QUESTION - May a private attorney who has formed a partnership for the practice of law with a part-time deputy district attorney for a rural Nevada county defend a person charged with a violation of any Nevada ordinance or law in any of the courts of the State of Nevada?

ANSWER - No.

AUTHORITIES RELIED ON
NRS 7.105 (1985)
NRS 252.120 (1985)
Nevada Rules of Professional Conduct
(Supreme Court Rules 157, 160 Op. Nev. Att'y Gen. No. 126 (Apr. 25, 1973)

DISCUSSION
This opinion discusses the ethical issues raised in Nevada when an attorney forms a partnership or association for the private practice of law with another attorney who serves as a part-time deputy district attorney for a rural Nevada county. Specifically, it discusses whether the partner or associate of the deputy district attorney may engage in criminal defense work in any court of the State of Nevada. For the reasons discussed below, it is the opinion of the Committee that the partner or associate may not.

NRS 7.105 states:
No city attorney, state district attorney or attorney general or their dupties and assistants hired or elected to prosecute persons charged with the violation of any ordinance or any law of this ……shall, during their terms of office or during the time they are so employed, in any court of this state, accept an appointment to defend, agree to defend or undertake the defense of any person charged with the violation of any ordinance or any law of this state.

(Emphasis added.)

Indisputably, a district attorney or deputy district attorney is disqualified by the terms of NRS 7.105 from defending any person charged with violating the criminal laws of the State of Nevada in any Nevada state court. The precise question presented, however, is whether the disqualification of a deputy district attorney applies to partners or associates of the deputy district attorney.

NRS 252.120 prohibits any partner of a district attorney from appearing in any criminal action, or from aiding, counseling, or assisting in the defense in any criminal action, within the county in which the district attorney serves. The same statute also prohibits the district attorney or his partner from appearing in any civil action begun or prosecuted during the district attorney's term, on behalf of any person suing or sued by the State of Nevada or any county of the State of Nevada. The Attorney General has interpreted NRS 252.120 as prohibiting a district attorney from representing a private client in any state or county civil action where the interests of the private client are adverse to those of the State of Nevada or any county thereof. Op. Nev. Att'y Gen. No. 126 (Apr. 25, 1973). Logically, then, the statute would also prohibit the district attorney's partner from making any such appearances in civil actions.

By its Order filed January 27, 1986 (effective March 28, 1986), the Nevada Supreme Court adopted, with certain amendments, the Model Rules of Professional Conduct adopted by the House of Delegates of the American Bar Association on August 2, 1983, as the rules of professional conduct for lawyers who practice in Nevada. These rules may be referred to as the Nevada Rules of Professional Conduct, and are comprised of Supreme Court Rules 150 through 203.5, inclusive.

Supreme Court Rule 157 (1) provides that "[a] lawyer shall not represent a client if the representation of that client will be directly adverse to another client, unless . . . the lawyer reasonably believes the representation will not adversely affect the relationship with the client . . . and each client consents, preferably in writing, after consultation." Supreme Court Rule 160, entitled "Imputed Disqualification," provides in subsection 1 that "[w]hile lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by [Rule] 157, 158(3), 159 or 168."

A lawyer who represents criminal defendants and whose partner or associate represents the State, though in different cases and in different counties, has divided loyalties. The lawyer may be called upon at time to attack statutes the partner or associate must later defend, or to cross-examine and impeach witnesses on whom the partner or associate must rely tomorrow. The effectiveness of a prosecutor may be diluted if the efforts of the partner or associate on behalf of defendants, even in other cases in other counties, are misconstrued by law enforcement officials.

A law firm is not permitted to represent adverse parties in contested proceedings, whether in the same or a different court; nor may it represent one party in one matter and, at the same time, represent an adverse party in a different matter. The State and those it prosecutes for crimes are adversaries.

The State of Nevada has expressly withheld its consent for a district attorney or a deputy district attorney to represent criminal defendants in any court of this State. NRS 7.105 (1985). Therefore, the partner of a deputy district attorney cannot rely upon the exception in Supreme Court Rule 157(1) (b), which permits the representation of conflicting interests if each party consents to the representation. Since a deputy district attorney is expressly disqualified from being of counsel adversely to the State, no partner or associate of the deputy or of the deputy's firm may accept employment adverse to the State in any case, in any court. To do so is prohibited by Supreme Court Rules 157 and 160 and the statutory sections cited. This appears to be the rule in most jurisdictions. See, e.g., Professional Ethics Comm., State Bar of Texas, Op. 419 (Dec. 1984), digested in ABA/BNA Lawyer's Manual of Professional Conduct 801.8305 (1986); Comm. On Professional Ethics, State Bar of Wisconsin, Mem. Op. 2-69 (Feb. 7, 1969), reprinted in Wis. B. Bull. 84 (Supp. June 1979), digested in O. Maru, 1980 Supplement to the Digest of Bar Association Ethics Opinions 13111, at 602 (1982); State Bar of Michigan, Informal Op. 49, reprinted in 57 Mich. St. B.J. 309 (Feb. 1978), digested in O. Maru, supra, 11496, at 286; Maryland State Bar, Informal Op. 77-57 (April. 28, 1977), digested in O. Maru, supra, 11321, at 246. See also Thompson v. State, 330 S.E.2d 348, 350-52 & 351 n.6 (Ga. 1985), and opinions cited therein. But see id. at 351-52 (because disqualification would limit the ability of criminal courts in rural areas to appoint competent counsel, the court declined to adopt a rule of automatic disqualification, and instead adopted a rule requiring disqualification only when an actual conflict of interest exists).

CONCLUSION
A private attorney who has formed a partnership for the practice of law with a deputy district attorney for a rural Nevada county may not defend any person charged with a violation of any Nevada ordinance or law in any Nevada Court.

This opinion is issued by the standing committee on ethics and professional responsibility of the State Bar of Nevada, pursuant to SCR 225. It is advisory only. It is not binding upon the courts, the State Bar of Nevada, its board of governors, any person or tribunals charged with regulatory responsibilities, or any member of the state bar.

STATE BAR OF NEVADA
STANDING COMMITTEE ON ETHICS AND PROFESSIONAL RESPONSIBILITY

Formal Opinion No. 2
May 23, 1986

QUESTION
May an attorney write to a person who a client says owes the client money, demand payment, and threaten to sue if the person does not pay?

ANSWER
Yes, with some qualifications. The attorney must reasonably believe that the client's claim and the intention to sue are legitimate. Threats of criminal prosecution and predictions of the consequences of litigation amounting to legal advice are improper, as are communications with persons represented by counsel.

AUTHORITIES RELIED ON
Model Code of Professional Responsibility
DR 7-105(a) (1980)
Nevada Revised Statutes § 73.040 (1985)
Nevada Rules of Professional Conduct
(Supreme Court Rules) 150(1), 181(1), 182, 184, 202(2), 203 (1986)

DISCUSSION
This opinion responds to a request for a discussion of the ethical considerations applicable to collection letters, that is, letters sent by lawyers to third parties demanding payment of debts owed to the lawyers' clients. Although framed in general terms, the request raises a number of specific, subsidiary issues: whether a lawyer may demand payment from a third-party debtor on behalf of a client; whether the lawyer may threaten the debtor with litigation if payment is not made; whether the lawyer may warn the debtor of the potential costs of that litigation (e.g., costs of suit, attorneys' fees); and whether the attorney may advise the debtor of the possible consequences of a judgment (e.g., garnishment of the debtor's wages, sale of the debtor's property). In the opinion of the Committee, collection letters are proper as long as certain principles of honesty and fairness are observed.

Lawyers may demand that third parties pay debts owed to their clients. Collection letters may be sent to adverse parties before suit is filed and before adverse parties are represented by counsel. If the debtor is represented by counsel in connection with the debt, however, the lawyer may not communicate directly with the debtor unless the other attorney consents. Nevada Supreme Court Rule 182 [hereinafter cited as S.C.R.]. The lawyer should inquire of the client whether the debtor has responded to previous demands for payment or otherwise communicated with the client through counsel. If so, the lawyer should communicate only with that counsel.

Collection letters must be accurate and truthful. "In the course of representing a client a lawyer shall not knowing . . .[m]ake a false statement of material fact or law to a third person . . . . . ." S.C.R. 181(1); see also S.C.R. 203 (It is professional misconduct for a lawyer to .. . [e]gage in conduct involving dishonesty, fraud, deceit or misrepresentation"). Demand letters must be sent in good faith and for the purpose of reaching a settlement. A lawyer must not send a collection letter whose only purpose is to harass or burden the recipient. See S.C.R. 184. Accordingly, before sending a collection letter on behalf of a client, the lawyer should examine the pertinent documents and otherwise investigate sufficiently to satisfy him - or herself that the purported debt is in fact owed.

Generally, collection letters may threaten litigation if the debt is not paid. But this general statement must be tempered by the requirements of truth and accuracy. If litigation is not reasonably likely or the attorney knows suit will not be brought, either because the claim is so small as to make litigation economically unfeasible or for any other reason, it would be untruthful for the attorney to state that suit will be brought if payment is not made. Similarly, a lawyer should not state that a suit will include a claim for costs or attorneys' fees if such awards could not be made in the particular circumstances. See, e.g., Nev. Rev. State § 73.040 (1985) (awards of attorneys' fees barred in small claims actions).

Collection letters should be dignified; they should not threaten or intimate dire consequences. They may not state that nonpayment will injure the debtor's credit or reflect on his moral standing. General allusions to the well-known costs and inconveniences of litigation are permissible, but the lawyer must be careful not to appear to be harassing the debtor or offering unsolicited legal advice.

Similarly, a lawyer may not threaten the debtor with criminal prosecution if the debt is not paid. Indirect threats of criminal prosecution are equally impermissible; for example, an attorney should not state in a collection letter that certain conduct is a crime or violates a statute.1

There is less agreement about the propriety of other statements in collection letters. One state bar ethics committee has apparently held that collection letters may include legal theories, conclusions of law, citations to law, statutes, rules, and similar authorities, and copies of proposed complaints. See ABA/BNA Manual, supra note 1, at 801:8105 (1986) (digesting Ethics Comm., Board of Professional Responsibility of the Supreme Court of Tennessee, Op. 81-F-22 (Nov. 20, 1981). Others apparently disagree. See, e.g., O. Maru, 1970 Supplement to the Digest of Bar Association Ethics Opinions 6844, at 238 (1972) (digesting New Jersey State Bar Association Op. 144) (demand letter threatening suit if payment is not made may not be accompanied by copy of proposed summons and complaint).

