Can an Alabama lawyer pay to join a for-profit attorney referral hotline that runs TV ads and routes callers to the lawyer?

Plain-English summary

A lawyer was approached by "Attorney Hotline," a California referral association. It prepared TV ads run in a given market (such as Birmingham), with the Alabama version carrying the disclaimer and a participating attorney's or firm's name. Viewers were given an 800 number; calls were received in California and transmitted to the participating attorney, who then called the prospective client. The program (40 spots) cost $2,495, which the lawyer found was virtually identical to buying the same air time directly, with the Hotline receiving the 15% commission an advertising agency would be paid.

The Disciplinary Commission concluded that "Attorney Hotline" is, from all appearances, nothing more than a for-profit referral service, and Alabama lawyers cannot ethically participate in its program. The opinion quoted Rule 7.2(c): "A lawyer shall not give anything of value to a person for recommending the lawyer's services," while noting that lawyers may participate in not-for-profit lawyer referral programs such as the State Bar's. The Commission observed that the Hotline selects participating lawyers, the 800 number is directed to its offices, and it makes the referral; the participating lawyer pays the Hotline directly, and that payment is not just for scheduled TV air time because the Hotline provides other services. In substance, the lawyer is paying for the referrals generated, not merely for advertising, with referrals given exclusively to one lawyer or firm in a geographical area.

The opinion reasoned that the fact the Hotline may receive all its revenue from commissions paid by TV stations to advertising agencies does not alter the nature of the program. The Commission distinguished a true advertising cooperative of Alabama lawyers who pool resources and control the advertising process themselves, or a lawyer who simply pays an advertising agency to produce and air commercials. On the facts presented, the Hotline was not a referral service permitted under Rule 7.2(c).

Currency note

This opinion was issued in 1991, before the 2002 Ethics 2000 revisions to the ABA Model Rules of Professional Conduct and Alabama's subsequent amendments to its Rules of Professional Conduct. Lawyer-advertising and referral rules have changed substantially since then. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Can an Alabama lawyer participate in a for-profit referral hotline that advertises and routes callers?

A: Per the opinion, no. The Commission concluded the lawyer would be paying for the referrals the service generates, which gives something of value for recommending the lawyer's services in violation of Rule 7.2(c).

Q: What distinguishes this from permitted lawyer advertising?

A: The opinion contrasted the Hotline with a lawyer advertising cooperative that controls its own advertising, or simply paying an advertising agency to produce and air ads; those involve paying for advertising, not for referrals.

Q: Does it matter that the Hotline is paid through advertising-agency commissions?

A: No. The opinion concluded that the source of the Hotline's revenue does not alter the nature of the program as a for-profit referral service.

Background and rules framework

The opinion interprets Rule 7.2 (Model Rule 7.2, advertising), specifically Ala. R. Prof. C. 7.2(c)'s bar on giving anything of value for recommending the lawyer's services, distinguishing prohibited for-profit referral arrangements from permitted not-for-profit referral programs and ordinary advertising.

Citations and references

Rules of Professional Conduct:

• Model Rule 7.2 / Ala. R. Prof. C. 7.2(c) (giving value for recommending a lawyer's services)

See also

• AL Ethics Op. 1992-23: funding a solo practitioner's advertising in a referral arrangement
• AL Ethics Op. 1992-14: a single disclaimer for a page of lawyer ads

Source

• Landing page: https://www.alabar.org/office-of-general-counsel/formal-opinions/1991-43/
• Original PDF: https://www.alabar.org/assets/2019/02/RO-91-43.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain; the linked PDF is authoritative.

ETHICS OPINION

RO-91-43

QUESTION:

"The purpose of this letter is to request a disciplinary opinion on the following advertising situation.

I have been approached by the 'Attorney Hotline', which appears to be a referral association located in California. They have prepared ads for television, which they run in a given market, such as Birmingham. The ads are used on a nationwide basis. For Alabama, the ads would contain the disclaimer and an attorney's or firm's name either in wording across the bottom of the screen or at the end. A person is given an 800 number to call if they are interested in having an attorney call them regarding their particular problem. The calls are received in California and transmitted to the participating attorney, who then calls the client. The Attorney Hotline arranges with the local television station for these specific spots.

The cost for the program, which includes forty (40) spots on a local television station is $2,495. I have contacted the same local station and requested information regarding how much these spots would cost if they were arranged directly by the attorney. I was informed that the cost would be virtually identical to that being charged by the Attorney Hotline. The sales person at the channel said the Hotline would be paid the fifteen (15) percent commission that an advertising agency would be paid. He further stated that it would be against FCC regulations for the station to sell the air time for less to the agency than it does to an individual contacting them directly."

ANSWER:

"Attorney Hotline" is from all appearance nothing more than a for-profit referral service and, as such, Alabama lawyers cannot ethically participate in its program.

DISCUSSION:

Rule 7.2(c) states "A lawyer shall not give anything of value to a person for recommending the lawyer's services." However, lawyers can participate in not-for-profit lawyer referral programs, such as the one sponsored by the State Bar.

"Attorney Hotline" selects the lawyers that participate in its program. The 800 number is directed to their offices and they make the referral. We do not know if they screen calls in any fashion. Apparently, they produce and own the commercials. The participating lawyer makes payment directly to "Attorney Hotline". This payment is not just to cover scheduled TV air time because "Attorney Hotline" is providing other services besides the placing of advertising. The lawyer is really paying for the referrals generated and not just advertising. (Apparently, the referrals are given exclusively to a lawyer or firm in a particular geographical area.)

The fact that "Attorney Hotline" may receive all of its revenue from the commissions paid by television stations to advertising agencies does not really alter the concept of the program. This is contrasted from a true advertising cooperative of Alabama lawyers who would pool financial resources for more advertising impact and who control the advertising process themselves, or where a lawyer simply pays an advertising agency to produce and air commercials.

On the facts presented, "Attorney Hotline" is not a referral service that comes within our interpretation of what is permitted by Rule 7.2(c) of the Rules of Professional Conduct.

MLM/vf

11/18/91