Potential Florida Bar ethics advisory opinion 17-2 will address lawyer referral fees and private client matching services

Hello everyone and welcome to this Ethics Alert which will discuss recent decision by the Florida Bar’s Board of Governors (BOG) to consider a potential ethics advisory opinion to address the ethics issues surrounding lawyer referral fees and private client matching services.  The advisory opinion has not been drafted; however, the draft opinion will be identified as Proposed Advisory Opinion 17-2.

The Bar review began after a lawyer sent an ethics inquiry to The Florida Bar asking whether lawyers could participate with a private lawyer referral service which planned to charge a different set fee depending upon the type of case referred.  The lawyer referred to the system “as a ‘pay-per-lead’ structure.”

The lawyer’s inquiry was referred to the BOG and, at its July 21, 2017 meeting in Miami, the BOG unanimously approved the recommendation of the Board Review Committee on Professional Ethics (BRCPE) that it be directed to prepare an advisory opinion on the inquiry, specifically whether lawyer referral services can charge a fee per referral and impose different fees for different types of cases.  The BRCPE has authority to decline drafting an opinion and the BOG could also decide not to issue the opinion if it is drafted.

If an ethics advisory opinion is drafted, it will address the ethics issues created when online entities (such as AVVO) rolled out programs which attempt to match potential clients with lawyers and which make different payments depending on the type of case.  The opinion would also address the Bar rules related to advertising and referral services.  Lawyers and others will be able to comment on the issues before any opinion is drafted and/or approved.

The Florida Bar Rules have long prohibited lawyers from sharing fees with private referral services.  The Bar’s Standing Committee on Advertising (SCA) also rejected “pay-per-lead” plans on previous appeals and the BOG rejected an appeal from a referral service that proposed a payment of $300.00 to participating lawyers for each referred and accepted case in 2012.

Other jurisdictions have published ethics opinions addressing these issues or are in the process of reviewing them.  As I reported in a recent Ethics Alert blog, New York Ethics Opinion 1132 (published August 8, 2017) found that New York lawyers are prohibited from participating in AVVO’s client referral services.  The opinion found that lawyers who participate in AVVO’s client referral services (and any similar services) would violate the New York Bar rules since they involve AVVO’s improper “vouching” for (recommendation of) the lawyer, improper lawyer referral fees, and improper fee sharing with a non-lawyer.

As background, The Florida Bar filed a petition with proposed Bar rule amendments with the Florida Supreme Court in 2015 addressing, inter alia, referral services that offer both legal and medical or other non-legal services. Those proposed rules would have allowed lawyers to participate in those services, as long as clients were informed about potential conflicts, there was no quid pro quo requiring the lawyer to send a referred client for medical or other services offered by the referral agency, and the lawyer’s independent judgment was not affected.

The Florida Supreme Court published an opinion on September 24, 2015 which declined to implement the rule revisions and instructed the Bar to draft rules that “preclude Florida lawyers from accepting referrals from any lawyer referral service that is not owned or operated by a member of the Bar.”    That opinion is here: 9/24/15 SC Opinion

The Florida Bar then filed revised rule amendments designating private entities which match lawyers with potential clients as “qualified providers” and requiring those entities to comply with the Bar rules, including a required review of the advertisements. Participating lawyers would not have been required to carry malpractice insurance.

The Florida Supreme Court heard oral argument in April 2017 and then published an order dismissing the petition on May 3, 2017. That order is here: 5/3/17 SC Order.  The order stated: “In this case, the Bar proposes amendments to rule 4-7.22 that do not comply with the Court’s direction concerning lawyer referral services that are not owned or operated by a member of the Bar and that seek to expand the scope of the rule to include “matching services” and other similar services not currently regulated by the Bar.

The May 3, 2017 Order also stated that the dismissal was without prejudice “to allow the members of this Court to engage in informed discussions with the Bar and those who are in favor or against the proposed regulation of matching and other similar services. The Court lacks sufficient background information on such services and their regulation at this time.”  A meeting was held at the June 2017 Bar Annual Convention in Boca Raton to discuss the issues and was attended by Justices, Bar officials, and representatives of private referral services.

The Bar’s Notice of the proposed ethics advisory opinion was published in the August 15, 2017 issue of the Florida Bar News.  The Bar’s Notice is here: 8/15/17 Notice of Proposed advisory opinion 17-2.

According to the Notice:  “The Board Review Committee on Professional Ethics will consider adopting a proposed advisory opinion at the direction of The Florida Bar Board of Governors based on an inquiry by a member of The Florida Bar, at a meeting to be held on Thursday, December 7, 2017, from 1-3 p.m. at the Ritz-Carlton on Amelia Island.” and “comments from Florida Bar members are solicited on the issues presented. Comments must contain Proposed Advisory Opinion number 17-2, must clearly state the issues for the committee to consider, may offer suggestions for additional fee arrangements to be addressed by the proposed advisory opinion, and may include a proposed conclusion. Comments should be submitted to Elizabeth Clark Tarbert, Ethics Counsel, The Florida Bar, 651 E. Jefferson Street, Tallahassee 32399-2300, and must be postmarked no later than 30 days from the date of this publication.”

Bottom line:  If the ethics opinion is drafted and approved, Florida will join the growing list of jurisdictions addressing “marketing fees” taken from fees paid by private online entities to lawyers participating in client generation services.  This ethics opinion (like all ethics opinions) would be advisory and for guidance only.

Stay tuned and be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19, N., Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670



1 Comment

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One response to “Potential Florida Bar ethics advisory opinion 17-2 will address lawyer referral fees and private client matching services

  1. Pingback: Is Avvo’s Referral Service Ethical? Florida May Add its Voice to the Chorus. | Legal Ethics in Motion

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