WSR 20-23-111
RULES OF COURT
STATE SUPREME COURT
[November 6, 2020]
IN THE MATTER OF THE SUGGESTED AMENDMENTS TO RPC 7.2—ADVERTISING, WASHINGTON REVISION COMMENT [6], RPC 5.4 NEW ADDITIONAL WASHINGTON COMMENT [5]—PROFESSIONAL INDEPENDENCE OF A LAWYER, AND RPC 1.5—FEES)
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ORDER
NO. 25700-A-1320
The Washington State Bar Association Board of Governors, having recommended the suggested amendments to RPC 7.2—Advertising, Washington revision comment [6], RPC 5.4 new additional Washington comment [5]—Professional Independence of a Lawyer, and RPC 1.5—Fees, and the Court having approved the suggested amendments for publication;
Now, therefore, it is hereby
ordered:
(a) That pursuant to the provisions of GR 9(g), the suggested amendments as shown below are to be published for comment in the Washington Reports, Washington Register, Washington State Bar Association and Administrative Office of the Court's websites in January 2021.
(b) The purpose statement as required by GR 9(e), is published solely for the information of the Bench, Bar and other interested parties.
(c) Comments are to be submitted to the Clerk of the Supreme Court by either U.S. Mail or Internet E-Mail by no later than April 30, 2021. Comments may be sent to the following addresses: P.O. Box 40929, Olympia, Washington 98504-0929, or supreme@courts.wa.gov. Comments submitted by e-mail message must be limited to 1500 words.
dated at Olympia, Washington this 6th day of November, 2020.
 
For the Court
 
 
 
Stephens, C.J.
 
