Partnership with Smart Start doesn't seem smart at all.

I saw some attorneys advertising their partnership with Smart Start, the interlock ignition device provider, for persons convicted of driving under the influence. They advertise the coupons that they will give their clients to save $70. Is that ethical?

The Smart Start-ignition interlock device is apparently advertising heavily in Pennsylvania due to the new changes of the rules for ignition interlock. To attract attorneys there's a Smart Start Attorney Partner Program put together by the company. Apparently, the attorney pays some very small fee and is considered a “partner” in the Smart Start business. In return, the attorney is given a number of free coupons worth $70, which they can give to their clients to get reduced fees on the ignition interlock. The attorneys can also get a portable breath tester device for $75, which is apparently less than the $129 purchase price.

This leads into the question, since some attorneys are advertising on websites or elsewhere that they have free coupons and they are using them to attract new clients.

Although at first glance this type of advertisement seems harmless and a nice way to try to attract clients and to give clients a little benefit, in reality this probably violates the Code of Professional Conduct. Obviously, there is no harm with lawyers recommending an interlock ignition program. Most clients don't know anything about ignition interlocks and wouldn't know where to go to get them. But, there is a difference between recommending any business and recommending a business where the lawyer has some sort of interest, even if it's just a nominal partnership where the lawyer gets some free benefits. Further, the lawyer is now able to offer a discount with the free coupons the lawyer gets by becoming a “partner” in the Smart Start ignition interlock business.

The problem is there may be other ignition interlock providers just as good or better and whose prices are better or machine works better. If a lawyer has an interest in one group and is getting benefits, then that could create, to some extent, a conflict. The lawyer is advertising one ignition interlock while getting a benefit. That undermines the independent legal advice a lawyer is supposed to provide.

Normally, a lawyer can't do any sort of business with a client or recommend a client use any kind of business a lawyer is associated with or getting benefits from unless the lawyer gives almost what is like Miranda warnings under Rule 1.8(a) of the Rules of Professional Conduct. Under Rule 1.8(a), the client has to be advised in writing of the lawyer's relationship and told to seek independent counsel to decide whether there can be a waiver of any potential conflict. The waiver then has to be done in writing by the client. Whether this Smart Interlock program is a gimmick where being a partner and getting some free coupons and a cheaper breathalyzer is really doing business with a client is uncertain, but it comes close. It certainly raises some concerns about a lawyer's independence in terms of making recommendations to a client.

What is, to some extent, upsetting is the lawyer is advertising these coupons on their websites and in advertisements to entice clients to come retain them as opposed to someone else. Rule 7.1 of the Rule of Professional Conduct preclude false or misleading statements. A lawyer's participation in some sort of “partnership” program with benefits should be fully revealed even if it was very minor. Under 7.2(c), a lawyer is not allowed to give anything of value for someone recommending a lawyer. Therefore, if a client recommends someone else to the lawyer and the lawyer gives them one of these free interlock coupons, that would be prohibited.

Also, there is a concern that there could be a conflict of interest under Rule 1.7 of the Rules of Professional Conduct if the lawyer is looking out for his own interest by these recommendations as opposed to his clients.

Perhaps the concern is minimal, but on the other hand it does seem that the lawyer's professional judgment is being compromised in terms of recommending a good ignition interlock manufacturer. Perhaps this article is being too conservative in reviewing this because of the little involvement the lawyer has with this business. But, there is always concern when a lawyer gets involved in another business and then makes recommendations to a client. Whether this is really an involvement or just a way to get the lawyer's attention remains to be seen. Any lawyer who is associated with this program must be very careful what they recommend and how they advertise it. At a minimum, if the lawyer is participating in this pseudo-partnership with benefits, at least that fully has to be disclosed to the client. Whether Rule 1.8 fully comes into play remains to be seen and more would have to be known about the lawyer's involvement and how the program is working. But, lawyers should be aware of these concerns. Any time a lawyer is getting involved with another business and advertising that benefits from his or her practice, the lawyer should be aware and careful. Conflicts are created, disclosures may be required, advertising may be false, etc.

Finally, advertising these free coupons undermines the dignity of a lawyer. Law is a respected profession and should keep its distance from other businesses, particularly those which are vigorously trying to sell their product and using the dignity of the legal profession to do so. An attorney should not be selling their profession such to offer free $70 coupons.

Never lend a client money.

As a lawyer, can I lend money to a client with the understanding that it will be paid back out of a real estate settlement or something of that nature?

Lending or advancing monies to a client is usually prohibited. Rule of Professional Conduct 1.8(e) notes a lawyer shall not provide financial assistance to a client in connection with pending or contemplating litigation except for the normal cost of litigation if the client is indigent or cannot pay court costs and expenses. It's interesting that Rule 1.8(e) talks only in terms of litigation, not in terms of general representation. It would appear that that rule ought to be broadened that a lawyer shouldn't advance monies to any client whether the representation involves litigation or contemplated litigation or is just in terms of drafting agreements or giving advice, etc.

