101019 RIEO, ETH 2019-04

• Case Date: October 10, 2019
• Court: Rhode Island

ETH 2019-04 Ethics Advisory Panel Op. 2019-04 Rhode Island Ethics Opinion Rhode Island Supreme Court October 10, 2019           FINAL          FACTS          The inquiring attorney has a private law practice and concentrates in real estate matters, including real estate purchases and refinance transactions. A mortgage broker has solicited the inquiring attorney's participation in the following arrangement that involves the inquiring attorney, the mortgage broker, and a digital marketing agency. Under the proposal, the digital marketing agency agrees to advertise the mortgage broker's business at no cost; the mortgage broker agrees to forward title orders to the inquiring attorney for borrowers' applications; and the inquiring attorney agrees to forward approximately two hundred dollars to the digital marketing agency for each title order he/she receives from the mortgage broker. The inquiring attorney states that the amount he/she pays to the agency for each title order “is built” into his/her settlement agent fee at the borrower's closing. He/she further states that the relationship between the digital marketing agency and the inquiring attorney would be on a 1099 basis, the agency being an independent contractor.          ISSUE PRESENTED          The inquiring attorney asks whether the proposed arrangement is permissible under the Rules of Professional Conduct.          OPINION          The arrangement violates Rule 7.2(c) and is therefore impermissible. REASONING          Rule 7.2(c) states

(c) 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 costs 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;

(3) pay for a law practice in accordance with Rule 1.17; and

(4) refer clients to another lawyer or a nonlawyer professional pursuant to an agreement not otherwise prohibited under these Rules that provides for the other person to refer clients or

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