UPON THE REQUEST OF A MEMBER OF THE SOUTH CAROLINA BAR, THE ETHICS ADVISORY COMMITTEE HAS RENDERED THIS OPINION ON THE ETHICAL PROPRIETY OF THE INQUIRER’S CONTEMPLATED CONDUCT. THIS COMMITTEE HAS NO DISCIPLINARY AUTHORITY. LAWYER DISCIPLINE IS ADMINISTERED SOLELY BY THE SOUTH CAROLINA SUPREME COURT THROUGH ITS COMMISSION ON LAWYER CONDUCT.
Ethics Advisory Opinion 04-05
Facts
South Carolina firm is developing a multi-state litigation practice. South Carolina firm’s associated co-counsel, who is from another state, will run advertisements outside of South Carolina regarding the potential litigation for the purpose of seeking clients. South Carolina firm and the associated co-counsel will likely work on the litigation together; nevertheless, under some circumstances, out-of-state co-counsel may merely refer cases to South Carolina firm and not actually work on the referred cases.
Question
To what extent, if any, must the South Carolina firm be identified in the advertisements that are run outside of South Carolina?
Summary
In general, a lawyer may advertise through any media so long as the content of the advertisement is not false or misleading. Rule 7.1, SCRPC. In addition, the nonadvertising lawyer may not pay for the costs of advertising unless certain conditions are met, including disclosing whether the advertising lawyer may refer any case received through the advertisement to the nonadvertising lawyer. Rule 7.2(e), SCRPC. Moreover, an advertisement must disclose the geographic location of the office of the lawyer who will actually perform the services advertised. Rule 7.2(i), SCRPC. Thus, under the facts presented, Rules 7.1, 7.2(e) and 7.2(i), South Carolina firm should be identified in any advertisements run by the out-of-state co-counsel that may result in a referral.
Opinion
Under Rule 7.1, SCRPC, a “lawyer shall not make false, misleading, deceptive, or unfair communications about the lawyer or the lawyer’s services.” Advertising would violate this rule if it contains a “material misrepresentation of fact…or omits a fact necessary to make the statement considered as a whole not materially misleading….” Rule 7.1(a), SCRPC. Therefore, any out-of-state advertisements that do not disclose South Carolina firm’s involvement in the litigation may be considered materially misleading under Rule 7.1 because it omits a material fact concerning the nature of the potential client representation.
More specifically, under Rule 7.2, SCRPC, a nonadvertising lawyer may not pay for the costs of advertising unless certain conditions are met. Rule 7.2 provides, in pertinent part:
No lawyer shall, directly or indirectly, pay all or a part of the cost of an advertisement by a lawyer not in the same firm unless the advertisement discloses the name and address of the nonadvertising lawyer, the relationship between the advertising lawyer and the nonadvertising lawyer, and whether the advertising lawyer may refer any case received through the advertisement to the nonadvertising lawyer. Rule 7.2(e), SCRPC (emphasis added).
Under this prohibition, if South Carolina firm in any way pays for the advertising, which under the facts presented may result in client referrals, then South Carolina firm would be required to be identified in the advertisements in accordance with Rule 7.2(e). See, e.g., Ethics Advisory Opinion 99-01 (use of an “advertising cooperative” to run anonymous advertisements on behalf of lawyers who pool their expenses is unethical).
Finally, Rule 7.2(i) further requires all advertisements to disclose the geographic location of the office in which the lawyer who will actually perform the services advertised principally practices law. Rule 7.2(1), SCRPC. Thus, the failure to identify South Carolina firm in out-of-state advertisements resulting in referrals is impermissible under the South Carolina Rules of Professional Conduct.