The problem with lending a client money is it also involves entering into a business transaction with the client. Rule 1.8(a) prohibits a lawyer from entering into any business transaction with a client when knowingly acquiring ownership or security or other pecuniary interest adverse to the client without the lawyer in writing telling the client the terms and conditions and advising the client of the desirability of seeking independent legal counsel and requiring the client to give informed written consent.

These types of arrangements really create problems. For instance, if a lawyer is lending money to a client for whatever reason (and it's hard to think of any real good reason), the lawyer is really creating a conflict situation under Rule 1.7. The lawyer now has an interest in these matters and, therefore, will want to protect his or her interest first as opposed to solely looking out for the client's interest. A problem could arise at a real estate settlement if the client doesn't want the monies paid out of the settlement. What is the lawyer going to do then? Certainly, the lawyer doesn't want to stop the real estate settlement because that could create deeper problems. Clearly, lending money to a client creates ethical conflicts.

The problems can become even more complicated if the reason the lawyer is lending funds is because of some relationship developed with the client, such as a dating relationship or even a sexual relationship. Of course, a sexual relationship is prohibited with a client under Rule 1.8(j) unless the consensual relationship existed before the attorney-client relationship began.

These types of arrangements can only result in a bad ending. Even if the lawyer was just lending the money out of the goodness of their heart, a lawyer quickly learns that clients forget those who try to help them. Most clients look to the future, not to what the lawyer did in the past. That creates great problems for the lawyer to get repaid down the line.

Therefore, when asked by a client to lend money, the lawyer should begin with the concept a lawyer should never lend money to a client. It's just not allowed and creates a serious conflict of interest down the line. Also, lending money is a sure way to generate a complaint to the disciplinary board when the lawyer goes after the client for payment of the fee. The client comes back and raises all kinds of incompetence of counsel and ineffectiveness of counsel issues. Only in the rarest of situations should a client ever borrow money from a lawyer. The conflict of interest problem just becomes too great.

Chester County lawyer Samuel C. Stretton has practiced in the area of legal and judicial ethics for more than 35 years. He welcomes questions and comments from readers. If you have a question, call Stretton directly at 610-696-4243 or write to him at 301 S. High St. P.O. Box 3231, West Chester, Pa. 19381.

Partnership with Smart Start doesn't seem smart at all.

I saw some attorneys advertising their partnership with Smart Start, the interlock ignition device provider, for persons convicted of driving under the influence. They advertise the coupons that they will give their clients to save $70. Is that ethical?

The Smart Start-ignition interlock device is apparently advertising heavily in Pennsylvania due to the new changes of the rules for ignition interlock. To attract attorneys there's a Smart Start Attorney Partner Program put together by the company. Apparently, the attorney pays some very small fee and is considered a “partner” in the Smart Start business. In return, the attorney is given a number of free coupons worth $70, which they can give to their clients to get reduced fees on the ignition interlock. The attorneys can also get a portable breath tester device for $75, which is apparently less than the $129 purchase price.

This leads into the question, since some attorneys are advertising on websites or elsewhere that they have free coupons and they are using them to attract new clients.

Although at first glance this type of advertisement seems harmless and a nice way to try to attract clients and to give clients a little benefit, in reality this probably violates the Code of Professional Conduct. Obviously, there is no harm with lawyers recommending an interlock ignition program. Most clients don't know anything about ignition interlocks and wouldn't know where to go to get them. But, there is a difference between recommending any business and recommending a business where the lawyer has some sort of interest, even if it's just a nominal partnership where the lawyer gets some free benefits. Further, the lawyer is now able to offer a discount with the free coupons the lawyer gets by becoming a “partner” in the Smart Start ignition interlock business.

The problem is there may be other ignition interlock providers just as good or better and whose prices are better or machine works better. If a lawyer has an interest in one group and is getting benefits, then that could create, to some extent, a conflict. The lawyer is advertising one ignition interlock while getting a benefit. That undermines the independent legal advice a lawyer is supposed to provide.

Normally, a lawyer can't do any sort of business with a client or recommend a client use any kind of business a lawyer is associated with or getting benefits from unless the lawyer gives almost what is like Miranda warnings under Rule 1.8(a) of the Rules of Professional Conduct. Under Rule 1.8(a), the client has to be advised in writing of the lawyer's relationship and told to seek independent counsel to decide whether there can be a waiver of any potential conflict. The waiver then has to be done in writing by the client. Whether this Smart Interlock program is a gimmick where being a partner and getting some free coupons and a cheaper breathalyzer is really doing business with a client is uncertain, but it comes close. It certainly raises some concerns about a lawyer's independence in terms of making recommendations to a client.

