IN-PERSON SOLICITATION:
NOT FOR LAWYERS
By
Kenneth L. Jorgensen, Director
Minnesota Office of Lawyers Professional Responsibility
Reprinted
from Bench & Bar of Minnesota (September
2004)
A
recent Minnesota Supreme Court
decision involving solicitation of patients by chiropractors has generated
confusion about the continuing viability of the legal ethics prohibitions
against in-person solicitation.Ftn 1 In July the Court determined that
chiropractor David Pietsch’s use of “runners”
or “cappers”Ftn 2 to solicit auto
accident victims for chiropractic services did not constitute “unprofessional
conduct” as defined by the statutes governing the delivery of chiropractic
services in Minnesota. Pietsch v.
Minnesota Bd. of Chiropractic Exam’rs, C6-02-2117 (Minn. 07/22/04).
Pietsch, a St. Paul
chiropractor whose practice focused upon treating no-fault patients, was
charged by the Chiropractic Board with improperly using the Xiong Translation
& Transportation Company (Xiong) to personally solicit accident victims in
the Hmong community. Pietsch admitted
paying Xiong $71,000 in 1999 and $95,000 in 2000 to obtain daily accident
reports from local police departments, identify Hmong accident victims, and
then telephone or visit the victims to solicit them as patients at Pietsch’s
clinic.Ftn 3
The Chiropractic Board
suspended Pietsch’s license for three years and assessed a $30,000 civil
penalty. In doing so, it determined
that Pietsch’s use of runners or cappers to solicit patients constituted
unprofessional conduct. Specifically
the Board found:
Obtaining patients by
employing runners to follow upon daily police accident reports preys on people
when they are most vulnerable. These
patients are not given an opportunity to carefully consider and choose among
health care options. They are, in fact,
pressured into choosing the runner’s employer for their health care.
The
Board also found that Pietsch’s targeting of the Hmong/Southeast Asian
communities was even more egregious because of the potential language and
cultural barriers experienced by these victims.
Pietsch appealed the
Board’s suspension to the Court of Appeals.
In affirming the Board’s determination, the Court of Appeals panel found
that there was substantial evidence supporting the conclusion that Pietsch’s
use of runners to solicit patients was unethical, deceptive, and harmful to the
public as well as the chiropractic profession.
Pietsch v. Minnesota Bd. of Chiropractic Exam’rs, 662 N.W.2d 917,
924 (Minn. App. 2003).Ftn 4
On review, the Supreme
Court analyzed two issues in reversing the decision and remanding the matter
back to the Chiropractic Board: (1) was
Pietsch’s solicitation of accident victims unprofessional conduct per se?;
and (2) did the record support the Board’s conclusion that in-person
solicitation of accident victims negatively affected the
professional-patient/client relationship and was unethical, deceptive, and harmful
to the public?
As to the first issue
the Court noted that the statute defining unprofessional conduct does not
specifically make the use of runners or cappers to obtain business
unprofessional conduct per se. This
deficiency could have been overcome by evidence of an industry standard clearly
recognizing the use of runners to obtain business as unprofessional. However, the record contained no evidence of
an industry standard.
The Court also found
the record devoid of any support for the Board’s conclusion that Pietsch’s
solicitation was deceptive and harmful to the public. Specifically it noted the absence of any evidence that the Xiongs
had deceived or pressured accident victims into using Pietsch’s services. Nor was there evidence that any of the
accident victims even objected to the solicitations. The paucity of evidence to support the unprofessional conduct
conclusions resulted in the Court’s reversal and remand of Pietsch’s
professional discipline case for further proceedings.
Since the Pietsch decision,
lawyers have inquired about the applicability of the Court’s decision to the
in-person solicitation prohibitions governing lawyers and those associated with
lawyers. The short answer to these
inquiries is that nothing has changed.
In-person as well as telephonic solicitation by lawyers and their agents
is not only unethical, but also illegal if the lawyer pays the runner to
solicit clients.
A quick comparison of
the legal regulations governing solicitation reflects the significant
distinctions between the chiropractic and legal professions. As noted in Pietsch, professional
conduct standards for chiropractors do not specifically address solicitation of
patients. In contrast, Rule 7.3,
Minnesota Rules of Professional Conduct, expressly prohibits in-person or
telephonic solicitationFtn 5
by a lawyer unless a prior professional relationship exists with the
prospective client or the client is a family member.Ftn 6
Assisting or inducing a nonlawyer (i.e.,
runner or capper) to violate the solicitation prohibition runs afoul of Rule
8.4(a).Ftn 7 Rule 7.2(c) makes it unethical to give
anything of value to a person for recommending the lawyer.Ftn 8
Applying the Court’s Pietsch analysis to lawyer conduct, Rules
7.2(c), 7.3 and 8.4(a) define in-person and telephonic solicitation, as well as
paying for the solicitation of clients, as unprofessional conduct per
se. These rules may also constitute
evidence of the industry standard the Court found lacking for the
chiropractic profession in Pietsch.
