Trade Association's Referral of Members to Lawyers.

I am writing in response to your letter which was received in this office on September 23, 1992, requesting an Unauthorized Practice of Law advisory opinion dealing with the requirements contained in Unauthorized Practice Rule 8-104(A)(2).

The Virginia Unauthorized Practice Rule about which you inquire is relevant to the operation of trade associations and their provision of legal services to their members. In pertinent part, UPR 8-104(A) permits a trade association to refer its member to a lawyer subject to (1) the member first having the opportunity to select a lawyer of his own choosing and (2) if the member does not so select a lawyer, the trade association shall submit a list of lawyers from which the member may make his selection.

You have requested that the Committee opine as to whether the list of lawyers required by UPR 8-104(A)(2) must contain names of lawyers from different law firms, or whether it may contain only the names of lawyers from a single law firm.

The Committee considered your inquiry at its October 1, 1992 and November 5, 1992 meetings and has directed me to transmit its conclusions to you.

The Committee has reviewed the Bar’s Record of February 13, 1981 Proceedings which was submitted to the Virginia Supreme Court in support of the Bar’s request for the Court to review UPL Advisory Opinion No. 8. That Opinion was subsequently approved by the Court on April 24, 1981 and incorporated into the Rules of Court as Part Six: Section I: Rule 8, effective August 3, 1981. In proposing the Opinion to the Court, the Bar’s Report addressed in detail several U.S. Supreme Court decisions[1] which stand for the general proposition that state regulations [regarding unauthorized practice of law] cannot infringe the associational rights of nonprofit organizations or labor unions, i.e., in advising their members as to referrals for appropriate legal services. Record at 4. However, the Committee also noted Justice Harlan’s dissent to NAACP v. Button, at 460, based upon an “unbroken line of cases prohibiting nonprofit automobile clubs from providing legal services to their members,???[2] which cases were distinguished by the majority as bearing only a “superficial resemblance in formî to a civil rights case. Id. at 442. Furthermore, the Committee relied on the Internal Revenue Service distinction between nonprofit trade associations organized to promote “a common business interestî and associations whose activities involve “the performance of particular services for individual persons,??? e.g., nonprofit automobile clubs which have been denied exempt status under the relevant tax laws.[3] Record at 22, n.19. Thus, it appears that the Committee was of the opinion that a distinction is permissible between the constitutional protections afforded nonprofit organizations or labor unions, as to their rights to refer their members to lawyers, and those associations whose overall level of “commercialism??? preclude their being categorized as nonprofit for federal tax purposes.

Based upon that distinction, this Committee is of the opinion that the intentions underlying UPR 8-104(A)(2) were for the broadest possible spectrum of lawyers to be included on the referral list submitted by the association to its member, so as to serve the needs of both types of trade associations (those promoting a common business interest and those whose activities involve the performance of particular services for individual persons). Therefore, this Committee opines that the reference contained in UPR 8-104(A)(2) to a “list of lawyers??? should be interpreted to reflect names of lawyers from different law firms rather than only the names of lawyers from a single law firm.

Committee Opinion
November 9, 1992

1 NAACP v. Button, 371 U.S. 415 (1963); Brotherhood of Railroad Trainmen v. Virginia State Bar, 377 U.S. 1 (1964); United Mine Workers v. Illinois State Bar, 389 U.S. 217 (1967); United Transportation Union v. State Bar of Michigan, 401 U.S. 576 (1971).

2 e.g., In re Maclub of America, Inc., 295 Mass. 45, 3 N.E.2d 272 (1936).

3 American Automobile Ass'n v. Commissioner, 19 T.C. 1146 (1953)(en banc).

Updated: Aug 28, 2006