What is, to some extent, upsetting is the lawyer is advertising these coupons on their websites and in advertisements to entice clients to come retain them as opposed to someone else. Rule 7.1 of the Rule of Professional Conduct preclude false or misleading statements. A lawyer's participation in some sort of “partnership” program with benefits should be fully revealed even if it was very minor. Under 7.2(c), a lawyer is not allowed to give anything of value for someone recommending a lawyer. Therefore, if a client recommends someone else to the lawyer and the lawyer gives them one of these free interlock coupons, that would be prohibited.

Also, there is a concern that there could be a conflict of interest under Rule 1.7 of the Rules of Professional Conduct if the lawyer is looking out for his own interest by these recommendations as opposed to his clients.

Perhaps the concern is minimal, but on the other hand it does seem that the lawyer's professional judgment is being compromised in terms of recommending a good ignition interlock manufacturer. Perhaps this article is being too conservative in reviewing this because of the little involvement the lawyer has with this business. But, there is always concern when a lawyer gets involved in another business and then makes recommendations to a client. Whether this is really an involvement or just a way to get the lawyer's attention remains to be seen. Any lawyer who is associated with this program must be very careful what they recommend and how they advertise it. At a minimum, if the lawyer is participating in this pseudo-partnership with benefits, at least that fully has to be disclosed to the client. Whether Rule 1.8 fully comes into play remains to be seen and more would have to be known about the lawyer's involvement and how the program is working. But, lawyers should be aware of these concerns. Any time a lawyer is getting involved with another business and advertising that benefits from his or her practice, the lawyer should be aware and careful. Conflicts are created, disclosures may be required, advertising may be false, etc.

Finally, advertising these free coupons undermines the dignity of a lawyer. Law is a respected profession and should keep its distance from other businesses, particularly those which are vigorously trying to sell their product and using the dignity of the legal profession to do so. An attorney should not be selling their profession such to offer free $70 coupons.

Never lend a client money.

As a lawyer, can I lend money to a client with the understanding that it will be paid back out of a real estate settlement or something of that nature?

Lending or advancing monies to a client is usually prohibited. Rule of Professional Conduct 1.8(e) notes a lawyer shall not provide financial assistance to a client in connection with pending or contemplating litigation except for the normal cost of litigation if the client is indigent or cannot pay court costs and expenses. It's interesting that Rule 1.8(e) talks only in terms of litigation, not in terms of general representation. It would appear that that rule ought to be broadened that a lawyer shouldn't advance monies to any client whether the representation involves litigation or contemplated litigation or is just in terms of drafting agreements or giving advice, etc.

The problem with lending a client money is it also involves entering into a business transaction with the client. Rule 1.8(a) prohibits a lawyer from entering into any business transaction with a client when knowingly acquiring ownership or security or other pecuniary interest adverse to the client without the lawyer in writing telling the client the terms and conditions and advising the client of the desirability of seeking independent legal counsel and requiring the client to give informed written consent.

These types of arrangements really create problems. For instance, if a lawyer is lending money to a client for whatever reason (and it's hard to think of any real good reason), the lawyer is really creating a conflict situation under Rule 1.7. The lawyer now has an interest in these matters and, therefore, will want to protect his or her interest first as opposed to solely looking out for the client's interest. A problem could arise at a real estate settlement if the client doesn't want the monies paid out of the settlement. What is the lawyer going to do then? Certainly, the lawyer doesn't want to stop the real estate settlement because that could create deeper problems. Clearly, lending money to a client creates ethical conflicts.

The problems can become even more complicated if the reason the lawyer is lending funds is because of some relationship developed with the client, such as a dating relationship or even a sexual relationship. Of course, a sexual relationship is prohibited with a client under Rule 1.8(j) unless the consensual relationship existed before the attorney-client relationship began.

These types of arrangements can only result in a bad ending. Even if the lawyer was just lending the money out of the goodness of their heart, a lawyer quickly learns that clients forget those who try to help them. Most clients look to the future, not to what the lawyer did in the past. That creates great problems for the lawyer to get repaid down the line.

Therefore, when asked by a client to lend money, the lawyer should begin with the concept a lawyer should never lend money to a client. It's just not allowed and creates a serious conflict of interest down the line. Also, lending money is a sure way to generate a complaint to the disciplinary board when the lawyer goes after the client for payment of the fee. The client comes back and raises all kinds of incompetence of counsel and ineffectiveness of counsel issues. Only in the rarest of situations should a client ever borrow money from a lawyer. The conflict of interest problem just becomes too great.

Chester County lawyer Samuel C. Stretton has practiced in the area of legal and judicial ethics for more than 35 years. He welcomes questions and comments from readers. If you have a question, call Stretton directly at 610-696-4243 or write to him at 301 S. High St. P.O. Box 3231, West Chester, Pa. 19381.