Can a North Carolina lawyer join a commercial online service that matches prospective clients with lawyers and lets lawyers send offer messages?

Plain-English summary

A commercial website matches prospective clients with lawyers. A client posts an anonymous description of a legal problem; participating lawyers (who pay registration and annual fees) can view it and send offer messages with their qualifications; the client reviews offers, profiles, and ratings, then selects and contacts a lawyer. The company is not involved once a client-lawyer relationship forms, including in fees or payment. The opinion addresses whether a lawyer may participate, and how the company's satisfaction guarantee interacts with the fee-dispute rule.

The opinion concludes a lawyer may participate, provided there is no fee sharing with the company in violation of Rule 5.4(a) and the lawyer is responsible for the veracity of the company's representations about the lawyer, the lawyer's services, and the process by which lawyers' names reach users. The service has features of both a lawyer referral service (the company screens lawyers and matches clients) and a legal directory (it provides names and qualifications for the client to evaluate). A lawyer may participate in an online legal directory if the information is truthful (RPC 241), and may participate in a lawyer referral service on the conditions of Rule 7.2(d). The service does not satisfy all of those conditions: it is operated for a profit, charges clients a fee for priority service, and does not state how a list of all participating lawyers may be obtained.

Even so, the opinion concludes the failure to meet every Rule 7.2(d) condition does not bar participation, because the service is not strictly a referral service. Unlike the passive recipient of a referral, the user must evaluate the lawyers' offers and decide whom to contact, so the harm of a pure referral service (the service choosing the lawyer) is avoided. Participation remains subject to the other Rules: the lawyer may pay a proportionate share of the reasonable costs of operating the service but may not pay the company any portion or percentage of legal fees earned from clients obtained through it (Rule 5.4(a)), and the lawyer is responsible for the truthful content of the company's information about the lawyer (Rule 7.1; Rule 7.2, cmt. [7]) and may not participate if the company's representations about screening, qualifications, or matching are untruthful or misleading. On the company's satisfaction guarantee (which routes disputes to a customer representative and then voluntary arbitration, with the company paying the client up to a capped amount if the lawyer does not), the opinion concludes the guarantee may not interfere with the lawyer's duty under Rule 1.5(f) to notify the client of the State Bar's fee dispute resolution program and participate in good faith if the client requests; a duplicative procedure only benefits clients.

In practice

Under the North Carolina rules as they stood at the time of the opinion, the analysis turns on whether the service impermissibly shares fees or makes the lawyer responsible for untruthful representations, not on rigid compliance with every referral-service condition. The opinion holds that a lawyer may join a for-profit online matching service where the client selects the lawyer, so long as the lawyer pays only a proportionate share of costs and never a share of legal fees.

Per the opinion, the lawyer remains responsible for the truthfulness of the company's statements about the lawyer and the matching process, and the company's satisfaction guarantee cannot displace the lawyer's Rule 1.5(f) fee-dispute-resolution obligations.

Common questions

Q: Can a lawyer participate in an online service that matches clients with lawyers?

A: Yes. The opinion concludes a lawyer may participate, provided there is no fee sharing with the company and the lawyer is responsible for the truthfulness of the company's representations about the lawyer and the matching process.

Q: Does it matter that the service is run for profit and charges clients for priority service?

A: Not dispositively. The opinion concludes that, because the client (not the company) chooses the lawyer, the service is not strictly a referral service, so failing to meet every Rule 7.2(d) condition does not bar participation.

Q: How may the lawyer pay the company?

A: Only a proportionate share of the reasonable costs of operating the service. The opinion concludes the lawyer may not pay the company any portion or percentage of legal fees earned from clients obtained through the service (Rule 5.4(a)).

Q: What is the lawyer responsible for in the company's marketing?

A: The truthful content of any information the company provides about the lawyer and the lawyer's services, and the veracity of the company's claims about screening, qualifications, and matching; the lawyer may not participate if those are untruthful or misleading (Rule 7.1).

Q: Does the company's money-back guarantee replace the State Bar fee-dispute program?

A: No. The opinion concludes the guarantee may not interfere with the lawyer's Rule 1.5(f) duty to notify the client of the State Bar's fee dispute resolution program and participate in good faith if requested.

Background and rules framework

The opinion interprets Rule 5.4(a) (no sharing of legal fees with a nonlawyer, corresponding to Model Rule 5.4) and Rule 7.2 (advertising and lawyer referral services, including Rule 7.2(d)'s conditions and comment [7], corresponding to Model Rule 7.2), together with Rule 7.1 (truthful communications about services, corresponding to Model Rule 7.1) and Rule 1.5(f) (the fee-dispute-resolution duty, corresponding to Model Rule 1.5). It applies the prior North Carolina opinion RPC 241 on online legal directories.

Citations and references

Rules of Professional Conduct:

• MR 5.4 / NC Rule 5.4(a) (no fee sharing with a nonlawyer)
• MR 7.2 / NC Rule 7.2(d) (lawyer referral service conditions), cmt. [7]
• MR 7.1 / NC Rule 7.1 (truthful communications about services)
• MR 1.5 / NC Rule 1.5(f) (fee dispute resolution)

Other opinions cited:

• NC RPC 241: a lawyer may participate in an online legal directory if the information is truthful.