On this point, we believe lawyers should be guided by the general principle that collection letters may not contain legal advice, other than advice to seek counsel. Extensive explanations of the legal consequences that might follow nonpayment constitute legal advice for these purposes. Therefore, detailed explanations of the grounds for recovery and the consequences of nonpayment should be avoided; while they may be appropriate in a demand letter to another attorney, a nonlawyer is more likely to perceive them as harassing and unduly threatening. Speculation about the possibility and meaning of wage garnishment, execution

1. Threats of criminal prosecution to gain an advantage in a civil matter were specifically prohibited under the Model Code of Professional Responsibility, DR 7-105(A) (1980). This specific prohibition was not carried forward in the Model Rules of Professional Conduct, which were adopted, with amendments, by the Nevada Supreme Court as its Rules of Professional Conduct. S.C.R. 150(1). The reason for omitting the specific provision was "that the misconduct to which [the prohibition] is directed is proscribed more narrowly by specific Model Rules provisions." ABA/BNA Lawyers' Manual on Professional Conduct 101:1001 (1986) [hereinafter cited as ABA/BNA Manual]. For example, because repayment of a debt is not a direct, inevitable result of a criminal prosecution brought against a debtor, threatening the debtor with criminal prosecution amounts to extortion, which, of course, is itself a criminal act proscribed by the Nevada Rules of Professional Conduct. See S.C.R. 202(2): see generally ABA/BNA Manual, supra, at 101:1001 to 1002. Therefore, the Committee is of the opinion that it is improper for a lawyer to threaten a client's debtor with criminal prosecution if the debt is not paid, even though the Nevada Rules of Professional Conduct do not contain an express provision to that effect.

of judgment, and other specific post-judgment remedies are best left to the debtor and the debtor's own attorney.

CONCLUSION
Lawyers with collections practices must strive on behalf of their clients to induce debtors to pay legitimate debts. At the same time, lawyers must remain sensitive to the dignity of debtors and to the principles of honesty, integrity, and fair dealing that govern our profession. These conflicting objectives make it difficult to formulate precise standards for collection letters. Lawyers must strike a balance to ensure that collection letters to debtors not represented by counsel encourage payment by adequately and accurately emphasizing the advantages of payment without overstating the disadvantages of nonpayment.

This opinion is issued by the standing committee on ethics and professional responsibility of the State Bar of Nevada, pursuant to SCR 225. It is advisory only. It is not binding upon the courts, the State Bar of Nevada, its board of governors, any persons or tribunals charged with regulatory responsibilities, or any member of the state bar.

Formal Opinion No. 3
May 22, 1987

QUESTION - May a non-profit legal services corporation, as part of its retainer agreement, contract with its clients to receive all money in its clients' trust fund accounts not claimed by the clients within a three-year period following the corporation's attempt to locate the clients and return the funds?

ANSWER - No.

QUESTION - May a non-profit legal services corporation's retainer agreement provide that any amounts less than $1 remaining in a trust fund account when a file is closed become the property of the corporation?

ANSWER - Yes.

AUTHORITIES RELIED ON
Nevada Rules of Professional Conduct
(Supreme Court Rules) 155, 158 (1986)

DISCUSSION
As a preliminary matter, it has been widely held and is apparently generally accepted that "an indigent person seeking assistance from a legal services office forms the same lawyer-client relationship with its staff of lawyers as any other client who retains a firm to represent him." Breger, Disqualification for Conflicts of Interest and the Legal Aid Attorney, 62 B.U.L. Rev. 1115, 1122 (1982). Both ethics committees and courts have held that traditional conflicts doctrines apply to legal aid societies. Id. While a non-profit legal services corporation is not a law firm, for purposes of ethical analysis it should be treated as one, unless extraordinary circumstances require a different result. See, e.g., Borden v Borden, 277 A.2d 89 (D.C. 1971). Therefore, these questions will be analyzed in the context of a traditional client-firm relationship.

The first question--whether a law firm may contract for the forfeiture of money left in trust funds by clients who cannot be located--presents unique issues involving fees and conflicts of interest. It is the opinion of the Committee that the contemplated forfeiture could not be part of a reasonable fee arrangement, and that such an arrangement would cause unacceptable conflicts of interest between client and counsel.

"A lawyer's fee shall be reasonable." S.C.R. 155(1) (1986). A forfeiture of client funds held in trust accounts cannot be classified as a reasonable fee. The factors set out by the rule to be considered in determining the reasonableness of a lawyer's fee do not include the possibility that a client will be difficult or impossible to locate. Id. Only the anticipated cost of prosecuting a matter or a fee contingent on the outcome is permitted.

A forfeiture provision in a retainer agreement with an indigent client is particularly objectionable, since any non-trivial amount forfeited would be relatively substantial compared with the client's income. Consent to such a forfeiture provision would be highly suspect, considering that the indigent client would likely have nowhere else to go to seek legal representation and advice. See Breger, supra p.1, at 1136.

The forfeiture provision also poses a conflict of interest. "A lawyer shall not acquire a proprietary interest in the cause of action or subject matter of litigation the lawyer is conducting for a client . . . ." S.C.R. 158(10) (1986). The Nevada Supreme Court interpreted a former, similar rule, S.C.R. 183 (1985), as prohibiting "a member of the state bar from purchasing or otherwise acquiring, directly or indirectly , any interest in the subject matter of the litigation which he is conducting." Eikelberger v. Tolotti, 96 Nev. 525, 530-31, 611 P.2d 1086, 1090 (1980). A potential for forfeiture of any amounts recovered for a client gives the attorney a clear interest in the cause of action. Such an interest is impermissible. In addition, the corporation's duty to locate the client and return trust funds is a direct conflict with the corporation's rights, pursuant to the retainer agreement, to retain the funds of clients it fails to locate.

However, in the opinion of the committee, a forfeiture of amounts less than $1 in a client's trust account may constitute part of a reasonable fee arrangement, since the administrative cost of maintaining such an account could reasonably be charged to the client. Thus, an assignment of insignificant amounts to the corporation is permissible.

CONCLUSION
A non-profit legal services corporation may not, as part of its retainer agreement, contract with its clients to receive all money in its clients' trust fund accounts not claimed by the clients within a three-year period following the corporation's attempt to locate the clients and return the funds.

A non-profit legal services corporation's retainer agreement may provide that any amounts less than $1 remaining in a trust fund account when a file is closed become the property of the corporation.

This opinion is issued by the standing committee on ethics and professional responsibility of the State Bar of Nevada, pursuant to S.C.R. 225. It is advisory only. It is not binding upon the courts, the State Bar of Nevada, its board of governors, any persons or tribunals charged with regulatory responsibilities, or any member of the state bar.

QUESTION - 1. May a lawyer agree to the following fee arrangement, when it is one his client has proposed?
(a) The lawyer will be paid monthly but at a rate equal to 80 percent of his usual hourly fee;
(b) If the litigation succeeds and the client recovers the stock and other property that are the subject of the suit, the lawyer is to receive a $150,000 bonus; and
(c) As an additional bonus, the lawyer is to receive 50 percent of any punitive damage award the client might recover.
2. May a lawyer contract with his client's out-of-state counsel to share one-third of the bonus called for by his combined fixed/contingent fee contract with the client?

ANSWERS - 1. The proposed combination fixed/contingent fee contract does not violate the Nevada Rules of Professional Conduct so long as the fee does not appear at the conclusion of any representation to be unreasonably high. The agreement, like any fee agreement, must be explained to the client in sufficient detail to permit an intelligent evaluation of it. As a contract for a contingent fee, the agreement must also be in writing.
2. The division of fees with out-of-state counsel is permissible, provided the requirements of the Supreme Court Rule 155(5) (1986) [hereinafter SCR] are met, and provided SCR 189, addressing unauthorized practice by out-of-state lawyers, is not violated. SCR 155 (5) permits a lawyer to divide fees with another lawyer who is not a member of his firm so long as the client consents after full disclosure, the total fee is reasonable, and the division is either proportionate to the services rendered by each lawyer or, although disproportionate, the client's written consent to the division of fees is obtained and the lawyers agree to assume joint responsibility for the representation.

AUTHORITIES RELIED ON
Nevada Rules of Professional Conduct (Supreme Court Rules) 154, 155, 157, 158 and 189 (1986)

DISCUSSION
The Model Rules of Professional Conduct, as adopted in Nevada, contain no prohibition against combination fixed/contingent fee contracts. Compare SCR 155(3) with SCR 155(4) (contingent fees are generally permitted, except in criminal and certain domestic relations matters); see also South Carolina bar Ethics Advisory Comm., Op. 84-11 (July 23, 1984) (attorney is not prohibited from contracting with client to charge a contingent fee for representation in connection with the client'' affirmative claims and an hourly fee for defending any potential counterclaim); cf. District of Columbia Bar Legal Ethics Comm., Op. 42 (Nov.23, 1977) (there is nothing intrinsically improper in an attorney contracting to try a case on a contingent fee basis but agreeing that, in the event of an appeal, additional compensation at the attorney's usual hourly rate would be paid).

The rules do require, however, that "[a] lawyer's fee shall be reasonable." SCR 155(1). This requirement applies alike to contingent and fixed fee contracts. G. Hazard & W. Hodes, The Law of Lawyering: A Handbook of the Model Rules of Professional Conduct 79 (1985) [hereinafter Hazard & Hodes].

Additional criteria, suggested by the inquiry in this case, are the sophistication of the client, Note, Judicial Power over Contingent Fee Contracts: Reasonableness and Ethics, 30 Case Western Reserve L. Rev. 523, 531 (1980); the fact that the arrangement was proposed or insisted on by the client, Foshee v. Lloyds, 643 F.2d 1162 (5th Cir. 1981); of New York City Bar Ass'n Comm. on Professional Ethics, (Op. 80-14); and the importance of the issues and the amount of money at stake, R. Aronson, Attorney/Client Fee Arrangements: Regulation and Review 40-43 (1980) [hereinafter Aronson]. Also bearing on the reasonableness of the proposed combination fixed/contingent fee contract is that here the lawyer risks loss of only 20 percent of his usual fee, which is much less than the all-or-nothing risks inherent in conventional contingent fee contracts. See ABA Comm. on Ethics and Professional Responsibility, Informal Op. 1317 (May 17, 1975) (an attorney who purchases insurance against loss of prospective contingent fee income must disclose that fact to the client and, having reduced his risk of loss, may have to reduce the size of his fee accordingly). The reasonableness of the $150,000 contingent "bonus" and the 50 percent share of any punitive damage award, which is in absolute terms a high percentage, would have to be measured against the total amount at stake and the degree of difficulty and risk involved in the case, generally, and on its punitive damages aspect, specifically, which are not stated in the inquiry. For a general discussion of "reasonableness" and the interpretation it has received, see Hazard & Hodes, supra p. 2, at 70-74; Aronson, supra; ABA/BNA Lawyers' Manual on Professional Conduct 41 (1987); S. Speiser, Attorneys' Fees ch. 8 (1973); Rhein, Judicial Regulation of Contingent Fee Contracts, 48 J. Air L. & Com. 151 J. Air L. & Com. 151 (1982); see also Hazard & Hodes, supra p.2, at 173 (Model Rule 1.8(j), codified as SCR 158 (10), prohibits a lawyer from acquiring through a contingent fee arrangement such a substantial "investment" in the case that the lawyer loses his perspective).

