Various recent cases involving prominent firms specializing in property related matters brought to the fore the much debated issue of touting. Some regard the strict Rules of the Law Society on this subject matter as archaic, whilst other members of the legal fraternity consider these Rules a necessity to ensure the dignity of the profession and to promote the interest of the public in their dealings with attorneys.

In terms of Rules of the Law Society of the Northern Provinces specifically Rule 89.1, unprofessional, dishonourable or unworthy conduct on the part of a practitioner shall include, inter alia, "touting for work of a professional nature".

Touting is then further defined in the guidelines and rulings of the Law Society as including:

(a) soliciting custom or work directly from any person;
(b) entering into an arrangement with any person, whether an employee or not, for the introduction of clients to the attorney, but this will not apply to:

(I) any agreement between an attorney and another attorney for the referral of work in the normal course of either's practice,
(II) any arrangement for the introduction to an attorney of other attorneys with a view to their instructing him on an agency basis;

(c) making unsolicited visits or telephone calls or sending unsolicited letters or printed material to any person, (other than to an existing professional connection) whom the attorney knows or should reasonable be expected to know has an existing attorney/client relationship with another attorney, where such conduct is carried out with a view to, or is calculated to, establishing an attorney/client or correspondent relationship with such person.

 

"Kick-backs" to agents and advances on property commissions are well known tactics employed by firms to ensure a constant flow of work. Whilst negotiating a fee with an existing client is considered acceptable practice, the first mentioned antics do not bode well with the Law Societies and Courts in which these complaints and findings by the Societies have been previously appealed. Other Rules closely coincide with the prohibition against touting and viewed cumulatively, may lead to a finding of unprofessional conduct on the part of a practitioner.

In the case of Law Society, Cape of Good Hope v Berrangé 2005 (5) SA 160 (C) the Applicant sought the suspension of the Respondent on the ground of the Respondent's alleged contravention of Rule 14.6.1.1 of the Applicant's rules in that he operated a scheme to secure for his firm "professional work solicited by unqualified persons".

In casu the Respondent's firm secured conveyancing work through "marketing agreements" with agents, in terms of which agreements payments were made to agents as quid pro quo for the promotion and marketing of the Respondent's firm.

The Applicant in preceding disciplinary proceedings found the Respondent guilty of contravening the said prohibition and thus of "unprofessional conduct", and hence referred the matter to the High Court in terms of S72(6)(a), seeking a suspension of three years.

Various key issues were not contested by the Respondent such as the existence of the agreements, the substantial amounts paid (in excess of R500 000.00) to the agencies, the significant number sales in which the respondent's firm was appointed as conveyancing attorneys and furthermore, that the "marketing fee" payable to the agencies would be measured against the volume of work referred to the Respondent by the respective agencies.

The Respondent however contended that these agreements were effected for a lawful purpose and not in breach of the Rules of the Applicant society. In essence the Respondent contended that there was in principle no difference between the agreements in question and the type of agreements or "business relationship" previously authorised by the Applicant. A director of the Respondent's firm had obtained prior confirmation from the Society that a "business relationship" where a firm contributes to the monthly advertising costs of an existing client, on certain specified terms, would constitute adherence to the general principles of professional conduct.

The Respondent's counsel averred that the aforementioned "authorisation" set the background for the marketing agreements concluded with the respective agencies. The court was not convinced that the authority provided by the Society was intended to condone payment to estate agents for conveyancing work referred to attorneys and further noted that the amendment of the particular rule in 1998 to include a prohibition against agreements which have the "potential result" of securing work solicited by an unqualified person further confirmed the Society's stringent view on the subject. For the sake of brevity the court's consideration of the evidence will not be repeated herein save for the aspects already highlight above.

The court viewed the Respondent's action akin to touting and accordingly held that the most plausible explanation of the evidence was that the "conveyancing work referred to the Respondent's firm was generated as a result of the agencies having invited their clients, or recommended to them, that they refer their conveyancing work to the Respondent's firm, which invitation or recommendation must have been very strongly induced by the payments the agencies received from the Respondent's firm" and further "that the most probable inference on the evidence was that the Respondent devised and implemented a scheme in terms of which his firm rewarded the agencies for the referral to it of conveyancing work."

The court held further that "The Respondent in fact secured conveyancing work that was solicited by the agencies as a result of their "marketing agreements" and the understanding between them regarding payment that clearly constituted "soliciting: of professional work within the meaning of the Rules".

The court accordingly found the Respondent in breach of the Rules and guilty of unprofessional conduct. The Respondent was suspended from practice for a period of two years.

Whether one finds the Rules of the various Law Societies cumbersome and financially crippling or necessary to ensure the dignity of the profession, the penalty for non-compliance is severe. Cases currently pending might sway the general opinion on touting and lead to the introduction of new Rules on the subject but until then, err on the side of caution.