Rational Ethics?
OK, how is this for rational ethics? As an attorney in Maryland or presumably in any state, I can start an ancillary business (let’s call it AB) like investment management or a lobbying shop or an insurance business which will serve both my firm and other customers. And presumably, because I own AB, any time a customer of AB needs a lawyer, AB’s employees will recommend my firm and any time my client needs a service, I’ll recommend AB. Of course, it’s likely that clients will shuffle back and forth between my firm and AB, but golly, that’s just serendipitous. Yes, as a lawyer in Maryland, I can engage in all of this, completely ethically, without concern about quid pro quo referrals or conflict of interest. I just can’t join a networking group and get to know some of the other business people in my community because that would make me beholden to the others in the group which would irreperably compromise my independent judgment.
If someone can provide a rational explanation of this that doesn’t involve a double standard for small firm practitioners and large firm attorneys, please post your comments below or send me a link to a post at your blog.
The “AB” arrangement you describe would be unethical in my jurisdiction. For much the same reason that the “network group” is unethical.
The “AB” arrangement you describe would be unethical in my jurisdiction. For much the same reason that the “network group” is unethical.
Turning to the Maryland Rules, it says:
“(b) A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyers responsibilities to another client or to a third person, or by the lawyer’s own interest, unless:
(1) the lawyer reasonably believes the representation will not be adversely affected; and
(2) the client consents after consultation.
(c) The consultation required by paragraphs (a) and (b) shall include explanation of the limitations of the common representation and any limitations resulting from the lawyer’s responsibilities to another, or from the lawyer’s own interests, as well as the advantages and risks involved.”
MD RPC 1.7
Therefore, while getting a client to buy or sell products or services from a business concern in which you have an interest is not per se unethical the situation is covered. Disclosure is key. What if the client wants you to negotiate a better deal with the video deposition company you own, isn’t that materially adverse, I think so.
The comment to the rule elaborates and says further that “…A lawyer may not allow related business interest to affect representation, for example, by referring clients to an enterprise in which the lawyer has an undisclosed interest.”
-BG
Turning to the Maryland Rules, it says:
“(b) A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyers responsibilities to another client or to a third person, or by the lawyer’s own interest, unless:
(1) the lawyer reasonably believes the representation will not be adversely affected; and
(2) the client consents after consultation.
(c) The consultation required by paragraphs (a) and (b) shall include explanation of the limitations of the common representation and any limitations resulting from the lawyer’s responsibilities to another, or from the lawyer’s own interests, as well as the advantages and risks involved.”
MD RPC 1.7
Therefore, while getting a client to buy or sell products or services from a business concern in which you have an interest is not per se unethical the situation is covered. Disclosure is key. What if the client wants you to negotiate a better deal with the video deposition company you own, isn’t that materially adverse, I think so.
The comment to the rule elaborates and says further that “…A lawyer may not allow related business interest to affect representation, for example, by referring clients to an enterprise in which the lawyer has an undisclosed interest.”
-BG
Offhand, I’d say the difference between recommending clients to your own firm/business verses a firm/business you knew through a networking association is that you know your ability to help your clients, and presumably a lot of background information about the client. However, as to the other firm/business, they don’t know the client like you do, nor do you really know the firm or business. You have merely seen their public face and do not know what issues may lie below the surface. Because of your expertise and relationship with the client, they look upon you as someone who can give trusted advice. To refer the client and steer them the wrong way would damage both your reputation and the client’s interests. The rule is in place as a failsafe to keep this from happening.
Offhand, I’d say the difference between recommending clients to your own firm/business verses a firm/business you knew through a networking association is that you know your ability to help your clients, and presumably a lot of background information about the client. However, as to the other firm/business, they don’t know the client like you do, nor do you really know the firm or business. You have merely seen their public face and do not know what issues may lie below the surface. Because of your expertise and relationship with the client, they look upon you as someone who can give trusted advice. To refer the client and steer them the wrong way would damage both your reputation and the client’s interests. The rule is in place as a failsafe to keep this from happening.
I think the problem you might be having here is with your definition of “ethical”. As Justice Potter Stewart said, “There is a difference between what you have a right to do and what is right to do.” We shouldn’t confuse what is legal and what is ethical.
Just because Maryland or any other jurisidiction permits the practice, does not make it ethical. I believe most any ethicist would say that either the self referral or the network referral is CLEARLY unethical.
When put in a position of self interest, far too many people will opt for what is in THEIR self interest, not their client’s best interest.
I think the problem you might be having here is with your definition of “ethical”. As Justice Potter Stewart said, “There is a difference between what you have a right to do and what is right to do.” We shouldn’t confuse what is legal and what is ethical.
Just because Maryland or any other jurisidiction permits the practice, does not make it ethical. I believe most any ethicist would say that either the self referral or the network referral is CLEARLY unethical.
When put in a position of self interest, far too many people will opt for what is in THEIR self interest, not their client’s best interest.