AND KEEPING CLIENTS
A. The Traditional
1. Professional Notices, Letterheads, Offices
and Law Lists. Rule 7.5.
2. Friends, Family and Acquaintances.
Building a Reputation and Getting Exposure.
a. Through community activities including
service clubs, churches and synagogues and charitable works.
b. Through educational and public relations
programs about our legal system. See Comment 1 to Rule 7.1.
3. Former Clients.
Through demonstrated professional competence
including thorough preparation, familiarity with applicable law and timely
delivery of services (e.g., returned phone calls).
4. Other Lawyers.
5. Through Concentration of Practice.
Advertising and Marketing of
1. A Phenomenon of the Last Two Decades.
a. Bates v. State Bar of Arizona, 433 U.S. 350 (1977),
declaring lawyer advertising within the category of constitutionally
protected commercial speech.
i. Blanket suppression of advertising by attorneys violates the
free speech clause of the First Amendment.
ii. False, deceptive or misleading advertising can be restrained.
b. Economic considerations underlying Bates.
i. Restrictions on advertising serve to perpetuate market position
of established lawyers. Proper advertising is now allowed so as to aid
the new competitor-attorney in penetrating the market.
ii. Proper advertising serves to inform the public of the
availability, nature and price of professional services.
iii. By informing the public, lawyer advertising allocates
resources in the free enterprise system.
c. Virginia after Bates.
i. A lawyer may advertise through written, recorded or electronic
communications, including public media. Rule 7.2(a).
ii. If disseminated by electronic media and prerecorded, it shall
be approved by the lawyer before broadcast. Rule 7.2 (b).
iii. Recording shall be retained for one year from last broadcast
date, and must be provided to the Standing Committee (see below) upon
iv. "Proper motivation" of commercial publicity needs to inform
public of availability of competent, independent counsel. Rule 7.2,
v. Advertising must not be false, fraudulent, misleading, or
deceptive. Advertising through which a lawyer seeks business by use of
extravagant, self-laudatory statements, or appeals to fears and
emotions could mislead laypersons. Rule 7.2, Comment 1b.
vi. Advertisements may be misleading or deceptive if they contain
misleading fee information; state or imply that the outcome of a legal
matter is not related to its facts or merits; make comparisons which
cannot be factually substantiated; create unjustified expectations
about the results the lawyer can achieve; contain celebrity
endorsements or actor portrayals of clients without proper disclosure;
contain specific or cumulative results without a disclaimer that such
results do not predict a similar result in the future. Rules 7.1 (a);
vii. Are further limitations consistent with Bates v. Arizona?
Yes, if excesses rise to the level of misleading or deceptive
viii All lawyer advertisements must include the name and office
address of a Virginia licensed attorney responsible for its content or
in the alternative, the firm may place the name of the responsible
attorney on file with the Virginia State Bar. Rule 7.2 (e).
2. The Standing Committee on Lawyer Advertising and Solicitation.
Standing Committee on Lawyer Advertising and Solicitation was created by
the Supreme Court of Virginia in 1992 and sunsetted in 2010. During the
course of their existence, the Advertising Committee issued advisory
legal ethics opinions in the areas of lawyer advertising and
solicitation. The responsibility of monitoring and enforcing the
rules regarding lawyer advertising and solicitation was transferred to
the Standing Committee on Legal Ethics and the Office of Bar Counsel in
those cases where disciplinary enforcement is deemed necessary. Much of
the monitoring of lawyer advertising is staff generated and includes
reviewing all media including print, television, radio, and Internet.
The key component of the monitoring process is a non-compliance letter
that informs the lawyer that his or her ad does not comply with an
applicable rule. Staff requests the lawyer to rectify the
non-compliance problem in exchange for closing the informal
investigation which creates no disciplinary record for the lawyer. This
“proactive” approach keeps lawyer advertising out of the disciplinary
process except in rare cases of recalcitrant lawyers who refuse to
rectify the problem informally or lawyers who engage in a pattern of
repeated violations of the same rule.
b. The Standing Committee issued a compendium opinion, LEO 1750, in
March 2001 summarizing twelve advertising opinions that it has issued
between April 1993 and February 2000. This opinion reviews the
requirements of Rules 7.1 through 7.5, holding that:
i. Use of Actors in Lawyer Advertising: use of actors or
employees in a law firm is misleading and deceptive absent a clear
disclosure that the actor is not a member or employee of the firm or
that the depiction is a dramatization.
ii. Use of "No Recovery, No Fee" Advertising that promises
"no recovery, no fee" is misleading without additional language that
litigation or court costs are payable regardless or outcome;
"guarantee to win" or "we are paid only if you collect" are also
misleading because there is no explicit reference to a legal "fee."
This language implies that the client will not have to pay fees or
costs and expenses regardless of outcome.
iii. Use of Fictitious Name: It is misleading and deceptive
for an attorney or firm to advertise using a fictitious name, such as
"AA Attorneys", unless the attorney or firm actually practices under
that name and displays it on its letterhead and office sign. (See also
LEO 1492, holding
that is improper for a sole practitioner to use the term "Attorneys
at Law" on his or her letterhead.) See also LEOs 935 and 937.
iv. Advertising that an Attorney Must be Consulted: It is a
violation of Rule 7.1 to advertise that a person injured in an
automobile accident must consult with a lawyer before speaking to the
insurance company because there is no such legal requirement.
v. Participation in Lawyer Referral Service: A lawyer may
advertise in lawyer referral services and joint marketing arrangements
provided such advertising is not false, fraudulent, misleading or
deceptive. See also LEOs 926, 1348 and 1543.
vi. Advertising Specific or Cumulative Case: It is
misleading to advertise specific case results, whether individual or
cumulative, because the results obtained in specific cases depend on a
variety of factors and each legal matter consists of circumstances
peculiar or unique to that specific case.
Rule 7.2(a)(3) now allows the advertising of specific or cumulative
case results with an appropriate disclaimer that explains these
distinctions and sets specific guidelines for placement, color and
type face of the disclaimer. Also use of statements or claims
such as "the best lawyers" and "the biggest earnings" are
self-laudatory and amount to comparative statements which cannot be
substantiated and violate Rule 7.1 (a)(3).
vii. Testimonials and Statements by Third Parties:
Statements made by third parties about a lawyer or law firm such as
"they are the best" or "they will get you quick results" are improper
comparative statements unless the comparison can be factually
c. A multi-jurisdictional law firm complies with Rule 7.5 (b) by
noting on its letterhead with an asterisk placed next to the name of
those lawyers in the law firm not admitted in Virginia with a notation
reading "Admitted to a bar other than Virginia" in small print. LAO
d. Though truthful, a law firm’s claim that "we have obtained the
largest verdict in the city" is inherently misleading and thus violates
without the appropriate disclaimer. LAO A-109.
e. Lawyer advertising and solicitation on the Internet is subject to
regulation under Rule 7.1 of the Code of Professional Responsibility.
LAO A-110. See also Rule 7.2 (d)’s requirements that solicitation
or advertising sent by e-mail must be identified in the header as
"ADVERTISING MATERIAL" and include instructions for recipient to decline
f. Where an attorney has an L.L.M. in Taxation and is a CPA and a
certified financial planner, she may advertise as a "tax specialist" so
long as the advertisement contains the disclaimer required by Rule 7.4
(d) that the Virginia State Bar has no mechanism in place to certify
specializations. LAO A-111.
g. A lawyer may not circumvent the prohibition against comparative
statements by using client testimonials. LAO A-113.
h. Claims such as "the best," even though based on an attorney’s inclusion in
a publication entitled "The Best Lawyers in America," are nevertheless
self-laudatory and amount to comparative statements which cannot be factually
substantiated. A firm cannot suggest that it is "the best" merely because one or
two attorneys are listed in such a publication. Such statements are misleading
and deceptive to the public.
statement that a lawyer is included in a publication such as The Best Lawyers
in America is permitted LAO A-114.
Legitimate Restraints on
Decisions involving specific statements and targeted mail.
1. Bates v. Arizona, supra, involved a newspaper
advertisement that the attorneys were operating a "legal clinic" offering
"legal services at very reasonable fees."
2. Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626
(1985), upheld the attorney's right to place newspaper copy advertising
his availability to handle DWI criminal cases and Dalkon Shield civil
cases. Such advertising was held not to involve prohibited pressure or
coercion on a prospective client. Because it contained truthful,
non-deceptive information regarding the legal rights of prospective
clients, it could not be restrained.
a. However, the Court upheld the State's reprimand of counsel for
stating "full legal fee [would be] refunded" if the client was convicted
of drunk driving because
i. Ad implied a contingent fee based on outcome of criminal case.
ii. Ad did not mention likelihood of plea bargain in which client
would not be convicted of "drunk driving," hence would owe full fee.
b. Court upheld reprimand because the civil ad failed to mention that
"costs" would be owed by client in Dalkon Shield case, even if no fees
3. Shapero v. Kentucky Bar Association, 486 U.S. 466 (1988),
held that direct mail solicitation, targeted to persons with specific
legal problems (property about to be foreclosed upon) was constitutionally
protected. However, in a recent case Florida Bar v. Went for It,
514 U.S.618 (1995), the Supreme Court upheld a 30 day ban on direct
targeted mailings by lawyers as Florida had produced evidence that such
mailings caused harm. Attempts in other states to regulate targeted mail
solicitation have met legal challenge.
