| Oregon State Bar Bulletin — JANUARY 2008 |
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You finally decide to make the leap and hang out your own shingle. You lease the perfect office space and arrange your brand-new used office furniture according to your Feng Shui consultant’s recommendations. Eventually you get your computer system running so that it doesn’t freeze every time you hit Enter. The PLF practice management advisers help you set up your trust account and a conflict check system, and you send out notices to everyone you can think of to let them know you’re ready to start working for pay. Now you sit, alone at your desk, waiting for the clients to come streaming in. But how do you entice them into your office? Did you miss the legal services marketing class in law school?
These days, many lawyers are turning to the Internet as their primary marketing tool. More often than not, law firms establish websites with creative domain names designed to reach a target audience. Online legal directories threaten to replace the traditional "yellow pages" entirely. Perhaps the most creative Internet-based marketing tool is the for-profit service that matches lawyers to potential clients, promising to produce big business for participating lawyers. Online matching services generally require lawyers to pay an application fee and periodic payments to participate. Lawyers provide information about their practice areas and experience for inclusion in the listings. Prospective clients may fill out an online questionnaire explaining their legal problems and providing other relevant information.
Whether lawyers may ethically participate in such online legal matching services is a common question for the Legal Ethics Hotline and requires reference to several interconnected rules of professional conduct.
False or Misleading
Statements
The Oregon State Bar Legal Ethics Committee recently
addressed the propriety of Internet-based referral
services in Formal Opinion No 2007-180 Internet
Advertising: Payment of Referral Fees. The opinion
starts with a reminder that Internet-based advertising
is governed by the same rules as other advertising.
The basic ground rule is that advertising cannot be
false or misleading. See RPC 7.1(a). Because
Web pages may be viewed by persons outside of Oregon,
lawyers must take care to ensure the advertisement
identifies the jurisdictional limits of their practices.
Furthermore, while lawyers may include their names
in directories or other advertising Web pages, they
must not allow a directory to promote them using means
that involve false or misleading communications. RPC
7.2(b). Lawyers are responsible for content that they
did not create to the extent they know about that content. 1
Payment for Services
More difficult questions arise when it comes to payment
for an online advertisement. A lawyer may pay the
costs of advertisements and to hire others to assist
with or advise about marketing the lawyer’s
services. RPC 7.2(a). However, lawyers may not "give
anything of value to a person or organization to
promote, recommend or secure employment by a client,
or as a reward for having made a recommendation resulting
in employment by a client … " RPC 7.2(a).
Comment 5 to the ABA Model Rule 7.2 describes the
recommendation of a lawyer’s services as "channeling" clients
to the lawyer and cites the use of "runners" as
the classic example of conduct that violates RPC
7.2(a). Former OSB Formal Op No 2005-112 distinguished
advertising and recommendation as follows:
When services are advertised, the nonlawyer does not physically assist in linking up lawyer and client once the advertising material has been disseminated. When a lawyer’s services are recommended, the nonlawyer intermediary is relied upon to forge the actual attorney and client link.
Although not specifically discussed in the opinion, indirect or nonmonetary compensation for referrals is considered "something of value" and therefore also prohibited under RPC 7.2(a). See OSB Formal Op No 2005-175 (prohibiting lawyer participation in a business referral club, the purpose of which is to facilitate referral exchange between members).
Sharing Legal
Fees
OSB Formal Op No 2007-180 also notes the application
of RPC 5.4(a), which prohibits lawyers "from giving
a nonlawyer a share of a legal fee in exchange for services
related to the obtaining or performance of legal work." In
re Griffith, 304 Or 575, 611 (1987)(interpreting
former DR 3-102, which is now RPC 5.4(a)). The opinion
explains:
In the context of advertising, RPC 5.4 thus precludes a lawyer from paying someone, or a related third party, who advertises or otherwise disseminates information about the lawyer’s services based upon the number of referrals, retained clients, or revenue generated from the advertisements. By contrast, paying a fixed annual or other set periodic fee not related to any particular work derived from a directory listing violates neither RPC 5.4(a) nor RPC 7.2(a). A charge to Lawyer based on the number of hits or clicks on Lawyer’s advertising, and that is not based on actual referrals or retained clients, would also be permissible.
Other substantive law may also limit a lawyer’s ability to pay a referral fee. See, e.g., 11 USC 503(b)(4); ORS 9.500 and 9.505.
Legal Services
Plans
A lawyer may be recommended by a for-profit referral
service or other similar legal services plan as long
as 1) the operation of the plan does not result in
the lawyer violating the rules of professional conduct
relating to professional independence or unlawful practice
of law;2 2) the lawyer recognizes the recipient
of legal services as the client, not the plan; 3) the
plan does not place any restrictions on the lawyer’s
exercise of professional judgment; and 4) the plan
does not engage in any solicitations that would be
improper if done by a lawyer.
Improper solicitations include in-person, live telephone or real-time electronic contact with prospective clients who are not lawyers and who do not have a family, close personal or prior professional relationship with the lawyer. RPC 7.3(a). The opinion does not decide what constitutes "real-time electronic contact," but the definition of electronic communication suggests that Internet chat rooms would fall into that category. See RPC 1.0(c).
Conclusion
Online marketing of legal services is the wave of the
future. The Pew Internet & American Life Project,
estimates that 7 million people a month will use
the Internet to search for law-related services by
the end of 2007.3 While lawyers may be
well-served to jump on the Internet marketing bandwagon,
they must take care that the service they use does
not run afoul of the rules of professional conduct.
Determining whether the service amounts to mere advertising
or a referral service is the first step in ensuring
compliance with the ethics rules. And, as with all
advertising, lawyers should confirm that the information
being distributed about them is not false or misleading.
Endnotes
1 Lawyers who request to be listed in online directories
are often unaware that they are not always updated
and may go unchanged for many years, even though the
lawyer may have made no more than a single payment
for the listing. Because lawyers generally are responsible
for the accuracy of information about them, lawyers
should keep track of the directories with which they
have chosen to list their services, and check periodically
to make sure their information has been updated as
necessary.
2 See RPC 5.4, 5.5 and OSB Formal Op No 2005-168.
3 Dreiling, Choosing Up Sides, ABA Journal, May 2007.
ABOUT THE AUTHOR
Helen Hierschbiel is deputy general counsel for
the Oregon State Bar. She can be reached at (503) 620-0222,
or toll-free in Oregon at (800) 452-8260, ext. 361,
or by e-mail at hhierschbiel@osbar.org.
© 2008 Helen Hierschbiel