Can a bar association run an online lawyer referral database, and must participating lawyers certify that they carry malpractice insurance?

Plain-English summary

A voluntary bar association proposed launching an online attorney referral database, searchable by consumers, in which participating lawyers would attest that they are members in good standing and carry sufficient malpractice insurance, and would agree to a disclaimer stating that the database is informational only, that the operator does not endorse any listed attorney, and that the database is for personal use. The association asked four questions about compliance.

The committee answered as follows. First, lawyer referral services like the one proposed are not per se prohibited under the rules (citing RPC 7.3(a)(3)), provided the service acts reasonably and responsibly to ensure its activities are compatible with the participating lawyer's professional obligations, with reference to RPC 7.1, 7.2, 8.3, and 8.4. Second, whether a lawyer carries malpractice insurance may be a material fact for some clients choosing counsel (RPC 1.4, 7.2), and APR 26 (effective July 1, 2007) requires active members to disclose on their annual licensing form whether they maintain such insurance; the committee suggested making insurance a requirement, while noting Washington lawyers are not mandated to carry it, and cautioned that representing coverage that later proves insufficient might be construed as a misrepresentation. Third, no published RPC specifically governs disclaimers for referral databases; provided the attorney follows RPC 7.1 by being truthful and complete, and conforms to RPC 8.4(a), the disclaimer complies. Fourth, under RPC 8.4(a) it is misconduct to assist or induce another's rule violation, and RPC 8.3(a) sets reporting duties; because misrepresenting good standing or insurance is a violation, reasonable monitoring may be necessary to ensure subscribers are in good standing and can prove insurance as represented.

In practice

Under the Washington rules as they stood at the time of the opinion, the committee gave four interlocking answers rather than a single yes or no. The referral database is permissible in principle (RPC 7.3(a)(3)) as long as the operator keeps it compatible with participating lawyers' duties. On insurance, the committee did not require certification but treated it as advisable, anchoring its reasoning in RPC 1.4 and 7.2 (insurance can be a material fact) and the then-new APR 26 disclosure obligation, and warning that overstating coverage could later read as a misrepresentation. On the disclaimer, the committee declined to impose rules beyond RPC 7.1's truthful-and-complete standard and RPC 8.4(a). On verification, the committee tied the operator's responsibility to RPC 8.4(a) and the reporting duty in RPC 8.3(a), concluding that reasonable monitoring of subscribers' standing and insurance may be necessary.

Common questions

Q: Is an online lawyer referral database allowed under the Washington rules?

A: Yes, in principle. The committee said such services are not per se prohibited (RPC 7.3(a)(3)) if the service acts reasonably to keep its activities compatible with participating lawyers' professional obligations.

Q: Must participating lawyers certify they carry malpractice insurance?

A: The committee did not make it mandatory but called it advisable. It noted that coverage may be a material fact under RPC 1.4 and 7.2 and that APR 26 requires lawyers to disclose whether they carry insurance, while Washington does not require carrying it.

Q: What makes the disclaimer compliant?

A: Per the committee, no specific RPC governs such disclaimers; a disclaimer complies if the attorney is truthful and complete under RPC 7.1 and conforms to RPC 8.4(a).

Q: Is the database operator responsible for verifying members' good standing and insurance?

A: The committee said reasonable monitoring may be necessary, because under RPC 8.4(a) it is misconduct to assist another's violation and RPC 8.3(a) imposes reporting duties; misrepresenting good standing or insurance is itself a violation.

Background and rules framework

The opinion interpreted Washington RPC 7.1 (Model Rule 7.1, false or misleading communications), RPC 7.2(a) (Model Rule 7.2, advertising) and its Washington Comments 6 and 7 on legal service plans and referral services, RPC 7.3(a) (Model Rule 7.3, solicitation, including the carve-out for bona fide organizations), RPC 1.4 (Model Rule 1.4, communication), and RPC 8.3(a) and 8.4(a) (Model Rules 8.3 and 8.4, reporting and misconduct). It also relied on Washington APR 26's insurance-disclosure requirement and prior Informal Opinion 1956.

