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Ethics Opinion

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RI-81

April 19, 1991

SYLLABUS

    A law firm which represents several claimants allegedly defrauded in an investment venture may publish a print advertisement which invites others who made the same investment to attend a free seminar at which the firm's lawyers will explain the law involved in the matter and possible recourses in general terms, where questions concerning an individual investor's possible claim will not be addressed at the seminar, and where attendees will be allowed to form a lawyer-client relationship with the firm only by independently initiated telephone or written communication after the seminar.

    References: MRPC 7.1, 7.3; CI-1042; Ohralik v. Ohio State Bar Ass'n, 436 US 447 (1978); Peel v. Attorney Registration and Disciplinary Commission of Illinois, 496 US 91 (1990); Shapero v. Kentucky Bar Ass'n, 486 US 466 (1988); Zauderer v. Office of Disciplinary Counsel of the Supreme Court of Ohio, 471 US 626 (1985).

TEXT

A law firm in private practice represents three different clients against a local brokerage firm and its broker employee in suits arising out of the failure of certain sophisticated investment vehicles. The suits are predicated on theories of breach of contract, fraud, and malpractice, and charge the brokerage with selling high risk, unsuitable investments to elderly widows and to a parent investing, as trustee, money representing the child's college fund.

The firm believes that there are numerous other elderly people similarly situated, who would find invaluable any information concerning the possibility of legal recourse for investment losses. The firm proposes to hold a seminar to discuss three specific investments, which would be advertised in the business section of the local newspaper. An ad in the following form is proposed:

    "A, B and C CAPITAL INVESTORS

    "You are cordially invited to attend an informational seminar on these limited partnerships discussing why they went bad and what can be done about it.

    "[Date and time specified]

    "[Name and address of law firm]

    "NOTE: This seminar is not intended as a substitute for legal advice. No attorneys will solicit business or schedule appointments at this time."

The firm proposes to hold the seminar at its law offices, if permissible, but otherwise in a rented room. A firm lawyer will be the featured speaker at the seminar. The lawyer will begin with a self-introduction, informing the guests about the lawyer's experience in the law in general, and in securities law in particular. It will be represented that the lawyer has handled cases against brokerage firms in the past, without details as to the cases or their disposition.

The speaker intends to discuss exactly what the three investments were, how they were set up, and why they lost money. Lastly, the speaker will close with discussing what recourse, if any, investors may now have. This includes class action suits pending and settled, selling the securities in the limited market available, and filing claims in court or through arbitration.

The speaker will generally discuss theories upon which suits may be brought, and will explain court and arbitration procedure. The speaker will not answer individualized questions, but, if asked to do so, will state that for answers to specific questions, attendees need to schedule an appointment with a lawyer. If, following the discussion, the speaker or other firm lawyers present are approached, they will tell the questioner to telephone the law firm's office to set up an appointment if they wish to discuss an individual case.

MRPC 7.3(a) states:

    "A lawyer shall not solicit professional employment from a prospective client with whom the lawyer has no family or prior professional relationship when a significant motive for the lawyer's doing so is the lawyer's pecuniary gain. The term 'solicit' includes contact in person, by telephone or telegraph, by letter or other writing, or by other communication directed to a specific recipient, but does not include letters addressed or advertising circulars distributed generally to persons not known to need legal services of the kind provided by the lawyer in a particular matter, but who are so situated that they might in general find such services useful, nor does the term 'solicit' include 'sending truthful and nondeceptive letters to potential client known to face particular legal problems' as elucidated in Shapero v. Kentucky Bar Ass'n, 486 US 466, 468; 108 S Ct 1916; 100 L Ed 2d 475 (1988).

    "(b) A lawyer shall not solicit professional employment from a prospective client by written or recorded communication or by in-person or telephone contact even when not otherwise prohibited by paragraph (a), if:

      "(1) the prospective client has made known to the lawyer a desire not to be solicited by the lawyer; or

      "(2) the solicitation involves coercion, duress or harassment."

The initial communication proposed by the law firm is not improper, provided the factual averments and all representations concerning the competence of the firm or any member of the firm are objectively reasonable, verifiable, and factually accurate, MRPC 7.1, Peel v. Attorney Registration and Disciplinary Commission of Illinois, 496 US 91; 110 L Ed 2d 83; 110 S Ct 2281 (1990); or perhaps no worse than mere puffery, Shapero v. Kentucky Bar Ass'n, 486 US 466, 479-480 (1988) (plurality opinion).

The firm's direct, face-to-face communication with seminar attendees who respond to the ad are identifiable as a group in need of particular legal services. In CI-1042 the Committee held that a lawyer may accept professional employment arising out of participation in an educational seminar, as long as the lawyer does not emphasize the lawyer's experience or reputation, nor undertake to give individual advice when speaking at the seminar.

The distinction between faceless advertising and in-person contact is a significant one. The U. S. Supreme Court has specifically distinguished targeted mail advertising from in-person solicitation, on grounds the latter is fraught with the risk of "overreaching or undue influence." Ohralik v. Ohio State Bar Ass'n, 436 US 447 (1978); Shapero v. Kentucky Bar Ass'n, 486 US 466 at 475 (1988); Zauderer v. Office of Disciplinary Counsel of the Supreme Court of Ohio, 471 US 626 at 642 (1985).

Under the facts stated, while the law firm initiates the advertisement there is no unsolicited, in-person intrusion of privacy to a vulnerable individual. The solicited individual can choose to attend the educational meeting or not, and can terminate all further contact by simply ignoring the advertisement. An attendee can choose to follow up the seminar with a law firm appointment or not; no appointments will be made at the seminar, and those interested in following up will have to make a separate telephone call on another day. This provides a cooling off period and time for individual, independent reflection away from the law firm's influence.

Where the meeting is public, no individual questions will be answered, and the attendees will have to schedule an appointment with a lawyer prior to making any further commitment, any risks of misrepresentation, overreaching and coercion to retain the law firm are minimized, and in fact much less than risked in a private one-on-one meeting initiated by a prospective client at the firm's offices. Therefore, we conclude that the proposed seminar is not prohibited.

 
     

 

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