Professional Ethics Committee for the State Bar of Texas
Topic:
“Under the Texas Disciplinary Rules of Professional Conduct, may a law firm agree with a for-profit legal service contract company to provide legal services at discounted rates to persons who have contracted with the legal service contract company? May a law firm having such an agreement with a for-profit legal service contract company accept referral fees from lawyers to whom the law firm refers matters that initially come to the firm under the agreement with the company?”
From the Opinion:
“[The] arrangement [with the for-profit legal service company] does not involve impermissible fee splitting because the payments made by or on behalf of…[the persons who have contracted with the legal service contract company] do not constitute fees for legal services but are rather in the nature of insurance premiums paid to the Company, viewed as an insurer, to insure the risk that a particular Contract Holder would require specified legal services during the period covered by the contract.”
Conclusion of the Committee:
“A law firm does not violate the Texas Disciplinary Rules of Professional Conduct by entering into an agreement with a for-profit legal service contract company to provide legal services at discounted rates to persons who have contracted with the company. The law firm would violate the Texas Disciplinary Rules of Professional Conduct if it received referral fees from lawyers outside the firm to whom the firm referred matters that came to the firm under the agreement with the legal service contract company.”
Rules:
Texas Disciplinary Rules of Professional Conduct 5.04 and Comment 1, 1.08(e), 7.03(b), 7.03(c), 7.02(a), 8.04(a)(3), 1.04(f)
The full text is available at http://www.legalethicstexas.com…