Here's my latest piece for the Connecticut Law Tribune:
Connecticut lawyers can now be paid by clients for their services in chickens and eggs. Well, not quite.
But an opinion issued by the Connecticut Bar Association's Standing Committee on Professional Ethics seems to have opened the door for lawyers to engage in barter.
The committee was asked to offer an opinion on whether an attorney may barter his or her legal services as part of a clearinghouse in which the members exchange goods and services. In this barter exchange program, the attorney is paid in "barter currency," which can be used to purchase goods and services from other members in the exchange. Attorney members and non-attorney members alike also must pay membership dues to such programs.
The opinion, which was drafted this past summer by three members of the CBA committee before it was ultimately approved by a majority of the committee, says that attorneys can ethically participate in barter exchange programs. But there are some limitations.
Marcy Tench Stovall, committee chairwoman and counsel at Pullman & Comley, said the main takeaway from the opinion for a lawyer admitted to practice in Connecticut is that "it's permissible for a lawyer to be paid through a barter exchange, but they have to comply with the all the relevant rules of professional conduct."
Those caveats include that attorneys participating in a barter exchange have to have a written engagement agreement, including spelling out that barter currency will be used as the compensation for legal services. "The cardinal principle governing a lawyer's fee still applies: the fee must not be unreasonable, regardless of form of payment," the opinion says.
A lawyer's participation in a barter exchange still has to comply with all applicable rules for attorney confidentiality, client solicitation and advertising, Stovall said. As a result, any ads published by the barter exchange about an attorney participating in the program must be true and not misleading, according to the opinion.
So what might a lawyer trade legal services for on such an exchange? Exchange Enterprises, which bills itself as "Connecticut's longest trusted barter company," offers everything from acupuncture treatments and small appliance parts to wigs and wedding consulting. Legal services aren't listed among the categories, but other professions such as accounting, opthalmology and sports medicine are represented.
SwapRight.com, a national barter website, includes postings from a number of lawyers. One Dallas practitioner is willing to draft wills and contracts in exchange for landscaping work that includes building a retaining wall. An Ohio attorney is offering "generic legal services and consultation" in exchange for a used car. And a California legal provider is offering civil or family law document preparation in exchange for professional photography services.
Kimberly Knox, a partner at Horton, Shields & Knox who has a practice focusing on professional disciplinary matters, said the committee's opinion "shows that the profession is becoming more flexible" and responsive to clients who may want to compensate their lawyers in non-traditional ways.
Karen Rubin, who is counsel with Thompson Hine's Cleveland office with a practice focusing on professional responsibility, wrote a column in October about the bar opinion on the Lexology website. She noted that barter exchanges have been growing around the country so much so that there is now a trade group, the National Association of Trade Exchanges.
Ethics opinions issued by the American Bar Association and from Massachusetts and California in the 1970s suggested it was improper for attorneys to participate in barter exchange agreements. More recently, ethics opinions from New York, Utah and North Carolina have found it ethical for a lawyer to participate in a barter exchange program if certain requirements are met.
"Bar regulators are extremely cautious by nature and they want to advance the interpretation of ethics rules step by step," Rubin said. "This opinion actually represents a friendlier attitude, a change in attitude, toward barter exchange agreements because … some previous ethics opinions, including from the American Bar Association, were very hostile to the idea of barter exchange arrangements."
The CBA opinion says that attorneys must preserve their independent professional judgment and keep the sole authority to accept matters if they are participating in a barter exchange program. The barter exchange also must not have any influence over the legal services provided through the clearinghouse, and the barter exchange must not be entitled to information about the representation of the client.
The committee also found that a lawyer's participation in a barter exchange program doesn't violate the rules against sharing legal fees with non-lawyers. The committee further opined that litigation expenses can only be paid in advance for legal services if there is a written fee agreement.
Rubin noted that other jurisdictions may not be able to follow Connecticut's lead in allowing attorneys to participate in barter exchanges. She questioned how a barter transaction would work in states where legal fees paid in advance must be put into a client trust account.
In her column, Rubin further said "there might be issues in a barter transaction where a lawyer receives plumbing services immediately, but 'pays' with legal services that will stretch out over an extended period of time: are the plumbing services advance fees, and how will they be 'withdrawn' only as earned?"
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