Ethics Opinion

Opinion 84-2

FLORIDA BAR ETHICS OPINION
OPINION 84-2
October 15, 1984
Advisory ethics opinions are not binding.
An attorney may participate in a barter exchange when the membership fee is a flat
annual fee rather than a percentage of legal fees derived from representation of exchange
members; when the exchange furnishes members a list of attorney members rather than
recommending any particular attorney; and when membership in the exchange does not interfere
with the attorney’s conflict-of-interest and confidentiality obligations.
CPR:

Opinion:

EC 2-30 [See current 4-1.1 and 4-3.1]; DR 2-103(B) [See current 4-7.17(b)], (D);
DR 2-109 [See current 4-3.1 and 4-4.4(a)]; DR 2-110(A) [See current 4-1.16]; DR
3-102(A) [See current 4-5.4(a)]; DR 5-103(B) [See current 4-1.8(e) and (i)];
Canon 5
ABA Informal 1430

Chairman Mead stated the opinion of the committee:
We have been asked to determine the ethical propriety of membership by a lawyer in a
barter exchange (hereinafter “Exchange”) based on the attached Attorney Membership
Agreement (hereinafter “Agreement”). The Agreement was designed by the inquiring attorney
for use by the Exchange’s lawyer members to comport with the requirements of the Code of
Professional Responsibility.
Although this Committee has never specifically addressed the subject, we note that
attorneys have traditionally been prohibited from participating in barter exchanges. In light of
recent changes in our advertising guidelines, and in acknowledgment of the fact that attorney
participation in barter exchanges is becoming widespread, we believe barter exchange
membership by lawyers requires careful consideration by the Bar.
DR 3-102(A), which prohibits lawyers from sharing fees with nonlawyers, would in our
opinion prevent attorneys from joining those barter exchanges in which a percentage of the
amount involved in each “purchase” transaction is paid to the Exchange. However, the
Agreement in question proscribes the charging of a transactional fee when legal services are
rendered. Instead, attorney members pay an annual flat membership fee to the Exchange; in our
view this does not constitute fee splitting under DR 3-102(A) [See current Rule 4-5.4(a)]. The
cost of the membership in the Exchange is comparable to the fee paid by lawyers for the use of a
Mastercharge or Visa card in their offices.
Another Code provision that bears on the barter exchange issue is DR 2-103(D) [See
current Rule 4-7.18(a)], which states that a lawyer shall not assist a person or organization in
promoting the use of his services (except as to approved lawyer referral services, prepaid legal
services plans, etc.). Under the Agreement each time an Exchange member requests legal
services the Exchange will furnish a list of all attorney members. Although recommending a
particular attorney would be prohibited, listing the attorney members of the Exchange as a

group, simply allowing the other members to make their own choice, does not violate DR
2-103(D) [See current Rule 4-7.18(a)].
A related proscription is contained in DR 2-103(B) [See current Rule 4-7.17(b)], which
states that a lawyer shall not compensate a person or organization to recommend his
employment. The question here is whether payment by an attorney of the annual membership fee
would violate this provision. The American Bar Association’s Committee on Ethics and
Professional Responsibility, in its Informal Opinion 1430 (issued January 8, 1979), answered this
question in the affirmative. We disagree; in our view, the payment of this fee is made by the
attorney not as consideration for the promotion of his services by the Exchange, but in return for
the rights and privileges of membership. We should point out that in the fact situation under
consideration by the ABA Committee in its opinion, the proposed arrangement also involved a
5% charge on each transaction which, as we have noted, would constitute fee splitting in
violation of DR 3-102(A) [See current Rule 4-5.4(a)].
In its opinion the ABA Committee reviewed several other ethical considerations
presented by the barter exchange question, which we now address. First, EC 2-30 and DR 2-109
require a lawyer to decline employment under certain circumstances (for example, when he is
not able to render competent service in the matter or when his client’s legal action is intended
merely to harass or maliciously injure another person). [See current Rules 4-1.1, 4-3.1, and 44.4(a)]. It is clear that a lawyer member of the Exchange must retain the right to refuse
employment, and the Agreement so provides. The Agreement is terminable by either party upon
thirty days’ written notice; nevertheless, the continuation of the Agreement is in no way
conditioned on the attorney’s acceptance or rejection of representation of Exchange members,
and the right of cancellation by the Exchange does not of itself compromise the attorney’s
obligation to decline employment as mandated by the Code.
The ABA opinion also examined the attorney’s duty to continue in the representation of
his client/member after the termination of the attorney’s membership in the Exchange. DR
2-110(A) prohibits a lawyer from withdrawing from representation except under specific
circumstances [See current Rule 4-1.16]. We see nothing in the Agreement, nor in the attorney’s
relationship with the Exchange, that would negate or adversely affect this requirement.
Finally, the ABA opinion discusses potential conflict of interest problems related to a
lawyer’s membership in the Exchange. The question is asked whether the lawyer can represent
an Exchange member against the Exchange, one member against another member, or a
nonmember against a member. The Agreement states that the attorney’s membership in the
Exchange does not create an attorney-client relationship with either the Exchange or any of its
members and further provides that the Code shall govern the conduct of attorney members. We
perceive no inherent conflict between an attorney’s obligations under Canon 5 and his
membership in the Exchange.
A question could be raised with regard to an attorney’s duty under Canon 4 to preserve
the confidences and secrets of his clients. The Agreement states that an attorney member shall
not be required to provide any information to the Exchange concerning his clients’ legal affairs.
The attorney remains subject to the dictates of the Code and his duty of confidentiality does not
appear to be incompatible with membership in the Exchange.

