Ethics Advisory Committee

How do mail away closings work in light of In re Lester*?

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A reader posed this question to me

A recent blog about a South Carolina Supreme Court amendment to a comment following our UPL rule contained the following paragraph:

“Remember that our Supreme Court adamantly told us in In re Lester* that a lawyer must be physically present for a closing. Prior to Lester, a closing attorney might be on vacation and available by telephone to answer closing questions. Lester called a halt to that practice.”

A reader responded, “Claire, can you clarify the effects of In Re Lester on ‘mail away’ closings?” This is such a great question, and I responded that I would answer with a new blog. This is that blog!

In the South Carolina Bar’s publication, Handbook for South Carolina Dirt Lawyers, I included the following discussion of mail-away closings.

“Attorneys in resort areas have done “mail away” closings routinely for years. Titles are examined, closing packages are prepared and mailed to a remote location for signatures. Recent South Carolina Supreme Court disciplinary cases requiring attorneys to be present at closings have caused some attorneys to question whether mail away closings can be done ethically by South Carolina attorneys.

The Supreme Court has not addressed this issue specifically, so no one knows the answer to this question. However, in a seminar in 2005, a lawyer from the Office of Disciplinary Counsel was asked whether an attorney can ethically handle a closing by mail.

He responded that it was his opinion that the attorney should:

           •     Schedule a closing date, time and place;

           •     Advise the clients that they should attend the closing;

           •     Advise the clients that the attorney will be able to provide better representation if the clients attend the closing; and

           •     Require the clients to sign a document indicating they received the foregoing advice but chose not to attend the closing.

Another speaker at the seminar suggested that he would only handle mail away closings if the clients agreed to meet with a lawyer in the clients’ location to execute the documents.

On September 16, 2005, we received a more formal opinion in the form of Ethics Advisory Opinion 05-16. This opinion states that an attorney may ethically conduct a real estate closing by mail as long as it is done in a way that:  (1) ensures that the attorney is providing competent representation to the client; (2) all aspects of the closing remain under the supervision of an attorney;  and (3) the attorney complies with the duty to communicate with the client, so as to maintain the attorney-client relationship and be in a position to explain and answer any questions about the documents sent to the client for signature. To meet this test, according to the opinion, clients must have reasonable means to be in contact with the attorney, by telephone, facsimile, or electronic transmission.

The Opinion states that there is no legal requirement that a client attend the closing, but it must be the client’s decision not to attend the closing. The Opinion acknowledges today’s climate by this statement: “Given today’s technological advances in communications and funds transfer, to require a client living in one part of the country to attend a closing against the client’s own wishes is both unnecessary and punitive.” The Opinion makes the point that the duties of the attorney do not change when the closing is accomplished by mail in this statement: “The prudent attorney will conduct closings by mail in such a fashion that the client is fully informed and properly advised, that the client has a reasonable means to consult with the attorney, and that all personnel assisting the attorney are properly supervised.”

South Carolina closing attorneys are relieved to have this authority and appreciative of the efforts of the South Carolina Bar Ethics Advisory Committee.”

Of course, technology has drastically changed since these words were written, but the legal issues have not. A dirt lawyer can certainly handle mail away closings ethically. But dirt lawyers must still practice law in connection with those closings.

Please feel free to make comments and ask questions about these blogs!

*353 S.C. 246, 578 S.E. 2d 7 (2003).

EAO Opinion 22-04 gives real estate lawyers guidance on non-negotiated checks

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How we did it back in the day

Ethics Advisory Opinion 22-04 addresses a trust accounting question from a real estate practitioner.

The underlying facts are: “Due to the nature of a residential real estate practice, Lawyer frequently issues relatively small dollar amount checks from Lawyer’s trust account to both clients and third parties. A number of these checks are not timely negotiated, resulting in ongoing trust accounting maintenance costs, including labor costs, stop-payment fees and mailing fees for uncashed trust account checks that require stop payments and/or reissuance and re-mailing to the payee.”

This is an age-old concern. When I was in private practice (150 years ago or so), our law firm’s excellent bookkeeper chastised me monthly about the $5.00 check issued for mortgage satisfactions that never seemed to get cashed.

The lawyer poses the following question to the Ethics Advisory Committee: “May Lawyer charge an amount to cover administrative costs associated with stop-payment fees and trust account check reissuance and re-mailing fees for checks that remain outstanding for more than thirty (30) days after issuance?”

Thankfully, the Committee responded affirmatively.

