Can a Utah lawyer pay a per-bid fee to an online service that forwards client requests so the lawyer can bid for the work?

Plain-English summary

Opinion 15-05 considers an internet forum service, described as akin to Angie's List, that lets consumers post a request for legal services in their area. The service is free to consumers; registered attorneys pay a nominal fee of roughly $3 to $5 each time they submit a bid, whether or not the bid wins. When a consumer posts a request, the consumer's first name and a short description go by email to attorneys who match the requested practice area and geographic radius, and the consumer receives the names and bids of the first five attorneys to respond, each bid including a price estimate, profile, message, and customer reviews.

The Committee concludes that paying the per-bid fee does not violate Rule 7.1 (communications about a lawyer's services), Rule 7.2 (advertising), or Rule 7.3 (direct contact with prospective clients). On Rule 7.2, the opinion treats the information the lawyer submits as permissible advertising and treats the nominal fee as paying the usual charges of a permissible advertising or lawyer-referral service, so long as the service does not "recommend," vet, or approve the bidding attorney but merely indicates the attorney is "available" and "interested." Rule 7.1 still applies to the attorney's own submissions and to any customer review sent with a bid, so those must not be false or misleading.

On Rule 7.3, the opinion concludes there is no improper solicitation because the attorney sends written materials rather than making in-person or real-time electronic contact, the consumer (not the lawyer) initiates the request, and the consumer decides whether to follow up. The opinion flags one caution: if the consumer includes a phone number in the initial request, an attorney who then places a phone call could run afoul of Rule 7.3's bar on real-time contact. Finally, because the consumer is a "prospective client" under Rule 1.18, the bidding attorney must not use or reveal the information except as Rule 1.9 would permit, and may face disqualification if accepting the matter would create a conflict under Rules 1.7, 1.9, 1.10, or 1.11.

In practice

Under this opinion, a Utah lawyer who pays the described nominal per-bid fee to participate in the internet forum service, under the Utah rules as they stood in 2015, does not violate Rules 7.1, 7.2, or 7.3 and does not violate Rule 1.18 merely by using the service. The opinion conditions that conclusion on two points: the service must not hold the attorney out as recommended, vetted, or approved (only as "available" and "interested"), and the attorney's own submissions and any accompanying customer reviews must not be false or misleading under Rule 7.1. Per the opinion, an attorney who receives a prospective client's phone number in the initial request may not place a real-time call without implicating Rule 7.3, and an attorney who learns matter information must screen for conflicts under Rules 1.7, 1.9, 1.10, and 1.11 because in some cases the winning bidder will be unable to take the representation once the parties' identities are known. Confirm the current text of Utah Rules 7.1, 7.2, 7.3, and 1.18 before relying on the specifics here.

Common questions

Q: Can a Utah lawyer pay a service a fee for each bid it lets the lawyer submit for legal work?

A: Yes. The opinion concludes that paying the nominal per-bid fee to the internet forum service does not violate Rules 7.1, 7.2, or 7.3, treating the fee as the usual charge of a permissible advertising or lawyer-referral service (paragraphs 2, 15, 16).

Q: Does paying the service count as paying for a referral, which Rule 7.2 prohibits?

A: Not as described. The opinion says the fee is permissible so long as the service does not "recommend," vet, or approve the attorney; if the service indicates the attorney has been vetted or approved, the attorney would violate Rule 7.2 (paragraph 15).

Q: Is sending a bid to a consumer improper solicitation under Rule 7.3?

A: No. The opinion reasons that the attorney sends written materials rather than making in-person or real-time electronic contact, and the consumer initiates the request, so Rule 7.3 is not violated; but an attorney may not call a phone number the consumer included in the request (paragraphs 17, 18).

Q: What duties does the lawyer owe the consumer who requested bids?

A: The consumer is a "prospective client" under Rule 1.18, so the bidding attorney must not use or reveal the information except as Rule 1.9 would permit and must check for conflicts under Rules 1.7, 1.9, 1.10, and 1.11 before accepting the matter (paragraphs 19, 20).

