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Holiday gifts raise ethical concerns

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Sending seasonal gift baskets or holiday cookies could be considered an ethical violation for lawyers who might want to say thanks to a colleague in the legal profession for sending a client their way.

That’s the takeaway from a strict reading of Indiana’s attorney advertising rules, which were rewritten a year ago and are now in place for their inaugural holiday season. One revision broadens the scope of a rule on the “channeling of professional work,” leaving lawyers with little practical guidance on what the line is on sending holiday tokens of appreciation to those who’ve helped their practices in the past.

But those enforcing the disciplinary rules, along with attorney ethics experts and an array of small and large law firm practitioners, say they don’t think nominal holiday gifts rise to the level of an ethical rule violation. Instead, it’s the large-scale gifts and back-room referral patterns that are the focus of the lawyer conduct rules.

“I will be surprised if any sensible attorneys change their practice of sending cards that could not be compensation or anything of value within the meaning of the rule,” said Jerry Jenkins, a partner at Baker & Daniels in Indianapolis who leads the firm’s ethics committee. “The Supreme Court surely has more important things to do than pursue holiday baskets and such.”

Changes to the Indiana attorney advertising rules in 2010 shuffled existing provisions and revised some of the writing of the professional conduct rules. For the most part, it did not change the essence of the provision, but in some places, it did broaden the scope. The court changed two sections that deal with attorney referrals in the context of advertising. Previously, Rule 7.2(b) had focused on press, radio, television or other communication mediums, but those listed areas were removed from the 2011 version. Now, it just prohibits lawyers from giving “anything of value to a person for recommending or advertising the lawyer’s services.” That’s led some to question whether the provision prohibits any referral-related holiday giving between attorneys that might have even the slightest value.

Commentary added for the first time to this rule specifically says the rule in question is designed to prohibit a lawyer from paying others for “channeling professional work.” That phrase is new and remains open for interpretation, according to the Indiana Supreme Court Disciplinary Commission executive secretary G. Michael Witte.

At the moment, Indiana doesn’t have any law on the books about that specific issue and the court hasn’t issued any guidance on what is and isn’t allowed, he said. But Witte doesn’t see the rule’s wording would lead to enforcement for those sending something that would otherwise be determined “reasonable” in most situations.

He looks to the state’s judicial code of conduct, which in Rule 3.13 allows for reasonable gifts that are “commensurate with the occasion.”

“That refers to birthdays and holidays, and while we don’t have anything that refines it more, that provision gives us a reasonable point of reference here,” Witte said. “We know there are certain things that occur during the calendar in the year when lawyers give and receive gifts, and the holidays are one of them where this would be termed appropriate.”

Witte hesitated to define what might cross the line of being “reasonable,” saying that he doesn’t want to define it and – if the case arose to test that line – the Supreme Court would have to offer that interpretation.

Law firms contacted by IL either declined to comment on this issue or offered statements that they comply with the rule as it’s written, without saying whether they specifically read the rule to preclude any small item such as holiday gift cards or baskets.
 

limontes Limontes

Alex Limontes, of counsel at Mitchell Hurst Dick & McNelis and incoming chair of the Indianapolis Bar Association’s Solo & Small Firm Committee, reads the rule to be more focused on the continued practice of funneling work to attorneys. The “for” part of the provision is the most important, he said.

“With regards to holiday gifts, I think that you begin to tow that line between ethical and unethical conduct if you give a large gift or significant monetary gift,” he said. “If you send the gift with a card that states something like, ‘Enjoy the gift. Thank you for sending me all of those clients,’ then that could potentially be construed as giving something of value for recommending or advertising.”

Limontes would advise attorneys to try and keep gifts simple and inexpensive such as cookies, candy or gift baskets. Multiple gifts could all be the same so that no one appears to be getting special treatment, and lawyers should avoid putting themselves in positions where someone could question the reason for the gift.

On the referral issue, he and others say that written non-exclusive fee agreements as outlined in Professional Conduct Rule 1.5 should be used between attorneys if any clients are being referred.

At Barnes & Thornburg in Indianapolis, law firm management relies on the counsel of the state’s former attorney ethics chief, Don Lundberg. While he doesn’t think an item like a gift basket falls within the Rule 7.2(b) prohibition, Lundberg does see how a literal reading of the rule can be taken to encompass those items and might cause some attorneys to wonder if this might be a practical concern.referral

“I suppose an after-the-fact, tangible expression of gratitude could be substantial enough and given in such a way that it would reasonably be viewed as a promise to make a similar gift for future referrals,” he said. “In that event, it could readily be interpreted as a quid pro quo rather than a pure gratuity.”

