Bloomberg Law
May 25, 2023, 8:00 AM

College Athletes Making Money Raises Ethical Hurdles for Lawyers

Carla Varriale-Barker
Carla Varriale-Barker
Segal McCambridge

The paradigm shift allowing college athletes to monetize their name, image, or likeness raises unique legal and business considerations. And it ushers in dynamic ethical concerns.

This change is a perfect storm of new entrepreneurial opportunities, blending potentially unsophisticated college athletes with potentially sophisticated agreements. It requires us to revisit the constraints on attorneys who aspire to practice in sports law.

In 2021, the US Supreme Court ruled for the first time that college athletes can benefit monetarily from their name, image, and likeness. With their National Collegiate Athletic Association v. Alston decision, the Supreme Court is credited with motivating the NCAA to change course and allow college athletes to receive compensation in exchange for the use of their name, image, or likeness.

This has kick-started an array of influencer-centric opportunities, including endorsements, monetization of social media channels, sponsorships, and public appearances. While the opportunities may seem boundless, there are limits that the NCAA has established for specific categories of promotional activities such as alcohol, tobacco, and sports gambling.

With these new opportunities, there is a concurrent need for professional services, including tax, legal, and subject matter experts. All are subject to requirements and professional responsibility.

Agents are regulated and attorneys are subject to ethical and professional responsibility requirements, promulgated by the American Bar Association and state laws. The ABA’s Model Rules of Professional Conduct provide guidance to those attorneys navigating this space.

The scope of the Model Rules contemplates that they are rules of reason and should be interpreted concerning the purpose of legal representation. The Model Rules—as well as any state requirements—should be reviewed before undertaking name, image, or likeness representation. A few examples:

Model Rule 1.1: Competence

This is imperative: A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness, and preparation reasonably necessary for the representation.

If the lawyer is unfamiliar with compliance issues, intellectual property, or the specific subject matter facing the college athlete, they could be headed for an ethical disaster.

Aside from keeping abreast of developments through continued education, an attorney may consider associating with another attorney who has established competence in intellectual property or contracts or another necessary area of law.

Model Rule 4.3: Dealing With Unrepresented Persons

Given the nature of some name, image, or likeness transactions, lawyers should be cautious with unrepresented persons and avoid giving legal advice to them. The lawyer must ensure that the unrepresented person knows the attorney’s role in the matter.

Of course, a lawyer owes a fiduciary duty to a client and that is no different in this context. The identification of who is the “client,” especially if the lawyer is purporting to represent multiple clients or college athletes, steers the ship. Once a fiduciary duty is owed, the lawyer’s duties of confidentiality, transparency, and unfettered loyalty are required.

Against this backdrop, lawyers must also be cognizant of the patchwork of NCAA requirements, state laws, individual school rules, and more. The potential for an ethical violation, or worse, is a very real consideration for any attorneys who are thinking of wading into the name, image, or likeness waters.

Before proceeding, be mindful of the Preamble of the Model Rules: “A lawyer, as a member of the legal profession, is a representative of clients, an officer of the legal system and a public citizen having special responsibility for the quality of justice.” Representing their clients, a lawyer acts as an advisor, an advocate, a negotiator, and an evaluator.

NIL lawyers—or those who would be—have a special responsibility, particularly to the young and vulnerable college athletes who are wading into the NIL waters for the first time. The overarching themes of competence, transparency, candor, confidentiality, and loyalty to their college athlete client are paramount.

The enterprising college athlete now has a new opportunity to capitalize on their image, but stellar representation by their attorney is critical. Pitfalls may be many but proper counsel can mitigate these risks.

These young athletes deserve no less.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Carla Varriale-Barker is a shareholder at Segal McCambridge in New York.

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