This Committee is not constituted as a fact-finding body. See SCR 222-228. Absent facts sufficient to permit a per se finding of unreasonableness, the ultimate determination of reasonableness must be left to the courts and disciplinary authorities to decide on a fully contested, case-by-case basis. E.g., ABA Comm. on Ethics and Professional Responsibility,

Informal Op. 1091 (Dec. 1, 1968) ("The Committee will not pass upon questions regarding the amount of an attorney's fee [because the] Committee cannot possibly undertake to pass

judgment on the reasonableness of [a] fee [without being fully] informed as to the extent of the services rendered and to be rendered"); see also Oregon State Bar Legal Ethics Comm., Op. 154 (June 30, 1967); Arizona State Bar Comm. on Rules of Professional Conduct, Op. 262 (Jan. 9, 1969); Virginia State Bar Standing Comm. on Legal Ethics, Op. 526 (Sept. 13, 1983); Maine Bar Board of Overseers Professional Ethics Comm'n, Op. 48 (Feb. 2, 1977). This is mandated by the fact-specific nature of the inquiry and because reasonableness cannot be determined in advance but must abide the termination of the representation. ABA/BNA Lawyers' Manual on Professional Conduct 41.903 (1986) (the inquiry as to reasonableness extends "to considering the unfairness resulting from enforcement of an originally fair contingent fee contract"); Connecticut Bar Ass'n Comm. on Professional Ethics, Informal Op. 81-8 (Nov. 18, 1980).

In addition to being reasonable, the fee arrangement must be thoroughly understood by and explained to the client. This is required by SCR 155(2), as well as by SCR 154 and 157. Under these rules,

A client must be given sufficient information so that he is able to direct the lawyer's actions intelligently. An important consideration for many clients is whether the service received will be worth the price. Similarly, a client's decision to continue pressing a legal matter may be heavily influenced by the prospective costs involved.

Hazard & Hodes, supra p. 2, at 71. The lawyer should make clear to the client how costs will be billed and collected; the parties should also be made aware that certain activities of the lawyer may relate both to the assertion of the claims for which the client has agreed to pay him hourly and to others, such as the punitive damages claim, which are contingent, and that this may result in the inability of the lawyer to distinguish billable from non-billable hours. South Carolina Bar Ethics Advisory Comm., Op. 84-11 (July 23, 1984). And, finally, the contingent fee agreement must be in writing. SCR 155(3).

1. Under the Model Code of Professional Responsibility, only "clearly excessive" fees were prohibited. DR 2-106. The somewhat awkward language of DR 2-106, equating fees that were "clearly excessive" with those that were "in excess of a reasonable fee," led some authorities to conclude that only grossly unreasonable fees were a basis for discipline under the Code. Hazard & Hodes, supra p. 2, at 73. Model Rule 1.5(a), adopted in Nevada as SCR 155(1), adopts the better Code review that unreasonable fees are per se prohibited. Id.

The division of fees with out-of-state counsel is controlled by SCR 155(5), which provides:
A division of fee between lawyers who are not in the same firm may be made only if:
(a) The division is in proportion to the services performed by each lawyer or, by written agreement with the client, each lawyer assumes joint responsibility for the representation;
(b) The client is advised in writing of and does not object to the participation of all the lawyers involved; and
(c) The total fee is reasonable.

The inquiry does not state whether the proposed one-third/-two-thirds division of fees is proportionate to the contemplated division of the services to be rendered. SCR 155(5) represents a departure form prior law in that it permits fee divisions that are disproportionate to the services to be rendered provided the lawyers assume joint responsibility for the representation. Again, the agreement must be preceded by full disclosure to the client and the client must agree to it in writing.

The facts posed to the Committee do not describe in detail the responsibilities out-of-state counsel will assume or discharge. SCR 189 provides:
A lawyer shall not:
1. Practice law in a jurisdiction where doing so violates the regulation of the legal profession in that jurisdiction; or
2. Assist a person who is not a member of the bar in the performance of activity that constitutes the unauthorized practice of law.

"The law in most jurisdictions treats lawyers who are licensed elsewhere almost as if they were lay persons for purposes of the 'unauthorized practice' rules." Hazard & Hodes, supra p.2, at 481. Depending on the particular facts involved here, pro hac vice admission may be required. Id. Care should be taken that the out-of-state lawyer does not step over the line marking what Nevada considers to be the unauthorized practice of law.

CONCLUSION
The combined fixed/contingent fee arrangement is not unreasonable per se. The final determination of reasonableness must abide the termination of the litigation and is, in any event, for the courts and the disciplinary authorities to decide on a fully developed record, not for this Committee to decide on the basis of incomplete, hypothetical facts. It is not improper to divide the contingent portion of the fee with out-of-state counsel, provided the requirements of SCR 155(5) are met and SCR 189 is not violated. Both the fee arrangement with the client and the arrangement must be preceded by full disclosure to the client and embodied in a writing signed by the client, expressing his understanding and assent to the terms of the fee arrangement.

This opinion is used by the Standing Committee on Ethics and Professional Responsibility of the State Bar of Nevada, pursuant to SCR 225. It is advisory only. It is not binding upon the courts, the State Bar of Nevada, its Board of Governors, any persons or tribunals charged with regulatory responsibilities, or any member of the State Bar.

QUESTION - May an attorney, in conjunction with fund-raising efforts of a church of which the attorney is a member, mail a letter to all church members and sponsors informing them that he will waive one-half of his normal fee for preparation of wills and trusts, if the client will agree to donate the one-half saved to the church?

ANSWER - No.

AUTHORITIES RELIED ON
Nev. Rev. Stat. § 7.045 (1985)
Nevada Rules of Professional Conduct (Supreme Court Rules) 167, 188, 195, 196, 197 (1986)

DISCUSSION
The question posed raises a number of ethical considerations. The proposed action would clearly violate certain of the Nevada Rules of Professional Conduct, and its implementation would create the clear and present danger of the violation of others. For reasons hereinafter discussed, it is the opinion of the Committee that the question must be answered in the negative.

With certain exceptions not here relevant, Nevada Supreme Court Rule 188 provides that "[a] lawyer or law firm shall not share legal fees with a nonlawyer." Supreme Court Rule 188(1) (1986) [hereinafter SCR].

The proposed action would be directly contrary to this rule. Similar plans have been considered in other jurisdictions and found to constitute an impermissible division of fees with a nonlawyer, notwithstanding the fact that the contribution to the church or charity is made by the client directly and not by the attorney. Arizona State Bar Comm. on Rules of Professional Conduct, Op. 79-15 (June 6, 1979); Iowa State Bar Ass'n Comm. on Professional Ethics and Conduct, Op. 84-7 (Jan. 18, 1985).

It is, therefore, the opinion of the Committee that any arrangement whereby an attorney agrees to perform specified legal services for the members of an organization upon the express understanding that all or any specified portion of the fee so earned will be contributed to the organization, directly by the client or by the attorney after receipt from the client, constitutes fee splitting in violation of SCR 188.

SCR 188 dispositively answers the inquiry presented to the Committee. Three additional problems are noted in passing, however. First, while SCR 196 and 197 permit advertising and certain limited types of solicitation, both rules are subject to the strictures of SCR 195, which provides:

A lawyer shall not make a false or misleading communication about the lawyer or the lawyer's services. A communication is false or misleading if it:
1. Contains a material misrepresentation of fact or law, or omits a fact necessary to make the statement considered as a whole not materially misleading . . .

Although the Committee has not found any opinions from other jurisdictions considering a proposal identical to the one here involved, the problem presented is the same as in the case of discounted fees. That problem has been stated as follows:

The principal concern with offering a discount from customary fees is the potential that the offer may be misleading in violation of [the Rule]. If the lawyer has customary fees for various services that are readily ascertainable, then it is permissible to offer to discount them. The difficulty is in determining what is a "customary fee."

New York State Bar Ass'n Comm. on Professional Ethics, Op 563 (Oct. 1, 1984) (emphasis added).

The question posed to the Committee here involves the "normal fee for preparation of wills and trusts." The range of fees for such services can be enormous - from less than $100 for a simple will to thousands of dollars for a complex trust. Absent a standard by which objectively to ascertain the "normal" or "customary" fee for such services, problems could arise under SCR 195. See Nassau County (New York) Bar Ass'n Comm. on Professional Ethics Comm., 83-2 (Feb 23, 1983) Oregon State Bar Legal Ethics Comm., Op. 448 (July 1980.)

The second problem is that in the event any client participating in the program described in the inquiry desires to name the church as devisee or legatee under his will or as beneficiary under any trust, potential violations of SCR 157 (conflict of interest) and SCR 67 (duty to exercise independent professional judgment) immediately arise. See ABA Comm. on Ethics and Professional Responsibility, Informal Op. 1288 (June 17, 1974); Montana State Bar Ethics Comm., Op. 26 (March. 1982); New York County Lawyers' Ass'n Comm. on Professional Ethics, Op. 656 (Sept. 23, 1980).

Finally, if the church, directly or indirectly, becomes involved in soliciting its members to participate in the program, it would appear that such activity by the church would be unlawful. Nev. Rev. Stat. § 7.045 (1985) (unlawful or nonlawyers to solicit legal fees on behalf of lawyers).

CONCLUSION
An attorney may not, in conjunction with fund-raising efforts of a church of which the attorney is a member, mail a letter to all church members and sponsors informing them that the attorney will waive one-half of his normal fee for preparation of wills and trusts, if the client will agree to donate the one-half saved to the church.

This opinion is issued by the Standing Committee on Ethics and Professional Responsibility of the State Bar of Nevada, pursuant to SCR 225. It is advisory only. It is not binding upon the courts, the State Bar of Nevada, is Board of Governors, any persons or tribunals charged with regulatory responsibilities, or any member of the State Bar.

QUESTION - May a practicing lawyer operate a collateral business through which he places temporary secretarial and clerical help in other law offices?