The opinion states that a lawyer may charge a check recipient an amount to cover administrative measures undertaken to resolve the outstanding check, which includes expenses incurred such as stop payment fees and postage fees, provided the amount charged is not unreasonable.

Comment 1 to Rule 1.5 provides, “A lawyer may seek reimbursement for the cost of services performed in-house…by charging an amount that reasonably reflects the cost incurred by the lawyer.” The Committee opined that the lawyer may charge an amount against the recipient’s check to obtain reimbursement for the same, provided the amount charged is not unreasonable. To collect on the amount charged, Lawyer may deduct the amount to be charged from funds that remain in trust after adequate steps have been taken to cancel, void, or otherwise nullify the previously issued check…”

The Committee imposed one limitation by stating that the amount to be charged is limited to the total amount of funds that were paid by the outstanding check.

This opinion may provide a small amount of assistance, but the administrative nightmare remains. Small checks that fail to be negotiated will remain a monthly quagmire. But this opinion may allow law firms to at least recoup a portion of the cost.

First Ethics Advisory Opinion of 2022 discusses “Land Title Dispute” email

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Is a unilateral non-client communication entitled to confidentiality?

We have our first Ethics Advisory Opinion of 2022 and it touches on a real estate matter.  In EAO 22-01, a lawyer posed a question to the Ethics Advisory Committee about an unsolicited email from an individual with whom the lawyer had no prior relationship.

The subject line of the email read “Land Title Dispute”. The email requested the lawyer’s “legal insight on a real estate situation” and included a description of the underlying facts with an inquiry of the lawyer’s opinion about whether the sender had a “legitimate claim.”

The lawyer immediately recognized that the facts recited in the message related to a matter in which the lawyer and the lawyer’s client had adverse interests to those of the sender. The lawyer replied to the email informing the sender of the adverse interests and stating that the lawyer could not represent the sender. The email further stated, “Please let me know if and when you are represented by other counsel and I will (be) happy to communicate with them regarding this matter.” The lawyer then took the opportunity to inform the sender that the lawyer believed the sender’s “proposal to profit off of this mistake is both theft and fraud.”

The lawyer asks the Committee whether the lawyer has an ethical obligation to maintain confidentiality of the information in the email since it was provided in the course of seeking legal advice.

The Committee first stated that the sender was neither a current nor a former client of the lawyer. The answer to the question depended on whether the sender is a “prospective client” under Rule 1.18. This rule reads: “A person with whom a lawyer discusses the possibility of forming a client-lawyer relationship with respect to a matter is a prospective client only when there is a reasonable expectation that the lawyer is likely to form the relationship.” Comment 2 reads: “Not all persons who communicate information to a lawyer are entitled to protection under this Rule. A person who communicates information unilaterally to a lawyer without any reasonable expectation that the lawyer is willing to discuss the possibility of forming a client-lawyer relationship, therefore, is not a “prospective client” …

The Committee concluded that the lawyer had no ethical obligation to maintain confidentiality of the information in the email.

This is excellent news! We’ve all heard stories of an individual about to seek a divorce who holds meetings with all the divorce lawyers in town to limit the spouse’s choice of counsel. Thankfully, that tactic should not extend to an unsolicited email.

Succession planning and the real estate practitioner

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Like me, many of my real estate practitioner friends are retirement age. Before COVID-19 prevented travel, I often visited our law firms across South Carolina and at some point became acutely aware of our aging population. Real estate must not be as fascinating to young folks as it is to me and many other lawyers my age. I announced last week that I will retire next February. For corporate employees like me, the retirement process is easy. Let me restate that. Once the extremely difficult mental threshold is crossed, the paperwork is easy.

Retirement from a law firm is much more difficult both in the decision-making process and the paperwork! The old not-so-funny joke is that lawyers don’t retire; they die at their desks. Don’t do that!

My office encourages our real estate lawyers to seriously consider succession planning at least five years before they plan to step away from their offices. For sole practitioners, no succession planning means the value built over a lifetime of work vanishes the moment of death or disability. Lawyers who practice in firms can also lose their sweat equity if they don’t have the foresight to plan.

We encourage sole practitioners to consider hiring younger lawyers to train up to take over their practices. We also encourage lawyers to identify other lawyers who may be interested in purchasing their practices or merging practices. Conversely, we encourage younger lawyers who seek to grow their practices to reach out to lawyers nearing retirement age to explore purchasing or merging practices.

