of calls and other safeguards, attorneys could, however inadvertently, run up extremely high bills for very general advice. Therefore, in circumstances such as those outlined above, the attorney should, at his or her own expense, call the potential client back or invite the consumer to call the law firm's business telephone number and make an appointment for further consultation. Requiring the consumer to re-call the 900 number in order to continue the discussion would constitute an improper conditioning of advice upon the incurring of an additional fee.
    In conclusion, although the conduct proposed by the inquirer is improper, establishment of a 900 telephone number pay-per-call service is not per se unethical. However, given the potential legal liability and the nature of the ethical problems that could arise, one should exercise great care in engaging in such conduct.

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Footnote: 1 1See Guidelines for AT&T Multiquest Billing Services and MCI Program Content Guidelines.
Footnote: 2 2Pursuant to Guideline 1, any attorney advertisement by an attorney must also include the attorney's bona fide street address.
Footnote: 3 347 U.S.C. 228; 47 C.F.R. 64.709 through 64.716 and 47 C.F.R. 68.318(c)(2).

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