Opinion 17:
Who Gets The Toaster?
By
Marcia A. Johnson, Director
Minnesota Office of Lawyers Professional Responsibility
Reprinted
from Bench & Bar of Minnesota (August
1993)
It is the age of
rebates; it is the time of perks and incentives. Companies need a gimmick.
Even companies that sell services to lawyers. And the perks aren’t just toasters these days. They start with coffee makers, Walkman
radios, or tickets to the Guthrie and they progress in value of color TVs,
compact disc players, and airline tickets, as well as hard cold cash.
Imagine the following
scenario: a managing partner of a medium-sized law firm is called in to resolve
a dispute between two secretaries that has quickly escalated. The dispute is this: who is the owner of a
free vacation in the Caribbean, offered by a local court reporting firm in
exchange for scheduling a certain number of depositions?
One secretary has been
responsible for scheduling the depositions in a large piece of litigation at
the firm. She has earned almost enough
credit with the court reporting firm to qualify for the vacation trip, when she
goes on maternity leave. She requests
her replacement to continue to schedule the depositions with the same firm. The replacement secretary does so, but also
takes the free tickets.
The lawyer is
temporarily nonplused …
Who is the rightful
owner of the free vacation? Secretary
1, secretary 2, the lawyer who conducted the depositions, or the client, who is
ultimately responsible for paying for the court reporting services?
The answer is, the
client. But there are other questions
that must be answered besides that of ownership. What are a lawyer’s ethical obligations with respect to the
acceptance by the lawyer, or a nonlawyer employee of the firm, of rebates,
gratuities, or incentives for simply scheduling services for which the client
is expected to pay?
The Lawyers Board
adopted Opinion 17, “Accepting Gratuities from Court Reporting Services and
Other Similar Services,” at its June 18, 1993 meeting. The opinion, reprinted below, clarifies the
Board’s position with respect to a lawyer’s ethical obligations regarding
gratuities from service providers.
OPINION NO. 17
ACCEPTING GRATUITIES FROM COURT
REPORTING SERVICES AND OTHER SIMILAR SERVICES
It
is improper for a lawyer to accept, or to permit any nonlawyer employee to
accept, a gratuity offered by a court reporting service or other service for
which a client is expected to pay unless the client consents after
consultation. However, a lawyer may
accept nominal gifts, such as pens, coffee mugs, and other similar
advertising-type gifts without consent of the client.
See Rules 1.4, 1.5(a),
1.8(f) (1), and 5.3, Minnesota Rules of Professional Conduct (MRPC). See also definition of “consultation”
in the MRPC terminology section.
The rationale of the
opinion is self-evident. If a lawyer
receives something of value, for ordering a service for which the client must
pay, the lawyer is really receiving additional compensation to which he or she
is not entitled, absent client consent.
ABA Opinion 278 (undated) decided that “if a lawyer accepts a gratuity
from anyone without his client’s knowledge and consent … the gratuity really
belongs to the client.”
The fact that it is
not a lawyer, but a nonlawyer employee of the firm who may have received the
benefit does not relieve the attorney of his or her professional
obligations. While nonlawyers are not
subject to professional discipline, the lawyer for whom they work is
responsible for ensuring that their conduct is compatible with the professional
obligations that apply to the lawyer.
The lawyer may herself be guilty of a violation of the Rules of
Professional Conduct if she knows of the conduct, ratifies it, or having direct
supervisory responsibility over the nonlawyer and knowing of the conduct at a
time when the conduct can be avoided or remedial measures can be taken, fails
to do so.Ftn 1
Attorneys are not
prohibited from accepting gifts and awards from court reporting firms, or other
services for which a client is expected to pay, so long as the client is
consulted and consents. What, then,
does the client need to know about such gifts?
“Consultation” is defined by the MRPC as “information reasonably
sufficient to permit the client to appreciate the significance of the matter in
question,” e.g. the nature of the gift or incentive, whether the
services could be obtained for less money if the gifts or incentives were
refused, and whether the cost of service is comparable to that charged by other
providers of like services in the area that do not offer such a gratuity or
incentive.
No client consent is
necessary for those gifts that are truly nominal in value. But what is nominal? Calendars with the company logo? Sure.
Popcorn? Well, it may not be an
“advertising-type” gift, but surely there can be an exception for popcorn. Gift certificates to Dayton’s? Cash bonuses of up to $100? Trips to the Bahamas? No.
The safest course is to consult your client, if in doubt.
NOTES