ANSWER - A lawyer should not operate such a collateral business unless he devises and adopts measures to ensure that:
1. The lawyer does not place temporary help in offices with which he has matters pending;
2. The employees clearly understand they must preserve client confidences and avoid working on matters they have worked on for the lawyer or in other law offices; and
3. The lawyers who use the temporary secretarial service are told that the owner/operator of the service is himself an active lawyer.

AUTHORITIES RELIED ON
Nevada Rules of Professional Conduct (Supreme Court Rules) 156, 187, 203(1) (1987)

DISCUSSION
Lay employees who move from office to office, whether permanent, part-time, or temporary, present a threat to client confidences. Nevada Supreme Court Rule 156(1) (1987) [hereinafter "SCR", entitled "Confidentiality of Information," states the general rule:
A lawyer shall not reveal information relating to the representation of a client….
By its terms, SCR 156(1) does not apply to nonlawyer assistants. It is made applicable to their conduct, however, by SCR 187 and 203(1).

SCR 187 establishes a duty of supervision in the lawyer who employs nonlawyer assistants. It provides:

With respect to a nonlawyer employed or retained by or associated with a lawyer:

1. A partner in a law firm shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that the person's conduct is compatible with the professional obligations of the lawyer;
2. A lawyer having direct supervisory authority over the nonlawyer shall make reasonable efforts to ensure that the person's conduct is compatible with the professional obligations of the lawyer; and
3. A lawyer shall be responsible for conduct of such a person that would be a violation of the rules of professional conduct if engaged in by a lawyer if:
(a) The lawyer orders or, with the knowledge of the specific conduct, ratifies the conduct involved; or
(b) The lawyer is a partner in the law firm in which the person is employed, or has direct supervisory authority over the person, and knows of the conduct at a time when its consequences can be avoided or mitigated but fails to take remedial action.

Under SCR 187, "partners and those who supervise nonlegal assistants, such as secretaries and paraprofessionals, must take steps to see that breaches of confidentiality 'incompatible with [SCR 156(1)] do not occur through the actions of such personnel." G. Hazard & W. Hodes, The Law of Lawyering 464 (1986) [hereinafter "Hazard & Hodes"].

SRC 187 addresses the duty of the lawyer who first hires or exposes a lay employee to client confidences. SCR 203(1) complements SCR 187 by imposing a duty on the lawyer who hires another lawyer's employee to prevent the employee from betraying the first lawyer's client confidences. Thus, SCR 203(1) establishes it as "professional misconduct" for a lawyer to "[v]iolate or attempt to violate the rules of professional misconduct, knowingly assist or induce another to do so, or do so through the acts of another." Under this rule, a lawyer may not hire another lawyer's lay employee unless he takes reasonable steps to ensure that the employee honors the other lawyer's duty of confidentiality to his clients. See Florida

Bar Professional Ethics Comm., Op. 86-5 (Aug. 1, 1986); Virginia State Bar Comm. on Legal Ethics, Op. 745 (Dec. 4, 1985); cf. Hazard & Hodes, supra p. 2, at 570 [illustrative case (a)].

There is nothing per se improper, under the principles just stated, in a lawyer operating a collateral business through which he places temporary secretarial and clerical help in other law offices so long as the lawyer does not place temporary help in offices against which the lawyer has adversary matters pending and adequately instructs the employees in their duty of confidentiality to the clients on whose files they work. See Oregon State Bar Legal Ethics Comm., Op. 226 (June 2, 1972) (lawyer may permit employees to work part-time for other firms so long as they do not work in offices against which the lawyer has cases pending); New York State Bar Ass'n Comm. on Professional Ethics, Op. 386 (Apr. 24, 1975) (to like effect). The lawyer conducting the business must carefully instruct each employee the rules of professional conduct, including the duty of confidentiality. SCR 187; see Florida Bar Professional Ethics Comm., Op. 86-4 (Aug. 1, 1986) (lawyer whose lay employee leaves to go to work for firm against whom lawyer occasionally litigates must instruct the departing employee in the duty of confidentiality); Wisconsin State Bar Comm. on Professional Ethics, Op. E-86-15 (Dec. 12, 1986) (to like effect). The lawyer who hires the temporary help must also take care to prevent "leaking" of confidences by such employees. SCR 203(1); see Tennessee Supreme Court Board of Professional Responsibility Ethics Comm., Op. 85-F-99 (Sept. 12, 1985) (a lawyer who leases employees from an employment agency must exercise "reasonable care" to prevent disclosure by them of confidential information and instruct the leased employees in their duty of confidentiality).

The real problem with the hypothetical before the Committee is the possibility that the lawyer will place temporary clerical or secretarial help in offices against which he has adversary matters pending. Other state ethics committees have addressed the related question of whether a firm may hire a departing nonlawyer employee of another firm when the firms have adversary matters pending and given varying responses, depending on whether client consent has been sought and obtained and on such additional factors as the access the employee had to confidential information, the relationship between the information and the issues in the case, the nature of the employee's duties, the risk of inadvertent disclosure, and the feasibility of instituting a "Chinese Wall" or other method of separating the employee from the matter. For a general discussion see Philadelphia Bar Ass'' Professional Guidance Comm., Op. 80-77 (1980); see also Florida Bar Professional Ethics Comm., Op. No. 86-5 (Aug. 1, 1986) (it is not improper to hire a secretary from a firm against which the hiring firm has pending matters, so long as the first firm's clients are advised and consent); Michigan Bar Association Op. CI0-798 (July 9, 1982, (to like effect provided client consent is obtained and a "Chinese Wall" established); New York State Bar Assn'n Comm. on Professional Ethics, Op. 422 (Nov.6,1975) (a lawyer may hire a secretary who worked at another firm against which the hiring lawyer has adversary matters pending provided he prohibits the secretary from divulging confidential information). But see Oregon State Bar Legal Ethics Comm., Op. 435 (Jan. 1980) (lawyer who hires secretary of firm against whom he has matter pending must withdraw where secretary worked on the matter previously and had access to confidential information); Vermont Bar Ass'n Com. On Professional Responsibility, Op. 79-28 (Feb. 1980) (a paralegal employee who has worked extensively on a case and is privy to confidential information concerning it cannot be hired by opposing counsel without creating an intolerable appearance of impropriety which will require the law firm to withdraw unless another solution is reached).

This case does not involve employees leaving one firm to work for another but employees working simultaneously for more than one lawyer and moving from office to office on a short-term, temporary basis. Addressing part-time employees who work for more than one firm, both the new York and Oregon State Bar Associations have concluded that it "is improper for a lawyer to employ a part-time secretary if he knows she will continue her employment at another law firm with which he has periodic adversarial matters." New York State Bar Ass'n Comm. on Professional Ethics, Op. 386 (Apr. 24, 1975; Oregon State Bar Legal Ethics Comm., Op. 226 (June 2, 1972); see also ABA Comm. on Professional Ethics, Op. 692 (Feb. 25, 1964) (a law firm engaged in criminal practice may not employ as a secretary in a confidential capacity the wife of a police detective, when the possible result is that the police would thereby gain access to confidential information otherwise not available to them). The duty of confidentiality is too important to be subjected to the risk that a lay employee's divided loyalties to simultaneous employers will lead to its breach, whether intentional or inadvertent. In the case of temporary or short term employees, moreover, the time does not permit consulation with clients, erection of Chinese Walls, or implementation of the other screening measures that can make tolerable the employment by one firm of another firm's former confidential employee. See also Tennessee Supreme Court Board of Professional Responsibility Ethics Comm., Op. 85-F-99 (Sept. 12, 1985) (in approving a "leased" employee arrangement, the Committee emphasized that the employees were to be leased on a long-term basis, which would permit the leasing lawyer time to counsel the employees as to their duty of confidentiality).

The temporary employees involved in the inquiry to this Committee present the same, even more acute problem of divided or confused loyalties as the part-time employees addressed in the New York and Oregon Bar Association Opinions. The lawyer who employs them is not a mere passive investor in an independently managed temporary secretarial agency; he owns and operates the business, side-by-side with his law practice. The inquiry to this Committee does not state whether the temporary employees also work for the lawyer in connection with his law practice, but even if they do not, the risk of inadvertent or intentional disclosure of confidential information is too great on the facts before the Committee to permit the lawyer to place temporary personnel in offices against which he has adversary matters pending.

To comply with his ethical obligations, the lawyer in question should maintain careful records of those lawyers against whom he has cases pending and decline to place temporary help in their offices. He should also inform lawyers who use his temporary help service that he is a lawyer, so they may exercise their own independent judgment regarding the propriety of using his employees.

Temporary employees frequently move from office to office. In view of this fact, both the lawyer operating the employment agency and the lawyers who use his services have a heightened duty to admonish the temporary employees not to disclose any confidential information, and to avoid exposing them to files regarding which they have pre-existing confidential knowledge.

This opinion is issued by the Standing Committee on Ethics of the State Bar of Nevada, pursuant to SCR 225. It is advisory only. It is not binding upon the courts, the State Bar of Nevada, its Board of Governors, any person or tribunal charged with regulatory responsibilities, or any member of the State Bar.

QUESTION - May a lawyer mail solicitation letters regarding the following:
(1) To inform persons whose homes are about to be foreclosed of the option of curing arrearages over five years under a Chapter 13 bankruptcy plan;
(2) To inform persons against whom Internal Revenue Service tax liens have been filed of the option of avoiding garnishment or foreclosure or both, and paying the debt owed to the Internal Revenue Service over a period of five years under a Chapter 13 bankruptcy plan;
(3) To inform persons similarly situated to litigants in pending litigation of their potential rights regarding the legality of Internal Revenue Service assessment made in the aftermath of certain tax court decision?

ANSWER - Nevada Supreme Court Rule 197 (1987) prohibits a lawyer from mailing solicitation letters to specific persons know to require legal services because of pending foreclosure, existing liens or involvement in previous litigation in which a judgment was entered against the person is presently the subject of post-judgment proceedings where no family or previous professional relationship exists between the lawyer and the person.

Absent a supervening determination from either the Supreme Court of the United States or the Nevada Supreme Court, the prohibition of certain types of solicitation contained in SCR 197 may constitutionally apply in circumstances like those described above.

AUTHORITIES RELIED ON
Nevada Rule of Professional Conduct (Supreme Court Rule) 197 (1987).

DISCUSSION
The committee was asked to consider this question in light of Nevada Supreme Court Rule 198 (1987) ("SCR"), entitled "Communication of Fields of Practice." However, it is the committee's opinion that this question is more properly evaluated in light of SCR 197, entitled "Direct Contact with Prospective Clients."

