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2005 Formal Ethics Opinion 2

April 15, 2005

Employment of Nonlawyer to Represent Social Security Claimants

 

Opinion rules that a law firm that employs a nonlawyer to represent Social Security claimants must so disclose to prospective clients and in any advertising for this service.

 

Inquiry #1:

 

The Social Security Act permits lawyers and nonlawyers to represent claimants before the Social Security Administration; however, nonlawyers are not allowed to represent claimants on appeals to a federal district court. 42 U.S.C. §406. The Social Security Administration currently withholds up to one-quarter of a claimant's past due benefits for payment of legal fees but it does not withhold funds to pay nonlawyer representatives. Nonlawyer representatives must collect their fees directly from claimants. In 2005 this practice will change and nonlawyer representatives who pass an open book test will be eligible for withholding. Although some firms already employ nonlawyer representatives, with the change to allow withholding, it is anticipated that more law firms will employ nonlawyer representatives to represent Social Security claimants.

 

A law firm that employs a nonlawyer representative need not assign a firm lawyer to oversee the work of the nonlawyer. Therefore, a claimant may never meet with a firm lawyer.

 

If a law firm advertises that its services include representation before the Social Security Administration, should the advertisement disclose that a nonlawyer will provide the representation?

 

Opinion #1:

 

Yes. Rule 7.1 prohibits a lawyer from making a false or misleading communication about the lawyer or the lawyer's services. The prohibition extends to a communication that omits a fact necessary to make an entire statement not materially misleading. Rule 7.1(a)(1). Most consumers assume that a lawyer will provide any representational services advertised by a law firm. Therefore, when representation will be provided by a nonlawyer, as allowed by law, the law firm must disclose this fact in its advertising.

 

Inquiry #2:

 

If a law firm employs a nonlawyer to represent Social Security claimants, is the conduct of the nonlawyer governed by the Rules of Professional Conduct?

 

Opinion #2:

 

Yes. Although a task is assigned to a nonlawyer employee of a law firm, the lawyers in the firm are responsible for assuring that the conduct of the nonlawyer is in compliance with the professional obligations of the lawyers. Rule 5.3. This is true even when the nonlawyer may, by law, provide unsupervised representation.

 

Inquiry #3:

 

If a law firm employs a nonlawyer claimants' representative, what disclosures must be made to a prospective client who seeks representation before the Social Security Administration and who will be assigned to the nonlawyer representative?

 

Opinion #3:

 

The prospective client must be advised that the person who will be providing the representation is not a lawyer. The prospective client must also be informed if any of the protections afforded by the client-lawyer relationship will not be present. For example, the attorney-client privilege not to testify to communications made for the purpose of obtaining or providing legal assistance may not extend to the client's communications with the nonlawyer representative. (Whether the privilege extends to communications with a nonlawyer representative who, although an agent of the law firm, will be providing representation without supervision from a lawyer, is a question of law outside the purview of the Ethics Committee.) Nevertheless, the prospective client may be assured that the nonlawyer must comply with the professional obligations of the firm's lawyers including the duty of confidentiality and the duty to avoid conflicts of interest.

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