Opinion will address LRS fees
Opinion will address LRS fees
Key issues about lawyer referral services, online companies that seek to match potential clients with lawyers, and Bar regulation will be addressed
Senior Editor
An advisory opinion on whether lawyer referral services can charge per referral and impose different fees for various types of cases is being prepared by the Bar’s Board Review Committee on Professional Ethics.
The Board of Governors, at its July 21 meeting in Miami, approved the recommendation of the BRCPE that it be directed to prepare the opinion. Committee Chair Michael Hooker said the opinion could be ready for review at the board’s December meeting. The committee is soliciting input from Bar members through an official notice on page 5 of this News.
The opinion will get to key issues in an ongoing debate about lawyer referral services, online companies that seek to match potential clients with lawyers, and Bar regulation of advertising and referral services.
The matter came to the Bar from an inquiry by a lawyer, Hooker said, who asked if he could participate with a lawyer referral service that planned on charging a different set fee depending on the type of case referred, “e.g., $10 per referral for each personal injury case and $15 per referral for family law.”
The inquiring lawyer referred to the system “as a ‘pay-per-lead’ structure.”
Hooker noted that Bar rules prohibit lawyers from splitting fees with a referral service, and the Standing Committee on Advertising has rejected “pay-per-lead” schemes on several appeals. In addition, in 2012, the Board of Governors rejected an appeal from a proposed referral service that wanted to charge $300 per accepted case to participating lawyers.
“Other out-of-state decisions concerning pay-per-lead structures have reached different conclusions,” Hooker said. “The key issue in this advertising inquiry is this: Can a lawyer agree to participate in a lawyer referral service in which the lawyer pays a differing amount per referral, which varies according to the type of case being referred?”
The BRCPE, in its review, voted “to recommend that this board direct the BRCPE to adopt a post advisory opinion on the issue of lawyer referral fees,” Hooker said.
The committee felt that, because of changes in technology since the board last addressed this in 2012 and because of the changing regulatory climate, the opinion is needed and that it should include issues beyond different fees for different types of cases, he said.
The first step will be to solicit input from Bar members and interested parties and then draft an opinion to bring back to the board.
President Michael Higer asked if the BRCPE would have the option, after getting feedback, of not drafting any opinion or if the board could decide not to issue the opinion. Bar Ethics Counsel Elizabeth Tarbert answered “yes” to both questions.
The board unanimously approved the committee’s recommendation.
The action is the latest step in a long Bar effort to revise and update its lawyer referral service rules. That led to the Bar filing rule amendments in 2015 addressing among other things referral services that offer both legal and medical or other non-legal services. The proposed rules would have allowed lawyers to participate in those services, as long as clients were informed about potential conflicts, there was no quid pro quo that the lawyer would send a referred client for medical or other services offered by the referral agency, and the lawyer’s independent judgment was not affected.
After oral arguments, the Supreme Court rejected those rules and instead instructed the Bar to submit a rule banning lawyers from belonging to referral services that also sent callers for other non-legal services and requiring that for-profit referral services must be owned or operated by Bar members.
Instead, the BRCPE, reacting to rapid changes in the legal marketplace, dramatically revised the proposed rule amendments. The committee was concerned that online legal service companies, which began by rating lawyers or offering legal forms to consumers, were expanding their operations to match lawyers with potential clients for fixed-fee work or other legal services.
The committee proposed, and the board adopted, amendments that anyone who matched lawyers with potential clients would be designated as a “qualified provider” and be subject to Bar rules, including a review of advertisements. However, participating lawyers would not be required to carry malpractice insurance.
The Supreme Court closely questioned those amendments during oral arguments in April, and then in May dismissed the petition to amend the rules without prejudice. In that order, justices expressed an interest in meeting informally with Bar officials and other interested parties to discuss referral-related issues.
That happened June 20 at the Bar Annual Convention at a meeting with justices, Bar officials, and representatives of private referral services and legal service providers.
“I thought the session was very, very informative, insightful and eminently more productive than the oral argument,” Hooker said of that meeting. “We expect and hope to see future input from the court.”
