The state Supreme Court issued a stay of enforcement of Opinion 745 of the Advisory Committee on Professional Ethics (ACPE), lifting the ban on referral fee payments to out-of-state attorneys by certified civil trial attorneys.
The New Jersey State Bar Association sought a stay of Opinion 745 pending a disposition of various petitions of review of the opinion before the Supreme Court. NJSBA Treasurer Diana C. Manning, Christina Vassilou Harvey and Kyle A. Valente wrote the brief.
The NJSBA is challenging ACPE Opinion 745, arguing it upends a decades-long interpretation of the rule governing the ability of certified trial attorneys to pay referral fees to lawyers. There is no distinction in the plain language of the New Jersey Rules of Court between in-state and out-of-state attorneys, the NJSBA said in its briefing.
The Association further argued that the ACPE improperly characterizes referral fees as legal fees. Such a characterization triggers the prohibition against paying legal fees to an attorney who is not permitted to practice law in New Jersey. But under R. 1:39-6(d), referral fees paid by certified civil trial attorneys are not compensation for legal fees – rather they are paid “without regard to services performed or responsibility assumed by the referring attorney...”
In its opinion, the ACPE analyzed R. 1:39-1 through -9 along with the Rules of Professional conduct in reliance on its opinion that referral fees to out-of-state attorneys are akin to compensation to attorneys who are not licensed to practice in New Jersey. According to the ACPE, referral fees are a division of a legal fee, paid for legal services rendered, and therefore are strictly prohibited by RPC 7.2(c), which prohibits attorneys from giving anything of value to a person for recommending a lawyer’s services; RPC 7.3(d), which prohibits compensation or anything of value to be given to a person for recommending the lawyer’s employment by a client or as a reward for recommendation of the attorney; and RPC 1.5(e), which permits payments of legal fees in proportion to legal services rendered when a lawyer has assumed joint responsibility for the representation.
In addition to pointing out that the ACPE misinterprets the court rule that does not distinguish between in-state and out-of-state attorneys and referral versus legal fees, the Association argued that Opinion 745 undermines the goals of the attorney certification program. The Supreme Court has not yet set a date for argument on the matter. A full copy of the briefing may be found here.
Supreme Court Clarifies RPCs Regarding Communication With Represented Parties on Social Media
The Supreme Court adopted an official comment to Rule of Professional Conduct 4.2 regarding communication with represented parties to include “acts of another.” The adoption follows a ruling in In re Robertelli, 248 N.J. 293 (2021), which involved an attorney whose paralegal communicated with a represented party through Facebook.
In Robertelli, a paralegal employed by an attorney representing a public entity sent a flattering message to a public employee who brought a personal injury action against a public entity. The employee granted the paralegal “friend” status, thus permitting the paralegal to access the employee’s personal information. The attorney was brought up on disciplinary charges for violating RPC 4.2 and other RPCs. He argued that he had no understanding of Facebook and did not direct the paralegal to communicate with the employee.
While the disciplinary charges were dismissed, the Court referred the matter to the ACPE for further study and consideration of amendments to the RPCs.
“Today, social media is ubiquitous, a common form of communication among members of the public,” Justice Barry Albin said in the unanimous opinion. “Attorneys must acquaint themselves with the nature of social media to guide themselves and their non-lawyer staff and agents in the permissible uses of online research. At this point, attorneys cannot take refuge in the defense of ignorance.”
The official comment clarifies that “[a] lawyer shall not engage in a prohibited communication through the acts of another” and that communications “intended to gain access to non-public social media postings of a represented party fall within the prohibition of [RPC 4.2].”