Citations and references

Rules of Professional Conduct:

• Model Rule 7.1 / Washington RPC 7.1 (false or misleading communications)
• Model Rule 7.2 / Washington RPC 7.2, 7.2(a) (advertising; legal service plans and referral services)
• Model Rule 7.3 / Washington RPC 7.3, 7.3(a) (solicitation; bona fide organization exception)
• Model Rule 1.4 / Washington RPC 1.4 (communication; material information for client decisions)
• Model Rule 8.4 / Washington RPC 8.4, 8.4(a), and RPC 8.3(a) (misconduct; reporting professional misconduct)

Other authorities:

• Washington APR 26 (annual disclosure of professional liability insurance, effective July 1, 2007)
• Washington Informal Opinion 1956

See also

• AL Ethics Op. 1991-43: a for-profit referral hotline
• AL Ethics Op. 1997-01: paying a national attorney-network fee

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=1615

Original opinion text

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

Advisory Opinion: 2171
Year Issued: 2007
RPC(s): RPC 7.1, 7.2(a), 7.3(a), 8.3, 8.4, 1.4, APR 26, 8.3(a), 8.4(a)
Subject: legal disclaimer proposed for lawyer referral database

Background:

The Committee received a letter from the head of XYZ Bar Association of Washington, aka, XYZLegal, seeking response to four questions relating to XYZLegal’s proposed legal directory service and proposed disclaimer.

XYZLegal intends to launch an on-line attorney referral database, accessible by those seeking XYZ or a “XYZ-friendly attorney.” Attorneys wishing to be part of the database must agree to the following XYZ terms:

“By checking the box above, you’re requesting to be listed in XYZLegal’s public online attorney database, searchable by consumers looking for a XYZ-friendly attorney. Further by checking the box, you are swearing or affirming (1) that you are an attorney in good standing of the Washington State Bar Association, (2) that you maintain sufficient professional malpractice insurance, and (3) that you understand and agree to the terms and conditions set forth below. Do not check this box if you are not an attorney or if you do not wish to be included in the online lawyer database.”

The same attorneys must agree to the following disclaimer:

By requesting inclusion in XYZLegal attorney database, the user understands and agrees to the following terms and conditions: (1) This database is for information purposes only. XYZLegal; XYZ Bar Association of Washington does not recommend or endorse any particular attorney contained in the database and no liability is assumed hereunder. (2) By submitting their information to XYZLegal, attorneys requesting inclusion in the lawyer database must affirm that they are a member in good standing of the Washington State Bar Association and are and will continue to be covered by professional malpractice insurance in an amount and of a nature sufficient to cover malpractice liability; (3) This database is for personal use only. The user of this database understands and agrees that the XYZLegal website and lawyer database may not be used for data mining, commercial or any non-personal purpose without prior written approval.

Analysis

Based upon the above, XYZ Bar Association submits four questions which I propose we respond to based upon the following analysis:

RPC 7.3(a) prohibits a lawyer from “directly or through a third person” soliciting “professional employment from a prospective client when a significant motive for the lawyer’s doing so is the lawyer’s pecuniary gain…”. The rule, however, does not prohibit a lawyer from participating in “public or charitable legal-service organizations or bona fide political, social, civic, fraternal, employee or trade organizations whose purposes include providing or recommending legal services to its members or beneficiaries.” 7.3 Comment 4 [Washington Revision].

RPC 7.1 states in relevant part:

A lawyer shall not make a false or misleading communication about the lawyer or the lawyer’s services. A communication is false or misleading if it contains a material misrepresentation of fact or law, or admits a fact necessary to make the statement considered as a whole not materially misleading.”