The Committee reaches this conclusion based on the method to be used to select persons who are to receive one or more of the solicitation letters. The attorney requesting this opinion has provided the committee with blank forms of the three letters that he proposes to send to each of the three categories of persons specified in the question stated above. Persons in the first category would receive a letter based on the fact that a notice of foreclosure sale affecting their property was published in a legal newspaper. Persons in the second category would receive a different letter based on the fact that the Internal Revenue Service published a notice of the filing of a tax lien affecting that person's property in the same legal newspaper. Persons in the third category would be selected to receive another letter based on information developed from the review of tax court records regarding cases recently disposed of. Based on the method to be used to select persons who are to receive the solicitation letters, it is the committee's opinion that this question properly involves direct contact with prospective clients rather than communication of a lawyer's fields of practice.

SCR 197 addresses the solicitation of professional employment from a prospective client. The rule reads:

A lawyer shall not solicit professional employment from a prospective client with whom the lawyer has no family or prior professional relationship, by mail, in person or otherwise, when a significant motive for the lawyer's doing so is the lawyer's pecuniary gain. The term 'solicit' includes contact in person, by telephone or telegraph, by letter or other writing, or by other communication directed to a specific recipient, but does not include letters addressed or advertising circulars distributed generally to persons not known to need legal services of the kind provided by the lawyer in a particular matter, but who are so situated that they might in general find such services useful.

The attorney requesting this opinion has asked the committee to consider this question in light of Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626 (1985); Leoni v. State Bar of California, 704 P.2d 183 (Cal. Sup. Ct. 1985) appeal dismissed, U.S. , 106 S.Ct. 1170 (1986); In Re Von Wiegen, 470 N.E.2d 838 (N.Y. App. Ct. 1984) cert. Denied, 472 U.S. 1007 (1985) and Grievance Committee v. Trantolo, 470 A.2d 235 (Conn. Sup. Ct. 1984).

Implicit in the requested consideration of case authorities cited in the previous paragraph is the suggestion that the solicitation standards in SCR 197 are constitutionally infirm. The committee does not accept the suggested conclusion. Zauderer is an advertising case which does not reach the direct mail solicitation issue involved in this opinion. Leoni deals with a targeted direct mail program using letters and pamphlets which the court treats like misleading advertising. Von Wiegen involves, in part, the direct mail solicitation of certain accident victims and their families under a professional responsibility rule that that court characterizes as a complete ban on this type of solicitation. Trantolo involves, in part, the direct mail solicitation of realtors under a professional responsibility rule that the court concludes is a blanket prohibition of mailed solicitations to third parties. As stated earlier, this opinion does not involve public advertising nor does it arise under a rule of professional responsibility that can be characterized as a blanket prohibition of mailed solicitations to third parties.

The committee recognizes that the cases discussed in the two preceding paragraphs are not the only authorities that appear to question the constitutionality of a rule like SCR 197. Adams v Attorney Registration & Disciplinary Com'n., 617 F. Supp. 449 (D.C. Ill. 1985) aff'd, 801 F.2d 968 (7th Cir. 1986) involves, in part a bankruptcy lawyer who wants to send direct mail materials offering his professional bankruptcy services to people whose names appear on state court lists of debtors against whom a judgment has been entered. The applicable Rule of Professional Responsibility reads in relevant part:

(b) A lawyer may initiate contact with a prospective client in the following circumstances:

…..

(2) By written communication distributed generally to persons not known in a specific matter to require such legal services as the lawyer offers to provide but who in general might find such services to be useful and providing that such letters and circulars and the envelopes containing them are plainly labeled advertising material;

Illinois Supreme Court Disciplinary Rule 2-103.

The district court enjoined the enforcement of the disciplinary rule in the circumstance of this type of targeted direct mail solicitation.

The district court contrasted Zauderer v. Office of Disciplinary Counsel, supra, with Ohralik v. Ohio State Bar Association, 436 U.S. 447 (1978) and In Re R.M.J., 455 U.S. 191 (1982) and concluded that the protection afforded lawyer "print" advertising precludes the disciplinary rule's overly broad prohibition against these targeted mailings. The court pointed out that targeted mail solicitation is properly subject to regulation to prevent misleading communication. However, the court could not see a justification for the conclusion that targeted mail solicitation should be completely banned because it may promote invasions of privacy, overreaching and undue influence which justifies the total prohibition of in-person solicitation. Adams v. Attorney Registration & Disciplinary Com'n., supra, 617 F. Supp. At 451-455. The court of appeals in affirming this reasoning points out that targeted mailings subject an individual to less harassment, overreaching and duress than personal contact does stating: "It is easier to throw out unwanted mail than an uninvited guest." Adams v. Attorney Registration & Disciplinary Com'n., 801 F.2d 968, 973 (7th Cir. 1986).

In Spencer v. Honorable Justices of the Supreme Court of Pennsylvania, 579 F. Supp. 880 (E.D. Pa. 1984 ) aff'd, 760 F.2d 261 (3rd Cir. 1985), the district court addresses another concern raised as a justification against direct mail solicitation. In that case the Rules of Professional Responsibility provide:

A lawyer shall not recommend employment, as a private practitioner, of himself, his partner, or associate to a nonlawyer who has not sought his advice regarding employment of a lawyer.

Pennsylvania Disciplinary Rule 2-103(A). The Rules also provide:
A lawyer who has given unsolicited advice to a layman that he should obtain counsel or take legal action shall not accept employment resulting from that advice….

Pennsylvania Disciplinary Rule 2-104(A). The attorney in this case wanted to claim that he was an experienced pilot and computer programmer in direct mail solicitation letters individually addressed to aircraft owners, aircraft pilots, computer users, computer operators, and others.

The district court agreed with the state that the claims the attorney wanted to make were inherently misleading but disagreed with the state that an absolute prohibition of direct mail solicitation was justified or permissible. In support of its position, the state argued that the prohibition of direct mail solicitation prevented undue influence, intimidation and overreaching where the lawyer's letter reached a vulnerable recipient. The court rejected this contention stating:

Even if the state could identify specific situations in which mail recipients were particularly susceptible or vulnerable to the persuasive influence contained in a lawyer's letter, an absolute prohibition of direct mails would not be justified. Rather, direct mails could be banned only in those identified circumstances.

Spencer v. Honorable Justices of the Supreme Court of Pennsylvania, 579 F. Supp. At 890. Similar considerations concerning direct mail solicitation as those analyzed in Adams and Spencer are noted and approved of in the circumstances where a bankruptcy law clinic mailed its pamphlet to persons facing foreclosure on their homes. In Re Damon, 40 B.R. 367 (Bkr. S.D.N.Y. 1984). However other courts have reached a different conclusion regarding the propriety of targeted direct mail solicitation.

SCR 197 is taken from Rule 7.3 of the American Bar Association's Model Rules of Professional Conduct (Adopted August 2, 1983). The comment accompanying Rule 7.3 discusses the dangers of false and misleading representations and the possibility of undue influence, intimidation and over-reaching that may be present in direct solicitation whether the solicitation is in-person or by mail and goes on to state:

These dangers attend direct solicitation whether in-person or by mail. Direct mail solicitation cannot be effectively regulated by means less drastic than outright prohibition. One proposed safeguard is to require that the designation 'Advertising' be stamped on any envelop containing a solicitation letter. This would do nothing to assure the accuracy and reliability of the contents. Another suggestion is that solicitation letters be filed with a state regulatory agency. This would be ineffective as a practical matter. State lawyer discipline agencies struggle for resources to investigate specific complaints, much less for those necessary to screen lawyers' mail solicitation material. Even if they could examine such materials, agency staff members are unlikely to know anything about the lawyer or about the prospective client's underlying problem. Without such knowledge they cannot determine whether the lawyer's representations are misleading. In any event, such review would be after the fact, potentially too late to avert the undesirable consequences of disseminating false and misleading material.

General mailings not speaking to a specific matter do not pose the same danger of abuse as targeted mailings, and therefore are not prohibited by this Rule. The representations made in such mailings are necessarily general rather than tailored, less importuning than informative. They are addressed to recipients unlikely to be specially vulnerable at the time, hence who are likely to be more skeptical about unsubstantiated claims. General mails not addressed to recipients involved in a specific legal matter or incident, therefore, more closely resemble permissible advertising rather than prohibited solicitation.

American Bar Association's Model Rules of Professional Conduct (1983), p. 30.

These concerns were considered and approved of very recently by the Supreme Court of Kentucky when it endorsed Model Rule 7.3 as the appropriate rule concerning solicitation by lawyers in that state. The court stated:

This Court is not unmindful of the serious potential for abuse inherent in direct Solicitation by lawyers of potential clients known to need specific legal services. Such solicitation subjects the prospective client to pressure from a trained lawyer in a direct personal way. It is entirely possible that the potential client may feel overwhelmed by the basic situation which caused the need for the specific legal services and may have a seriously impaired capacity for good judgment, sound reason and a natural protective self-interest. Such a condition is full of possibility of undue influence, overreaching and intimidation.

As provided in the Model Rules which are now under consideration by this Court and members of the Kentucky Bar Association, as well as current rules, advertising makes it possible for a potential client to be informed about the need for legal services and about the qualifications of available lawyers without subjecting them to direct personal pressure. The use of general advertising as distinguished from direct private contact tends to assure that information is presented without intimidation.

We do not believe submission of a blank form letter to the Advertising Commission provides a suitable protection to the public from overreaching, intimidation or misleading private targeted mail solicitation.

Such dangers result from direct solicitation whether in person or by mail. General mailings not addressed to a specific situation do not have the same danger for abuse as direct target mailing.

Shapero v. Kentucky Bar Ass'n., 726 S.W. 2d 299, 301 (Ky. 1987). Absent, a supervening decision by the Supreme Court of the United States or the Supreme Court of the State of Nevada, the committee adopts the rationale of the Supreme Court of Kentucky and determines that SCR 197 may be applied to the issue addressed in this opinion.

The first concern in applying SCR 197 to the proposed solicitation letters is whether the letters and method for selecting their recipients are solicitation within the meaning of SCR 197. Based on the text of the sample letters received by the committee, it is apparent that they

are written communication from the lawyer that would be directed to a specific recipient. We must assume for purposes of this opinion that the specific recipient of the letter enjoys no family or prior professional relationship with the lawyer. The content of the sample letters makes it apparent that a significant motive for transmitting the letter is the lawyer's pecuniary gain because the letter outlines the recipient's legal situation in very general terms, discusses possible legal avenues that may be pursued (i.e., filing a Chapter 13 petition in the United States Bankruptcy Court), states the lawyer's fee for filing the petition and closes with an offer of the layer's professional services. The only other concern is whether the letter is excluded from SCR 197 because of the last sentence contained in that rule.

The last sentence of SCR 197 reads in part:
The term 'solicit'… does not include letters addressed…to persons not known to need legal services of the kind provided by the lawyer in a particular matter, but who are so situated that they might in general find such services useful.

