Hello everyone and welcome to this JACPA Ethics Alert blog which will discuss the recent letter sent by Florida Chief Financial Officer (CFO) Jeff Atwater to current Florida Bar President Scott Hawkins in which he called for a complete ban on for-profit lawyer referral services (such as 1-800-ASK-GARY and 411-PAIN). The Florida Bar has also appointed a committee to review lawyer referral services and make recommendations for any changes, which could include a potential prohibition of all for-profit lawyer referral services.
According to media reports, in his November 14, 2011 letter, CFO Atwater states that the Department of Financial Services has been investigating for-profit referral services for several years to determine whether close ties among those referral services, lawyers and pain clinics have led to fraudulent over treatment of accident victims that drives up the cost of auto insurance. Atwater’s letter did not identify any lawyer referral services by name but stated that if the Bar does not prohibit lawyer referral services, the Florida Legislature should prohibit them by law.
According to Atwater, DFS “has received many confidential tips regarding the incestuous interactions between the participants in these referral services.” He said that he is “appalled by the fact that these individuals, disguised as legitimate referral services, have been able to prey on society for so long.” Atwater is also quoted in the St. Petersburg Times as stating that the for-profit referral service relationships set up a “quid pro quo environment” and lawyers might send clients to clinics associated with the referral service instead of other unaffiliated clinics.
For those of you who are not familiar with the Florida Bar Rules related to for-profit lawyer referral services (which are distinct from non-profit lawyer referral services operated by The Florida Bar and many local Bar associations), under Bar Rule 4-1.10, lawyers who use for-profit lawyer referral services are prohibited from using such services unless the referral service complies with all of the requirements of the rule including, inter alia, that the service does not violate the Bar advertising and solicitation rules, share fees with the lawyer, has or requires each lawyer to have a liability policy of at least $100,000.00, furnishes the Bar with quarterly reports with names and Bar numbers of all lawyers participating and names of all persons authorized to act on behalf of the service, uses only its legal name in all public communications, and responds to any Bar inquiry in writing within 15 days.
Bottom line: For-profit lawyer referral services (and alleged accident fraud schemes) have generated large amounts of media, Florida Bar and government attention and investigation recently and it will be interesting to see how it all plays out. Stay tuned…
…be careful out there!
As always, if you have any questions about this Ethics Alert or need assistance, analysis, and guidance regarding these or any other ethics, risk management, or other issues, please do not hesitate to contact me.
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