Philadelphia law firms files complaint against out of town firm arguing false advertising and unfair competition

If you watch any TV, you have seen commercials of firms announcing they are available to represent client suffering from any number of injuries.  But if you notice closely on the very small print at the end of the commercial you'd notice a disclaimer saying that the firm is only licensed in certain states which often does not include the state in which the commercial is airing.  When contacted by potential clients from these states, the firms typically will refer the case to a lawyer licensed in that state and share the fee.

Obviously, lawyers are not allowed to represent clients in a state in which the lawyers are not admitted.  Lawyers are also not allowed to get fees for merely referring cases to other lawyers.  But lawyers are allowed to share fees with other lawyers under certain circumstances.

Yet, is the practice of purposely advertising in a jurisdiction one is not admitted to a violation of the rules?  

Rosenbaum & Associates, a Philadelphia personal injury law firm, thinks so.  It  recently filed a complaint against Morgan & Morgan, a Florida-based personal injury law firm, alleging that Morgan & Morgan falsely advertises that it represents clients in the Philadelphia area, when in fact Morgan allegedly employs only one attorney in Philadelphia with “little or no experience in handling personal injury matters.”  According to Rosenbaum, Morgan & Morgan refers nearly all of its cases to another law firm in violation of a rule that prohibits advertising that is “a pretext to refer cases obtained from advertising to other lawyers.”

For more on the story go here.  To read the complaint go here.

Not surprisingly, Rosenbaum's complaint is based on the fact that has experienced a decline in influx of new clients, which it attributes to Morgan & Morgan’s misleading advertisements.  The question is whether the decline is the result of unethical or illegal conduct or just the result of economic competition.  Is the Morgan law firm just better at marketing its services?  Is it just smarter at taking advantage of what the rules allow it to do? 

It will be interesting to see how the court addresses these questions.