Finally, the Agreement anticipates potential problems with DR 5-103(B)—which
prohibits an attorney from acquiring an interest in litigation by advancing or guaranteeing
financial assistance to a client in connection therewith—by providing that no transaction between
a client member and his attorney will be completed if the client does not have a credit balance in
his trade account sufficient to cover the proposed legal fees. [See current Rules 4-1.8(e) and (i)].
For the reasons set forth above, it is the opinion of this Committee that attorney
membership in a barter exchange, within the specific guidelines set forth herein, is ethically
permissible. However, we expressly caution against relying on this opinion in a general sense.
Our finding of propriety is based on, and strictly limited to, our review and interpretation of the
Attorney Membership Agreement attached hereto. Any barter exchange arrangement created or
entered into under terms that are not identical to the provisions of said Agreement is not covered
by this opinion and must be considered on a case by case basis.
ATTORNEY MEMBERSHIP AGREEMENT
AGREEMENT made this ______ day of _______________ , 198__ ,
between
a Florida corporation of
, Florida, (hereinafter referred to as
“Exchange”), and
, attorney at law of
, Florida, (hereinafter referred to as
“Attorney”), as follows:
RECITALS:
Exchange is a “barter exchange” acting as an accounting and clearing house for the
exchange of goods and services among its members.
Attorney is a member of the Florida Bar and a practicing attorney with offices in
Florida. Attorney and Exchange wish to have attorney’s services available for exchange for
goods and services of other members of the exchange. Attorney and Exchange wish to
memorialize their relationship to each other and set forth certain restrictions on the attorney’s
membership in exchange.

,

IT IS THEREFORE AGREED AS FOLLOWS:
1. MEMBERSHIP: Upon the effective date of this Agreement, Attorney shall become a
member of the
Exchange. He shall be entitled to all of the benefits of membership and
comply with all the rules and regulations of the Exchange unless modified or superseded by this
Agreement.
2. FEES: Upon the effective date of this Agreement, Attorney shall pay a membership fee
of $__________ . In addition, beginning one (1) year after the effective date of this Agreement,
and every year thereafter, Attorney shall pay an annual membership fee of $__________ . No fee
or surcharge shall be made on any exchange of legal services made by Attorney, nor will any fee
or surcharge be made on any use of trade credits in exchange for goods and services made by
Attorney. The usual 10% fee of the amount of the trade normally charged to members of the
Exchange when they use trade credits to purchase goods and services will not be made when a
member purchases legal services from an attorney/member of the Exchange.