Several years ago, I contacted my friend Bill Higgins, a practitioner here in Columbia who has worked extensively with ethics and business entity issues, and asked him to develop a practice area that includes succession planning for lawyers. Bill has done that, and if you need legal advice in this regard, I highly recommend Bill as an excellent source.

If you want information about the firms who practice real estate and who might be open to discussing the issues of merging or purchasing practices, reach out to your title insurance company. We are singularly positioned to know what’s going on in the market place and we might be able to point you in the direction of a lawyer or firm that may want to discuss these issues.

The reason this topic came to my mind now is that the Ethics Advisory Committee issued new EAO 20-03 that touches on the issue of succession planning. The question in this opinion is a little complicated. “A, B, C & D, P.A.” is the name of an existing law firm.  Lawyer A is already retired. Lawyer B is the 100% equity owner of the firm, and now seeks to retire. Lawyers C and D are non-equity members who have each practiced with the firm more than ten years. Lawyer C plans to practice with another firm.

Lawyer D seeks to purchase most of the assets of the firm and to operate a new firm called “A, B & D, P.A.” in the same location, using the same phone number and website and retaining two or more of the employees. Lawyer D seeks to continue to represent Lawyer B’s current clients in ongoing and future matters if the clients elect to retain the new firm’s services via formal substitution of counsel agreements. The question became whether Lawyer D may ethically utilize the names of retired lawyers A and B in the name of the new law firm.

Analyzing Rules of Professional Responsibility 7.1 and 7.5 and prior Ethics Advisory Opinions 79-06 and 75-01, the Committee opined that Lawyer D may use the names Lawyers A and B in the new firm name.  The Rules have changed since the prior opinions, and the Committee sought to provide us with this updated analysis. The Committee assumed Lawyer D had the legal right to use the names of the two retired partners.

In Opinion 02-19, the Committee opined that a law firm may continue to use the name of a deceased or retired partner if the new law firm is a “bona fide successor” to the prior firm.  The question for the current opinion became what constitutes a bona fide successor, and the Committee stated that Lawyer D will be a part of the continuing line of succession of the firm and may use the names.

The Committee encouraged Lawyer D to review the comments to Rule 7.5 and EAO 05-19. The Committee also suggested that Attorney B remain at the firm for a time after the purchase to increase the “bona fides” of the firm name since both lawyers will work under the new name and therefore provide a continuing succession in the firm’s identity. Additionally, Lawyer D was encouraged to take care to avoid misleading the public by using asterisks or some other means to show that Lawyers A and B are retired.

This brief discussion is an example of how complicated succession planning can become. I encourage you to start early!

Is it ethical to buy a competitor’s name as a search engine “keyword”?

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Most South Carolina dirt lawyers don’t do much direct advertising, but some make use of Internet keyword advertising. For that reason, I wanted to make sure you noticed the recently issued Ethics Advisory Opinion 20-01, which you can read here.

South Carolina’s Ethics Advisory Committee was asked the following question:  “May a lawyer bid on and use the names of other lawyers and law firms as a part of a competitive keyword advertising strategy?” In other words, it is ethical for a lawyer to pay an internet search engine to insert his or her ads when a searcher types a competitor’s name into the search engine?

In some search engines, the resulting advertisements appear on the right side of the page. In other search engines, they may appear marked as an “ad” or “sponsored” above the organic search results.

The Committee pointed out that competitive keyword advertising is different from search engine optimization (SEO). SEO is the process of increasing the visibility of a web page by users of a search engine and is directed at optimizing unpaid placement organic results. This opinion addresses only keyword advertising.

The Committee followed the lead of New Jersey, Texas and Wisconsin and opined that a lawyer may purchase an internet competitive advertising keyword that is the name of another lawyer or law firm in order to display a “sponsored” website advertisement.

The Committee stressed that lawyers should be mindful to comply with all advertising rules and should use care to ensure that no derogatory or uncivil message is conveyed. The Committee also pointed out that surreptitious redirection from a competitor’s website to a lawyer’s own website via hyperlink is prohibited under our Rules.

What do you think?

South Carolina lawyers: “Reply All” is not always your friend!

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Don’t communicate with represented parties accidentally!

business woman shocked computer

“Ruh-roh”

There are numerous ways a lawyer can get into trouble with the Supreme Court, but inadvertently communicating with another lawyer’s client can be avoided simply by thinking before hitting “Reply All” in your email system.

