Clicks, Clients, and Controversy: The Ethics of Paying for Client Leads

Several states are asking whether a lawyer can pay a non-lawyer for each Internet-based client lead that the non-lawyer generates.  Some state bar authorities, most notably Connecticut's, contend that such a payment is an unethical referral fee, whereas other states (e.g., Hawaii) have concluded that it is simply a fee for advertising, which the rules permit.

In my view, lead generation is no different from what you see on the left and right sides of this blog.  You are likely to see ads for lawyers and law firms.  If you click on one of those ads, Google (a non-lawyer) gets a small fee for generating a “lead,” and this blog gets a small fee.  Because Google (and this blog) do not get paid any additional money if the prospective client retains the lawyer, the fee is for advertising, which is ethical, and not for the referral, which would be unethical.   (Carolyn Elefant makes a similar point here.)

The conduct getting all of the attention is the business model of totalattorneys.com, which is slightly different from the Google ads, but not different in any meaningful sense.  An attorney (say a bankruptcy attorney) subscribes to Total Attorneys’ service, totalbankruptcy.com.  If someone comes to the website looking for a bankruptcy lawyer, Total Attorneys identifies the prospective client’s zip code and connects her to an attorney near where the prospective client lives.  That lawyer then pays a fee to Total Attorneys for the lead.  Critically, the lawyer pays the same fee regardless of whether the prospective client decides to hire the attorney. 

I don’t see how Total Attorney's lead generation revenue model is conceptually different from Google's pay-per-click model.  In both cases, a lawyer is paying a fee to a non-lawyer for each lead that the non-lawyer generates.  If Total Attorneys is doing something problematic, isn't Google doing the same thing? 

The Connecticut authorities try to distinguish Google (see pages 10 and 11) primarily on the grounds that the fee paid to Google is small, but I don't see anything in the rules that distinguishes between small referral fees and larger ones.  If there is no such distinction, Connecticut should necessarily prohibit attorneys from advertising through Google.  And if they start to do that, please don't tell them about our blog ads. “Ethics Blog Helps Lawyers Engage in Unethical Conduct” is a headline that we could do without.

Comments

[Alice Woolley]

Andy, given your analysis here I say 'bring it on'. I don't see how, given your analysis, this can be a referral not an advertisement. And the fact that the service calls itself "totalattorneys" rather than google doesn't seem to me to change anything materials.

Alice

[Carolyn Elefant]

I have updated with another post here - http://is.gd/4PEwc which focuses on the precise language of Rule 7.2 which bans lawyers from giving something of value for "recommendations" not referrals. Two very different things.

[Andrew Perlman]

Very nice point (and post), Carolyn. Thanks for the link.