A Maryland statute prohibiting direct mail solicitation
within 30 days of a person’s arrest for a criminal misdemeanor traffic
offense violates the First Amendment. Ficker v. Curran, 950 F.
Supp. 123 (D. Md. 1996), aff’d 119 F.3d 1150 (4th Cir.
New Mexico amended its rules of professional conduct to
completely ban all attorney direct mail advertisements to personal injury
victims and family members of wrongful death victims. A federal court
found the rule was unconstitutional and the Tenth Circuit affirmed.
Revo v. Disciplinary Board of the Supreme Court of New Mexico, 106
F.3d 929 (10th Cir. 1997).
4. A written communication that is contained in an
envelope bearing the lawyer's or firm's name must display on the envelope
in conspicuous capital letters the words "ADVERTISING MATERIAL" if the
purpose of the letter is in whole or in part an initial contact to promote
employment for a fee and is sent to a prospective non-lawyer client who is
not a close friend, current client, former client, one who has initiated
contact with the attorney or one who is part of a prospective class
action. The required statement "ADVERTISING MATERIAL" must also be
displayed on the first page of the enclosed written communication. Rule
Additionally, in the case of e-mail advertising or solicitation, the
header shall also display the statement, in uppercase letters,
5. LEO 862 . "A solicitation letter sent to all persons
recently charged with criminal offenses states that the soliciting
attorney works 'primarily with DWI's, traffic infractions, and criminal
offenses.' The committee opines that this is not a per se statement of
some limited expertise. The committee is without facts to enable it to
opine as to whether or not the soliciting attorney has made a 'false,
fraudulent, misleading or deceptive statement or claim' as prohibited by
Rule 7.1(a). The solicitation letter also states that 'I am sure you will
find that my fees are substantially lower than the normal rates of this
community.' The committee opines that this statement is improper, noting
that only factual assertions should be made in advertisements and personal
communications." Rule 7.2(1a).
6. LEO 904. "It is not improper for an attorney to solicit by mail
individuals whose homes are subject to foreclosure provided the solicitation
letter complies with the provisions of Rule 7.1(c)." See also LEOs
470, 579, 862, 1001, 1098. Shapero v. Kentucky Bar A’ssn, 486 U.S. 466
(1985) (state may not absolutely ban truthful targeted solicitation letters to
The State or the Bar constitutionally may discipline a lawyer for
soliciting a client in person under circumstances likely to pose dangers
that the State has a right to prevent. Ohralik v. Ohio State Bar Assn.,
436 U.S. 447, 56 L.Ed.2d 444 (1978). In Ohralik, the lawyer contacted
the parents of one of the drivers injured in an automobile accident after
hearing about the accident from another source. He approached the daughter
in the hospital and offered to represent her. He subsequently entered into a
contract to represent her. Upholding Ohio's suspension of the lawyer, the
1. A lawyer's solicitation of business through direct, in-person
communication with a prospective client has long been viewed as
inconsistent with the profession's ideal of the attorney-client
relationship and as posing a significant potential of harm to the
prospective client. Ohralik, at 454.
2. The State does not lose its power to regulate commercial activity
deemed harmful to the public simply because speech is a component of that
activity. Id. at 455-56.
3. A lawyer's procurement of remunerative employment is only marginally
affected with First Amendment concerns. While entitled to some
constitutional protection, appellant's conduct is subject to regulation in
furtherance of important state interests. Id. at 457-59.
4. The State bears a special responsibility for maintaining standards
among members of licensed professions, especially members of the Bar.
Protection of the public from those aspects of solicitation that involve
fraud, undue influence, intimidation, overreaching and other forms of
"vexatious conduct" is a legitimate and important state interest. Id.
5. The absence of proof of harm or injury to the person solicited is
immaterial. The application of the Disciplinary Rules to appellant, who
solicited employment for pecuniary gain under circumstances likely to result in
the adverse consequences the State seeks to avert, does not offend the
Constitution. Id. at 462-68.
In-Person Solicitation Not Per Se Unethical Except In Cases Involving Personal
Injury or Wrongful Death
1. The Rules of Professional Responsibility adopted by
the Virginia State Bar has adopted no blanket rules prohibiting in-person
solicitation except in cases involving personal injury or wrongful death. Rule
7.3(f) In all other situations Rule 7.3(a) prohibits in-person solicitation only
a. Such communication contains a false,
fraudulent, misleading or deceptive statement or claim; or
b. Such communication has a substantial
potential for or involves the use of coercion, duress, compulsion, intimidation,
threats, unwarranted promises of benefits, over-persuasion, overreaching, or
vexatious or harassing conduct, taking into account the sophistication regarding
legal matters, the physical, emotional or mental state of the person to whom the
communication is directed and the circumstances in which the communication is
made. In-person communication means face-to-face communication or telephonic
Rule 7.3 (a)(1), (2).
2. In-person solicitation for pecuniary gain is seen as
having much greater potential for ethical abuse than direct mail contact. The
attorney must be sensitive to the difference and act in a way consistent with
those Professional Responsibility Rules because in-person solicitation is:
a. More likely to involve exertion of
b. Often demands an immediate response
without opportunity for comparison or reflection on important issues, such as
need for counsel, nature of services to be rendered or availability and costs of
c. May provide one-sided presentation to
encourage speedy and uninformed decision-making;
d. May be an inherent conflict of interest;
e. Usually involves a witness other than the
client and lawyer as to what took place.
3. Attorneys are not just "self-employed
businessmen," but "trusted agents of their clients and assistants to the Court
in search of a just solution to disputes." Cohen v. Hurly, 36 U.S.
117, 124 (1961).
4. Risk of overreaching and undue influence is enough to
support State's interest in regulating in-person contact because state and
federal laws have recognized abuse inherent in "direct selling" and have
regulated to a recognized degree: cooling off periods, bait and switch laws,
5. Attorney solicitation is onerous particularly where
prospective client is seriously ill, physically or mentally, or is a grieving
6. Although an attorney may delegate certain
tasks to non-lawyer employees, in-person solicitation of a prospective client
does not fall into that category. Rule 5.3 (a) & (b). LEOs 1290, 1572.
7. Rule 7.3(f) states: "Notwithstanding any other
provisions of Rule 7.3, a lawyer shall not initiate in-person solicitation of
professional employment for compensation in a personal injury or wrongful death
claim of a prospective client with whom the lawyer has no family or prior
professional relationship. In-person solicitation means face-to-face
communication and telephone communication." Additionally, Rule 8.4 (a) states
that: "It is professional misconduct for a lawyer to violate or attempt to
violate the Rules of Professional Conduct, knowingly assist or induce another to
do so,or do so through the acts of another."
II. TYPES OF
Advertising and Solicitation of Clients for an Attorney by Others
In 1956 the Virginia General Assembly expanded the statutory provisions
outlining solicitations of legal business (running and capping) to include
as a "runner" or "capper" an agent for an individual or organization which
retains a lawyer in connection with an action to which it was not a party
and to which it had no pecuniary right or liability.
In NAACP v. Button, 371 U.S. 415, 9 L.Ed.2d 405, the Supreme Court
held the expanded provisions unconstitutional in its application to the NAACP,
which would locate and retain attorneys for persons seeking vindication of
constitutional rights. Virginia's claim that it was regulating the traditionally
illegal practices of barratry, maintenance and champerty had to yield to the
First Amendment's protection of vigorous advocacy.
An attorney may not participate in a referral group where one of the
primary purposes of the organization is to trade referrals as this
potentially violates the rules regarding undisclosed conflicts of
interest, may compromise a lawyer’s professional independence, and risk
violation of the solicitation rules. LEO 1846
B. Legal Services
Lawyers may participate in prepaid legal services plans so long as the
services performed and the communications made are appropriate under Rule
7.1 or Rule 7.2.
1. The attorney may license the plan with the state, administer the
plan and provide all its legal services. He or she may market the plan
through non-attorneys who will receive commissions based on the income
derived from subscribers. LEO 875.
2. Virginia Code Section 38.2-4400, et seq. defines "Legal Services Plan."
According to Rule 7.3(c), lawyers may have non-profit organizations promote
their services so long as:
1. The lawyer’s assistance or the communications of the organization on
his or her behalf are not false, fraudulent, misleading or deceptive; or
2. The lawyer’s assistance or the communication of the organization on his or
her behalf do not involve the use of coercion, duress, compulsion, intimidation,
threats, unwarranted promises of benefits, over-persuasion, overreaching or
vexatious or harassing conduct, taking into account the physical, emotional or
mental state of the person to whom the communication is directed and the
circumstances in which the communication is made.
1. Participation in lawyer's referral services of the Virginia State
Bar and local bar associations is widely accepted as proper. Rule
7.3(d); LEOs 926, 1348.