Background and rules framework

The opinion interprets the Utah Rules of Professional Conduct governing lawyer communications and prospective clients: Rule 7.1 (false or misleading communications about a lawyer's services, Model Rule 7.1), Rule 7.2 (advertising and paying others to recommend a lawyer, Model Rule 7.2), Rule 7.3 (direct contact with prospective clients, Model Rule 7.3), and Rule 1.18 (duties to a prospective client, Model Rule 1.18), with reference to Rule 1.9 (duties to former clients) and the conflict rules 1.7, 1.10, and 1.11. The analysis turns on whether the internet service "recommends" the attorney, whether the attorney's submissions are truthful, and whether the lawyer makes real-time contact versus sending written materials in response to a consumer-initiated request.

Citations and references

Rules of Professional Conduct:

• Model Rule 7.1 / Utah Rule 7.1 (communications concerning a lawyer's services)
• Model Rule 7.2 / Utah Rule 7.2 (advertising; paying others to recommend a lawyer)
• Model Rule 7.3 / Utah Rule 7.3 (direct contact with prospective clients)
• Model Rule 1.18 / Utah Rule 1.18 (duties to a prospective client)
• Model Rule 1.9 / Utah Rule 1.9 (duties to former clients)

Cases:

• Bates v. State Bar of Arizona, 433 U.S. 350 (1977), commercial-speech protection and risk of deceptive legal advertising
• Ohralik v. Ohio State Bar Ass'n, 436 U.S. 447 (1978), constitutionality of the ban on in-person solicitation for pecuniary gain
• In re Utah State Bar Petition, 647 P.2d 991 (Utah 1982), state interest in protecting the public from misleading advertising

Other opinions cited:

• Utah Ethics Advisory Opinion 14-04 (quoted on the commercial-speech standard, also citing Opinions 00-02 and 09-01)

See also

• Utah Ethics Op. 13-02: Paying for Referrals and Owning Referral Sources
• Utah Ethics Op. 04-05: Referrals to a Lawyer-Owned Services Cooperative
• Utah Ethics Op. 09-01: Testimonials and Dramatizations in Lawyer Advertising
• Utah Ethics Op. 97-03: Direct-Mail Solicitation of Mediation Services

Source

• Landing page: https://www.utahbar.org/ethics-opinions/2015-05/
• Original PDF: https://www.utahbar.org/wp-content/uploads/2022/12/2015-05.pdf

Original opinion text

Reproduced from the official source for research purposes. The two-column PDF has been reassembled into reading order by paragraph; the linked source is authoritative.

Opinion 15-05

Utah Ethics Opinion

Utah State Bar Ethics Advisory Opinion Committee

October 6, 2015

ISSUE

1. May an attorney pay an internet service company a nominal fee to bid on potential legal work? May an attorney seek clients through an internet business that provides the attorney with limited client information in order to permit the attorney to bid to provide the needed legal services?

OPINION

2. Payment of a nominal fee to the internet forum service provider described herein, thereby enabling the attorney to offer a bid for legal services to a potential client, does not violate: (a) Rule 7.1, Communications concerning a Lawyer's Services; (b) Rule 7.2, Advertising, or (c) Rule 7.3, Direct Contact with Prospective Clients. Using such an internet business to seek new clients does not violate Rule 1.18 or other rules of professional conduct provided the attorney does not undertake representation for which he has a conflict of interest and the attorney protects the confidentiality of the information received from the prospective client.

BACKGROUND

3. A new internet service provider website has emerged for Utah business market consumers, including potential clients who need and/or seek legal services. The website is an internet forum designed to help all consumers, obtain bids or quotes on various professional services, including legal services, in the geographic area where the potential consumer or client lives or where the potential services are needed. Professionals, including attorneys, may create a profile on the service website (free of charge both to the consumer and to the professional). These professionals may respond in writing to consumer requests for bids or quotes on proposed services. Consumers, including potential legal clients, are allowed to review the professionals/potential attorneys' submissions, such as attorney biographies, other client analysis of such attorney services, and attorney case summaries. The consumer/potential client may then leave comments or recommendations on the website for separate consumer access.