Ethics Advisory Opinion 18-04 addressed this concern. The situation posed to the Ethics Advisory Committee was:

“Factual Background: Lawyer A sends an email to Lawyer B and copies several people, including Lawyer A’s client. Lawyer A has not previously consented to Lawyer B contacting Lawyer A’s client and does not expressly do so in the email.

Question:  If Lawyer B receives an email from Lawyer A on which Lawyer A’s client is copied, may the lawyer “reply to all” – copying Lawyer A’s client with the response – without the express consent of Lawyer A?”

The Committee discussed Rule 4.2, SCRPC, which provides that in representing a client, a lawyer shall not communicate about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter unless the lawyer has consent of the other lawyer or is authorized to do so by law or a court order.

The purpose of the rule is to ensure proper functioning of the legal system by protecting a party who is represented by counsel from overreaching by other lawyers. The rule is also aimed at preventing interference in the lawyer-client relationship.

Two previous opinions discussed whether letters can be ethically mailed to opposing parties represented by counsel. Ethics Advisory Opinion 91-02 advised prosecutors to avoid copying criminal defendants on court appearance notifications without the consent of the defense attorney. Similarly, Ethics Advisory Opinion 93-16 advised plaintiffs’ lawyers to avoid copying defendants on settlement offers to defense counsel without the consent of defense counsel.

The Committee opined that copying an opposing party on email is prohibited in the same way sending a letter is prohibited, absent consent of opposing counsel. The question then became whether consent must be express or may be implied. The Restatement (Third) of the Law Governing Lawyers indicates the consent may be implied: “An opposing lawyer may acquiesce, for example, by being present at a meeting and observing the communication. Similarly, consent may be implied rather than express, such as where such direct contact occurs routinely as a matter of custom, unless the opposing lawyer affirmatively protests.”

The North Carolina, Alaska and New York City Bar Committees had previously opined that, while this consent may be implied, the mere fact that an attorney copies a client on an email sent to opposing counsel does not, by itself, constitute implied consent to a response sent to both opposing lawyer and the opposing client. South Carolina’s Committee agreed.

The Committee stated, however, that consent to a “reply all” may sometimes be implied. The Committee indicated that whether the matter is adversarial is an important factor. Additionally consent may be implied if the email is about scheduling under circumstances whether the client’s availability is at issue along with counsels, if email conversations among counsel and sophisticated clients together are the normal course of dealing, or if the lawyer initially cc’d the client expressly invites a “reply all” response.

The Committee cautioned that the practice of copying a client by either “cc” or “bcc” when emailing opposing counsel poses the risk of revealing confidential information. The Committee said that the recipient of an email might not recognize all the names in a group email and might communicate with opposing client’s client inadvertently by using “reply all”.  For these reasons, the Committee said that it is generally unwise to “cc” a client on an email communication to opposing counsel.

The Committee summarized its opinion: “Absent consent of Lawyer A, Lawyer B may not communicate with Lawyer A’s client about the subject of the representation either directly or by copying Lawyer A’s client in an emails sent in response to Lawyer A’s email on which the client was copied. The mere fact that a lawyer copies his own client on an email does not, without more, constitute implied consent to a “reply to all” responsive email.

My advice? Use caution when hitting “reply all” in all circumstances! “Less is more” is a generally good rule to follow in email communications. I have actually heard that one lawyer may set up another lawyer by coping a client in email communications. Don’t be a victim!

Lawyer accolades

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Is it ethical to advertise you’ve won?

If you are a recipient of legal awards and accolades, you’ll be glad to know that we now have an Ethics Advisory Opinion that tells us it is acceptable to let the world know you have won, under certain circumstances.

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Many newspapers, television stations and national publishers compile an annual “best of” list by surveying their customers or conducting evaluations. Some of the entities ask for nominations from their customers or ask for a fee to be paid in order to receive a nomination. Some accept all nominations and votes without the consent of the nominee. Most offer a badge or emblem to be used on firm websites and in other marketing materials to publicize the honor.

The question posed in EAO 17-02 is whether a South Carolina lawyer may accept and advertise a designation or accolade such as “Best Lawyers” or “Super Lawyers” in a legal publication or newspaper readers’ poll, in conformity with the rules for lawyer advertising.

