Ezel / Ethics Opinions / NYSBA
NYSBA 2012-01-13

Can a lawyer pay a marketing firm based on the number of clients it introduces?

Short answer: No. Under Rule 7.2, a lawyer may pay the reasonable cost of marketing, but may not tie a marketing firm's compensation to the number of potential or actual clients it introduces, because that gives the firm a stake in the volume of business.
Currency note: this opinion is from 2012
Subsequent statutory amendments, court decisions, or later opinions or rule amendments may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
Disclaimer: Advisory only. Not binding precedent.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official ethics opinion. The original opinion (linked at the bottom of this page) is the authoritative source for any reliance.

NY State Bar Ethics Opinion 902: Paying for Marketing Based on Contacts Developed

Short answer: A lawyer may not base compensation to a marketing firm on the number of potential or actual clients the firm introduces to the lawyer.

Disclaimer: This is an advisory ethics opinion. Advisory opinions are not binding; they interpret the New York State Bar Association's rules of professional conduct and are persuasive authority. This summary is for research purposes only and is not legal advice. Verify current rules before acting on any specific guidance.

About this page: The plain-English summary and Q&A below were written by Ezel based on the official opinion. We do not reproduce the opinion text on this page; follow the linked source for the official text, which controls.

View original opinion

Plain-English summary

A collection attorney proposed contracting with a marketing firm that would introduce the attorney to its network of doctors so the attorney could seek collection work from them. The attorney preferred not to pay a flat fee and asked whether compensation could instead be based on the contacts the firm developed (paragraph 1).

The committee held that Rule 7.2 permits a lawyer to pay the reasonable cost of advertising and marketing services, but not to compensate a marketer in a way tied to the number of clients introduced. Compensation keyed to the volume of business developed is improper because it gives the marketing firm a pecuniary interest in the success of the solicitation, which can lead to hard-sell tactics or other improprieties. The committee relied on its prior opinions barring payment for "leads" and commission-style or percentage-of-volume compensation (citing N.Y. State 779 and N.Y. State 565).

In practice

The opinion holds that, under New York Rule 7.2, a lawyer may pay for legitimate marketing services but may not structure the marketer's pay around the number of potential or actual clients it brings in. The committee made the controlling concern the marketer's pecuniary interest in the volume of business: compensation measured by contacts or clients developed effectively pays for clients and risks the hard-sell tactics the rule guards against. A flat or reasonable fixed cost for the marketing service itself is the permissible structure the opinion contrasts with the proposed per-contact arrangement.

Common questions

Q: Can I pay a marketing company per client or per lead it sends me?

A: No. The committee held a lawyer may not base compensation to a marketing firm on the number of potential or actual clients introduced, because that gives the firm a stake in the volume of business (paragraph 1; conclusion).

Q: Can I pay for marketing services at all?

A: Yes. Rule 7.2 permits paying the reasonable cost of advertising and marketing services; the problem is tying that pay to clients or contacts developed rather than to the service itself.

Q: Why does volume-based pay matter?

A: Because, per the opinions the committee cites, a commission or percentage based on volume gives the marketer a pecuniary interest in the success of the solicitation and may lead to hard-sell tactics or other improprieties (N.Y. State 565).

Background and rules framework

The opinion interprets New York Rule 7.2 (payment for recommending or marketing a lawyer's services), corresponding to ABA Model Rule 7.2. The rule allows paying the reasonable cost of advertising but not paying a person for channeling clients; the committee applied that line to a proposal to compensate a marketer by the contacts it produced.

Citations and references

Rules of Professional Conduct:

  • MR 7.2 / NY Rule 7.2: payment for advertising and marketing; bar on paying for client volume

Other opinions cited:

  • N.Y. State 779 (2004): improper to pay a marketing organization for bundles of "leads" to potential clients
  • N.Y. State 565 (1984): commission or percentage based on volume is improper; risks hard-sell tactics

See also

Source