4. This internet forum service is akin to the popular Angie's List website, www.angieslist.com, which also allows consumers to find professional services the consumer either wants or requires in an identified geographic area. Yet a critical difference between Angie's List and the internet forum service provider described in this Opinion is that the Angie's List service charges consumers to become Angie's List "members" in order to take advantage of Angie's List services. In contrast, the internet service described in this Opinion is available cost-free to consumers. Instead, the internet service charges the professionals, including attorneys, for this internet service when the professionals submit bids to the consumer with respect to the consumer's requested service. In order for an attorney to submit a bid to the potential client for requested legal services, the attorney must pay a nominal fee of approximately $3.00 - $5.00 per bid to the internet service provider. The attorney must pay this fee for each bid, regardless of whether the bid actually results in any work for the consumer/client.

5. Any Utah lawyer can register on the internet forum service provider described herein and submit a resume and/or listing of attorney qualifications for designated legal services. The internet service confirms that the Utah State Bar has in fact licensed the bidding attorney. The attorney, who has registered with the internet service, selects a category of requests he/she would like to receive, such as tax litigation, contract law, criminal law, etc. The attorney also sets a travel geographic area to specify the maximum distance the professional would limit his/her services.

6. To secure an attorney service bid, the consumer/potential client first completes a form application on the internet, identifying the area of law and the type of service and providing a short narrative about the issue. The potential client is essentially requesting the internet service to provide via the internet the names of attorneys capable of providing the designated professional service, such as hypothetically "attorneys" who handle "taxation" matters. Potential clients' first names and requests for legal services are instantly transmitted by email to all attorneys who have registered with the internet service, and who match the requested service category and geographic area. The internet service then provides the consumer/potential client applicant the names and bids of the first five attorneys who have submitted bids. Each attorney's bid includes a price estimate, a business profile (possibly including links to the attorney's website), a personalized message, customer reviews and contact information. A customer/potential client's request is only active for twenty-four hours or until five professionals/attorneys have submitted bids, whichever comes first.

7. The customer/potential client information is contractually deemed a confidential communication to the bidding professional/potential attorney. The customer/potential client information submitted to a professional/potential attorney is not public information, consistent with the internet service contract between the internet service and the potential client. Hence, such information cannot lawfully be shared with anyone but the professional/potential attorney applicant who is invited to submit a bid.

8. After the potential client receives the bids from up to five attorneys, it is up to the potential client to take the next step. The potential client may undertake communication with one or all of the bidding attorneys, and may at that point share his complete name, further confidential information about the matter, and additional contact information including a telephone number. Any use of this information by anyone, except for the intended recipient professional/potential attorney as the potential client deems appropriate, is contractually prohibited. The internet service provider informs the professional/potential attorney that if he/she has received the potential client transmission in error, the professional/professional attorney should immediately reply to the sender and delete such information from the professional/potential attorney internet system.

9. After the bid, there may be no further communication from the potential client to the professional/ potential attorney bidding for the job. Alternatively, after the potential client initiates contact with an attorney, there may be back and forth communication until the client has decided to hire the attorney.

ANALYSIS

10. With respect to the internet forum service provider, and the potential attorney participation therein, the most relevant provisions of the Utah Rules of Professional Conduct ("URPC") are Rules 7.1, 7.2, 7.3 and 1.18. Rule 7.1, Communications Concerning a Lawyer's Services, prohibits "false or misleading communication" about a lawyer or a lawyer's services. Rule 7.2 (b), Advertising, prohibits giving "anything of value to a person for recommending the lawyer's services[, ]" and Rule 7.3(a) Direct Contact with Prospective Clients, prohibits a lawyer "in-person" and by "real-time electronic contact, " from soliciting "professional employment from a prospective client when a significant motive for the lawyer's doing so is the lawyer's pecuniary gain, " unless the lawyer participates "with a [separately owned] prepaid legal services plan."