To avoid any potential issues, Lundberg said lawyers would be well-advised to be transparent about whether something is a gift of appreciation or something more. For example, a note could be written and attached to a box of chocolates or nuts to say, “I hope you’ll accept this as an expression of my appreciation for the business you have referred to me over the past year.”

He cautioned, “If, in reality, it is a disguised quid pro quo for referral of a case and the ‘gift’ is of substantial value and tied to the result in a particular case, no amount of window dressing will keep it from being what it really is.” 

Jenkins agreed, saying that although there’s little guidance about what the rule means and no disciplinary decisions interpreting this provision, lawyers should be conservative in how they handle any gift – even during the holiday season.

“As for Christmas baskets and other nominal gifts, the careful attorney will take pains to emphasize that it is a holiday gesture to a business acquaintance and not compensation for a referral of business,” he said.•

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  1. This law is troubling in two respects: First, why wasn't the law reviewed "with the intention of getting all the facts surrounding the legislation and its actual impact on the marketplace" BEFORE it was passed and signed? Seems a bit backwards to me (even acknowledging that this is the Indiana state legislature we're talking about. Second, what is it with the laws in this state that seem to create artificial monopolies in various industries? Besides this one, the other law that comes to mind is the legislation that governed the granting of licenses to firms that wanted to set up craft distilleries. The licensing was limited to only those entities that were already in the craft beer brewing business. Republicans in this state talk a big game when it comes to being "business friendly". They're friendly alright . . . to certain businesses.

  2. Gretchen, Asia, Roberto, Tonia, Shannon, Cheri, Nicholas, Sondra, Carey, Laura ... my heart breaks for you, reaching out in a forum in which you are ignored by a professional suffering through both compassion fatigue and the love of filthy lucre. Most if not all of you seek a warm blooded Hoosier attorney unafraid to take on the government and plead that government officials have acted unconstitutionally to try to save a family and/or rescue children in need and/or press individual rights against the Leviathan state. I know an attorney from Kansas who has taken such cases across the country, arguing before half of the federal courts of appeal and presenting cases to the US S.Ct. numerous times seeking cert. Unfortunately, due to his zeal for the constitutional rights of peasants and willingness to confront powerful government bureaucrats seemingly violating the same ... he was denied character and fitness certification to join the Indiana bar, even after he was cleared to sit for, and passed, both the bar exam and ethics exam. And was even admitted to the Indiana federal bar! NOW KNOW THIS .... you will face headwinds and difficulties in locating a zealously motivated Hoosier attorney to face off against powerful government agents who violate the constitution, for those who do so tend to end up as marginalized as Paul Odgen, who was driven from the profession. So beware, many are mere expensive lapdogs, the kind of breed who will gladly take a large retainer, but then fail to press against the status quo and powers that be when told to heel to. It is a common belief among some in Indiana that those attorneys who truly fight the power and rigorously confront corruption often end up, actually or metaphorically, in real life or at least as to their careers, as dead as the late, great Gary Welch. All of that said, I wish you the very best in finding a Hoosier attorney with a fighting spirit to press your rights as far as you can, for you do have rights against government actors, no matter what said actors may tell you otherwise. Attorneys outside the elitist camp are often better fighters that those owing the powers that be for their salaries, corner offices and end of year bonuses. So do not be afraid to retain a green horn or unconnected lawyer, many of them are fine men and woman who are yet untainted by the "unique" Hoosier system.

  3. I am not the John below. He is a journalist and talk show host who knows me through my years working in Kansas government. I did no ask John to post the note below ...

  4. "...not those committed in the heat of an argument." If I ever see a man physically abusing a woman or a child and I'm close enough to intercede I will not ask him why he is abusing her/him. I will give him a split second to cease his attack and put his hands in the air while I call the police. If he continues, I will still call the police but to report, "Man down with a gunshot wound,"instead.

  5. And so the therapeutic state is weaonized. How soon until those with ideologies opposing the elite are disarmed in the name of mental health? If it can start anywhere it can start in the hoosiers' slavishly politically correct capital city.

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