3. OTHER ATTORNEY/MEMBERS: Nothing in this Agreement shall restrict the
exchange from acquiring other Attorney members. Any other Attorney/member of the Exchange
will be admitted to membership on the same conditions with the same rights and obligations as
contained in this Agreement.
4. ATTORNEY’S FEES: Attorney agrees that he will charge his normal rates for services
to members of the Exchange and always deal with members as he would any other client of his
practice. In all cases, the amount of the fee and the services to be rendered, therefore, will be
solely determined between Attorney and client member. Attorney is under no obligation to
accept employment from any exchange member for any particular legal matter. Attorney’s sole
obligation to the members of the Exchange is that if he agrees to accept employment by a client
member, and there is a sufficient trade credit in the client member’s account, that he will accept
an exchange of goods and services for his fees under the rules and regulations of the Exchange.
5. NO CREDIT TRANSACTIONS: Exchange and Attorney agree that no transaction
between a client member and Attorney will be completed if the client member does not have a
credit balance in his trade account sufficient to cover the proposed attorney fee. Exchange agrees
that Attorney may rely on information as to the credit balance of each client member as supplied
by the Exchange. In no event will Attorney be allowed to receive goods and services from other
members without a sufficient trade credit balance.
6. ADVERTISING: Exchange issues monthly newsletters and periodic communications
to members. Exchange agrees that it will not permit any advertising by any Attorney member of
the Exchange, unless permitted under existing guidelines for attorney advertising of The Florida
Bar, nor will it publish the name of any attorney member in any respect without publishing the
names of all current attorney members of the Exchange. Exchange may advise its members that
legal services are available for trade and may advise members of the current attorney members of
the Exchange and the specific terms of this Agreement.
7. REFERRALS: In the event a member of the Exchange inquires as to the availability of
legal services, or requests information concerning lawyer members of the Exchange, the
Exchange will not refer to individual attorney members, but will advise the inquiring member of
all current attorney members of the Exchange. In no event will the Exchange or any of its agents
or employees characterize the value or benefit of legal services from one particular member as
distinguished from another, or from member attorneys as distinguished from other attorneys.
8. CLIENT CONFIDENCES AND PROPERTY: At all times, the property, confidences,
and the like of a client member are solely the property and concern of Attorney and client
member. In no event and for no reason shall Attorney be required to provide any information
concerning the affairs of a client member to the Exchange, or any of its affiliates.
9. CONFLICTS OF INTEREST: The execution of this Agreement and membership in
the Exchange does not create an attorney-client relationship with either the Exchange or any of
its members, or any of its affiliates. Therefore, Attorney is free to accept employment from any
member of the Exchange for any legal matter agreed to between client member and Attorney,
including actions against the Exchange, its affiliates, or any other member. In all events, the
normal rules of conduct concerning an attorney’s conflict of interest shall govern. In the event

that a client member wishes to take legal action, or seek advice concerning actions, against the
Exchange or another client member who is already a client of Attorney, such employment may
be turned down by Attorney for that reason solely. In the event that Attorney is also employed by
the Exchange or any of its affiliates he may reject employment by any member seeking action
against the Exchange for that reason solely.
10. Attorney agrees that he will not make individual barter or trade transactions with
members of the Exchange that do not go thru [sic] the Exchange. However, in the event that a
client member’s trade balance is not sufficient to cover legal fees, arrangements for the payment
of the balance in cash may be made between Attorney and member client.
11. The provisions of this Agreement shall govern the relationship of Attorney to
Exchange and supersedes any other agreement or rule or regulation of the Exchange or its
affiliates. In the event of any conflict, this Agreement shall govern. This Agreement, in all
respects, shall be construed under the provisions of the laws of the State of Florida. Nothing in
this Agreement, or in Attorney’s relationship with the Exchange, or client members, shall be
construed to require Attorney to violate any provision of the Code of Professional Conduct [sic]
of The Florida Bar. Whether any conduct under the terms of this Agreement violates the Code of
Professional Conduct shall be solely determined by Attorney and construed pursuant to the
interpretation of the Code of Professional Conduct by the Florida Bar.
12. It is understood that there may be rules, regulations or requirements imposed upon the
relationship between Attorney and Exchange by the State of Florida, or The Florida Bar.
Attorney and Exchange agree that they will either comply with such requirements, even if they
are not contained in this Agreement, or immediately terminate the Agreement under the
provisions of Paragraph 13A.
13. TERMINATION: This Agreement may be terminated in the following ways:
A. In the event any provision of this Agreement is determined to be violative of any law
of the State of Florida, or of the United States, or of the Code of Professional Conduct of the
Florida Bar, this Agreement shall be immediately terminated. Any credit balance in Attorney’s
trade account shall be frozen and available in trade. All client members shall be advised by
Attorney and Exchange of the termination of this Agreement. Any retainers, whether in cash or
trade, owing client members shall be returned in cash to the client member, or in legal services
rendered to the client.
B. The Agreement may be terminated by Exchange upon thirty (30) days written notice
to Attorney. Upon termination, all credit balances due Attorney will be available in trade to
Attorney, together with a prorated portion of the last annual membership fee.
C. The Agreement may be terminated by Attorney upon thirty (30) days written notice to
Exchange. Upon termination, all credit balances due Attorney will available to Attorney in trade.
No proration of any membership fee will be made.
D. This Agreement may be terminated on the anniversary date of this Agreement by
either party if there is no credit balance owing to Attorney.

14. NOTICES: Any notices under this Agreement shall be delivered to
15. Exchange agrees that there is nothing in its agreement with the affiliated
organizations known as
Exchange with general offices in
that prohibits this
Agreement and further that all relationships between Attorney and any affiliate of Exchange will
be governed by this Agreement solely.
IN WITNESS WHEREOF, this Agreement was executed by the parties herein this
_________ day of _____________________ , 198___ .
WITNESSES:

ATTORNEY:

__________________________

_________________________

__________________________
WITNESSES:
__________________________

BY: _______________________

__________________________
The above Agreement has been accepted.
Exchange
BY:_________________________