Legal Ethics Opinion No. 1374

 Third Party Payment of Fees--Conflict of Interests--Advertising
and Solicitation: Nonlawyer Entity Arranging for Legal Services
to Employees Under Assistance Benefits Contract; Display of
Attorney's Professional Card in Nonlawyer's Office

You have indicated that a mental health therapist who holds an
Employee Assistance Benefits Contract with a large employer, for
the benefit of the company's employees, is committed to providing
free legal counseling sessions to employees or their family
members.  To discharge that obligation, the therapist asks
Attorney to accept direct referrals of clients/employees. 
Attorney will bill clients directly for the initial consultation
and clients will seek reimbursement for Attorney fees from
therapist as a benefit under the Contract.  In addition,
Attorney's professional card will be available in the therapist's
office for purposes of furthering the client referrals.

You have requested that the committee opine as to the propriety
of the arrangement and, in particular, whether (l) the client's
request for contractual reimbursement for legal consultation
would violate the Attorney's ethical responsibility to preserve
the client's secrets and confidences; (2) the payment of attorney
fees would constitute fee-splitting with a nonlawyer since the
payment is made from contract funds paid to therapist by
employer; and (3) leaving Attorney's business cards in
therapist's office constitutes improper solicitation of clients? 

The primary disciplinary rules controlling the facts you describe
are DR 5-l06(A)(l) and (B) which require, respectively, that a
lawyer shall not accept compensation for his legal services from
one other than his client except with the consent of his client
after full and adequate disclosure, and that a lawyer shall not
permit a person who recommends, employs, or pays him to render
legal services for another to direct or regulate his professional
judgment in rendering such legal services.  Additional pertinent
disciplinary rules include DR 2-l03(D), which prohibits a lawyer
from compensating a person or organization to recommend or secure
his employment by a client; DR 4-l0l(B)(l), which prohibits a
lawyer from knowingly revealing a confidence or secret of his
client; and DR 3-l02, which prohibits a lawyer from sharing legal
fees with a nonlawyer.  Further guidance is available in Ethical
Considerations 5-2l, 5-22 and 5-23, all of which emphasize the
need for a lawyer's judgment to be impervious to influence by a
third party who compensates a lawyer for the provision of
services to his client.

In the Committee's opinion, the primary concern under the
circumstances you describe is the absolute avoidance of any
influence upon the Attorney by either the employer or the
therapist.  Regardless of the source of funds for payment of
Attorney's fees, the client is the individual employee who
consults Attorney for legal assistance, and Attorney owes to that
client duties of zealous representation, the preservation of
confidences and secrets, and independent professional judgment. 
See LEO #609.  Within that attorney-client relationship, loyalty
to the client must not be compromised based upon any extraneous

In considering the propriety of a similar fact situation, the
Committee has earlier opined that an attorney accepting
compensation from a professional counselor service which refers
clients to an attorney for legal advice would not be a per seethical violation of the Code of Professional Responsibility. 
The Committee continues to be of the view that "[a] disclosure by
an attorney to a professional counselor service of the purpose
and length of time spent with a client on a particular problem
without the express informed consent of the client would violate
the provisions of DR 4-l0l."  See LEO #5l6.  Under the facts you
have provided, however, the client will be billed directly for
the initial consultation and client will then seek reimbursement
for Attorney fees from the therapist as a benefit under the
Employee Assistance Benefits program.   Since reimbursement to
the client is a matter of the benefits available under a
contractual arrangement between the employee and employer, the
consequences of such arrangements involve legal determinations
beyond the scope of the Committee.  However, the Committee is of
the opinion that since disclosure is to be made by the client for
purposes of reimbursement, it clearly would not be tantamount to
Attorney's disclosure of client's secrets or confidences and thus
could not be violative of DR 4-l0l.   

Similarly, the Committee opines that the arrangement described is
not, by definition, violative of DR 3-l02 since the client is
receiving reimbursement after having paid Attorney directly.
Thus, under the facts you have provided, the committee observes
that no monies pass between Attorney and therapist regardless of
the basic source of the reimbursement funds.  Cf. LEO #609.

Finally, the Committee is of the opinion that prior LEO #682 is
dispositive of the issue you raise regarding the propriety of
distributing Attorney's business cards through therapist's
office.  The earlier opinion found that it is not improper for an
attorney to give his business cards to a third-party for
distribution so long as the business cards are not false,
fraudulent, misleading or deceptive; the third-party distributing
the cards makes no statement that is false, fraudulent,
misleading or deceptive and does not initiate contact with the
potential client under circumstances that might involve duress or
intimidation; and the attorney does not compensate the
third-party for distributing his business cards.

Committee Opinion
September 13, 1990