A lawyer shall not compensate or give anything of value to a person
or organization to recommend or secure employment by a client, or as a
reward for having made a recommendation resulting in employment by a
client, except that the lawyer may pay for public communications
permitted by Rules 7.1and 7.2 and the usual and reasonable fees or dues
charged by a lawyer referral service and any qualified legal services
plan or contract of legal services insurance as authorized by law,
provided that such communications of the service or plan are in
accordance with the standards of this Rule or Rule 7.1 and 7.2 as appropriate.
2. It is not per se improper for an attorney to
participate in a lawyer referral service that is a profit-making lay
organization or corporation. LEO 910. Nor is it improper to participate
in an arrangement with a trade association under which the association
refers its members to the attorney, as long as there is no division of
fees or other compensation by the attorney to the association. LEO 1497.
Nor is it improper for a non-profit lawyer referral program of a local
bar association to impose a contingent or percentage fee upon
participating attorneys. LEO 1751.
3. Attorneys may advertise participation in lawyer referral services and
joint marketing arrangements so long as the advertising is not false, deceptive
or misleading. LAO A-0105.
Attorneys may also advertise in on-line directories as long as they
comply with the advertising rules. LAO A-0017.
Referrals to Lawyers—Participation in Lead
Sharing Organizations. LEO 1846 (Feb 2, 2009)
Lawyers may not join a lead-sharing organization in which
membership “is often dependent on the number of leads a member passes,”
because such “reciprocal” referrals amount to a “quid pro quo payment for
services” in violation of the prohibition on providing something of value in
return for a referral; such participation puts the client’s interest at risk
because the lawyer “may be obligated to refer a client to a particular
member specialist when a non-member specialist may be better suited to meet
the client’s needs”; the lawyer faces a personal conflict of interest
because the lawyer may not feel free “to choose the most appropriate
specialty provider for a client”; “[t]he mere disclosure of a client’s name
and specific need in certain circumstances may be enough to violate the Rule
without consent of the client.” A lawyer may own an interest in a company
that is such a lead-sharing organization “as long as the lawyer is not a
member.” Lawyers may also engage in voluntary referrals to other lawyers and
professionals, but may not join “a hypothetical organization that bases
membership on the commitment to provide referrals.”
Prohibited Indirect Solicitation
A lawyer shall not accept employment when he or she knows or it is obvious
that the person who seeks his or her services does so as a result of any
person's conduct that is prohibited under Rule 7.3(e).
Fields of Practice and Certification
1. Rule 7.4. Lawyers may state, announce or hold themselves out as
limiting their practice in a particular area or field of law so long as
the communication of such limitation of practice is in accordance with the
standards of Rules 7.1, 7.2, 7.3 and Rule 7.4 as appropriate. A lawyer
shall not state or imply that the lawyer has been recognized or certified
as a specialist in a particular field of law except as follows:
a. A lawyer admitted to engage in patent practice before the United
States Patent and Trademark Office may use the designation "Patent
Attorney" or a substantially similar designation;
A lawyer engaged in Admiralty practice may use as a designation
"Admiralty," "Proctor in Admiralty" or a substantially similar
A lawyer who has been certified by the Supreme Court of Virginia as a
specialist in some capacity may use the designation of being so
certified, e.g., "certified mediator" or a substantially similar
A lawyer may communicate the fact that the lawyer has been certified
as a specialist in a field of law by a named organization, provided that
the communication clearly states that there is no procedure in the
Commonwealth of Virginia for approving certifying organizations.
2. As with any form of advertising, the overriding concern is that the
information disseminated to the public not be misleading, false or deceptive.
Rather than stating that an attorney "specializes" in a certain area of
practice, it is more appropriate and less misleading to use the phrase "areas of
practice are limited to . . .," provided that the attorney's practice is in fact
limited to those areas. LEO 1231.
IS THE LAWYER FOR THIS CLIENT?
Office-Sharing and Actual Partnerships
1. A number of situations give rise to the question: Who is my lawyer
or who are my lawyers in this matter? The problem areas include:
a. A lawyer shares office space with one or more other lawyers. Are
there any practices which suggest that the other lawyers in the space
are this client's lawyer?
b. Does the sign on the door suggest the existence of a
c. Does the receptionist answer the telephone as though a
d. Do other attorneys cover motions or other legal proceedings for
e. Does the retainer agreement clearly set forth that only Lawyer A
is responsible for the management and oversight of this matter?
2. If the attorney is employed by a professional corporation or a
partnership, does the client understand that others within the professional
corporation or partnership are going to work on his or her case? If so, who is
the attorney principally and ultimately handling this client matter? Does the
client understand that non-lawyers such as paralegals and law clerks may perform
services on the case for which the client may be economically responsible? LEO 1850
3. If two
firms want to use the terms “associated” or “affiliated” to describe their
relationship with each other the terms much not be false or misleading.
In order to meet that requirement the firms much adhere to applicable rules
regarding disclosure of confidential information and conflicts of interest
as if they were a single firm. LEO 1813
with Lawyers Licensed in Different Jurisdictions
1. A client approaches a lawyer in the District of Columbia who is
not licensed in Virginia, but who has associate attorneys in his or her
law firm who are licensed in Virginia. Can the District of Columbia
lawyer be the lawyer for the client in this matter? If so, what
disclosures must he or she make to his or her client, if any?
2. A lawyer in the District of Columbia has no partners or associates
licensed to practice in Virginia. He or she retains local counsel in
Virginia. What are the responsibilities of foreign counsel in the case?
What are the responsibilities of local counsel in the case?
The Virginia Supreme Court held that Virginia local counsel owed a
duty to the District of Columbia chief counsel to exercise reasonable
care, skill and diligence in performing the tasks for which the chief
counsel had employed him. Ortiz v. Barrett, 222 Va. 118 (1981).
Local counsel also had an implied obligation to the clients to exercise
the same degree of care in performing such professional services as the
chief counsel required of him. However, the standard of due care only
applied to the work assigned to Virginia local counsel by the District
of Columbia chief counsel. Local counsel had no duty to second guess,
overrule or independently advise the client on the management of the
case under Virginia law.
3. Multi-state Law Firms. A law firm's letterhead should indicate the
jurisdictional limitations of any of the listed lawyers' practices. LEO 1143.
A multi-state law firm must indicate on its letterhead which
lawyers are members of the Virginia State Bar and which are not, and may include
a footnote indicating that the non-Virginia lawyers are admitted in other states.
LEO 858. If a law firm lists different states where its lawyers are licensed,
the names of the lawyers should be included. A statement indicating that the law
firm "serves" three jurisdictions might give the erroneous impression that each
lawyer is licensed in those jurisdictions. LEO 1026.
4. Multi-jurisdictional Practices
(MJP). A recent national debate is ongoing regarding many aspects
of a state allowing foreign lawyers (both out-of-state and those from
foreign countries) certain practice rights within the state. The
breadth of this issue reaches to the core of the unauthorized practice
pro hoc vice admission rules in each state and especially impacts
in-house counsel and lawyers and law firms maintaining offices and
practicing in multiple state and federal jurisdictions. The
American Bar Association commission on MJP has issued recommendations
and proposed rule amendments to provide direction and guidance to state
The Virginia Supreme Court approved amendments to Rules 5.5 & 8.5 of the
Rules of Professional Conduct effective March 1, 2009.
Rule 5.5 - Temporary Practice
by a Foreign Lawyer
The new Rule 5.5 regulates
unauthorized practice of law in Virginia by non-Virginia licensed attorneys,
both those from other
jurisdictions and those licensed in foreign countries. Prior to the
adoption of this rule, unauthorized practice of law by attorneys or
non-attorneys was regulated and monitored by the Virginia State Bar’s
Standing Committee on the Unauthorized Practice of Law (“the UPL Committee”) and governed by
Virginia’s Unauthorized Practice of Law Rules, the Definition of the
Practice of Law in Virginia, and Part 6, §I (C), Rules of Supreme Court
of Virginia. The new Rule 5.5 now makes practice by non-Virginia
licensed lawyers, other than as authorized by the rule, a disciplinary
The new Rule 5.5 authorizes a Foreign
Lawyer to provide legal services in Virginia on a “temporary and
occasional basis” if they are: (1) undertaken in association with a
licensed Virginia lawyer who actively participates in the matter; (2)
related to a pending or potential proceeding in Virginia or another
jurisdiction if the lawyer is authorized to appear or expects to be so
authorized; (3) related to mediation or arbitration in Virginia or
another jurisdiction if such services are related to the lawyer’s
practice in his/her licensing jurisdiction and do not require pro
hac vice admission; or (4) related to representation of a client in
the foreign lawyer’s licensing jurisdiction or which are governed by
The new Rule 5.5 prohibits a
lawyer from establishing an office or other systematic presence in
except as authorized by other Rules of Professional Conduct or other
law. The new rule retains the long-standing restrictions under the
current Rule 5.5 regarding the employment of a lawyer whose license has
been suspended or revoked. Paragraph (d)(5), which was added to the new
rule, specifically excludes a corporate counsel registrant practicing
under Part II of Rule 1A:5 of the Rules of the Virginia Supreme Court,
and excludes a foreign legal consultant practicing under proposed Rule
1A:7 of the Rules of the Virginia Supreme Court from being authorized to
practice under proposed Rule 5.5.