See also

• NC State Bar 2011 FEO 4: Participation in a Referral Arrangement
• NC State Bar 2013 FEO 10: Online Group Legal Advertising Using Territorial Exclusivity
• NC State Bar RPC 94: Private Lawyer Referral Service

Source

• Landing page: https://www.ncbar.gov/for-lawyers/ethics-and-governing-rules/ethics-opinions/opinions/2004-formal-ethics-opinion-1/

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Inquiry #1:

A commercial Internet company (the company) operates a website that matches prospective clients with lawyers. A prospective client logs onto the website where he registers and is given an identification number to preserve anonymity. The prospective client posts an explanation of his legal problem on the website and consents to contact from participating lawyers. There is no charge to the prospective client for the standard service but, for more individualized and faster service, there is a fee.

The company solicits lawyers to participate in its service. To participate, a lawyer must be licensed and in good standing with the regulatory agency of his state of licensure. A participating lawyer is charged a one-time registration fee that covers expenses for verifying credentials, technical system programming, and other set-up expenses. An annual fee is charged to each participating lawyer for ongoing administrative, system, and advertising expenses. The amount of the annual fee varies by lawyer based on a number of components, including the lawyer's current rates, areas of practice, geographic location, and number of years in practice.

Only participating lawyers can access the information posted by a prospective client on the website. A local participating lawyer who is interested in a posted case may list his qualifications and send the prospective client an offer message setting forth an explanation of the services he can provide and his qualifications. The prospective client can review offer messages from lawyers and learn more about these lawyers by reviewing the company's on-line lawyer profiles and consumer rating information. If a lawyer has a website, the prospective client may also visit it. Using this information, the prospective client selects a lawyer and contacts the lawyer at which time the prospective client reveals his identity.

If a client-lawyer relationship is formed between a participating lawyer and a user of the service, it is done without the participation of the company. The company does not get involved in the lawyer-client relationship or in related financial matters such as fees, retainers, invoicing, or payment.

May a lawyer participate in this service?

Opinion #1:

Yes, provided there is no fee sharing with the company in violation of Rule 5.4(a), and further provided the participating lawyer is responsible for the veracity of any representation made by the company about the lawyer or the lawyer's services or the process whereby lawyers' names are provided to a user.

This on-line service has aspects of both a lawyer referral service and a legal directory. On the one hand, the on-line service is like a lawyer referral service because the company purports to screen lawyers before allowing them to participate and to match a prospective client with suitable lawyers. On the other hand, it is like a legal directory because it provides a prospective client with the names of lawyers who are interested in handling his matter together with information about the lawyers' qualifications. The prospective client may do further research on the lawyers who send him offer messages. Using this information, the prospective client decides which lawyer to contact about representation.

A lawyer may participate in an on-line legal directory provided the information about the lawyer in the directory is truthful. RPC 241. A lawyer may also participate in a lawyer referral service subject to the following conditions set forth in Rule 7.2(d):

(1) the lawyer is professionally responsible for its operation including the use of a false, deceptive, or misleading name by the referral service;

(2) the referral service is not operated for a profit;

(3) the lawyer may pay to the lawyer referral service only a reasonable sum which represents a proportionate share of the referral service's administrative and advertising costs;

(4) the lawyer does not directly or indirectly receive anything of value other than legal fees earned from representation of clients referred by the service;

(5) employees of the referral service do not initiate contact with prospective clients and do not engage in live telephone or in-person solicitation of clients;

(6) the referral service does not collect any sums from clients or potential clients for use of the service; and

(7) all advertisements by the lawyer referral service shall: (A) state that a list of all participating lawyers will be mailed free of charge to members of the public upon request and state where such information may be obtained; and (B) explain the method by which the needs of the prospective client are matched with the qualifications of the on-line recommended lawyer.

It appears that the on-line service satisfies all of the conditions of Rule 7.2 except that it is operated for a profit, potential clients are charged a fee if they chose the priority service, and the website does not include a statement on how the names of all participating lawyers may be obtained.

Nevertheless, the company's on-line service is not strictly a referral service and failure to meet all of conditions set forth in Rule 7.2(d) should not prohibit a lawyer from participating. Unlike the passive recipient of a referral from a lawyer referral service, a user of the company's website must evaluate the information and offers he receives from potentially suitable lawyers and decide for himself which lawyer to contact. Thus, the potential harm to the consumer of a pure lawyer referral service is avoided because the company does not decide which lawyer is right for the client.

A lawyer's participation in on-line service is subject to the other requirements of the Rules. Notably, the prohibition on fee sharing with a non-lawyer must be observed. Although a participating lawyer may pay a proportionate share of the reasonable costs of operating the service, the lawyer may not pay the company any portion or percentage of legal fees earned from clients obtained through the service. Rule 5.4(a).

In addition, a participating lawyer is responsible for the truthful content of any information the company provides, via the Internet or otherwise, to prospective clients about the lawyer or the lawyer's services. Rule 7.1; Rule 7.2, cmt. [7]. The lawyer is also responsible for the veracity of any representations made by the company on the website or elsewhere about the screening and qualifications of the lawyers who participate in the service and the matching process and may not participate if such representations are untruthful or misleading.

Inquiry #2:

The company provides a satisfaction guarantee. If a dispute arises between the client and a lawyer engaged through the on-line service, a customer services representative from the company will try to resolve the problem. If this fails, the client and the lawyer will be directed to voluntary arbitration. If an arbitration judgment is awarded to the client, the company will pay up to $1000 ($5000 for priority service cases) to the client if the lawyer fails to pay.

Rule 1.5(f) requires a lawyer who has a fee dispute with a client to participate in the State Bar's program of fee dispute resolution. How does the guarantee relate to this requirement?

Opinion #2:

The guarantee may not interfere with a lawyer's compliance with the requirements of Rule 1.5(f) to notify a client of the State Bar's fee dispute resolution program and, if the client so requests, to participate in good faith. If the company's guarantee provides a duplicative dispute resolution procedure, it is only beneficial for clients.