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May 15, 2013
Panel continues work on referral services rewrite

Board told LRSs continue to proliferate

Recommendations for changing Bar rules relating to lawyer referral services won’t be ready until later this year, according to the chair of the Bar’s Board Review Committee on Professional Ethics.

Carl Schwait reported to the Board of Governors at its April 19 meeting that the committee was still reviewing the recommendations of the Special Committee on Lawyer Referral Services and was getting more input from lawyers and businesses affected by those recommendations.

The BRCPE had hoped to present its finding to the board at its April or May meeting, he noted.

Carl Schwait “We will not be finished during this [fiscal year 2012-13] term,” Schwait said. “In the last few weeks, we have seen that attorneys realized . . . that we mean business and suddenly attorneys have started to pop up writing us letters. Just in the last few weeks, we have received letters as well as taken testimony.”

One group submitted a 33-page memorandum and several other attorneys and organizations, including LexisNexis, have expressed concerns, he said.

“Notwithstanding, the committee is ready at the next meeting to begin voting on the issues. However, we have to get it to you for first reading and we do not believe will be ready to have that to you by May. Every time we get to one issue, another issue pops up,” he said.

He added it’s important to get the project done.

“Just while we have been doing this, 10 or 15 or 20 more lawyer referral services have popped up, so we want to get our rules in place,” Schwait said, in addition to the 70 or so that were previously in existence, most of which have begun operations in the past few years.

“By our meeting in July, hopefully we will be able to give you first reading of the new lawyer referral service documentation,” he said.

The special committee made its report to the board last year. It found that clients were being solicited improperly, that lawyers had a potential conflict when a referral service made medical as well as legal referrals, and that possible unlicensed practice of law questions are raised when some referral services use nonlawyers to sign up clients.

It also made seven recommendations, which are being considered by the BRCPE:

* Lawyers may not accept referrals from services that also refer callers for other professional services “for the same incident, transaction or circumstance.” Likewise, lawyers may not refer their clients to the referral service for those other professional services.

* A lawyer accepting referrals from a referral service must register with the Bar, including the listing of all referral services in which the lawyer participates.

* One lawyer within a law firm must be designated as the responsible party in the firm for receiving or accepting client referrals from a service.

* A lawyer may not initiate contact with a referred client. Instead, “all such contact must be initiated by the prospective client.”

* A lawyer must provide complete disclosure to a prospective client referred by a service about the lawyer’s participation in referral services.

*The Bar should step up enforcement of its rules on lawyers participating in referral services.

* The Bar should increase public education about rules and regulations on lawyers participating in referral services.

[Revised: 07-19-2018]