Rule 8.5 - Disciplinary
Authority and Choice of Law
The new Rule 8.5 addresses
disciplinary authority and choice of law in disciplinary cases and
provides enforcement authority for new Rule 5.5. The new rule extends
the Virginia State Bar’s disciplinary authority over any lawyer who
provides or holds out to provide legal services in Virginia, regardless of where the lawyer is
licensed. Under the new Rule 8.5, a lawyer not admitted in Virginia, who
provides or holds out to provide legal services in
Virginia, shall consent to appointment of an
official designated by the Supreme Court of Virginia as his/her agent
for disciplinary service of process. The choice of law to be applied in
a disciplinary matter will be: (1) the rules of the court, agency or
tribunal if the conduct in question occurred in connection with a matter
before such court, agency or tribunal; (2) for any other conduct, the
rules of the jurisdiction where conduct occurred; or (3) the Virginia
Rules of Professional Conduct, if the lawyer provides or holds out to
provide legal services in Virginia.
Partnership with or
Influence by a Non-Lawyer
1. A lawyer may not form a partnership with a non-lawyer, Rule
5.4 (b), but may use the services of a non-lawyer and may
incorporate the product of the non-lawyer into his or her work as
long as the lawyer ultimately remains responsible. The non-lawyer
is not permitted to counsel clients about legal matters, appear in
court or permit any representation that the non-lawyer is a
lawyer. Moreover, the lawyer is obligated to exercise a high
degree of care to assure that the non-lawyer complies with the
Rules of Professional Conduct. Rule 5.3. But see LEO 1584.
2. A lawyer may not practice in an association with a
non-lawyer where the non-lawyer has the right to direct or control
the professional judgment of the lawyer. Rule 5.4(c) Accordingly,
lawyers providing services under prepaid legal services plans,
through non-profit organizations, or as house counsel or internal
counsel to corporations and insurance companies, owe a duty to the
client that is not subject to direction or supervision by the
non-lawyer agency. See LEO 1276. A lawyer hired by an insurance
company to defend the insured owes the insured the same duties as
if privately retained by the insured. Norman v. Insurance Co.,
218 Va. 718, 727 (1978). Consequently, an insurance defense lawyer
cannot, without written consent of the client (insured) after full
consultation, agree to terms or guidelines imposed by the
insurance company that limit the attorney’s representation of the
insured. LEO 1723.
3. Foreign Legal Consultants.
The Virginia Supreme Court approved, effective
January 1, 2009, a rule that will allow a non-
attorney to practice in
as a Foreign Legal Consultant (“FLC”). This new rule is work
product of the Virginia State Bar’s Task Force on
Multi-jurisdictional Practice (“MJP Task Force”). The new FLC rule carves out a
rather limited role for the foreign legal consultant. The FLC rule
provides access to foreign law expertise with accountability; FLCs
will be subject to the ethics rules and discipline system in
Virginia. Also, a FLC
will be permitted to render any legal services only with regard to
matters involving the law of the foreign nation(s) in which the
person is admitted to practice, or international law. They cannot
appear before any court.
Finally, a FLC cannot hold him/herself out as a member of
the Virginia State Bar.
4. Multidisciplinary Practices (MDPs). A national debate is raging
over whether lawyers should be permitted to work in a firm which
delivers, among other things, legal services to the public, where the
non-lawyers have equity ownership and controlling interests in the firm,
and share legal fees with non-lawyers. Proponents of MDPs argue that
consumer demand for MDPs is so strong that MDPs are inevitable and
therefore Rule 5.4 should be amended so that lawyers may practice in
MDPs. Opponents fear that MDPs threaten the "core values" of the legal
profession and call for preservation of the current rules prohibiting
non-lawyer control and ownership of firms that deliver legal services
and fee-sharing with non-lawyers. So far, the VSB Council has rejected
any proposals to revise the Rules of Professional Conduct to allow
lawyers to practice law in entities controlled by non-lawyers.
WITH THE CLIENT
A. Explanation of
1. Fees shall be reasonable and adequately explained to client. Rule
1.5(a) & (b).
2. "When the lawyer has not regularly represented the client, the amount,
basis or rate of the fee shall be communicated to the client, preferably in
writing, before or within a reasonable time after commencing the representation.
" [Rule 1.5(b)] "A contingent fee agreement shall state in writing the method by
which the fee is to be determined . . ." [Rule 1.5(c)]. No single area of the
financial relationship between attorney and client has generated so much
controversy, conflict, and misunderstanding as the failure of attorney and
client to reach a prompt agreement as to the fees and costs to be incurred in
the prosecution of the client's matter.
Contingent Fees vs. Flat Fees
1. If flat fee, is the fee or portions of it refundable in the event
it is not fully earned?
a. It is the duty of an attorney to refund so much of an advanced
fee as has not been earned by performance of the services for which
the attorney was retained. Heinzman v. Fine, Fine, Legum and Fine,
217 Va. 958 (1977), serves as guidance in regard to the standard by
which the earned portion of the retainer may be measured. See
LEOs 646, 1246.
b. A fixed or flat fee is an advanced legal fee. It remains the
property of the client until it is actually earned and must be
deposited in the attorney's trust account. If the attorney-client
relationship is ended before legal services are concluded, the client
is entitled to a refund of that portion of the fee that has not been
earned. LEO 1606.
2. If hourly fee, has the client been advised of the hourly rates to
be charged by each of the lawyers and non-lawyers who may work on the
client matter? Does the fee agreement set forth the kind of costs which
will be billed to the client? Does the firm bill for word processing or
3. If the fees are contingent, does the client understand that the
contingent fee is calculated on the gross amount received by way of
judgment or settlement?
4. Contingent fees are rarely proper in domestic relations cases. Rule
a. An arrangement for a
contingent fee in a domestic relations matter has been previously
considered appropriate only in those rare instances where:
(a) the contingent fee is for the
collection of, and is to be paid out of (i) accumulated arrearages
in child or spousal support; (ii) an asset not previously viewed or
contemplated as a marital asset by the parties or the court; (iii) a
monetary award pursuant to equitable distribution or under a
property settlement agreement;
(b) the parties are divorced and
reconciliation is not a realistic prospect;
(c) the children of the marriage are
or will soon achieve the age of maturity and the legal services
rendered pursuant to the contingent fee arrangement are not likely
to affect their relationship with the non-custodial parent;
(d) the client is indigent or could
not otherwise obtain adequate counsel on an hourly fee basis; and
(e) the fee arrangement is fair and
reasonable under the circumstances.
Rule 1.5 Comment 
b. The factors listed in paragraph 4(a) above reflect
concern regarding the propriety of accepting domestic
relations cases on a contingency fee basis. Such an
arrangement is more likely to be deemed proper where there
is little danger of affecting either a marital or familial
relationship. Thus, where the parties are already divorced
in an equitable distribution case or the non-custodial
parent is deceased in a child support case, a contingency
fee is more likely to be found permissible. See LEOs
1298 and 1174.
5. Difficulties in determining the fee owed when the
contingent matter is disposed of by way of a structured
settlement or payout.
a. Does the retainer agreement specify whether, in a
structured payout, the fee is calculated as the percentage
of the present value of the future income stream? If present
value is used, is it the present value of all guaranteed
future payments or does it include the present value of
b. Does the retainer agreement provide that the
contingent fee shall be calculated based upon the cost of
procuring any annuity to secure the future payment?
i. The defendant may not be obligated to disclose its
cost of procuring the annuity.
ii. The cost of the annuity may be significantly less
than the present value of the annuity and the client's
interest in the difference may be significant.
6. In LEO 1748, the Ethics Committee stated that it is
permissible for an attorney to represent a criminal defendant,
on a contingency fee basis, whose property was the subject of a
civil forfeiture proceeding having been seized incident to the
client’s arrest on charges of possession of controlled
substances with intent to distribute. Although Rule 1.5 (d) (2)
prohibits contingent fees in criminal matters, the forfeiture
proceeding is a civil matter, not criminal; there exists a
res out of which a fee can be paid; and there is uncertainty
as to the outcome.
LEO 1766 the Ethics Committee looked at a situation that
involved a mixed contingent fee combining an hourly rate with a
percentage of the res and determined that there is
nothing that specifically prohibits a mixed fee as long as the
resulting total fee is reasonable.
Does the retainer agreement clearly indicate that the costs
are the client's obligation and are not contingent?
1. A lawyer shall not provide financial assistance to a
client in connection with pending or contemplated litigation.
[Rule 1.8(e)] See
Shea v. Virginia State Bar, 236 Va. 442, 374 S.E.2d 63
2. Attorneys may ethically advance court costs and expenses
of litigation for the client, but the client ultimately must be
responsible for their payment/reimbursement. Rule 1.8(e)(1).
3. It is not improper for an attorney to advance costs even
when it is apparent to the attorney that the client will be
financially unable to repay or meet his or her cost obligations.