Contrasting this language with the text of the sample letters, it is apparent that the lawyer knows that the recipient is in need of legal services. It is entirely possible that the potential client receiving one of these letters may feel overwhelmed by the situation which caused the need for the specific legal services and may have seriously impaired capacity for good judgment and a natural protective self-interest. Shapero v. Kentucky Bar Ass'n., supra, 726 S.W.2d at 301. See also State v. Moses, 642 P.2d 1004, 1007 (Kan. 1982) (lawyer's direct mail solicitation for real estate listings grounds for discipline) and In Re Frank, 440 N.E.2d 676, 677 (Ind. 1982) (lawyer's direct mail solicitation of persons charged with crime grounds for discipline). Consequently, the proposed direct mail solicitation of specific persons known to presently require legal services because of pending foreclosure, existing liens or involvement in previous litigation would be improper under SCR 197 absent the lawyer having a family or prior professional relationship with the person

This opinion is issued by the Standing Committee on Ethics of the State Bar of Nevada, pursuant to SCR 225. It is advisory only. It is not binding upon the courts, the State Bar of Nevada, its Board of Governors, any person or tribunal charged with regulatory responsibilities, or any member of the State Bar.

QUESTION - May a lawyer who is personally involved in a dispute with nonlawyers communicate directly with the nonlawyers about the dispute after having been asked to communicate only through counsel?

ANSWER - No. Having been asked to do so, the lawyer-party should refrain from contacting the adversaries directly. Even if there is no express request, the lawyer should refrain from contacting personal adversaries known to be represented in the specific matter by another lawyer, without the other lawyer's consent. The adversaries' lawyer should not withhold consent unreasonably.

AUTHORITIES RELIED ON
Nevada Rules of Professional Conduct
(Supreme Court Rules) 171(1), 182, 184, 203(1) (1968)

DISCUSSION
Communications with adverse parties are governed by Nevada Supreme Court Rule 182 (1986) [hereinafter SCR]: "In representing a client, a lawyer shall not communicate about the subject of the representation with a party the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized by law to do so." Cf. Model Rules of Professional Conduct Rule 4.1 (1983) (identical to SCR 182). The rule against direct communication applies whether or not the parties are in litigation. Model Rules of Professional Conduct Rule 4.2 comment (1983).

The purpose of the Rule is "to preserve the integrity of the client-lawyer relationship by protecting the represented party from the superior knowledge and skill of the opposing lawyer." ABA/BNA Lawyers' Manual on Professional Conduct 71:303 (1984); see also United States v. Jamil, 546 F. Supp. 646, 652, 654 (E.D.N.Y. 1982) (the rule "protects an adverse party from the imbalance of skill and knowledge between laymen and lawyers," and "from squandering a possible claim or defense"; it also ([e]nsure[s] against disclosure of privileged information").

The rule's applicability is clear where a lawyer representing a party communicates with the party's adversary, bypassing the adversary's lawyer. It is not so clear where the communications are between two parties, one of whom just happens to be a lawyer. The rule allows "parties to a matter [to] communicate directly with each other." Model Rules of Professional Conduct Rule 4.2 comment (1983); see also Kleiner v. First National Bank of Atlanta, 102 F.R.D. 754, 769 (N.D. Ga. 1983). Thus, it could be argued that lawyers acting in their capacities as parties may communicate directly with other parties. Cf. United States v. Dennis, 645 F.2d 517, 523 (5th Cir. 1981) (it is not an ethics violation for an FBI agent who is a law school graduate but not a member of any bar to interview a criminal defendant who is represented by counsel, because "the agent is not acting as an attorney"). It could be further argued that otherwise laudable efforts to resolve personal disputes privately should not be prevented simply because one of the disputants happens to be a lawyer. The generalization that a lawyer always has the advantage over lay adversaries could be dismissed as conceit.

Nevertheless, in the only opinion we have found directly addressing this question, a state bar ethics committee held that a lawyer must not communicate with represented parties even though the lawyer is acting as a party to the matter. South Carolina Bar Ethics Advisory Comm., Op. 86-10 (June 16, 1986) (decided under comparable provision - DR 7-104(A) (1) -of the Model Code of Professional Responsibility). The South Carolina Bar committee stated that "a lawyer must comply at all times with all applicable disciplinary rules of the Code of Professional Responsibility whether or not he is acting in his professional capacity." Id. (quoting ABA Comm. on Ethics and Professional Responsibility, Formal Op. 336 (June 3, 1974)).

The inquiry before the Committee does not require such a sweeping interpretation of SCR 182. The crucial point here is the hypothesis that the lawyer has been asked to communicate with the adversaries only through their counsel, which suggests that direct communications are a burden to them. The lawyer has an obligation not to burden others through conduct serving no other substantial purpose. SCR 184. We cannot see how dealing through counsel would prejudice the lawyer. Therefore, the lawyer should honor the request and refrain from dealing with his adversaries except through their counsel.

The Committee also believes that under SCR 182 a lawyer-party should not communicate directly with represented adversaries even where no express request has been made. In this context, the meaning of "represented" is restricted. SCR 182 prohibits communications with persons a lawyer knows to be represented "in the matter" by another lawyer. We interpret "in the matter" as limiting the prohibition against direct communication to situations where a lawyer learns during the course of a specific controversy that his or his clients' adversaries are represented by another lawyer with respect to the subject matter under discussion or at issue. Thus, if a lawyer or the lawyer's client has a dispute with (for example) a landlord or a creditor or a neighbor, the lawyer can talk to the landlord, creditor, or neighbor about the dispute, even though the lawyer knows that the person is or has been represented by counsel on other matters. But if the lawyer learns that the adversary has referred the matter in question to counsel, the lawyer's communications with the adversary should cease. By referring the dispute, the adversary signals his decision to have it handled by counsel. The lawyer should respect that decision, even if he is personally a party to the dispute, by obtaining the other lawyer's consent before communicating directly with the adversary. When considering requests for consent, the other lawyer should keep in mind the duty to "make reasonable efforts to expedite litigation consistent with the interests of the client." SCR 171(1). Accordingly, the other lawyer should freely consent to direct communications where they will facilitate a resolution without jeopardizing the client's interests.

CONCLUSION
A lawyer personally involved in a dispute should not communicate directly with adversaries who are represented by another lawyer in connection with the specific dispute, unless the other lawyer consents. The other lawyer should not withhold consent unreasonably.

This opinion is issued by the Standing Committee on Ethics and Professional Responsibility of the State Bar of Nevada, pursuant to SCR 225. It is advisory only. It is not binding upon the courts, the State Bar of Nevada, its Board of Governors, any persons or tribunals charged with the regulatory responsibilities, or any member of the State Bar.

QUESTIONS - 1. Is an attorney required to disclose to the insurance company which hires him to defend a personal injury lawsuit arising from a vehicle accident information communicated by the insured client as to potential fraud of the client in obtaining vehicle liability insurance?
2. Does the client's communication of information as to potential fraud in obtaining vehicle liability insurance create a conflict of interest which requires or suggests a) the attorney withdraw his representation from client or b) terminate his employment by the insurance company?
3. Does the client's disclosure create a conflict of interest which precludes the attorney from accepting compensation from the insurance company for representing the client?

ANSWERS
1. Information communicated by an insured client to his attorney as to potential fraud in obtaining vehicle liability insurance is confidential. Unless the client consents to disclosure, it would be a violation of Nevada Supreme Court Rule 156 (hereinafter SCR) for attorney to reveal such information to the insurance company which hired him because a) disclosure is not impliedly authorized to carry out attorney's representation, b) there is no threatened criminal act likely to result in death or bodily harm, c) the attorney's services have not been used in the commission of the fraud, and d) disclosure is not necessary for the attorney's self-defense.
2. Information of the potential fraud communicated by client to the attorney does not create a conflict of interest within the meaning of SCR 157 to require that attorney withdraw his representation from the client or terminate his employment by the insurance company provided that a) the attorney believes his representation of client will not be adversely affected and b) the client consents to continuing representation. Nor does the communication suggest the attorney should consider withdrawal under SCR 166 because a) continuing representation does not violate the Nevada Rules of Professional Conduct or other law, b) the client has not used the attorney's services to perpetrate the fraud and c) the fraud does not involve continuing use of the attorney's services.
3. Client's communication of potential fraud in obtaining vehicle insurance does not create a conflict of interest under SCR 158 to require the attorney decline compensation from the insurance company provided a) the client consents after consultation, b) there is no interference with the attorney's independence of professional judgment or the client-lawyer relationship and c) information relating to representation of the client is protected as required by SCR 156.

AUTHORITIES RELIED ON
Nevada Rules of Professional Conduct (Supreme Court Rules) 152, 154, 156, 157, 158, 166, 167, 172 and 181.
Nevada Revised Statutes, Sections 49.035 through 49.115 (1971).

DISCUSSION
The questions presented arise from a hypothetical fact situation submitted to the Ethics Committee wherein attorney is hired by client's insurance company to defend client regarding a complaint filed against client alleging client, as owner of a vehicle, negligently entrusted the vehicle to client's brother's friend. Client's brother's friend then became involved in an accident injuring plaintiff. Client is, in fact, the title owner and registered owner of the vehicle involved in the accident. Prior to the accident, client's brother had been cited on numerous occasions for driving while under the influence and was unable to obtain automobile insurance because of his poor driving record.

Significant discovery has taken place in litigation over the accident, although no trial has been set. Recently, client advised attorney that the vehicle involved in the accident was for client's brother to use and that the only reason client was the title owner and registered owner was so that he could obtain insurance for the vehicle. It is likely that if such information had been known to client's insurance company, the policy would have been written so as to exclude client's brother from coverage or not written at all. It is further likely that such information could provide client's insurance company with ground to deny coverage.

The attorney submitting the hypothetical fact situation requests the Committee advise the best method for the attorney involved to handle the situation and the reasons for the Committee's opinion.

It is assumed by the Committee that the attorney has been hired solely to represent the client in defense of the vehicle accident and not for the purpose of advising the insurance company on questions of coverage. It is further assumed, without deciding, and for purpose of this opinion only, that client's conduct in obtaining insurance constituted a "fraudulent act" within the meaning of SCR 156. Whether the client actually committed fraud is a question of law beyond the scope or jurisdiction of this Committee. It is suggested the attorney advise client that fraud may have been committed, and if discovered independently by the insurance company, this may be grounds for denial of coverage and possible criminal prosecution. Accordingly, client should be advised of his right to consult with other counsel as to these matters.