RPC 7.2(a) states in relevant part:

Subject to the requirements of Rules 7.1 and 7.3, a lawyer may advertise services through written, recorded or electronic communication…”

Comment 6 of RPC 7.2 states in relevant part:

(6) [Washington Revision] A legal service plan is a prepaid or group legal service plan or a similar delivery system that assists prospective clients to secure legal representation. "A legal referral service, on the other hand, is an organization that holds itself out to the public as a lawyer referral service. Such referral services are understood by lay persons to be consumer-orientated organizations that provide unbiased referrals to lawyers with appropriate experience in the subject matter of the representation and afford other client protections, such as complaint procedures or malpractice insurance requirements." (Emphasis added)

Comment 7 of RPC 7.2 cautions that:

(7) A lawyer who accepts assignments or referrals from a legal service plan or referrals from a lawyer referral service must act reasonably to assure that the activities of a plan or service are compatible with the lawyer’s professional obligations. See Rule 5.3. …advertising must not be false or misleading, as would be the case if the communications of a group advertising program or a group legal services plan would mislead prospective clients to think that it was a lawyer referral service sponsored by a state agency or bar association.

In addition to the RPC’s listed above, RPC 8.3 (Reporting Professional Conduct) and RPC 8.4 (Misconduct) should also be reviewed to avoid “facilitating conduct known to be outside the bounds of RPC 7.1 [See Informal Opinion 1956]. This committee has, in the past, considered other inquiries referencing lawyer referral services which can be accessed from the WSBA website under Ethics Opinions reference “Referral Services.”

Response:

In response to the four questions you propose, the Committee responds as follows:

1. Does the proposed legal directory comply with the Rules of Professional Conduct?

Response: Lawyer Referral Services and the participation of Lawyer Referral Services, such as you proposed, are not per se prohibited under the Rules of Professional Conduct (See RPC 7.3(a)(3)) provided the service acts reasonably and responsibly to ensure that its activities are compatible with the participating lawyer’s professional obligation and representation. RPC 7.1; 7.2; 8.3; 8.4.

2. Is it necessary for XYZLegal to also require its attorney members who have requested inclusion in the database to certify that they carry malpractice liability insurance? Is such a course of conduct advisable?

Response: Under the Rules of Professional Conduct, it is required that a lawyer give the client sufficient information regarding material fact to allow a client to make informed decisions when choosing representation. RPC 1.4; 7.2. Whether a lawyer maintains professional liability insurance may be a material fact for some individuals in hiring an attorney. 7.2 Comment 6. Effective July 1, 2007, APR 26, requires that all active members of the Washington State Bar Association disclose on his or her annual licensing form whether or not the lawyer maintains professional liability insurance. It is the Committee’s suggestion that malpractice liability insurance be a requirement although it’s not mandatory that lawyers licensed in Washington maintain malpractice liability insurance. The wording in the disclosure suggests that coverage is sufficient to cover all reasonable contingencies, and anything less from the attorney might be construed as a misrepresentation in the future should the amount of coverage be insufficient to meet a claim.

3. Does the proposed disclaimer comply with the Rules of Professional Conduct?

Response: There are no published specific requirements in the RPC’s addressing legal disclaimers as it relates to lawyer referral databases. Provided the attorney follows the directive of RPC 7.1, being truthful and complete in the disclosure, he or she would be in compliance with the RPC’s as it relates to representations made in the disclaimer. Disclosure must also conform to RPC 8.4(a) and in this regard, Informal Opinion 1956 should be reviewed.

4. Is XYZLegal responsible for making sure that the participating members are in fact in good standing and/or carry professional liability insurance?

Response: 8.4(a) states as follows:

“It is professional misconduct for a lawyer to: (a) violate or attempt to violate the Rules of Professional Conduct knowingly assist or induce another to do so, or do so through the act of another.

RPC 8.3(a) sets forth the reporting requirements of a lawyer who knows that another lawyer has violated the Rules of Professional Conduct. Representing that one is a member in good standing or has malpractice insurance when in fact he/she does not is a RPC violation. Self-regulation within the profession places upon its members a greater burden of monitoring the wrongful and unethical actions of its own. Failure to meet this obligation undermines the Association’s belief that lawyers should be able to self-regulate. Reasonable actions including monitoring may be necessarily to ensure that the attorney subscribers are in good standing with the Bar and have and can provide proof of insurance as represented in the disclosure.