Rule 1.8 (e) (2). See
LEO 997 (it is not improper for an attorney to advance costs in
a death penalty case even though he or she knows that the client
does not have the financial capacity to pay the costs or
reimburse the attorney for the advance of costs).
4. An attorney who posts an appeal bond on behalf of a client
in a civil matter is advancing an appropriate litigation-related
expense which is permitted under Rule 1.8 (e) (1) since the
client remains responsible to the attorney for reimbursement.
1. May attorney's fees be divided between
lawyers not in the same firm? Yes, but only if the client is
advised of and consents to the participation of all the lawyers
involved; the terms of the division of the fee are disclosed to
the client and the client consents thereto; the total fee is
reasonable; and the division of fees and the client's consent is
obtained in advance of the rendering of legal services,
preferably in writing. Rule 1.5(e). LEO 1488. In LEO 1739, the
Ethics Committee opined that the relaxed requirements of Rule
1.5 (e) permit a lawyer to charge a "referral fee" for referring
a client to another lawyer outside the firm even though the
referring attorney has no further responsibility to the client.
2. When an attorney leaves his firm before
completion of a contingent fee case and takes the case to his
new practice, may he divide the ultimate fee with the former
firm absent client consent? Yes. As per
Rule 1.5(f), there is no prohibition against the division of
fees between attorneys who were previously associated in a law
firm or between any successive attorneys in the same matter
(This overrules the finding in LEO 1760.)
3. May fees be divided with a non-lawyer?
Only where money is paid to the estate of a deceased lawyer over
a reasonable period of time or to the estate of a deceased
lawyer for whom the living lawyer undertakes to complete
unfinished legal business. A lawyer or law firm may include
non-lawyer employees in a compensation or retirement plan based
wholly or in part on a profit sharing arrangement. Rule 5.4.
4. Does Rule 5.4's prohibition against
sharing fees with a non-lawyer prohibit a lawyer from sharing or
turning over court-awarded attorneys fees to the ACLU, NAACP or
other non-profit organization that sponsored the litigation? In
LEO 1744, the Ethics Committee said that
Rule 5.4 (a) does not prohibit an
attorney from sharing or turning over court-awarded attorneys
fees to a non-profit public interest group which sponsored the
5. What is the appropriate procedure for an
attorney handling funds paid by a finance company on behalf of a
client where the attorney pays the finance company a portion of
his fee? In LEO 1764, the Ethics Committee concluded that the
attorney may not properly participate in this arrangement. An
attorney may not share his legal fees with non-lawyers except
within the parameters of three exceptions noted in Rule 5.4,
none of which were applicable in this case. As the proposed
arrangement involves the attorney allowing the finance company
to keep a portion of the attorney's legal fees, the attorney may
not participate in this arrangement.
Fees Owed When Client Prematurely Terminates Relationship
1. Those fees which have been earned to the date of
2. If the matter was being handled on a contingency fee, then
recovery of fee may be had quantum meruit. See
Fary v. Aquino, 218 Va. 889 (1978); Heinzman v. Fine,
Fine, Legum & Fine, 217 Va. 958 (1977); See also LEO
Quantum meruit fees are those determined to be
reasonable under the circumstances and based upon "the
amount and character of the services rendered; the
responsibility imposed; and labor, time and trouble
involved; the character and importance of the matter in
which the services are rendered; the amount of the money or
the value of the property to be affected; the professional
skill and experience called for; the character and standing
in their profession of the attorneys; and whether or not the
fee is absolute or contingent, it being a recognized rule
that an attorney may properly charge a much larger fee where
it is to be contingent than where it is not so." County
of Campbell v. Howard, 133 Va. 19, 51 (1922).
Fees Charged for Collection of Medical Expense Payments
Lawyers representing personal injury
claimants may charge a non-contingent fee for the ministerial
task of collecting medical expense payments from the insurance
company. However, it is improper to use a contingent fee
agreement for the recovery of such funds where the task is
purely ministerial. LEOs 1696,1641, 1461.
Amendment of Fee Agreement During Course of Representation
Lawyers and clients may amend fee agreements
as long as they do not involve "undue influence or coercion by
the lawyer." A lawyer may enforce an amended fee agreement
prepared after the client in extensive litigation over a cloud
on a real estate title indicated that he could not continue to
finance the litigation as originally agreed and instead offered
to pay an additional $25,000 upon successful completion of the
litigation "in consideration of payment not being made as
originally agreed." The change from an hourly-based contract to
a contingent fee agreement was not improper because the outcome
was uncertain; the client could not continue to finance the
litigation otherwise; and success would produce a "res" out of
which to pay the fee. The extra $25,000 to be paid upon
successful completion of the litigation was based on the
lawyer's agreement to delay collection of the outstanding fees
until the case ended. LEO 1705.
Fee Agreement Requiring Arbitration of Malpractice Claim by Client
Although a "lawyer's fiduciary duties extend
to preliminary consultation by a prospective client with a view
to engagement," it is not per se improper for a client
engagement agreement to provide for binding arbitration of legal
malpractice claims as long as there is adequate disclosure and
consent. Like fee agreements, such initially-acceptable
engagement agreement provisions might become improper given the
"occurrence of unusual and extraordinary facts and circumstances
not contemplated at the outset of the representation." The
committee declined to require any specific disclosures or insist
that the client actually consult another lawyer before entering
into such an agreement (in LEO 638, the committee seemed to
require that the client must be advised to seek independent
counsel regarding an arbitration provision). Appropriate
disclosures might include "waiver of trial by jury or by the
court, discovery, evidentiary rules, arbitrator selection, scope
of award, expense, appellate rights, finality of award,
enforcement of award." LEO 1707.
Payment of Fees Using
As early as November 16, 1974, the American
Bar Association adopted Formal Opinion 338, allowing the use of
credit cards subject to specific guidelines. This opinion has
served as an impetus for virtually nationwide approval of the
use of credit cards for the payment of legal fees and expenses
by state and local bar associations. The Virginia State Bar
Council approved an ethics opinion authorizing the use of credit
cards for the payment of legal fees. LEO 186 A. A law firm may
allow clients to pay with a credit card, as long as all payments
are deposited in a trust account and the lawyer does not
withdraw any fees until deposit checks have cleared. LEO 999. It
should be noted that a retainer fee may be paid by the use of a
credit card, but amounts received by the attorney from the
credit card institution, in the same manner as all fees received
in advance of the rendering of services, must be deposited and
preserved in escrow in the trust account maintained by the
attorney for his clients to the extent that such fees remain
unearned. Charges made by any lawyer or law firm shall be only
for the reasonable value of the services actually rendered
regardless of whether a credit card is used. Virginia lawyers
may pass along to their client the transactional costs/merchant
fees charged by a credit card company when the client uses a
credit card—as long as the lawyer explains the process to the
client before the client uses the credit card. Such
transactional/service fees may be deducted from the lawyers’
trust account, but lawyers using best practices should arrange
for the fees to be deducted from the lawyers’ operating account.
Lawyers must “monitor and personally replace any escrow funds
that are subject to a charge back” by a credit card company, and
lawyers using best practices should arrange for any charge backs
to come from the lawyers’ operating account rather than trust
account. LEO 1848 (2009)
Discounting Fee to Client When Client is a Judge Before Whom
Attorney May Appear in Future
It is not improper for the attorney to treat
a judge, and longtime friend, no differently from other friends
and colleagues to whom the attorney would extend the same
professional courtesy of a discounted fee for legal services
rendered by the attorney. Obviously, the attorney would have a
conflict if he were representing the judge as a client while
appearing before the judge on behalf of another client. Assuming
the attorney has no matters before the judge, the discounted fee
arrangement would not be viewed as an attempt to give something
of value to the judge to improperly influence official action.
Rule 3.5 (d). LEO 1730.
K. Mixed Fee Arrangement
May an attorney charge a contingent fee that calls not
only for a percentage of the settlement, but also an hourly fee?
This type of contingent fee, involving some combination of a
percentage and an hourly rate, is commonly referred to as a
"mixed," "combined," or "blended" fee. While there is no per
se prohibition against a mixed fee, the total amount must
still be reasonable. Rule 1.5 sets out a number of factors to
determine whether the fee charged is reasonable. LEO 1766.
STATUTORILY LIMITED FEES AND
The attorney may be entitled to no more fee than awarded
by the Industrial Commission. See Hudock v. Virginia State Bar,
233 Va. 390 (1987). The Industrial Commission entered a settlement order,
setting the attorney's fee at $2,500 and ordering that the remaining portion of
$12,500 be paid to the client in one lump sum. The attorney had entered into a
contingency fee arrangement with his or her client which called for one-third of
the gross settlement as the legal fee. The Industrial Commission was never
advised of this arrangement nor was a request for a specific fee made by the
attorney at the time the settlement petition was submitted. After the entry of
the Commission's order setting the attorney's fees, the attorney asked for and
received an additional $2,500 from his or her client, bringing the attorney's
fee total to $5,000. In a disciplinary proceeding, the State Bar Disciplinary
Board found the attorney violated Rule 1.5(a) and (b) and ordered him publicly
reprimanded. The Virginia Supreme Court affirmed.