11. The EOAC has frequently concluded in previously issued opinions that "[t]he U.S. Supreme Court has made it clear that public communication concerning a lawyer's services (including any for advertising) is commercial speech, enjoys First Amendment protection, and can be regulated only to further substantial state interests, and only in the least restrictive manner possible. The cardinal rule concerning all public communication about a lawyer and her services is that the communication not be false or misleading." Ethics Advisory Opinion No. 14-04 (also quoted in Ethics Advisory Opinion 00-02 and 09-01). Similarly, the Utah Supreme Court has found that "[t]he state obviously has a substantial and compelling interest in protecting the public from false, deceptive, or misleading advertising." In re Utah State Bar Petition, 647 P.2d 991, 993 (Utah 1982). Deceptive advertising in the legal profession poses a particular risk because "the public lacks sophistication concerning legal services, [and therefore] misstatements that might be overlooked or deemed unimportant in other advertising may be found quite inappropriate in legal advertising." Bates v. State of Arizona, 433 U.S. 350, 383 (1977).

12. With respect to the internet forum service provider for attorneys, as described above in detail, Rule 7.1 has application to applicant attorneys, but not to the internet forum service provider. That is because the internet forum service provider itself makes no representations to the public or to the consumer/potential clients except that "interested and available professionals" will send "custom quotes." The internet forum service simply facilitates attorney bids (including price quotes, biographies, and customer reviews) being sent to potential clients. However, if the internet service provider includes any false or misleading statements about the bidding attorneys, then Rule 7.1 will be violated by the attorney.

13. The potential attorney bids to a client for legal representation are not publicly available, but rather are available only to the potential client. Although Rule 7.1 "governs all communications about a lawyer's services, including advertising permitted by Rule 7.2[, ]" the Rule applies only to a "lawyer's communication" and/or "An advertisement that truthfully reports a lawyer's achievements on behalf of clients or former clients [that] may be misleading if presented so as to lead a reasonable person to form an unjustified expectation that the same results could be obtained for other clients in similar matters without reference to the specific factual and legal circumstances of each client's case." It is theoretically possible that a potential attorney's submission to the internet forum service provider could be misleading if the attorney's submitted resume or case summary were false or misleading. Similarly, it is possible that a customer review could be false or misleading if it were "presented so as to lead a reasonable person to form an unjustified expectation that the same results could be obtained for other clients in similar matters." URPC Rule 7.1 cmt. 3. When that customer review is sent with the attorney's bid, the lawyer will be seen to be making that communication under Rule 7.1. Yet there is no violation of Rule 7.1 by lawyer submission of such documents, again assuming they include no attorney misrepresentation.

14. Rule 7.2(a) provides that "Subject to the requirements of Rules 7.1 and 7.3, a lawyer may advertise services through written, recorded or electronic communication, including public media." Comment 2 to Rule 7.2 explains:

This Rule permits public dissemination of information concerning a lawyer's name or firm name, address and telephone number; the kinds of services the lawyer will undertake; the basis on which the lawyer's fees are determined, including prices for specific services and payment and credit arrangements; a lawyer's foreign language ability; names and references and, with their consent, names of clients regularly represented; and other information that might invite the attention of those seeking legal assistance.

Accordingly, the attorney information the Utah lawyer submits to the internet forum service provider precisely complies with the "Advertising" permissible by Rule 7.2.

15. Rule 7.2 further prohibits giving "anything of value to a person for recommending the lawyers' services" except to "pay the reasonable costs of advertisements or communications permitted by this Rule" or to "pay the usual charges of... a lawyer referral service." URPC Rule 7.2(b)(1) & (b)(2). Thus, if the internet service provider "recommends" a bidding attorney in any manner or indicates that the bidding attorney has been vetted or approved, then the attorney will be in violation of Rule 7.2. Provided the internet service provider simply indicates the bidding attorney is "available" and "interested, " Rule 7.2 is not violated.