The Ethics Advisory Committee answered that these accolades and designations, including the badges and symbols are ethical when:

  1. The entity or publication has strict, objective standards for inclusion that are verifiable and would be recognized by a reasonable lawyer as establishing a legitimate basis for determining whether the lawyer has the knowledge, skill, experience, or expertise indicated by the listing;
  2. The standards for inclusion are explained in the advertisement or information on how to obtain the standards is provided in the advertisement. Referral to the publication’s website is adequate;
  3. The date of the designation or accolade is included;
  4. An advertisement makes it clear that the designation or accolade is made by a specific publication or entity through the use of a distinctive typeface or italics;
  5. No payment of any kind for any purpose, including, but not limited to, advertising or purchase of commemorative items, is required of the lawyer, or the lawyer’s firm, for giving the designation, accolade or inclusion in the listing; and
  6. The organization charges the lawyer only reasonable advertising fees to the extent it not only confers the designation or accolade but also provides a medium for promoting or advertising the designation or accolade.

The opinion stated that courts and bars of several jurisdictions nationwide uniformly approved the acceptance of designations or accolades including badges, symbols and other marks in attorneys’ advertising, subject to conditions designed to insure that the use of the accolades or designations is not false or misleading.

Don’t Share Fees with Non-Lawyers!

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New Ethics Advisory Opinion warns against web-based referral service

South Carolina Ethics Advisory Opinion 16-06 fields questions about an attorney directory website fixed-fee legal referral service. The service works like this:

  • Attorney signs up for the service by agreeing to offer certain flat fee services.
  • The fee for the service is set by the internet advertising directory website (service).
  • The service makes the referral to the attorney, who then contacts the client to arrange a meeting and begin the representation.
  • The service handles payment processing from the client and holds the funds until the legal work is completed.
  • Upon completion of the work, the service transfers the full amount of the fee to attorney’s account.
  • Upon completion of the work, the service charges the attorney a “per service marketing fee” which seems to be based upon the legal work provided and is only incurred when the lawyer provides the legal work. For example, the legal fee for an uncontested divorce may be $995, and the marketing fee is $200, while the legal fee to start a single member LLC is $595, and the marketing fee is $125.

Rule 5.4 of the Rules of Professional Conduct prohibits a lawyer from sharing legal fees with a non-lawyer. There are some exceptions set out in the rule, but those exceptions generally fall into two categories, payments to a deceased lawyer’s estate and payments to non-lawyer employees in a profit sharing compensation or retirement plan. The exceptions, of course, don’t apply to this attorney directory situation.

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The Ethics Advisory Committee stated that the situation described above where the service collects the legal fee and transmits it to the attorney and in a separate transaction, the service receives a fee for its efforts, is an indirect method to share attorney’s fees. Attempting to disguise the fee-sharing arrangement in two transactions doesn’t cure the problem.  Calling the fee received by the service a “per service marketing fee” also doesn’t cure the problem.

Rule 7.2 (c) prohibits a lawyer from giving anything of value for recommending the lawyer’s services, with three exceptions. One of the exceptions allows a lawyer to pay for the “reasonable costs of advertisements”. The Ethics Advisory Committee pointed to Comment 7 to the rule which lists reasonable advertising costs such as newspaper, radio and television advertisements and on-line directory listings.  The Committee stated that the permitted advertising is typically for a fixed cost per add or per run of air time, and that reasonableness of the costs can be assessed by the market rate.

The Opinion says that the internet service purports to charge the lawyer fees based on the type of legal service rather than the cost of advertising. Since it doesn’t cost the service any more to advertise online for a family law matter than for preparing corporate documents, the fees are not rational and do not fall under the exception for “reasonable costs of advertisements”.

Dirt lawyers, be careful when assessing any type of referral arrangement, and, when in doubt, ask questions of the Ethics Advisory Committee.

When Do I Have to Turn My Fellow Lawyer In?

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We have a hot-off-the-presses South Carolina Ethics Advisory Opinion (16-04, July 18, 2016) in which a lawyer asks when opposing counsel must be reported to the Office of Disciplinary Counsel (ODC). The opinion only relates to dirt in that it revolves around a foreclosure matter, but all of us as attorneys may need guidance in these extremely difficult situations from time to time.

