Cba Ethics Committee Opinion
| Publication year | 1992 |
| Pages | 219 |
1992, February, Pg. 219. CBA Ethics Committee Opinion
The Committee has received inquiries addressing several facets of lawyer involvement in the preparation and marketing by non-lawyers of estate planning documents, such as living trust "packages." In particular, the Committee has considered the following scenarios:
1. A non-lawyer (such as a financial planner or life insurance agent) markets a living trust package, gathers family and asset information from the consumer, and forwards the information to a central "factory," which generates the living trust documents. The non-lawyer then delivers the documents to the consumer for signature. While an attorney, either in-state or out-of-state, may assist in preparation and review of documents at the "factory," the consumer has no personal contact with that attorney. In instructions accompanying the living trust package, the consumer is advised to contact independent legal counsel for assistance in clarifying the trust terms and funding the trust. The consumer remits a fee for the living trust documents directly to the non-lawyer, payable to the "factory," out of which the non-lawyer receives a sales commission.
2. A publishing house markets living trust "kits" to the public through direct mail advertising. The consumer makes a payment to the company and receives a living trust kit in return. The kit includes the name of a local attorney, with a recommendation that the consumer contact this attorney for assistance in review of the documents and funding requirements. If the consumer does so, he or she then enters into a fee agreement with the attorney which is independent of the consumer's arrangement with the publishing house.
3. A non-lawyer solicits a customer, collects relevant information, delivers that information to a local attorney, and schedules an appointment for the customer to meet with the attorney. The attorney then prepares a living trust package and arranges for execution of the documents at a subsequent meeting, at which the lawyer supervises those funding tasks characterized as "legal" in nature, including assignment of business interests and preparation of deeds for real estate passing to the trust. The non-lawyer assists the client with funding tasks characterized as "non-legal," such as changing beneficiary designations, bank account titles, and stock account titles. In this scenario, there are several conceivable options for collecting and distributing the client's payment for these services. For example, the client might pay a fee for all services to the non-lawyer, from which the attorney is paid for his services according to a pre-arranged "split" of the fee, and the non-lawyer retains the remainder of the fee as compensation for gathering the information and assisting with the "non-legal" funding. As another possibility, the client could pay the entire fee to the lawyer, who would then pay the non-lawyer according to a pre-arranged split which is based on the relative "value" of the lawyer's and non-lawyer's efforts and responsibilities, e.g., one-third to the non-lawyer and two-thirds to the lawyer.
4. In other possible variations on the third scenario, compensation could be provided in some manner other than a "split" of fees between the lawyer and non-lawyer. The consumer could make one payment to the non-lawyer for the information gathering and "non-legal" assistance, and a second payment to the attorney for preparation of the documents and other legal services. The division of fees would reflect a percentage breakdown of the total charge for the living trust package and would be fully disclosed by the non-lawyer to the consumer. In another variation, the attorney, after receiving the entire fee from the consumer, might pay a fee to the non-lawyer off the non-lawyer's invoice, which would reflect an hourly fee for information gathering and "non-legal" funding.
5. Educational seminars on estate planning are sponsored and financed by non-lawyers (such as insurance agents, accountants, or financial planners) and are marketed by newspaper advertisement or direct mail. An attorney addresses certain topics as a guest speaker, but does not share seminar costs or split fees with the seminar sponsors. At the conclusion of the seminar, attendees are asked to complete evaluation forms on which they may request a free interview with the attorney, to be coordinated through the seminar sponsor. A non-lawyer representative of the seminar sponsor would then accompany the attendee to the lawyer's office, where the attorney and the attendee determine whether representation is appropriate. If so, the attorney and client agree to the appropriate legal work and fee.
This Opinion addresses violations of the Code of Professional Responsibility and related ethical considerations in each of the above scenarios. The Opinion does not address related issues with respect to what may constitute the unauthorized practice of law by a non-lawyer, except insofar as those issues have already been decided by the Colorado Supreme Court.
The scenarios described above raise several issues bearing on the appropriate relationships between lawyers and nonlawyers.
By knowingly affiliating or collaborating with a non-lawyer person or entity who prepares and markets legal documents used in estate planning, a lawyer violates Disciplinary Rule ("D.R.") 3-101(A) of the Code of Professional Responsibility. This principle, which is clear from decisions of the Colorado Supreme Court, applies to the "factory" lawyer in the first scenario and the lawyer whose name is used in...
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