CHIEF JUSTICE
GR 9 COVER SHEET
Suggested Amendments to
THE RULES OF PROFESSIONAL CONDUCT (RPC)
Rule 7.2 (b)(2), Comment [6] to Rule 7.2, Comment [5] to Rule 5.4, and Rule 1.5 (e)(2)
Submitted by the Board of Governors of the Washington State Bar Association
A. Name of Proponent: Washington State Bar Association
B. Spokespersons:
Rajeev D. Majumdar, President
Washington State Bar Association
1325 4th Avenue, Suite 600
Seattle, WA 98101-2539
(206) 214-5177
Jeanne Marie Clavere, Professional Responsibility Counsel
Washington State Bar Association
1325 4th Avenue, Suite 600
Seattle, WA 98101-2539
(206) 727-8298
C. Purpose:
The purpose of this proposal is to authorize not-for-profit qualified lawyer referral service organizations, including bar associations, to be paid a portion of a lawyer's fee.
RPC 1.5 (e)(2) states "a division of a fee between lawyers who are not in the same firm may be made only if: […] (2) the division is between the lawyer and a duly authorized lawyer referral service of either the Washington State Bar Association or one of the county bar associates of this state."
In 2012, the WSBA RPC Committee interpreted the "duly authorized" language to mean "some kind of affirmative approval by the Washington Bar Association, or by one of the county bar associations of this state." The opinion added that "This committee does not have the power to grant such approval, and it does not have any special insights to offer the inquirer on how to obtain such approval." WSBA Ethics Advisory Op. 2227 (2012).
The WSBA does not have and never has had any mechanism in place to "authorize" lawyer referral services, and we surmise there is little interest within the WSBA to process such requests. Representatives of Spokane, Pierce and King County Bar Associations have advised they have no such mechanism.
The WSBA Committee on Professional Ethics proposes: 1) deletion of RPC 1.5 (e)(2) and, 2) relocation of the authority for lawyers to work with lawyer referral services to RPC 7.2.
The committee proposes amending RPC 7.2 as follows:
(a) Subject to the requirements of Rules 7.1 and 7.3, a lawyer may advertise services through written, recorded or electronic communication, including public media.
(b) A lawyer shall not give anything of value to a person for recommending the lawyer's services, except that a lawyer may
(1) pay the reasonable cost of advertisements or communications permitted by this Rule;
(2) pay the usual charges of a legal service plan or a not-for-profit lawyer referral service, and share a fee with a not-for-profit lawyer referral service that qualifies under Section 501 of the Internal Revenue Code or Washington's Nonprofit Corporation Act, or is a program sponsored by a non-profit organization or a court as authorized under Rule 6.5(a);
(3)….
The committee proposes amending Comment [6] to RPC 7.2:
[6] [Washington revision] A lawyer may pay the usual charges of a legal service plan or a not-for-profit lawyer referral service. A "legal service plan" is a prepaid or group legal service plan or a similar delivery system that assists people who seek to secure legal representation. A "lawyer referral service," on the other hand, is any individual or entity that operates for the direct or indirect purpose of referring potential clients to lawyers, regardless of whether the term "referral service" is used.organization that holds itself out to the public as a lawyer referral service. Such referral servicesNot-for-profit lawyer referral services are understood by the public to be consumer-oriented organizations that provide unbiased referrals to lawyers with appropriate experience in the subject matter of the representation and afford other client protections, such as complaint procedures or malpractice insurance requirements. Consequently, this Rule only permits a lawyer to pay the usual charges of
a not-for-profit lawyer referral service.The "usual charges" of a legal services plan or not-for-profit lawyer referral service are fees that are openly promulgated and uniformly applied. A lawyer also may share a percentage of a fee in exchange for a referral from not-for-profit lawyer referral services, because these services help to facilitate access to justice and, if they operate under Section 501 of the Internal Revenue Code or the Washington Nonprofit Corporation Act, will use the fee only to defray reasonable operating costs. The fee paid by a client who is referred by the service, however, should not exceed the total charges that the client would have paid if the lawyer referral service was not involved.
The language of this comment draws on both comment [15] to proposed RPC 7.3 (b)(2), as part of the proposed revisions to Title 7 of the RPC (November 2018 proposed rules published for comment), and Arizona RPC 7.2 (b)(2).
Third, the committee further proposes new Washington Comment [5] to RPC 5.4 (Professional Independence of a Lawyer) that cross-references proposed RPC 7.2 (b)(2).
RPC 5.4:
….
Additional Washington Comments (3-45)
[3] Paragraph (a)(5) was taken from former Washington RPC 5.4 (a)(2).
[4] Notwithstanding Rule 5.4, lawyers and LLLTs may share fees and form business structures to the extent permitted by Rule 5.9.
[5] For circumstances when a lawyer can share a fee with a not-for-profit lawyer referral service, See Rule 7.2 (b)(2).
D. Hearing:
None is requested.
E. Expedited Consideration:
None is requested.
F. Supporting Material:
ºRPC 1.5(e) - Redline
ºRPC 7.2(b) - Redline
ºRPC 5.4 - Redline
SUGGESTED AMENDMENTS TO RULES OF PROFESSIONAL CONDUCT
RPC 7.2 ADVERTISING
RPC 7.2
(a) Subject to the requirements of Rules 7.1 and 7.3, a lawyer may advertise services through written, recorded or electronic communication, including public media.
(b) A lawyer shall not give anything of value to a person for recommending the lawyer's services, except that a lawyer may
(1) pay the reasonable cost of advertisements or communications permitted by this Rule;
(2) pay the usual charges of a legal service plan or a not-for-profit lawyer referral service, and share a fee with a not-for-profit lawyer referral service that qualifies under Section 501 of the Internal Revenue Code or Washington's Nonprofit Corporation Act, or is a program sponsored by a non-profit organization or a court as authorized under Rule 6.5(a);
(3) pay for a law practice in accordance with Rule 1.17; and
(4) refer clients to another lawyer or LLLT 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.
(c) Any communication made pursuant to this Rule shall include the name and office address of at least one lawyer or law firm responsible for its content.
Comment
[1] – [5] Unchanged.
[6] [Washington revision] A lawyer may pay the usual charges of a legal service plan or a not-for-profit lawyer referral service. A "legal service plan" is a prepaid or group legal service plan or a similar delivery system that assists people who seek to secure legal representation. A "lawyer referral service," on the other hand, is any individual or entity that operates for the direct or indirect purpose of referring potential clients to lawyers, regardless of whether the term "referral service" is used.organization that holds itself out to the public as a lawyer referral service. Such referral servicesNot-for-profit lawyer referral services are understood by the public to be consumer-oriented organizations that provide unbiased referrals to lawyers with appropriate experience in the subject matter of the representation and afford other client protections, such as complaint procedures or malpractice insurance requirements. Consequently, this Rule only permits a lawyer to pay the usual charges of a not-for-profit lawyer referral service.The "usual charges" of a legal services plan or not-for-profit lawyer referral service are fees that are openly promulgated and uniformly applied. A lawyer also may share a percentage of a fee in exchange for a referral from not-for-profit lawyer referral services, because these services help to facilitate access to justice and, if they operate under Section 501 of the Internal Revenue Code or the Washington Nonprofit Corporation Act, will use the fee only to defray reasonable operating costs. The fee paid by a client who is referred by the service, however, should not exceed the total charges that the client would have paid if the lawyer referral service was not involved.
SUGGESTED AMENDMENTS TO RULES OF PROFESSIONAL CONDUCT
RPC 5.4 PROFESSIONAL INDEPENDENCE OF A LAWYER
RPC 5.4
(a) - (d) Unchanged.
Comment
[1] - [2] Unchanged.
Additional Washington Comments (3-45)
[3] Paragraph (a)(5) was taken from former Washington RPC 5.4 (a)(2).
[4] Notwithstanding Rule 5.4, lawyers and LLLTs may share fees and form business structures to the extent permitted by Rule 5.9.
[5] For circumstances when a lawyer can share a fee with a not-for-profit lawyer referral service, see Rule 7.2 (b)(2).
SUGGESTED AMENDMENTS TO RULES OF PROFESSIONAL CONDUCT
RPC 1.5 FEES
RPC 1.5
(e) A division of a fee between lawyers who are not in the same firm may be made only if:
(1)(i) the division is in proportion to the services provided by each lawyer or each lawyer assumes joint responsibility for the representation;
(2)(ii) the client agrees to the arrangement, including the share each lawyer will receive, and the agreement is confirmed in writing; and
(3)(iii) the total fee is reasonable.; or
(2) the division is between the lawyer and a duly authorized lawyer referral service of either the Washington State Bar Association or of one of the county bar associations of this state.