B. Other Fees
Set by Statute
1. Social Security
2. Veterans' claims
3. Federal Tort Claims Act
C. Civil Rights Cases
1. The federal courts in awarding attorney's
fees in civil rights cases have enumerated a number of standards for the award
of such fees.
2. In Daly v. Hill, 790 F.2d 1071 (4th
Cir. 1986), the Fourth Circuit Court of Appeals noted that the District Court,
when considering petitioner's fee application, used twelve factors outlined in
Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir.
1974), and adopted by the Fourth Circuit in
Barber v. Kimbrell's Inc., 577 F.2d 216, 226 (4th Cir.), cert. denied,
439 U.S. 934 (1978).
VI. COLLECTING FEES
A. Retaining Files
May the lawyer retain client's file as security for
arrearages of fees and costs?
1. The file is the property of the client, not
the law firm. LEO 1544. Thus, in most instances, the former client or a
successor attorney is entitled to the file on demand. The delivery of the file
to the client or his or her new attorney is required under Rule 1.16(e). This
includes "work product" of the attorney. LEO 1366.
2. The Standing Committee on Legal Ethics
has issued numerous opinions regarding the retention of client files.
LEOs 1101, 1124, 1171, 1176, 1357, 1366, 1418, 1485, 1544 and 1690. Rule
1.16(e) is very clear regarding the fact that the lawyer can bill for copying of
the file and seek to collect those costs; however, he cannot hold the client’s
file pending receipt of the copying costs or for any other reason.
3. The lawyer only has to provide a
complete copy of the client’s file one time; however, providing documents on an
item-by-item basis does not meet this requirement. Rule 1.16(e).
Charging Interest on
Uncollected Fees and Costs
It is not improper for an attorney to charge interest to
his or her client on fees earned but not paid or on costs advanced but not
reimbursed, provided that (1) such interest is charged pursuant to a prior
agreement of the lawyer and client, (2) the client is capable of paying the same
but desires that the payment be deferred for the client's convenience, (3) the
interest rate does not violate the laws of the Commonwealth of Virginia and, (4)
the client has the unrestricted right to prepay any balance of the fee or costs
without penalty. See LEOs 186-B, 642 and 1247. But it is improper to
require the client to agree up front in the fee agreement that the lawyer may
charge a fixed collection fee of $500 in the event the lawyer has to file a
collection suit against the client on an unpaid account. LEO 1667 citing
DR 2-105(A) and DR 5-104(A). Now Rule 1.5(a) and Rule 1.8(a) respectively.
Non-Refundable Retainers or
1. Distinguish between "retainer" and "advanced
legal fee" as payment for specific legal services to be performed. LEO 1606.
2. A "retainer" is not a pre-payment for legal
services to be rendered in the future. A "retainer" is a payment made to secure
an attorney's employment for a legal matter which may arise in the future
or to secure the attorney's unavailability to a potential adverse party. A
"retainer" is earned when paid and becomes the property of the attorney on
receipt and may not be deposited in the trust account.
3. If the employment agreement between the
lawyer and client provides that the pre-payment is to be applied against future
services to be rendered by the attorney, the fee is not a retainer, but rather
an advanced legal fee which must be deposited in the trust account and may not
be withdrawn until services are rendered. The advanced legal fee remains the
property of the client until it is earned. Therefore, it is improper for an
attorney to require a client to agree that an advanced legal fee is a minimum
fee or non-refundable. LEO 1606.
Binding Arbitration of Fee Dispute Provisions in Retainer Agreement
A retainer letter requiring arbitration of fee disputes
does not amount to a per se violation of the Code as long as: there is
"full and adequate disclosure as to all possible consequences" of the agreement;
the client consents; and the arrangement is not "unconscionable, unfair, or
inequitable when made." LEO 1586.
E. Disciplinary Cases
1. Fee Agreements
Respondent’s agreement with Client
stipulated that Respondent’s unpaid legal fees could not be discharged
in bankruptcy and permitted Respondent to charge client for time spent
defending and responding to bar investigation. Held: Violation of
Rules 1.5, 1.7(a)(3) and 8.4. In the Matter of Brian Gay, VSB
Docket No. 08-222-073165 (VSB Disc. Bd. (Feb. 17, 2010).
Respondent violated Rule 1.5 by charging
Client for time spent preparing and appearing on motion to withdraw from
Client’s case. In the Matter of Brian Gay, VSB Docket No.
08-222-073165 (VSB Disc. Bd. (Feb. 17, 2010).
SERVING THE CLIENT THROUGH ALTERNATIVE DISPUTE RESOLUTION
Alternative Dispute Resolution (ADR) refers to a variety of processes
other than litigation that are used to resolve disputes. The Virginia
Rules of Professional Conduct (VRPC) contemplate that attorneys will
advise their clients about, and competently represent their clients in,
the different forms of ADR, including collaborative problem solving,
mediation and other processes. The value of ADR is apparent in the
commentary of the VRPC Rules relating to competence, scope of
representation, diligence, communication and advice.
This value is
also apparent in recent recommendations of the Commission on Virginia
Courts in the 21st Century, which support increased use of ADR in the
courts in upcoming decades. In order to better serve the client each
attorney should be familiar with these obligations and with the array of
ADR processes available in Virginia.
The Ethical Duty To Advise The Client Regarding
Lawyers in Virginia are required to advise a client about the
appropriateness and availability of ADR. Rule l.2 of the Rules
requires that a lawyer “abide by a client’s decisions concerning the
objectives of representation,” and “consult
with the client as to the means by which they are to be pursued.” The
interpretative comment to Rule 1.2 states that in the context of a
client’s right to consult with the lawyer about the means to be used in
pursuing the client’s objectives, the lawyer “shall advise the client
about the advantages, disadvantages, and availability of dispute
resolution processes that might be appropriate in pursuing these
objectives.” Rule 1.2, cmt. 1.
During the course of the representation, a lawyer must “keep a client
reasonably informed” and “explain a matter to the extent reasonably
necessary to permit the client to make informed decisions regarding the
representation. . . .” Rule 1.4 (a). “This continuing duty to keep
the client informed includes a duty to advise the client about the
availability of dispute resolution processes that might be more
appropriate to the client than the initial process chosen.” Rule 1.4,
cmt. 1. The comment gives an example of where information obtained
during a lawyer to lawyer negotiation may give rise to consideration of
a process, such as mediation, where the parties themselves could be more
directly involved in resolving the dispute.
In rendering “candid advice” to a client, a lawyer may refer “not only
to law but to other considerations such as moral, economic, social and
political factors that may be relevant to the client’s situation.” Rule
2.1. The Comment to this Rule cites “practical considerations, such as
cost or effects on other people,” which might be more valuable to the
client than “advice couched in narrowly legal terms,” which “could
ignore, to the client’s disadvantage, the relational or emotional
factors driving a dispute. In such a case, advice may include the
advantages, disadvantages and availability of other dispute resolution
processes that might be appropriate under the circumstances.”
representation of the client often calls for the collaborative problem
solving skills central to mediation and ADR processes.
discussing subject matter skills, the Comments to Rule 1.1 (Competence)
turn to process. “Another important skill is negotiating and, in
particular, choosing and carrying out the appropriate negotiating
strategy. Often it is possible to negotiate a solution which meets some
of the needs and interests of all the parties to a transaction or
dispute, i.e., a problem solving strategy.” Rule 1.1, cmt 2a.
the meaning of diligence, the Comments to Rule 1.3 state: “Additionally,
lawyers have long recognized that a more collaborative, problem-solving
approach is often preferable to an adversarial strategy in pursuing the
client’s needs and interests. Consequently, diligence includes not
only an adversarial strategy but also the vigorous pursuit of the
client’s interest in reaching a solution that satisfies the interests of
all parties. The client can be represented zealously in either setting.”
Rule 1.3, cmt. 2.
Dispute Resolution Options Available To The Client
Choosing among dispute resolution options
be able to assist clients in understanding their needs, interests and
goals, as well as in deciding on the most appropriate dispute resolution
process. Some of the reasons that counsel may suggest that the
client consider an ADR process rather than litigation include:
parties have a continuing relationship;
issues in dispute are related to or originating from communication
parties desire to have significant control or decision-making power over
dispute seems based upon each party’s perceptions of facts; and
Where time and expense are significant concerns.
Where one or
more of the factors listed above are relevant in a case, counsel has the
opportunity to consider the array of dispute resolution options
available ranging from negotiation, which does not involve a third party
neutral, to mediation, where the neutral serves to facilitate the
parties’ negotiation, to arbitration, where the neutral makes a decision
for the parties. Counsel and the client must assess the
characteristics of the case that may make it more or less appropriate
for one of the ADR processes described herein.
Preparing for Dispute Resolution
If an ADR
process is elected, counsel should discuss the objectives of the
process, the role of the neutral, the range of activities in which the
neutral will engage, and the confidentiality of any discussions.
