Rule 7.2 Advertising
(a) Subject to the requirements of Rules 7.1 and 7.3, a lawyer may advertise services through written, recorded or electronic communication, including public media.
(b) A lawyer shall not give anything of value to a person for recommending the lawyer’s services except that a lawyer may
(1) pay the reasonable costs of advertisements or communications permitted by this Rule;
(2) pay the usual charges of a legal services plan or a not-for-profit or qualified lawyer referral service. A qualified lawyer referral service is a lawyer referral service that has been approved by an appropriate regulatory authority;
(3) pay for a law practice in accordance with Rule 1.17; and
(4) refer clients to another lawyer or a nonlawyer professional pursuant to an agreement not otherwise prohibited under these Rules that provides for the other person to refer clients or customers to the lawyer, if
(i) the reciprocal referral agreement is not exclusive, and
(ii) the client is informed of the existence and nature of the agreement.
(c) Any communication made pursuant to this Rule shall include the name and office address of at least one lawyer or law firm responsible for its content.
COMMENT
[1] To assist the public in learning about and obtaining legal services, lawyers should be allowed to make known their services not only through reputation but also through organized information campaigns in the form of advertising. Advertising involves an active quest for clients, contrary to the tradition that a lawyer should not seek clientele. However, the public's need to know about legal services can be fulfilled in part through advertising. This need is particularly acute in the case of persons of moderate means who have not made extensive use of legal services. The interest in expanding public information about legal services ought to prevail over tradition. Nevertheless, advertising by lawyers entails the risk of practices that are misleading or overreaching.
[2] This Rule permits public dissemination of information concerning a lawyer's name or firm name, address, email address, website, and telephone number; the kinds of services the lawyer will undertake; the basis on which the lawyer's fees are determined, including prices for specific services and payment and credit arrangements; a lawyer's foreign language ability; names of references and, with their consent, names of clients regularly represented; and other information that might invite the attention of those seeking legal assistance.
[3] Questions of effectiveness and taste in advertising are matters of speculation and subjective judgment. Some jurisdictions have had extensive prohibitions against television and other forms of advertising, against advertising going beyond specified facts about a lawyer, or against "undignified" advertising. Television, the Internet, and other forms of electronic communication are is now one of among the most powerful media for getting information to the public, particularly persons of low and moderate income; prohibiting television, Internet, and other forms of electronic advertising, therefore, would impede the flow of information about legal services to many sectors of the public. Limiting the information that may be advertised has a similar effect and assumes that the bar can accurately forecast the kind of information that the public would regard as relevant. Similarly, electronic media, such as the Internet, can be an important source of information about legal services, and lawful communication by electronic mail is permitted by this Rule. But see Rule 7.3(a) for the prohibition against the a solicitation of a prospective client through a real-time electronic exchange initiated by the lawyer. that is not initiated by the prospective client.
[4] Neither this Rule nor Rule 7.3 prohibits communications authorized by law, such as notice to members of a class in class action litigation.
Paying Others to Recommend a Lawyer
[5] Lawyers are not permitted to pay others for channeling professional work recommending the lawyer’s services. A communication contains a recommendation if it endorses or vouches for a lawyer’s credentials, abilities, competence, character, or other professional qualities. Paragraph (b)(1), however, allows a lawyer to pay for advertising and communications permitted by this Rule, including the costs of print directory listings, on-line directory listings, newspaper ads, television and radio airtime, domain-name registrations, sponsorship fees, banner ads, Internet-based advertisements, and group advertising. A lawyer may compensate employees, agents and vendors who are engaged to provide marketing or client development services, such as publicists, public-relations personnel, business-development staff and website designers. Moreover, a lawyer may pay others for generating client leads, such as Internet-based client leads, as long as the lead generator affirmatively states that it does not recommend the lawyer, any payment to the lead generator is consistent with Rules 1.5(e) (division of fees) and 5.4 (professional independence of the lawyer), and the lead generator’s communications are consistent with Rule 7.1 (communications concerning a lawyer’s services). To comply with Rule 7.1, the lawyer must ensure that the lead generator discloses that the lawyer has paid a fee in exchange for the lead and that the lead generator does not state or imply that it has analyzed a person’s legal problems when determining which lawyer should receive the referral. See also Rule 5.3 for the duties of lawyers and law firms with respect to the conduct of nonlawyers. who prepare marketing materials for them.