16. Comment [5] to Rule 7.2, entitled Paying Others to Recommend a Lawyer, with respect to advertising, provides that "A lawyer may compensate employees, agents and vendors who are engaged to provide marketing or client-development services], such as publicists, public-relations personnel, business-development staff and website designers." Similarly, Comment [6] to Rule 7.2 defines a "lawyer referral service" as "an organization that holds itself out to the public to provide referrals to lawyers with appropriate experience in the subject matter of the representation." Hence, the minimum fee an attorney must pay the internet forum service provider, as described above, complies with ethically permissible advertising services or lawyer referral services available to attorneys.

17. Rule 7.3 (a) provides that "A lawyer shall not by in-person, live telephone or real-time electronic contact solicit professional employment from a prospective client when a significant motive for the lawyer's doing so is the lawyer's pecuniary gain, unless the person contacted (a)(1) is a lawyer; or (a)(2) has a family, close personal, or prior professional relationship with the lawyer." This ethical prohibition against lawyer solicitation was upheld as constitutional in Ohralik v. Ohio State Bar Ass'n, 436 U.S. 447, reh'g denied, 439 U.S. 883 (1978), where the Court stated:

Unlike a public advertisement, which simply provides information and leaves the recipient free to act upon it or not, in-person solicitation may exert pressure and often demands an immediate response without providing an opportunity for comparison or reflection. . . There is no opportunity for intervention or counter-education by agencies of the Bar, supervisory authorities, or persons close to the solicited individual.

Ohralik at 534.

18. With respect to the Utah internet forum service provider described herein, the attorney application and bid for a potential client does not violate Rule 7.3 for these reasons. First, the attorney does not communicate with the client by "in-person live telephone or real-time electronic contact" but submits a bid and other written materials that are forwarded to the client. Second, it is the client, not the lawyer, who has solicited attorney representation. Third, it is the client who initiates further conversation about the representation, including possibly by telephone, after receiving the attorneys' bids. The one caution is that the client may include a telephone number in the initial written account of the situation that is distributed to all qualified attorneys. In such a case, the attorney bidding for the client's business may not initiate a telephone call to the client without running afoul of Rule 7.3's prohibition of "real time ... contact."

19. The attorney's relationship with this potential client is also governed by Rule 1.18 Duties to Prospective Client, Utah Rules of Professional Conduct. This rule defines a "prospective client" as "a person who consults with a lawyer about the possibility of forming a client-lawyer relationship with respect to a matter." This rule applies whether or not the prospective client ultimately retains the attorney. Because the consumer soliciting bids will be a "prospective client, " the attorney bidder who learns information from that prospective client must not "use or reveal that information except as Rule 1.9 would permit with respect to a former client." URPC Rule 1.18(b). Similarly, an attorney bidder may not represent another client "with interests materially adverse to those of a prospective client in the same or a substantially related matter if the lawyer received information from the prospective client that could be significantly harmful to that person in the matter" with certain limited exceptions. URPC Rule 1.18(c). Consequently, it would be wise for the attorney submitting the bid to limit the information he receives from the prospective client.

20. At some point the prospective client must decide whether to retain the attorney. The attorney must also decide whether representation of this client will involve a "conflict of interest" in violation of Rule 1.7, Rule 1.9, Rule 1.10 or Rule 1.11. If there is no conflict of interest, the attorney could represent the client. Typically an attorney will screen for a conflict of interest using the names of the client and the opposing parties prior to any communication about the legal matter. Here, the attorney will learn something about the prospective client's legal matter before discovering the client's or the opposing party's names. In some cases the attorney who has submitted a winning bid will be unable to accept the representation once the attorney learns the identities of the parties, as there will be an impermissible conflict of interest.