An attorney hired by an insurance company to represent an insured owes that person the same unswerving allegiance and fidelity that would be owed if the attorney were retained and paid personally by the insured. Glacier Gen. Assurance Co. v. Superior Court, 95 Cal. App. 3d 836, 157 Cal. Rptr. 435, 436 (1979) ("overall", . . . .the attorney's primary duty is to the insured"), Mead Corp. v. Liberty Mut. Ins. Co., 107 Ga. App.167, 129 S.E. 2d 162, 165 (1962) (Attorneys, whether or not paid by insurance companies, owe their primary obligation to the insured they are employed to defend"); Apex Mut. Ins. Co. v. Christner, 99 Ill. App. 2d 153, 240 N.E. 2d 742, 753 (1968) (counsel provided by insurer represents only the insured); Jackson v. Trapier, 42 Misc. 2d 139, 247 N.Y.S. 2d 315, 316 (Sup. Ct. 1964) (counsel provided by insurer represents solely interest of the insured); American Employers Ins. Co. v. Goble Aircraft Specialities, Inc., 205 Misc. 1066, 131 N.Y.S. 2d 393, 401 (Sup. Ct. 1954) (counsel provided by insurer has "paramount" duty to insured).

The attorney should consult with client to confirm the confidential nature of the information and the attorney's duty to maintain the confidence unless the client otherwise consents to disclosure. This is in conformity with the general rule of attorney-client privilege (Nev. Rev. Stat. Sec. 49.095) pertaining to confidential communications. Such information is not to be released unless authorized by the client.

"A communication is 'confidential' if it is not intended to be disclosed to third persons other than those to whom disclosure is in furtherance of the rendition of professional legal services to the client or those reasonably necessary for the transmission of the communication." Nev. Rev. Stat. Sec. 49.055.

The general rule of confidentiality under the Nevada Rules of Professional Conduct, SCR 156, is that all information conveyed by the client, unless subject to stated exceptions, is confidential. The exceptions include disclosures that are "impliedly authorized" to carry out representation and disclosures required or permitted under subsections 2 and 3 of the rule
 

SCR 156(2) mandates disclosure where the attorney "reasonably believes" disclosure is necessary to prevent the client from committing a criminal act that the attorney believes is likely to result in "imminent death or substantial bodily harm." This exception is not applicable under the facts submitted.

SCR 156 (3) (a) allows discretionary disclosure to the extent the attorney "reasonably believes" necessary:

"(a) To prevent or rectify the consequences of a client's criminal or fraudulent act in the commission of which the lawyer's services have been used, but the lawyer shall, where praticable, first make reasonable effort to persuade the client to take corrective action.. . ."

Disclosure is further allowed under SCR 156(3) (b) to establish a claim or defense in behalf of the attorney in a controversy between the attorney and client, to establish defense to a criminal charge or civil claim against the attorney based upon conduct in which the client was involved, or to respond to allegations in any proceeding concerning the attorney's representation of the client. This is commonly known as the "self-defense" exception.

Neither of the exceptions to discretionary disclosure applies in this case to overcome the general rule of confidentiality. First, the client's fraudulent conduct in obtaining vehicle insurance for his brother occurred before attorney's representation and not in the course of representation. Discovery of the fraudulent conduct was "incidental" to the attorney's representation. The attorney's conduct was not "instrumental" in the commission of the fraud. Secondly, the fraud has already occurred and cannot be prevented by the attorney's disclosure. In accord, see Sloan v. State Bar, 102 Nev. Adv. Opn. 97, 726 P.2d 330 (1986).

SCR 156 (formerly SCR 179), is derived from the Model Rules of Professional Conduct adopted by the American Bar Association with amendments approved by the Nevada Supreme Court based upon analysis of the confidentiality problem and proposal for solution by Professor Geoffrey C. Hazard, Jr., reporter for the Model Rules, in his article entitled "Rectification of Client Fraud: Death and Revival of Professional Norm", 33 EMORY LAW JOURNAL 271 (1985). SCR 156(3) (a) embodies the language suggested by Professor Hazard. Id., 308. As noted by Professor Hazard, the rule requires a connection between attorney services and the fraud before the attorney has discretion to reveal the information. It draws the line between not being an "instrument of fraud", on the one hand, and not being a "policeman" on the other. It prevents disclosure of fraud that the lawyer discovers "incidental" to representation as opposed to that which is committed in the course of representation. The rule also includes both prevention rectification of fraud and requires warning and effort to persuade the client to take corrective action. Id., 308-309.

The second issue to be considered is conflict of interest with respect to continued representation. The general rule concerning conflict of interest is embodied in SCR 157. Subsection 2 of the rule states:
"2. A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer's responsibilities to another client or to a third person, or by the lawyer's own interest, unless:
a) The lawyer reasonably believes the representation will not be adversely affected; and
b) The client consents, preferably in writing, after consultation."

Since the insured is the client, not the insurance company (third party), the attorney must use his skill to present the best defense he can for the client. The Committee has previously stated this opinion is rendered on the assumption that the attorney is hired solely to represent the insured in defense of the negligence lawsuit. Were it otherwise, the attorney would have to determine if his representation of the insured would be "adversely affected" by his responsibilities to the insurance company on questions of coverage and would further be required to obtain the client's consent to dual representation. In such case, it is likely the attorney would find himself in a position of conflict of interest.

The conflict of interest problem where disclosure of confidential information occurs is demonstrated in Parsons v. Continental National American Group, 113 Arizona 223, 550 P.26, 94 (1976). In Parsons, the attorney obtained information from the insured client indicating the client had intentionally injured plaintiffs. The attorney felt compelled to convey the information to the company resulting in refusal to settle and pay judgment. The attorney continued to represent the insured and insurance company, and was further retained by the insurance company in defense of a subsequent garnishment proceeding to collect on the judgment. The Arizona Supreme Court, in its analysis of the conflict of interest created by the disclosure and continued representation, determined that the attorney should have notified the company that he could no longer represent it when he obtained information that could be detrimental to the client's interest in policy coverage. Relying on Parsons the Arizona State Bar Ethics Committee in Opinion No. 79-16, June 7, 1979, determined that an attorney involved in a similar fact situation must withdraw as counsel for the insurance company to avoid a conflict.

The problem with attorney withdrawal, either from representation of the client or the employment relationship with the insurance company is that the mere announcement or act of withdrawal, even without disclosure, is likely to place the insurance company on notice there is a problem which may result in defeat of coverage or other adverse consequences for the client. See comment in HAZARD, THE LAW OF LAWYERING: A HANDBOOK ON THE MODEL RULES OF PROFESSIONAL CONDUCT (1985), P. 430.1 ("an announcement of withdrawal usually signifies much more than the 'mere fact' of withdrawal.").

The client's "paramount" interest is obviously better served by the attorney continuing his employment relationship with the insurance company and his representation of the client where it is clear that his responsibility is to provide for the insured's defense and not to advise the insurance company on questions of coverage. This avoids the conflict of interest problem. It also avoids having to consider withdrawal under SCR 157 or SCR 166 for the reasons previously stated in the Committee's answer to question two.

The third issue is whether the attorney has a conflict of interest which ethically prohibits his accepting compensation from the insurance company under SCR 158(6), which states:

The requirement of SCR 158(6) (c) is satisfied since the information conveyed by the client is confidential and protected by SCR 156. It is thus incumbent upon the attorney to see that the requirements of SCR 156 (6) (a) and (b) are met. Presumably, the client will consent to the attorney's compensation by the company unless the client wishes to pay the attorney himself. It is further presumed acceptance of compensation from the company will not interfere with the attorney's independence of professional judgment or client-lawyer relationship since the attorney should know whether or not his employment relationship with the insurance company requires that he render advise on questions of coverage.

CONCLUSION
The information communicated by client to attorney should be considered a confidential communication subject to SCR 156 which prohibits the attorney from disclosing to the insurance company the potential fraud of client in obtaining vehicle insurance for his brother. The attorney does not have a conflict of interest under SCR 157 provided he has been retained by the insurance company for the purpose of defending client in the negligence lawsuit and not for the purpose of advising the insurance company on questions of coverage. Attorney is not prohibited under SCR 158 from accepting compensation from the insurance company provided the client consents and there is no interference with attorney's independence of professional judgment or with the attorney-client relationship. Although not specifically required under the Nevada Rules of Professional Conduct, it is recommended that the attorney counsel with the client to refrain from future conduct of a fraudulent nature, including obtaining future vehicle insurance coverage for client's brother. This is consistent with the provision in SCR 156 (3) (a) to rectify client fraud and to avoid any appearance of impropriety in condoning fraudulent conduct.

This opinion is issued by the Standing Committee on Ethics and Professional Responsibility of the State Bar of Nevada, pursuant to SCR 225. It is advisory only. It is not binding upon the courts, the State Bar of Nevada, its Board of Governors, any persons or tribunals charged with regulatory responsibilities, or any member of the State Bar.

NOTE:  The Nevada Supreme Court has expressly held that when an insurer retains a lawyer to represent an insured, the lawyer represents both the insured and the insurer.   Nevada Yellow Cab Corp. v. Eighth Judicial District Court, 123 Nev. Adv. Op. No. 6 (March 8, 2007).  Although the insured remains the lawyer’s “primary” client, the retention also establishes an attorney-client relationship between the lawyer and the insurer, absent a conflict of interest.  Id.  While statements to the contrary in this opinion are thereby superseded, the Court’s holding does not otherwise overrule or alter this opinion or its conclusions.

QUESTION - What are the ethical and professional responsibilities of an attorney whose client informs the attorney that the client has embezzled funds from his employer and the client induces the attorney to take possession of the embezzled funds?

ANSWER - An attorney cannot assert the attorney-client privilege as a justification for taking possession of and retaining the fruits of a crime. The funds should be surrendered to an appropriate law enforcement official having jurisdiction, with identification of the right owner, if known. The attorney should not disclose the client's communications surrounding the attorney's receipt of the funds.

AUTHORITIES RELIED ON
Nevada Rules of Professional Conduct (Supreme Court Rules) 152 and 156.

DISCUSSION
An individual in the course of seeking advice from an attorney discloses the fact that he has embezzled monies from his place of employment. He informs the attorney he desires to admit his wrong, make partial restitution by returning the remaining balance of the monies, and appeal to the court for leniency.

Later the individual asks to place the remaining embezzled funds isn the attorney's trust account for safekeeping to evidence his early intent to make partial restitution, while he counsels with his family and seeks counseling. The attorney accepts the money.

Subsequently, the individual in writing informs the attorney he has changed his mind, does not want to make disclosure of the facts, and asks for the return of the monies deposited in trust.

SCR 156 addresses confidentiality of information. The rule reads:
1. A lawyer shall not reveal information relating to representation of a client unless the client consents after consultation, except for disclosures that are impliedly authorized in order to carry out the representation, and except as stated in subsections 2 and 3.

