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August 15, 2016
Matching services rules go to the court

Lawyers are not allowed to split fees and may only participate with entities that follow Bar advertising rules

By Gary Blankenship
Senior Editor

A major overhaul of Bar lawyer referral service rules that also address lawyer participation with private matching companies — such as LegalZoom, Avvo, and RocketLawyer — has been approved by the Bar Board of Governors and is being submitted to the Supreme Court.

The amendments to Rule 4-7.22 and conforming amendments to Rules 4-7.12, 4-7.13, 4-7.16, 4-7.17, and 4-7.23 were approved at the board’s July 29 meeting in Miami Beach and were recommended by the Board Review Committee on Professional Ethics and the board’s Technology Committee.

The board had extensive presentations and discussions at its past two meetings and passed the changes without further debate.

BRCPE Chair Carl Schwait noted some local bar associations oppose the changes, but thought much of that was based on fear and misinformation.

“This rule does away with all definitions [of lawyer referral services, legal directories, and the like] and says that any entity or any person that is in the business for profit of matching a lawyer and a consumer . . . must follow certain protocols and rules if they are to have lawyers participate in their service,” he said. “No one is exempt. If in fact you are one of these entities that match, you will be subject to our rules.”

Those entities offering such matching services would be called “qualifying providers,” Schwait said, and for lawyers, the amendments provide “bright line” guidance on participating with qualifying providers.

“Every lawyer who wants to participate in a matching service will know exactly what they have to do and what the service has to do . . . so that the service complies with our rules. Most importantly, we protect the public in their choice of lawyer they might be matched with,” he said.

Schwait also said the committees believe the new rules will meet any constitutional challenge, and the Bar can demonstrate a rational basis for the rules.

In some ways, the rules make it easier for lawyers to participate with qualifying providers.

They “level the playing field for everyone and also, hopefully, allow the rules to stand the test of time,” said John Stewart, chair of the Technology Committee, after the meeting.

“We’ve made it easier for our attorneys to understand when they can and cannot participate with a service and included a takedown provision, so that if they are participating in a service that is later found to be operating in violation of the rules, they can remove themselves from the program within 30 days without fear of sanction,” he added.

“We’ve assisted the public by assuring that these persons or companies who comply with our rules can continue to operate, thereby expanding access to justice.”

Lawyers are not allowed to split fees with the providers. Lawyers may only participate with entities that follow Bar advertising rules and some other regulations that include annually giving the Bar a list of Florida lawyers participating with their services. Lawyers would not be required to carry malpractice insurance, as they must do now when participating in for-profit referral services.

For their part, qualifying providers would not have to state in ads that lawyers pay to participate with the company (some companies do not charge and instead make their money by selling advertising space or charging consumers to participate) or have to state in ads that they are a referral or similar type service. The latter could be a problem in other states, which ban for-profit referral services.

Qualifying providers would be banned from requiring lawyers to provide cross references to other provider services, such as those that offer medical as well as legal referrals. They must also provide documentation to Bar members of their compliance with Bar rules, respond to any Bar inquiries within 15 days, make referrals only to those authorized to provide legal services, and not imply they are endorsed by the Bar.

The definition of qualifying provider includes not only referral services and matching companies, but also any group or pooled advertising service.

The Bar had originally submitted amendments to the court addressing only for-profit lawyer referral services. Those proposed changes allowed lawyers to belong to services that provided referrals for more than one professional service, such as for legal and medical needs, as long as they had a signed acknowledgement from the client.

The court rejected that rule and told the Bar to return with a rule that required for-profit referral services to be owned or managed by a Bar member. That in turn stimulated a broader look at the rapidly evolving legal marketplace where companies like LegalZoom, Avvo, and others have moved from offering legal forms or ratings of lawyers to connecting consumers to lawyers for document reviews, divorces, and other services.

The two committees extensively discussed the court’s request that only lawyers be allowed to own or manage such services, but did not recommend the court’s proposal, saying it is unworkable, penalized companies that comply with Bar rules, and is constitutionally suspect. The board approved the amendments by voice vote with at least one dissent.

The Bar must file the amendments with the court by August 15, and comments may be filed with the court between August 15 and September 15. The revised rules can be found on the Bar’s website at: www.floridabar.org/proposedlrsamend.

On a related issue, Schwait said a lawyer has asked the Bar if it is permissible under Bar rules to participate in a service offered by Avvo that links lawyers to consumers with legal questions. The board unanimously approved the committee’s recommendation to defer the issue until the Supreme Court acts on the proposed rule amendments.

[Revised: 12-12-2017]