~ Written by Erica J. Erwin ~
Recessions and other profession-shifting paradigms (technology, outsourcing, boom/bust) absolutely stink, so I’m obsessed with the idea of insulating my firm. In particular, bartering professional legal services for client services or stuff, without money as a middleman.
Of course there are ethical implications of bartering for legal services. On a very basic level, it counts as doing business with a client. Most attorneys would leave it at that, and just walk away from that level of risk.
Now hold up. We deal with risk. It’s our job. It’s totally doable.
– You might want to skip ahead if Legal Ethics isn’t why you’re reading this…
Prior to 2016, Oregon lawyers were required to provide the Professional Liability Fund (PLF) with copies of business transaction disclosure letters or risk exclusion of coverage. This, however, is no longer the case. From the PLF forms online:
Reporting to the PLF – No longer required effective January 1, 2016 When you engage in a business transaction with a client, you have an ethical duty to make certain disclosures pursuant to ORPC 1.0(g) and 1.8(a). In prior years under the PLF Primary Claims Made Plan, lawyers were required to provide the PLF with copies of such disclosure letters or risk exclusion of coverage. The reporting requirement to the PLF has been removed for plan year 2016.Lawyers are no longer required to provide the PLF with copies of disclosure and consent letters when engaging in business transactions with clients. Caveat: Your ethical duty of disclosure and consent is unchanged. For the convenience of practitioners, a sample disclosure and consent letter for engaging in business transactions with clients is available below.
After looking up my PLF insurance for this year, Exclusion 8 says:
Business Transaction with Client. This Plan does not apply to any Claim based on or arising out of any business transaction in which any Covered Party, or in which anyone for whose conduct a Covered Party is legally liable, participated with a client unless any written disclosure required by ORPC 1.8(a), or its equivalent, was properly executed prior to the transaction.
An attorney is not required to inform the PLF when doing business with a client. If something comes up, attorneys have to prove they’ve complied with Exclusion 8 and fulfilled their duty under ORPC 1.8(a)
Specifically, under RPC 1.8(a):
- The terms of the agreement must be reasonable and fair.
- Your fee agreement must be in writing.
- You must obtain the informed consent of your client to proceed (usually contained within the fee agreement).
- You must recommend that the client consult with another attorney in deciding whether consent should be given.
- You must fully disclose the details of the business transaction and each party’s role (part of informed consent).
Of course, be smart. Call the PLF yourself and don’t rely solely on this post.
On a practical level, barter might be easier for civil attorneys to accomplish than criminal ones. There is an interesting case from 2013 of an attorney in Louisiana accepting weed in exchange for legal representation. That was bad, but he didn’t lose his license!
Law-for-barter systems occurred somewhat more frequently during the last recession, but I’m surprised it didn’t happen more often. One theory I have is that it can be difficult to establish a level of trust AFTER the fact. Lawyers already have a sketch reputation. During the past recession we were basically forced into bankruptcy law and ambulance chasing, so yeah.
It might make more sense to establish those ties NOW. Befriend your favorite grocer at the co-op farmer’s market. Make ties within your small business community now, so that when SHTF they’d trust you to handle their company restructuring (aka bankruptcy) in exchange for food.
Barter doesn’t pay for malpractice insurance, Clio, bar dues, or Westlaw. But food is food. Don’t get me wrong. I love how easy LawPay makes it these days, but at the end of the day invoicing can seem really cold and lifeless. Not only am I down with creating a bartering contract for my clients, I’m open to the prospect of bartering my services for other goods and services.
What are you thoughts on bartering?
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