On “Lawyer Referral Services”

One limitation on lawyer advertising, found in ABA Model Rule 7.2(b)(2) and the rules of nearly every state bar, is the prohibition on anything but bar-sanctioned “lawyer referral services.”

What’s a “lawyer referral service?”  It’s a service that refers consumers to lawyers.  Duh.

But why would that be a problem?  Attorneys have a right to advertise, after all.  How does a “lawyer referral service” differ from say, buying Google AdWords or banner advertising on a local news website?

To understand the basis of this disconnect – and that of many other problems with attorney advertising regulation – we have to go back to the Bars’ grudging acceptance of Bates v. Arizona, the 1977 decision in which the Supreme Court first found that attorneys have a right to advertise. Instead of scrapping the prohibition on unsanctioned “lawyer referral services” along with the rest of the advertising prohibitions that the Supreme Court found unconstitutional in Bates, the Bars just kept all of the prohibitions in place – but appended a little sotto voce exception allowing advertising.  So now, nearly 40 years on, attorneys have to parse the distinction between permitted advertising and prohibited “lawyer referral services.”

Unsurprisingly, this creates confusion.

Some attorneys and bar regulators consider a “lawyer referral service” to be any form of advertising in which the attorney pays for advertising on a per-lead or per-client basis.  If the attorney is paying the referring party for each client or potential client that is sent their way, it’s a referral program.  Which is prohibited, unless it’s non-profit and approved by the Bar.

This kind of rationale is one attorneys are well-known for: the exaltation of form over substance.  Sure, you can say the attorney is paying for each referral.  And sure, the bar rules still prohibit unsanctioned “lawyer referral services.”  So there’s that.

But go back to Bates, and there’s also this: attorneys have a first amendment right to advertise.  Paying for advertising on a per-lead or per-client basis is just a more efficient way of buying marketing.  How do we square that with prohibitions on lawyers participating in “lawyer referral services?”

A “lawyer referral service” can’t simply be whatever the bar says it is. The commercial speech doctrine tells us that restrictions on advertising must be narrowly-tailored to mitigate against real, non-speculative harms. What harm is being addressed by the prohibition on lawyer referral services?  Surely not the efficient deployment of legal marketing budgets.

Rather, as Kentucky Bar Ethics Opinion E-429 does a particularly good job of pointing out, the prohibition against lawyer referral services is intended to guard against consumer deception. Shady lawyer referral services operate by making the consumer believe that their legal issue is being vetted, and that they are being sent to the appropriate attorney for their needs – when in fact they are simply being sent to whichever attorney is next in the rotation, or has purchased the exclusive rights to all leads in their area. 1

Modern performance-based advertising programs may superficially look like referral programs (in that lawyers are paying per-referral or per-client), but they are missing, crucially, that which made the shady old lawyer referral programs a problem: consumer deception. Consumers who click on a Google AdWords ad or get connected to the first available attorney through Avvo Advisor aren’t being conned into thinking their cases are being screened and they are getting an attorney hand-picked for their specific needs. Rather, these consumers are simply responding to a form of attorney advertising that has tied the marketing fee much closer to actual performance.

Ultimately, the restriction on lawyer referral services could be safely stricken from the Rules of Professional Conduct, as the general prohibition on false and misleading advertising would cover any such practices that deceive consumers.  As it stands, this is a rule that simply acts as a drag on attorneys participating fully in performance-based marketing – which ultimately comes at a cost to the consumers that the advertising rules are intended to protect.

Notes:

  1. Which begs the question of why the bar’s own referral programs should pass muster, but that’s a question for another day.

One thought on “On “Lawyer Referral Services””

  1. Let’s also be clear about bar-sanctioned referral services — they don’t vet the clients very well, either. My local bar association’s referral service has no idea of the difference between a business/corporate lawyer and a business litigator.

    The other effect of the ban on referral services is that it inhibits the growth of some of these new lawyer-client matching services. While some states allow lawyers to pay a referral fee (even to non-lawyers, oh my Gawd!!), other states don’t allow any referral fees. Period. So these new services have to develop a revenue model to get around the patchwork quilt that is our medieval ethics system. Compounding the mess is the fact that some of these services are run by non-lawyers who have no knowledge of the ethical rules, and no interest in avoiding getting participating lawyers disbarred.

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