PROCEED WITH CAUTION: Lawyer Referral Services
Smart and ethical legal marketing is an important component of legal practice. Legal marketing encompasses a wide variety of methods and media, with internet marketing playing an outsize role. Increasingly, attorneys rely on third-party internet marketing companies that offer a variety of methods to increase exposure and generate leads, ranging from basic services to drive traffic to law firm websites (e.g., search engine optimization and “pay-per-click” advertising like Google AdWords) to more active measures, including for-profit lawyer referral services that attract prospective clients and connect them with subscribing attorneys.
In this article we highlight relevant ethical issues attendant to lawyer referral services and suggest steps you can take to evaluate such services prior to engaging one. State bar rules regarding lawyer referral services vary considerably, and we do not analyze each such rule. Rather, we direct your attention to the varying treatment among the states, with the goal of alerting you to the importance of your carefully scrutinizing the rules in your state before engaging a lawyer referral service.
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A lawyer referral service is commonly understood to include an arrangement by which a third-party, non-attorney acquires prospective client leads and sells them to subscribing attorneys. Such services may be subject to explicit approval and oversight by the state bar, but in many states attorneys must rely instead on ethical opinions drafted by the bar, which may be narrowly drafted to consider only specific fact patterns. Thus, given the dynamic nature of internet marketing, new types of referral services are likely to emerge over time that are not squarely addressed by existing ethical opinions. We have observed two general categories of lawyer referral services: lead generation and outsourced client intake/retention.
Lead-generation services match prospective clients with subscribing attorneys through the use of proprietary, interactive features on the company’s website. Attorneys are purportedly pre-screened based on practice area, experience, disciplinary records, and professional references. Prospective clients provide basic information about their legal need via the service’s website, and the information is forwarded to subscribing attorneys. If the attorney elects to “accept” the referral, she contacts the prospective client directly and discusses the terms of representation.
Outsourced client intake/retention
Outsourced client intake/retention is an emerging practice whereby so-called “ready to litigate” cases are sold on a variable rate basis depending on the type of claim. The acquisition and matching process appear similar to lead generation services, but instead of simply forwarding the lead to the attorney for further consideration, the service has the prospective client sign the subscribing attorney’s retention agreement, a copy of which has been provided in advance to the company. The signed retention agreement is then forwarded to the attorney for countersignature. Referrals not meeting the attorney’s specified criteria reportedly can be “returned” to the company.
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The starting point in understanding the regulation of lawyer referral services is the ABA Model Rules of Professional Conduct (“ABA Model Rules”). The ABA Model Rules do not expressly address for-profit lawyer referral services, but Rules 7.2 (Communications Concerning a Lawyer’s Services: Specific Rules) and 7.3 (Solicitation of Clients) are germane. ABA Model Rule 7.2 provides in relevant part:
(a) A lawyer may communicate information regarding the lawyer’s services through any media.
(b) A lawyer shall not compensate, give or promise anything of value to a person for recommending the lawyer’s services except that a lawyer may:
(1) pay the reasonable costs of advertisements or communications permitted by this Rule
ABA Model Rule 7.2 (emphasis added).
ABA Model Rule 7.2, Comment 2 (“Paying Others to Recommend a Lawyer”) provides additional context:
[a] communication contains a recommendation if it endorses or vouches for a lawyer’s credentials, abilities, competence, character, or other professional qualities. Directory listings and group advertisements that list lawyers by practice area, without more, do not constitute impermissible “recommendations.”
ABA Model Rule 7.2, Comment 2.
ABA Model Rule 7.3, which prohibits in person solicitation of prospective clients, is also relevant. Comment 1 explains that “[a] lawyer’s communication is not a solicitation if it is directed to the general public, such as through a billboard, an Internet banner advertisement, a website or a television commercial, or if it is in response to a request for information or is automatically generated in response to electronic searches.”
ABA Model Rules 7.2 and 7.3 thus distinguish between communications that endorse and recommend a lawyer’s services versus those that are simply marketing and conveying information to the public, including “[d]irectory listings and group advertisements that list lawyers by practice area” and other advertisements directed to the public generally.
Most states have adopted ABA Model Rules 7.2 and 7.3 to varying degrees, with the result that regulation of lawyer referral services differs significantly from state to state. For example, Florida expanded the regulation of lawyer referral services in 2018, imposing new requirements on providers, but also broadening its definition of permissible referral services to include legal directories, internet matching services, group or pooled advertising programs, and lead-generation programs. In contrast, Georgia has embraced a more limited regulatory approach, adopting rules permitting lawyer referral services, but requiring certain disclosures while still emphasizing the ABA Model Rules prohibition on paying for recommendations.
Other state bars have not adopted rules expressly permitting lawyer referral services, but have opined that they are permissible, subject to conditions that track the ABA Model Rules limitations. See, e.g., Texas Legal Ethics Opinion 573 (July 2006) (a permissible lawyer referral service “must not state that it is making referrals of lawyers or describe itself in such a way that would cause a reasonable potential client to believe the Service is selecting, referring and recommending the participating lawyers”); Tennessee Rules of Professional Conduct, Rule 7.2, comment 7 (“a lawyer may pay others for generating client leads, such as Internet-based client leads, as long as the lead generator does not recommend the lawyer . . . [and] the lead generator’s communications [do not create] a reasonable impression that it is recommending the lawyer, is making the referral without payment from the lawyer, or has analyzed a person’s legal problems when determining which lawyer should receive the referral.”).
