RI-18
February 7, 1989
SYLLABUS
It is not unethical for a lawyer to use a corporation to sell "legal" insurance by the use of mail solicitation to targeted groups, provided that the corporate entity is not used to promote the lawyer's services in any form of communication that is false, fraudulent, misleading or deceptive.
References: MRPC 7.3; Shapero v. Kentucky Bar Ass'n, 486 US 466 (1988).
TEXT
A corporation will offer to targeted professional groups an insurance policy which will provide for, in the event of litigation, the cost of the defense in the lawsuit. The corporation will retain lawyers to defend any lawsuit and will additionally pay any defense costs associated with a covered loss. The president of the corporation, in the capacity of an attorney, would also be available to defend policy holders in litigation. The policy will not cover judgments and/or settlements. The corporation will directly solicit certain professional groups by, among other means, direct mail.
The president asks whether the solicitation is ethically permissible.
At the outset, it is noted that we are dealing with the conduct of a corporation ostensibly set up to sell insurance to the buying public. The company is free to advertise its product and, in that sense, is not controlled by the dictates of lawyer ethics rules. It appears that the corporation, save one possible exception, will not be in the business of providing legal service, but will retain lawyers for its insureds when the need arises. There is no suggestion that the lawyers defending the lawsuits are to pay for the referral, therefore MRPC 7.2(c) need not be addressed.
A different problem arises if the corporation were used to advertise its president as a lawyer and the president's availability for professional employment. See MCL 450.681; 450.1123, Sec 2. Again from the facts presented, what the corporation proposes is availability of retained lawyers only if the claim of the policy holder falls within the ambit of coverage.
The exception alluded to is the possibility of the president of the corporation, a lawyer, being retained by the corporation to serve as defense counsel to an insured. MRPC 7.3 provides:
"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."
Since this plan would not be solicitation of persons known to need legal services in the particular matter, MRPC 7.3 may be inapplicable. Even if MRPC does apply, the Supreme Court case of Shapero v. Kentucky Bar Ass'n, 486 US 466 (1988), which discusses the ramifications of American Bar Association Model Rule of Professional Conduct 7.3, from which MRPC 7.3 is derived, makes it clear that absent a clear state interest in prohibiting the direct solicitation of individuals with particular legal needs, a lawyer in the exercise of both First and Fourteenth Amendment rights may engage in such direct solicitation, as long as the means employed are truthful and nondeceptive.