2. A lawyer shall reveal such information to the extent the lawyer reasonably believes necessary to prevent the client from committing a criminal act that the lawyer believes is likely to result in imminent death or substantial bodily harm.
3. A lawyer may reveal such information to the extent the lawyer reasonably believes necessary:
(a) to prevent or rectify the consequences of a client's criminal or fraudulent act in the commission of which the lawyer's services have been used, but the lawyer shall, where practicable, first make reasonable effort to persuade the client to take corrective action; or
(b) to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client, to establish a defense to a criminal charge or civil claim against the lawyer based upon conduct in which the client was involved, or to respond to allegations in any proceeding concerning the lawyer's representation of the client.

The effect of SCR 156 is modified by SCR 152, subsection 4, which reads as follows:
4. A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent, but a lawyer may discuss the legal consequences of any proposed course of conduct with a client and may counsel or assist a client to make a good faith effort to determine the validity, scope, meaning or application of the law.

While SCR 156 is to be considered in deciding the question presented, the Committee is of the opinion that the confidentiality gained in the attorney-client relationship is not absolute. The common law prohibits an attorney from taking possession of the fruits of a crime, except for the limited purpose of turning them over to proper authority.

Though arising under variant fact patterns and under differing statements of the rule supporting the attorney-client privilege, all opinions addressing the subject hold that if counsel possesses the proceeds of a crime, counsel must disclose such to the appropriate authority. In re January, 534 F.2d 719 (7th Cir. 1976); In re Ryder, 263 F.Supp. 360 (E.D. Va. 1967) aff'd, 381 F.2d 713 (4th Cir. 1967); People v. Superior Court, 192 Cal. App. 3d 32, 237 Cal.Rptr. 158 Ct. App. 1987); People v. Meredith, 175 Cal.Rptr. 612, 613 P.2d 46 (1981); Morrell v. State, 575 P.2d 1200 (Alaska 1978); Anderson v. State, 297 So. 2d 871 (Fla. Dist. Ct. App. 1974) State v. Olwell, 394 P.2d 681 (Wash. 1984); California State Bar comm. on Professional Responsibility and Conduct, Op. 1986-1989.

The policy compelling this result is best stated in In re January, 534 F.2d at 727:
The recognition that an attorney need not produce stolen monies . . . would provide a mechanism by which a member of a learned profession could become the privileged repository of the fruits of a . . . crime. There is no reason for thinking that the policy of respecting the private enclave of individual citizens reaches that far.

While apparently unanimous in respect to compelling surrender of the fruits of a crime, the authorities are in disagreement as to whether or not the communications surrounding the possession of the property must or should be compelled. The Committee adopts the holding in State v. Olwell and Andersons v. State, supra, that though it is proper to turn over the property the attorney cannot be compelled to testify when, how and from whom the property was received.

CONCLUSION
A lawyer who takes possession of the proceeds of a crime from his client must surrender them to the appropriate law enforcement official and identify the rightful owner if known. The attorney should not divulge the communications of the client surrounding the receipt of the proceeds.

This opinion is issued by the Standing Committee on Ethics and Professional Responsibility of the State Bar of Nevada, pursuant to SCR 225. It is advisory only. It is not binding upon the courts, the State Bar of Nevada, its Board of Governors, any persons or tribunals charged with regulatory responsibilities, or any member of the State Bar.

QUESTION - May a Nevada law firm's letterhead, which otherwise complies with SCR 199, show the firm's affiliation with an out-of-state law firm?

ANSWER - Yes.

AUTHORITIES RELIED ON
Nevada Rules of Professional Conduct (Supreme Court Rules) 199 (1988)

DISCUSSION
A lawyer licensed to practice law in this state is interested in maintaining an office in one or more locations in Nevada. These offices will operate under the name of this attorney. The attorney is a member of an out-of-state law firm that maintains offices in other states. The attorney wants to demonstrate this affiliation with the out-of-state firm on his Nevada firm's letterhead. A specimen of the letterhead format is set out below.

Licensure Information (Name) Additional Offices
|For Named Attorney (Attorney at Law) (Name of Out-of-State Firm)
(Address) (Office Locations)
(Telephone) (Name of Out-of-State Firm)
(Office Location)

SCR 199 provides in part: "It shall be unprofessional conduct to use a firm name for a law firm unless each and every person whose name is used is a member of the state bar in good standing and a bona fide member of the firm." This rule is satisfied in this circumstance because the firm name used is the name of a member in good standing of the state bar and a bona fide member of the firm. The Nevada attorney is not attempting to practice in this jurisdiction under the name of the out-of-state firm. If that were the case, each person whose name appears in the name of the out-of-state firm would have to be a member of the Nevada bar.

A rule like SCR 199 has as its predicate the prevention of potentially misleading the public or prospective clients about the composition of the law firm based on the firm's name. In re Professional Ethics Advisory Comm. Opinion, 444 A.2d 1092, 1097-98 (N.J. 1982); but see New York Criminal and Civil Court Bar Ass'n v. Jacoby, 460 N.E.2d 1325, 1327 (N.Y. 1984). The Committee is of the opinion that the proposed letterhead is not misleading, since it is clear that the Nevada firm is practicing under the name of a Nevada attorney in compliance with SCR 199.

CONCLUSION
A Nevada law firm satisfying the requirements of SCR 199 may indicate its affiliation with an out-of-state law firm on the law firm's letterhead.

This opinion is issued by the Standing Committee on Ethics and Professional Responsibility of the State Bar of Nevada, pursuant to SCR 225. It is advisory only. It is not binding upon the courts, the State Bar of Nevada, its Board of Governors, any persons or tribunals charged with regulatory responsibilities, or any member of the State Bar

QUESTION - May a private attorney or law firm send companies engaged in international business a form letter representing that the attorney or firm offers legal services in the areas of import-export and customs law?

ANSWER - Yes, with some qualifications. The attorney or firm must possess no information indicating that any recipient of the letter needs specific legal services in a specific matter; an attorney in the firm must have devoted at least 300 hours each year for the preceding two years in the field of practice being communicated to the public as a particular specialty of the firm; and the firm must comply with other requirements of SCR 198.

AUTHORITIES RELIED ON
Nevada Rules of Professional Conduct (Supreme Court Rules) 197, 198 (1987)

DISCUSSION
Supreme Court Rule 197 states that lawyers shall not solicit professional employment by mail from individuals with whom the lawyer has no family or prior professional relationship if the lawyer's motive is pecuniary gain. These unlawful solicitations do not include "letters distributed generally to persons not known to need legal services of the kind provided by the lawyer in a particular matter, but who are so situated that they might in general find such services useful." As long as the attorney possesses no information indicating that a recipient of the letter needs services in a specific legal matter of the type provided by the attorney, then the general prohibitions of SCR 197 are not violated.

A separate issue is suggested by the communication to a targeted group that an attorney or firm offers services in a particular area of the law. Supreme Court Rule 198 states that an attorney may communicate that the attorney's practice is limited to a particular area of practice or that the lawyer practices primarily in a particular area. But this communication is allowed only if the attorney has devoted at least 300 hours in each of the preceding two years to the particular specialty and has completed at least six hours of accredited continuing legal education in the designated field during the preceding calendar year. The lawyer must notify the Board of Continuing Legal Education in writing that these requirements have been completed, specifying the courses, hours, and fields of practice. Also, the lawyer who communicates a field of practice pursuant to SCR 198 must keep time records to demonstrate compliance with the rule and make them available to the Board and to the State Bar Association on request. Finally, any communication to the public of a field of practice must identify the member or members of the firm together with their fields of practice and must be accompanied by the "Notice to the Public," as prescribed in SCR 198 (3) (a) and (b).

A final issue is whether a lawyer may communicate to the public that he or she practices in the specific area of "Import-Export and Customs Law." Supreme Court Rule 198 lists "Immigration and Customs Law" as an approved designation, but not "Import-Export and Customs Law." Nevertheless, SCR 198 specifies that a lawyer may communicate that the lawyer's practice is limited to the approved designations "and such others as are not false or misleading." As long as the representation that an attorney or firm practices "Import-Export and Customs Law" is not false or misleading, it does not violate SCR 198.

CONCLUSION
A private attorney or law firm may write to companies engaged in international business and offer legal services in the areas of import-export and customs law if the attorney or firm possesses no information indicating that any recipient of the letter needs specific legal services in a specific matter, the attorney or an attorney in the firm devoted at least 300 hours each year for the preceding two years to the area of practice, the attorney complied with the other requirements of SCR 198, and the communication of the particular area of practice is not false or misleading.

This opinion is issued by the Standing Committee on Ethics and Professional Responsibility of the State Bar of Nevada, pursuant to SCR 225. It is advisory only. It is not binding upon the courts, the State Bar of Nevada, its Board of Governors, any persons or tribunals charged with regulatory responsibilities, or any member of the State Bar.

Formal Opinion No. 13 -- Updated
October 3, 2005

February 1, 2007 re-issued

QUESTION

May a lawyer who has been certified as a specialist in a certain area of law list this certification on his or her advertisements, letterhead, and business cards?

ANSWER

A lawyer who has been certified in a certain area of law may list this certification on his or her advertisements, letterhead, and business cards so long as (1) the certifying organization has been approved by the State Bar Board of Governors, (2) the lawyer meets the conditions set forth in SCR 198(3)(a)-(e), and (3) the advertisement states the name of the certifying organization.

AUTHORITIES RELIED ON

 

Nevada Rules of Professional Conduct (Supreme Court Rules) 195, 196, 196.5, 198, 198.5; Nevada State Bar Board of Governors Governing Rules For Attorney Specialization; Bates v. State Bar of Arizona, 433 U.S. 350 (1977); In re R.M.J., 455 U.S. 191 (1981); Gary E. Peel v. Attorney Registration and Disciplinary Commission of Illinois, 496 U.S. 91 (1990).

DISCUSSION

 

The Bates Case and Its Progeny

The present question is best considered in historical context.  In Bates v. State Bar of Arizona, 433 U.S. 350 (1977), the U.S. Supreme Court concluded that attorney advertising was a form of commercial speech, protected by the First Amendment and that advertising by attorneys “may not be subject to blanket suppression.”  Bates, 433 U.S. at 383.

In In re R.M.J., 455 U.S. 191 (1982), the Supreme Court reiterated the message of Bates that:

False, deceptive, or misleading advertising remains subject to restraint, and the (Bates) Court recognized that advertising by the professions poses special risks of deception-"because the public lacks sophistication concerning legal services, misstatements that might be overlooked or deemed unimportant in other advertising may be found quite inappropriate in legal advertising."