[6] A lawyer may pay the usual charges of a legal service plan or a not-for-profit or qualified lawyer referral service. A legal service plan is a prepaid or group legal service plan or a similar delivery system that assists people who seek prospective clients to secure legal representation. A lawyer referral service, on the other hand, is any organization that holds itself out to the public as a lawyer referral service. Such referral services are understood by laypersons to be consumer-oriented organizations that provide unbiased referrals to lawyers with appropriate experience in the subject matter of the representation and afford other client protections, such as complaint procedures or malpractice insurance requirements. Consequently, this Rule only permits a lawyer to pay the usual charges of a not-for-profit or qualified lawyer referral service. A qualified lawyer referral service is one that is approved by an appropriate regulatory authority as affording adequate protections for the public. prospective clients. See, e.g., the American Bar Association’s Model Supreme Court Rules Governing Lawyer Referral Services and Model Lawyer Referral and Information Service Quality Assurance Act (requiring that organizations that are identified as lawyer referral services (i) permit the participation of all lawyers who are licensed and eligible to practice in the jurisdiction and who meet reasonable objective eligibility requirements as may be established by the referral service for the protection of the public prospective clients; (ii) require each participating lawyer to carry reasonably adequate malpractice insurance; (iii) act reasonably to assess client satisfaction and address client complaints; and (iv) do not make referrals prospective clients to lawyers who own, operate or are employed by the referral service).
[7] A lawyer who accepts assignments or referrals from a legal service plan or referrals from a lawyer referral service must act reasonably to assure that the activities of the plan or service are compatible with the lawyer’s professional obligations. See Rule 5.3. Legal service plans and lawyer referral services may communicate with prospective clients, but such communication must be in conformity with these Rules. Thus, advertising must not be false or misleading, as would be the case if the communications of a group advertising program or a group legal services plan would mislead laypersons prospective clients to think that it was a lawyer referral service sponsored by a state agency or bar association. Nor could the lawyer allow in-person, telephonic, or real-time contacts that would violate Rule 7.3.
. . .
Explanation for the Commission's Proposal
Model Rule 7.2(b) currently prohibits a lawyer from giving anything of value for recommending the lawyer’s services. The Rule, however, creates exceptions that permit a lawyer to pay for the “reasonable costs” of advertising and the “usual charges” of non-profit or state-qualified lawyer referral services. In practical effect, the Rule has been interpreted to mean that a lawyer may divide client fees with non-profit or approved referral services, but may only pay set costs to advertising programs, such as the cost of a television commercial or a newspaper advertisement.
Prior to the Internet, this dichotomy between advertising and lawyer referral services was not difficult to understand. For example, payments to television stations to run a commercial or payments to a phone book company to run a Yellow Pages advertisement were clearly permissible, whereas sharing fees with a for-profit referral service was clearly impermissible.
The Internet has blurred these lines, and it is highly likely that continued technological innovation will make the lines even less clear. For example, new marketing methods have emerged, such as those provided by Legal Match, Total Attorneys, Groupon, and Martindale-Hubbell’s Lawyers.com that do not fit neatly into existing categories. Although the particular models vary, lawyers often pay these companies a fee for each client lead that the company generates. The existing version of Rule 7.2 does not clearly resolve whether these payments constitute an impermissible fee to “recommend” the lawyer’s services.[1]
These ambiguities also arise when lawyers use social networking sites to market their practices. For example, one firm recently distributed free t-shirts containing the law firm’s name; the firm then offered a chance to win a prize to everyone who posted a photo of themselves on Facebook that showed them wearing the firm’s t-shirt. The firm arguably gave people something “of value” (the shirt and the opportunity to win a prize) for “recommending the lawyer’s services” and thus might be viewed as running afoul of the existing version of Rule 7.2.
