3 minute read
Schooled in Ethics
SCHOOLED IN ETHICS By: Judy M. Cornett
University of Tennessee College of Law
On September 1, 2021, in response to a petition from the Tennessee Bar Association, the Tennessee Supreme Court approved amendments to Tennessee Rules of Professional Conduct 7.1-7.5, governing advertising and solicitation. These amendments delete Rules 7.2, 7.4, and 7.5 and their comments, moving much of their content to Rule 7.1, Rule 7.3, and their comments.1 These amendments streamline the Rules, moving away from specific restrictions to reliance on the standard that advertising cannot be “false or misleading.”
The major substantive changes are as follows: - New Rule 7.3(f) makes it clear that lawyers can compensate both lay and lawyer employees for marketing activities: “A lawyer shall not compensate, give, or promise anything of value to a person who is not an employee or lawyer in the same law firm for the purpose of recommending or securing the services of the lawyer or the lawyer’s law firm . . .” (emphasis added). According to the TBA, the former rule forced law firms to “dedicate time and resources to findings ways to compensate such people, indirectly if necessary,” in order not to run afoul of the former rule. The new rule “allow[s] lawyers and law firms greater freedom as to how to compensate those that they actually employ.”2
- New Rule 7.3(f)(5) adds the Model Rule provision on reciprocal referral agreements:
A lawyer may . . . refer clients to another lawyer or a nonlawyer professional pursuant to an agreement not otherwise prohibited under these Rules that provides for the other person to refer clients or customers to the lawyer; if: (i) the reciprocal referral agreement is not exclusive; and (ii) the client is informed of the existence and nature of the agreement.
However, lawyers who wish to share fees through a reciprocal referral agreement must still comply with the requirements of Rule 1.5( e).3 - New Rule 7.3(b)(2) allows lawyers to solicit “a person who routinely uses for business purposes the type of legal services offered by the lawyer.” According to Comment [4], Examples include persons who routinely hire outside counsel to represent the entity; entrepreneurs who regularly engage business, employment law, or intellectual property lawyers; small business proprietors who routinely hire lawyers for lease or contract issues; and other people who routinely retain lawyers for business transactions or formations. - The detailed requirements for written solicitations contained in former Rule 7.4(c)(1)-(6) are deleted, and instead new Rule 7.4(c) merely requires that a solicitation contain “the words ‘Advertising Material’ on the outside envelope, if any, and at the beginning and ending of any recorded or electronic communication . . .”
- New Comment [7] to Rule 7.1 makes it clear that distasteful lawyer ads are not subject to sanction, as long as they are not false or misleading: Questions of effectiveness and taste in advertising are matters of speculation and subjective judgment. . . . Television, the Internet, and other forms of electronic communication are now among the most powerful media for getting information to the public, particularly persons of low and moderate income; prohibiting television, Internet, and other forms of electronic advertising, therefore, would impede the flow of information about legal services to many sectors of the public. . . .” - Comment [9] to Rule 7.1 acknowledges that advertisement of specialization in admiralty law, as well as patent law, is now permitted as a matter of tradition.
According to the TBA, the amendments should “alleviate existing consumer harm by increasing the public’s access to communications about the availability of legal services.”4 Along with the TBA, we can hope that streamlining the rules increases access to justice.
1 The TBA petition also requested changes to Rule 7.6 regarding intermediary organizations, but the supreme court issued a separate order proposing amendments to Rule 7.6 and Tennessee Supreme Court Rule 44, and invited comments to its proposal by November 30, 2021. Order, In re RULE 8, RPC 7.6 AND RULE 44, RULES OF THE TENNESSEE SUPREME COURT, No. ADM2021-01008 (Tenn. filed Sept. 1, 2021). 2 Tennessee Bar Association, PETITION OF THE TENNESSEE BAR ASSOCIATION FOR THE ADOPTION OF REVISIONS TO TENN. SUP. CT. R. 8, RPCs 7.1, 7.2, 7.3, 7.4, 7.5, and 7.6 , No. ADM2020-01505 (Tenn. filed Oct. 27, 2020), at 5. 3 (e) A division of a fee between lawyers who are not in the same firm may be made only if (1) the division is in proportion to the services performed by each lawyer or each lawyer assumes joint responsibility for the representation; (2) the client agrees to the arrangement, and the agreement is confirmed in writing; and (3) the total fee is reasonable. 4 TBA Petition, supra note 2, at 1.