Prior to the session, counsel and client should discuss the client’s
interests and objectives, the anticipated needs and objectives of the
other side, the client’s preferred outcome as well as fall-back
positions and concessions to which the client might agree, the
respective roles of attorney and client in the ADR process, anticipated
strategic behavior by either party, and the legal implications of
reaching (and not reaching) a resolution. To the extent possible,
the attorney must prepare the client to be receptive to the idea that
the purpose of the ADR process is not necessarily to win, but to resolve
the dispute in a mutually satisfactory way, and that satisfaction may
involve a variety of objectives, including mending relationships and
bringing closure to hurt feelings and disruption of lives caused by
ongoing litigation. The attorney should discuss the obligation to
participate in good faith, and the importance of taking full advantage
of the opportunity that ADR offers to settle disputes.
the basic and most prevalent dispute resolution process. In conventional
legal practice many people think of negotiation as adversarial, with
arguments about the meaning of law and doctrine, the significance of
facts, and the allocation of scant resources. But there are two models -
adversarial and problem-solving negotiation.
adversarial model is typically associated with litigation and lawyer to
lawyer negotiation, often “on the courthouse steps” (just before or
during trial) or “in the shadow of the courthouse” (looking primarily at
possible outcomes in court). Adversarial negotiation 1) emphasizes
maximizing individual gain, 2) assumes the parties desire the same
goals, items and values, 3) conceals certain interests or facts (and
assumes opponent will do the same), 4) attempts to persuade opponents to
make concessions without reciprocating and 5) encourages “positional
problem-solving model is typically associated with ADR - either a stand
alone negotiation process or the core behavior in other voluntary ADR
processes, such as mediation, conciliation and collaborative practice.
The strategies of problem-solving negotiation include 1) focusing on the
interests and needs of both clients rather than their “positions,” 2)
creating value for joint gains, 3) balancing assertion of your own
client’s interests with understanding the interests of the other party
and 4) developing a heightened awareness of emotional and psychological
barriers. The problem-solving model also relies more heavily on prior
planning with and participation of the client in the negotiation
will typically use strategies from both models, but the conscious choice
of the problem-solving perspective, coupled with the predominant use of
problem-solving strategies will in most cases produce a more positive
and satisfying result for the client.
Mediation is a dispute resolution process in which
a neutral third person facilitates communication between
the parties and, without deciding the issues or
imposing a solution on the parties, assists them in
understanding and resolving their dispute. Va.
Code § 8.01-581.21, § 8.01-576.4.
A mediator is an impartial third party selected by agreement of the
parties to a dispute to assist them in the
process. See Va. Code § 8.01-581.21. Although mediators are
not required to be certified, the
Office of the Executive Secretary of the Supreme
Court of Virginia maintains a Directory of mediators who
to receive court-referrals. For a listing of court-certified
Certified mediators are required to
have had a sufficient level mediation training and
experience to mediate such cases; in addition certified mediators must
comply with the Standards of Ethics and Professional Responsibility for
be initiated either by agreement of the parties, on motion of the
parties or sua sponte by the court. Judges have the authority to refer
any contested civil matter to a dispute resolution orientation session.
(Virginia Code § 8.01-576.5.) This is a no-cost preliminary meeting
during which a mediator helps the parties assess the case and decide
whether to pursue a dispute resolution procedure, like mediation, or
continue with adjudication. In domestic relations cases and other
appropriate cases, the neutral will also screen the case for
domestic violence and other factors, which may affect balance of power
between the parties and make the case inappropriate for mediation.
The court will
excuse the parties from participating in the dispute resolution
orientation session if within fourteen days after entry of the order of
referral, a written statement signed by a party is filed with the court
stating that the process has been explained to the party and he objects
to the referral. (Virginia Code § 8.01-576.6) All parties must agree
voluntarily to participate in a dispute resolution process, such as
mediation, following the orientation session. Parties may select a
private mediator or elect to use a no-cost court-connected mediation
is responsible for establishing trust and rapport with counsel and the
parties and ensuring that everyone understands the mediation process and
the role of the mediator. Many mediators meet with counsel in a
pre-mediation phone conference to confirm that the appropriate parties
attend the session and that any pre-mediation briefs, if requested, are
filed in a timely fashion. The mediator, through a process of
active listening, gathers information and identifies the parties’
underlying needs and interests. The mediator facilitates the
negotiation between the parties. Areas of common ground are highlighted
and possible options are generated. Ultimately the mediator guides
the process to closure with a resolution that is acceptable to all
parties in about 80-85% of all cases.
Advantages of Mediation
Reduces emotional toll of litigation and other
dispute resolution process because parties have more control over
process and outcome;
Improves communication between parties;
Provides an opportunity to deal with underlying interests and needs;
Offers parties more settlement options and enables them to develop more
Enables parties to control outcome and thus there is stronger ownership
in agreement and a higher degree of commitment;
Provides a model for future conflict resolution;
Provides an opportunity to vent in a safe environment;
Reduces time and expense.
are also available in other dispute resolution processes, particularly
interest-based negotiation and collaborative law processes.
Circumstances Where Mediation Is Inappropriate
Where there is a significant imbalance of power due to lack of knowledge
or resources to gain information by one party;
Where a party’s physical or mental condition prevents a party from
understanding or protecting his/her interests or analyzing options;
Where there is ongoing domestic abuse or previous interactions between
the parties resulting in one party controlling or abusing the other
party to such an extent that the less dominant party cannot
exercise independent judgment;
seek to establish legal precedent.
Selection of the Mediator
In selecting a
mediator, the attorney should determine whether the case is such to
require the mediator have subject matter expertise. The mediator’s
experience, reputation and cost are other important factors for
consideration. Also important is whether the mediator’s style is
appropriate for the client and the case. For example, some
mediators offer a purely “facilitative” approach that is especially
useful in promoting communication among the parties, helping the parties
to understand their interests, and generating settlement options that
will satisfy those interests. This approach works especially well
where the parties will have a future relationship or could develop
creative settlements involving issues other than the payment of money.
Another mediator approach is more “evaluative”; here mediators
supplement the facilitative approach with evaluative techniques that
help the parties assess the value of their court case and the costs of
pursuing it. This approach is useful where the barrier to
settlement lies in differences in opinion about the likely court
outcome. Under the Virginia Rules of Professional Conduct, the
lawyer-mediator and the parties must consult about (i) the nature of the
mediation process; (ii) the limitations on the use of any evaluation, if
it is to be employed (i.e., that such evaluative approach must not
interfere with the mediator's impartiality or the self determination of
the parties), (iii) the mediator's approach, style and subject matter
expertise; and (iv) the parties' expectations regarding the mediation
process. Rule 2.11 (d) & (e). Then, the parties and mediator
must enter into an agreement to mediate which references the choice and
expectations of the parties, including whether the parties have chosen,
permit or expect the use of neutral evaluation or evaluative techniques
during the course of the mediation. Rule 2.11(e) Although
this Rule expressly applies only to lawyers acting as mediators, it is a
good practice for all counsel at the outset to clarify expectations
about the process, including the lawyer’s role in the mediation.
Role of the Attorney in Mediation
should be involved in scheduling the mediation. The attorney needs
to allow sufficient time for discovery, if appropriate and if not
already conducted. Some mediations may not require discovery or
the client may be able to easily obtain the necessary documents.
Counsel should review all discovery before the mediation. A
well prepared case, and a client who is educated about the case and
understands his/her goals will be more likely to succeed in mediation.
Early on in
the case, the decision whether the attorneys will attend mediation
sessions must be made. Cost and the nature of the dispute may be
important considerations as to whether the attorney is physically
present during the mediation or is merely consulted during the course of
attorney is not going to attend, he should inform the client how the
lawyer will be available by telephone and/or fax during the time of the
mediation. This can be very helpful in moving the mediation
forward if the client can obtain advice, or the attorney can review a
faxed agreement while the parties are present with the mediator.
If the mediation has multiple sessions, counsel should schedule time to
discuss the mediation with the client before the next session.
Counsel should answer questions about process and substantive issues as
well as goals.
should understand that there are variations in form and method of
mediation. Usually the parties meet physically with the mediator,
but telephone and even on-line mediations are conducted. It is
possible to have “shuttle” mediation where the mediator goes back and
forth between the parties who are in separate rooms. Prepare the
client as to the mediator’s method and the role the attorneys will play
in the mediation.
mediation, counsel should decide who will draft an agreement if the
mediation is successful. Most mediators will draft as “scriveners
only,” whether they are lawyers or not. A lawyer may prefer to
draft the agreement for a variety of reasons. If so, this should
be decided in advance with the mediator and a method chosen for terms of
the agreement to be communicated to the attorney. Once any agreement has
been reached, the final document should be prepared by counsel or, at
the very least, reviewed by counsel.
a process in which one or more neutrals decide the outcome of a
contested matter after hearing arguments and reviewing evidence provided
by the parties. See, Uniform Arbitration Act, VA Code Sections
8.01-581.01 et seq. In arbitration, the parties to a dispute
relinquish their decision-making right to the neutral party, or
arbitrator, who renders a decision for them. By pre-agreement, the
arbitrator's decision is either binding or nonbinding. If binding,
the neutral's decision is final, and the winning party may enforce it
against the losing party. If nonbinding, the neutrals' decision is
advisory in aid of settlement. As to the benefits of arbitration,
it is normally a private process where, by mutual agreement, the parties
select qualified neutrals who sometimes have specific expertise relevant
to the dispute. Such expertise is not always available by resort
to the court system. The process is ordinarily conducted in a less
formal and rigorous setting, thereby enhancing the potential for a more
expeditious resolution. Arbitration can be scheduled at the
convenience of the parties and the arbitrator, thereby not being subject
to the delays of traditional adjudication. The parties usually
share the cost of the arbitrator’s
fees, as well as administrative fees, but such costs normally are much
less than those associated with a litigated case.
arbitration include a lack of quality control, due to the fact that
arbitrators are independently selected in individual cases, and are not
generally accountable to any supervisory authority. Other
drawbacks to the process may include the lack of public norms, the lack
of binding precedent, insufficient opportunity for full discovery,
relaxed rules of evidence, usually no written reasons for decisions, no
uniformity of decisions, and usually no opportunity for appeal.
