Friday, December 6, 2019

California Appellate Court finds that operates as a referral service

Long time readers of this blog know that one of the most important topics of discussion over the last couple of years has been whether it would be unethical for lawyers to share fees with internet “lead generators” and other services that seek to match people looking for legal services with lawyers who are available to provide those services.

Part of that discussion is based on the application of rules that ban lawyers from providing “anything of value” to someone as compensation for recommending the lawyer’s services, such as Model Rule MR 7.2(b), a version of which has been adopted in almost all jurisdictions.

For this reason, “lead generators” do not want to be considered to be “referral services.”  And this is why a recent opinion from an appellate court in California called Jackson v. is important (available here).

In this case, LegalMatch, an online company that connects people seeking legal representation with lawyers who pay a subscription, sued attorney Dorian Jackson after the attorney allegedly failed to pay his service subscription fees. In response, Jackson alleged the company was operating as an uncertified lawyer referral service, which would make it improper for the attorney to pay the fees.

The trial court found for the plaintiff LegalMatch, but the court of appeals reversed, thus preventing LegalMatch from being able to recover its fees and, also probably undermining LegalMatch’s ability to argue that is not a lawyer referral service in other states.

The opinion has re-generated an interest debate among the members of the Association of Professional Responsibility Lawyers, many of whom have expressed opposition to the type of ban imposed by rules like Model Rule 7.2 and support for the proposition that lawyers should be allowed to pay to participate in for-profit lawyer referral services.

California Legal Ethics has a comment on the case here.

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