Beyond legal ethics
standards, Minnesota law also criminalizes lawyer payment of a fee or
commission to runners and cappers. See
Minn. Stat. §§481.03 and 481.05 (providing that payments by lawyers to
anyone other than another lawyer for securing or soliciting clients is a
misdemeanor punishable by a fine and 90 days in jail). State law does not include an analogous
provision applicable to chiropractors’ use of runners or cappers. If such a provision had existed, it is
entirely likely that the Pietsch result would have been different. This is especially true since the Court did
not find that chiropractor solicitation was constitutionally protected. Rather it determined the Board had failed to
provide sufficient evidence that chiropractor solicitation was unprofessional
conduct per se or that it was harmful to the public for the reasons
advanced by the Board.
The Pietsch
chiropractic discipline proceeding is consistent with a larger effort by
government agencies on both the state and federal level to curb or thwart
healthcare fraud. One factor cited by
the Chiropractic Board in its discipline of Pietsch is that payments to runners
“can encourage patients to exaggerate or invent injuries.” Similar concerns undoubtedly caused the 2002
Legislature to enact Minn. Stat. §609.612, making it a felony to employ a
runner to procure patients for the purpose of fraudulently obtaining benefits
under a contract of motor vehicle insurance.
Within the past year,
federal investigations focusing upon use of runners and cappers resulted in the
indictments of local chiropractors for healthcare fraud. Key to the investigations was the testimony
of runners who sought leniency in their own prosecution in exchange for
testimony against chiropractors about incidents of healthcare fraud. Unfortunately, the allegations made by these
runners were not limited solely to the chiropractic profession. Although no lawyer was implicated in
healthcare fraud, allegations of in-person solicitation and lawyer payments to
runners surfaced in the federal investigation.
Runners from more than one ethnic community claimed to have been paid fees
for soliciting legal clients or fees for nonexistent interpretation services to
conceal that they were in fact being compensated for soliciting clients.
Although lawyer
discipline for in-person solicitation and nonlawyer referral payments is
infrequent, complaints of this nature are on the rise. Most of these complaints, like the complaint
in Pietsch, stem from alleged abuses
within the various ethnic communities in the Twin Cities. One ongoing lawyer discipline investigation
involves allegations of payments for interpreter services as pretext for runner
solicitation fees. Other alleged abuses
include a runner soliciting legal representation at the home of an accident
victim within 24 hours of the accident.
In nearly all of the ethics complaints alleging runner solicitation, the
determinative issue is whether the lawyer directed, assisted, promoted, induced
or ratified the improper solicitation by the runner. Other ethics complaints have similarly turned upon the lawyer’s
supervision, or lack thereof, of nonlawyer employees or agents.
As the healthcare
fraud prosecutions have shown, changes in the criminal laws have provided
significant incentive for runners and cappers to bite the hands that feed
them. Lawyers wishing to avoid
disciplinary exposure to solicitation violations need only keep a few simple
precepts in mind.
Written solicitation
letters targeted to prospective clients are permissible, in-person or
telephonic contact is not.Ftn 9 Accepting referrals from nonlawyers is
allowable whereas compensating nonlawyers for those referrals is not. Payments for interpreter or other
client-related services must be bona fide.
Invoices reflecting the time expended by the interpreter in rendering
the services should be documented in client files. Undocumented cash payments for interpreter or other
client-related services will likely garner increased scrutiny in any
disciplinary investigation.
Retainer agreements
signed by clients who have never consulted or even talked with a firm’s lawyer
invite disciplinary inquiry. Lawyers
who entrust investigators and other nonlawyers with retainer forms and the
authority to sign up clients must appreciate the peril of this practice if the
client later contends he or she was improperly solicited.
Other measures include
precautions that may appear obvious to most lawyers. Investigators, interpreters, or other nonlawyer associates should
not be allowed the autonomy to supplant or circumvent the lawyer’s involvement
at crucial stages of the representation.
Such stages include, but are not limited to retention of the lawyer’s
services, advising the client about settlement offers, and distributing
settlement proceeds. Language or
cultural barriers between the lawyer and the client do not justify wholesale
entrustment of the representation to a nonlawyer agent, assistant, or
employee. Lawyers who do so risk
professional discipline as they can be held accountable for the errant or
dishonest acts committed by nonlawyers so entrusted. See e.g., In re Krueger, A04-303 (Minn. 07/12/04) in which
a 30-day suspension resulted from inter alia the lawyer’s failure to
supervise a nonlawyer investigator who settled the injury claim of a deceased
client, secured a forged endorsement on the settlement check and releases, and
caused the lawyer to distribute settlement proceeds to the deceased client’s
wife.
The Pietsch decision
makes it likely that for now in-person solicitation of chiropractic patients
will continue. Lawyers who work closely
with the chiropractic community need to appreciate the significant distinctions
between chiropractic and lawyer regulations when it comes to soliciting
clients.
1 See e.g.,
“Accident-file Gatherers Win One Round, Minneapolis
Star Tribune, 08/08/04: “To many
attorneys, the [Pietsch] ruling gives
a green light to the hiring of runners, provided they are not involved in any
fraudulent medical care scheme.”
6 See
e.g., In re Charges of Unprofessional Conduct Against 97-29, 581 N.W.2d 347 (Minn.
1998) (where the lawyer was admonished for his unsuccessful attempt to solicit
an injury client by telephone).