Additionally, as to the time and expense of the proceedings, complex
arbitration hearings can potentially last for weeks or months, thereby
consuming more time and costing considerably more than the parties
is a process in which a neutral third party “facilitates settlement by
clarifying issues and serving as an intermediary for negotiations in a
manner which is generally more informal and less structured than
mediation.” Va. Code § 8.01-576.4. In Virginia, conciliation is
available in several courts (e.g., Fairfax County Circuit Court, Prince
William County Juvenile and Domestic Relations Court) as a mechanism for
helping parties resolve or narrow down pre-trial motions and disputes.
A neutral conciliator confers with counsel or the pro se parties, either
via telephone conference or in personal conferences at the courthouse.
This process has the advantages of utilizing a neutral to assist with
discrete aspects of the case, thereby enabling the matter to be resolved
more quickly and efficiently than through the courts. Because of
the informality and brevity of the typical conciliation, it may be less
useful than mediation for reaching more global settlements of a dispute.
evaluation is a process in which a neutral provides a non-binding
evaluation of a matter between parties in dispute based on information
provided by the parties and governing law. In Virginia, neutral
case evaluation is offered in several courts (e.g., Fauquier County
Circuit Court and Fairfax County Circuit Court) and by private
providers. Typically, counsel and the parties present abbreviated
summaries of their cases (liability and damages) to the neutral
evaluator, who is an attorney with experience in the subject matter and
the jurisdiction in which the case is pending. The neutral
evaluator helps assess the strengths and weaknesses of the case and
gives an opinion of the case's worth and an estimate of a likely jury
award (or range of awards). Where the primary obstacle to
settlement is that the parties or their counsel have different
assessments of the likely court outcome, neutral evaluation is a
private, quick and inexpensive process that can lead to more realistic
negotiations. On the other hand, where the parties are more
concerned about issues other than the value of their court case,
mediation (with or without an evaluative component) may be the more
appropriate ADR process.
law is an ADR process in which parties and their lawyers, trained in
collaborative process, agree to seek a mutually acceptable settlement
using interest based, problem-solving negotiation strategies without
going to court or using court as a threat. The negotiations are
conducted from the outset in meetings with the lawyers and the parties
with input from neutral consultants as needed. Parties, advised
and supported by their lawyers, agree in writing at the outset regarding
the parameters of the process. If either party decides to resort
to court, the process ends and the lawyers can no longer represent their
respective clients. Like mediation, collaborative law is a future
oriented process that provides the opportunity for a win-win outcome.
The interests of the parties and the attorneys involved in the process
are all aligned toward the goal of a quality settlement that serves the
interests of both parties, and to that end, the participating attorneys
are trained in interest based negotiation and collaborative law process.
While the content of the negotiations remains private, full disclosure
of all relevant information is required within the process.
Additionally, a requisite transparency of legal advice allows both
parties to hear legal explanations from both sides.
law may save the clients time and money, allows for creative solutions
not limited to the resolutions available by law, and is designed to
preserve and even improve the relationship between the parties.
While there is an increased likelihood of compliance by the parties with
any resolution that is reached, one limitation, as with all ADR
processes, is that the process does not guarantee a resolution.
Other drawbacks include the fact that the process does not promulgate
statements of legal precedent and is only for parties who desire full
disclosure and transparency. Additionally, if either party engaged
in collaborative law process chooses to litigate, the collaborative
attorneys must withdraw, adding to the client’s expense.
Restorative Justice Processes
Justice is an ADR process, which begins with the understanding that
crime harms victims, offenders, their families, and communities in
measurable and often lasting ways. Restorative Justice equates
toughness on crime with holding offenders accountable directly to those
whom their crimes have affected, with the intent that offenders attempt
to right the wrongs they have inflicted on their victims and the
community. It responds to crime and wrongdoing by involving
victims, offenders, communities and justice professionals. A
Restorative Justice process attempts to focus on the harms of wrongdoing
rather than the rules that have been broken; empowers victims by giving
them a voice, and addresses their needs in the justice system; shows
equal concern for victims, offenders and communities, involving all in
the justice process, and provides opportunities for dialogue between
victims, offenders and their families and those affected by the crime.
Judicial Settlement Conference Program
Settlement Conference program combines aspects of mediation and the
traditional settlement conference. The pretrial settlement
conference has been available to Circuit Courts, for many years pursuant
to Virginia Supreme Court Rule 1:19, but many courts have not utilized
it because of insufficient time and resources as well as ethical
concerns about judges providing settlement services in cases assigned to
them for adjudication. The Judicial Settlement Conference program
addresses these issues by using trained retired Circuit Court judges who
conduct the conference under the referring court’s auspices, but have no
trial authority over the case. When referral is made to a
settlement conference, counsel may select a settlement judge from the
Supreme Court of Virginia’s list at
http://www.courts.state.va.us/jsc/home.html. The Supreme Court
will designate the judge for the settlement conference and the
conference will be held a time convenient to the parties and the
settlement judge. The Settlement Conference program is free of
cost to the parties. This program has been very well
received by counsel and successful in resolving a significant number of
Circuit Court cases that would have taken several days to litigate.
Fee Dispute Program
State Bar recognizes that fee disputes present a significant problem for
both clients and attorneys and contribute significantly to the current
negative attitude of the public towards the legal profession. In 1992,
the VSB Special Committee on Resolution of Fee Disputes recommended that
the State Bar establish a voluntary procedure for resolving fee disputes
in each of the 31 judicial circuits within the state and it created the
Fee Dispute Resolution Program (the “FDRP”). Currently there are
16 circuits that are served and programs are being developed in more
circuits. Since 2006, the Bar has offered arbitration and
mediation of fee disputes.
The first step
is for the attorney or client to contact the chair of the Circuit
Committee on the Resolution of Fee Disputes (CCRFD), who administers the
program in each respective locality. Virginia State Bar staff member
Davidson, coordinates the Fee Dispute Hotline, at (804) 775-9423. The Petitioner, the party who
contacts the program first, pays a one-time non-refundable fee of
$20.00. This is the only administrative fee charged, whether the parties
choose to mediate, arbitrate, or mediate first and then arbitrate. The CCRFD will not handle a fee dispute that has already been decided by a
court. Also, the CCRFD will not handle a dispute that is pending before
a court. Therefore, if both parties sign an agreement to participate in
the program, either by mediation or arbitration, and nonsuit the case or
ask the court for a stay in the proceedings, the FDRP can handle the
This is a
voluntary program so, if there is no mutual agreement to mediate or
arbitrate through the FDRP, the CCRFD cannot resolve the dispute.
The Virginia State Bar strongly encourages all attorneys and clients
involved in a fee dispute to consider using the FDRP instead of
resorting to court. For more information on the fee dispute
ADR is clearly
an integral part of the legal landscape in Virginia. The Commission on
Virginia Courts in the 21st Century: To Benefit All, To Exclude None,
referred to as the Futures Commission, was initiated by Supreme Court of
Virginia Chief Justice Hassell in the fall of 2005 to study the needs of
the Virginia judicial system over the next 10-15 years. The Commission’s
2007 report supports the continued growth of ADR by recommending that:
1) ADR be encouraged by the collaborative efforts of the public and
private sectors, 2) Education regarding ADR be increased, 3) The use of
existing legislation providing for referral of litigants to ADR be by
party choice, not by mandate, 5) Those who cannot afford ADR be given
access, and 6) Restorative justice processes be a referral option in the
criminal justice system.
To fulfill his/her ethical obligations and better
serve the client, the Virginia lawyer should have a working knowledge of
ADR processes. This can be done through continuing legal education
programs provided by Virginia CLE, the Virginia State Bar or Virginia
Bar Association and their Joint ADR Committee, the ADR courses offered
at state law schools, and through a wide choice of ADR publications and
continuing education offerings throughout the United States. The
Supreme Court of Virginia’s website www.courts.state.va.us has a great
deal of information on mediation, brochures, and links to other local
and national mediation organizations. With this background
Virginia lawyers will be better able to assist clients in determining
their needs, interests and goals and in deciding on the most appropriate
dispute resolution process. This will also enable a lawyer to engage the
other party’s lawyer in a discussion about the most effective process to
resolve the dispute.