The bottom line is that before signing on with a company that provides any of the above-described marketing services (or any variation thereof), it is critical that you perform due diligence and verify that the proposed services are consistent with your state’s rules of professional conduct. Relying on the fact that a company has been in business for several years or claims to comply with “all applicable state bar rules” is fraught with risk: you, not the referral service, are subject to disciplinary proceedings (and perhaps even malpractice and fiduciary liability). You should understand clearly what services are being proposed and how the company intends to fulfill them. Reading the fine print and looking at the company’s on-line presence (including all links and uploaded files) is critical. Obtaining and interviewing several company references could also give you peace of mind that you are making a good selection. Again, it is you, the attorney, who will answer to disciplinary counsel if the rules are violated, not the referral service.
Below are some questions you should consider before engaging a lawyer referral service:
- What are the specific methods of communication the service uses to obtain prospective clients?
- Does the service accept leads from other entities unaffiliated with the company? If so, how does the company verify that the acquisition methods are in compliance with the applicable state bar rules?
- How are prospective clients screened?
- What training does the service provide to its employees enabling them to screen prospective clients?
- If the service represents that it complies with applicable rules, how has it made such determination?
In addition to conducting appropriate due diligence, you should carefully evaluate the terms and conditions of the engagement. Again, read the fine print. Preferably, the company will be willing to negotiate a service agreement or other form of contract that details the services to be provided and contains other relevant terms desirable in such an agreement. At a minimum, such an agreement should contain:
- a detailed description of the services, including any specified referral criteria;
- representations and warranties regarding the company’s:
- marketing and prospective client acquisition practices, and
- compliance with law (including the applicable state’s rules);
- covenants requiring compliance with prospective client disclosures and attorney advertising disclosures required under your state’s rules;
- provisions for periodic verification/auditing of the company’s compliance with your state’s rules; and
- indemnification provisions appropriately tailored to the scope of work.
The bottom line is that you—not the legal referral service—are responsible for fully complying with your state’s rules. Such services can afford numerous opportunities for practice enhancement, but not at the expense of clouding your good judgment or harming your professional reputation. Having advised referral companies and lawyers facing claims and disciplinary investigation, we understand these issues. Our hope is that our practice experiences and resulting suggestions herein will help you prevent and avoid claims and grievances. But, if trouble has already arisen, we are always there to help. If you have any questions or require assistance, please feel free to contact us to discuss your particular situation. We can be reached at (404) 593-2670 or on the internet at https://chandler-law.net/.
 This article discusses only unregulated for-profit lawyer referral services, as opposed to not-for-profit or “qualified” lawyer referral services approved by the state bar and generally intended to serve the public interest. See note 5, infra.
 Although the focus of this article is on lawyer referral services, lawyers should also be mindful of the rules governing lawyer advertising in general. See, e.g. ABA Model Rule 7.1 and the comments thereto.
 In some states legal directories and group advertising may also be regulated under the heading of lawyer referral services.
 Although we offer no opinion on whether this type of referral service is permissible under state bar rules, we note that evaluating prospective clients’ claims and then having them sign an attorney’s retention agreement could be construed as an impermissible recommendation as set forth in ABA Model Rule 7.2. Moreover, such service appears to place control of the client intake/retention/termination process in the hands of a third party who may be unqualified to make decisions about a host of matters requiring an attorney’s professional judgment.
 ABA Model Rule 7.2 (b)(2) does permit lawyers to “pay the usual charges of a legal service plan or a not-for-profit or qualified lawyer referral service,” but such services are separate and distinct from unregulated, for-profit lawyer referral services. See generally “The Regulation Of Lawyer Referral Services: A Preliminary State-By-State Review” (American Bar Association Standing Committee on Lawyer Referral and Information Service).
 See ABA Model Rules Alphabetical List of Jurisdictions Adopting Model Rules, https://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/alpha_list_state_adopting_model_rules/.
 See https://www.floridabar.org/ethics/etad/etad001/ (detailing the Florida Qualifying Provider Rule).
 See Georgia Rules of Professional Conduct, Rule 7.3(c)(1).
 Lawyers are responsible for their own communications and those of third parties acting on their behalf. See, e.g., Georgia Rules of Professional Conduct, Rule 7.3(e) (“A lawyer shall not accept employment when the lawyer knows or reasonably should know that the person who seeks to employ the lawyer does so as a result of conduct by any person or organization that would violate these Rules if engaged in by a lawyer.”); see also Georgia Rules of Professional Conduct, Rule 7.1(c) (“A lawyer retains ultimate responsibility to insure that all communications concerning the lawyer or the lawyer’s services comply with the Georgia Rules of Professional Conduct.”).
 Chandler Law, LLC has represented attorneys in situations involving referral services where the service interviewed our client about the advice we gave and then used our advice to revise its own referral agreements in an effort to comply with the Georgia Rules of Professional Conduct. In other words, they used their prospective referral partner to get free legal advice about how their program did or did not comply. Caution should be taken to limit this sort of activity and disclaim any reliance upon advice by a non-client.
Authored by: Sharon D. Nelson Esq.
Sharon D. Nelson, Esq., is the President of Sensei Enterprises, Inc., a digital forensics, cybersecurity and information technology firm in Fairfax, Virginia. Ms. Nelson is the author of the noted electronic evidence blog, Ride the Lightning and is a co-host of the Legal Talk Network podcast series called “The Digital Edge: Lawyers and Technology” as well as “Digital Detectives.” She is a frequent author (eighteen books published by the ABA and hundreds of articles) and speaker on legal technology, cybersecurity and electronic evidence topics. She was the President of the Virginia State Bar June 2013 – June 2014 and a past President of the Fairfax Law Foundation and the Fairfax Bar Association. She may be reached at email@example.com