The facts are as clear as mud, but my colleague and former foreclosure lawyer, Jennifer Rubin, has attempted to decipher them for us. It appears that Lawyer A (the lawyer who is raising the question) represents a lender in the context of an ongoing mortgage foreclosure sales action. We’re guessing here, but it sounds as if the lender needs to unwind the foreclosure sale, probably because of some agreement or dispute with the borrower. Lawyer B represents the purchaser at the sale. Lawyer B’s client does not want the sale to be unwound, and Lawyer B argues that his or her client enjoys a bona fide purchaser status. Lawyer A argues that Lawyer B purportedly knew of a potential defect prior to paying the balance of the purchase price and acquiring title but failed to reveal that information to the court. In other words, Lawyer B knew his client was not a bona fide purchaser.

whistle blowerLawyer A believes Lawyer B’s conduct has damaged the lender financially and also rises to the level of misconduct that must be reported to the ODC. The question becomes whether Lawyer A must report Lawyer B’s conduct to the ODC immediately or whether the report can be made at the conclusion of the litigation or appeal.

The Ethics Advisory Committee first reviews Rule of Professional Conduct 8.3 which requires a Lawyer to report a fellow lawyer of a violation of the Rules which raises a substantial question of the lawyer’s honestly, trustworthiness or fitness to practice law. Rule 8.3 requires actual knowledge, which implies more than a suspicion of misconduct. But judgment is required of the reporting lawyer. Comment 3 gives guidance by limiting the reporting obligation to “those offenses that a self-regulating profession must vigorously endeavor to prevent.”

Why do we have to report each other? The Committee points to the preamble of Rule 8.3 which states that the legal profession is largely self-governing and that “the legal profession’s relative autonomy carries with it a responsibility to assure that its regulations are conceived in the public interest and not in furtherance of  parochial or self-interested concerns of the bar.”

So, assuming this lawyer’s conduct rises to the level that must be reported, when must the report be made? A partial answer is that the rule is silent as to timing, but the Committee points to prevailing opinions around the country that reporting should be made “promptly”. The Louisiana Supreme Court has said *, “The need for prompt reporting flows from the need to safeguard the public and the profession against future wrongdoing by the offending lawyer.”

The Committee said it believes it is appropriate for the lawyer to consider any potential adverse impact to the client in determining the timing of the report against another lawyer. And because the Rule is silent as to timing, the Committee opined that Lawyer A may wait until the conclusion of the matter if Lawyer A determines that immediate reporting may hurt the client, but the misconduct should be reported promptly at the conclusion of the litigation or appeal.

*In re Rielmann, 802 So.2d. 1239 (Louisiana, 2005)

Donut Fridays

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Ethics Opinion gives them a thumbs up!


donutsSavvy residential dirt lawyers continue to explore innovative marketing methods. A recent Ethics Advisory Opinion (15-02) issued by the Ethics Advisory Committee of the South Carolina Bar blessed the following scenario, with a few caveats:

“Law Firm would like to pursue a practice referred to as “Donut Friday,” where an employee of Law Firm visits the Firm’s existing vendors (e.g., banks, real estate agencies, etc.) and delivers a box of donuts to these vendors. Included with the box of donuts are a dozen koozies bearing the name of Law Firm, as well as a fee sheet, a pamphlet containing information about Law Firm and its staff, and a coupon for $50.00 off Law Firm’s fee for a consultation or real estate closing. None of the marketing materials is addressed or directed to any one person, nor does the material request that existing vendors refer business to Law Firm, although the intent is to receive referrals.”

The Committee stated as a preliminary matter that the mere delivery of gifts or other marketing materials to a business generally without delivery to specific individuals does not constitute solicitation. For that reason, Rule 7.3 of the Rules of Professional Responsibility does not apply. Enclosing law firm materials in a donut box does constitute lawyer advertising, making the remainder of the advertising and communication rules (7.1, 7.2, 7.4 and 7.5) apply.

Because the donut box recipients are existing law firm vendors who refer closing business to the firm, the specific rule at play, according to the Committee, is Rule 7.2(c), which prohibits giving “anything of value to a person for recommending the lawyer’s services.”  The Committee specified that as long as the weekly donut boxes are delivered regardless of whether the lender or real estate agency had referred clients to the law firm that week, and regardless of how many, then the requisite quid pro quo for a Rule 7.2 (c) violation does not exist. The rule would be violated, however, if the delivery of donuts was contingent on the referral of business.

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The Committee said that only the donuts, koozies and coupons (not the fee sheets or pamphlets) would be considered things “of value” under Rule 7.2 because the rule contemplates value to the recipient and not cost to the sender. Finally, the Committee stated that although the Rules of Professional Conduct are “rules of reason”, the prohibition on giving “anything” of value contains no explicit de minimis exception.

Kudos to the law firm that devised this marketing ploy and received the blessing of the Ethics Advisory Committee!