To determine how to treat new forms of marketing, the Commission examined the original purpose of the restrictions contained in Model Rule 7.2(b). One important goal was to prohibit payments to other people to develop clients in a manner that the lawyer was not permitted to employ. For example, the Rule prohibits a lawyer to pay “runners” to engage in in-person solicitation.
The legitimate concerns associated with the use of “runners,” however, are not apparent when lawyers use pay-per-lead services or other Internet-based marketing tools, such as those referenced above. In particular, those services typically do not use methods that run afoul of existing rules of professional conduct. For example, these services do not usually use in-person solicitation or employ false or misleading communications. If they did, lawyers could be disciplined for using those services. Accordingly, the Commission concluded that it should propose clarifying language regarding Rule 7.2’s scope.
A. The Commission’s Proposal
The Commission proposes to retain the general prohibition against paying others for recommending the lawyer’s services, but to clarify what that prohibition means. In particular, the Commission proposes to add new language to Comment [5] that defines the term “recommending.” This new definition would enable lawyers to identify more clearly the circumstances under which a payment for lead generation services, such as a “pay-per-click” and “pay-per-lead” services, are permissible. At the same time, it would retain existing prohibitions on paying nonlawyers for a recommendation.
The proposed Comment language also makes clear that, even if a lead generation service does not “recommend” the lawyer in the manner described above, the lawyer must not make any payments to a lead generator if the payment would violate Rules 1.5(e) (division of fees) and 5.4 (professional independence of the lawyer). Moreover, the proposed Comment language emphasizes that a lawyer must ensure that the lead generator’s communications to potential clients are consistent with Rule 7.1 (communications concerning a lawyer’s services). In particular, the lawyer must ensure that the lead generator discloses that the lawyer has paid a fee in exchange for the lead. Moreover, the lead generator should not state or imply that the lead generator has analyzed the potential client’s legal problems when determining which lawyer should receive the referral. These requirements are intended to prevent any misunderstanding as to the reason why the lead generator has identified a particular lawyer.
The new definition also would have clearer implications for other forms of Internet-based marketing methods. For example, the “free t-shirt” promotion mentioned above would likely be permissible because the individuals wearing the t-shirts could not reasonably be understood as a “recommendation” (i.e., it is not reasonably understood as an endorsement of the law firm’s credentials, abilities, or qualities).
B. Alternative Approaches Considered
The Commission considered alternative approaches to amending Rule 7.2 and paid particular attention to one that would have had more significant implications than the approach that the Commission is proposing. In particular, the Commission considered eliminating Rule 7.2(b)’s prohibition against paying nonlawyers for recommendations. Such a change would enable lawyers to pay for such recommendations as long as the nonlawyers’ methods are consistent with the lawyer’s own ethical obligations. For example, a lawyer under this alternative approach would be permitted to pay a for-profit referral service for recommending the lawyer, but only if the service does not employ any methods that the lawyer could not employ (e.g., it does not use misleading communications or engage in in-person solicitations) and only if any fee paid to the service is consistent with Rule 1.5(e) (i.e., the payment is for the recommendation and not a portion of the fee that the lawyer earned) and Rule 5.4 (the recommender does not have the ability to control the way in which the lawyer represents the client). The Commission learned that the District of Columbia has adopted a somewhat similar approach.[2]
This alternative approach would retain the historical restrictions on paying others to engage in unethical conduct (such as paying “runners” to engage in in-person solicitation), but free lawyers to use new and innovative forms of marketing. For example, for-profit lawyer referral services would be able to recommend to potential clients the lawyers who are particularly well-suited to provide the specific services that the potential clients are seeking, including offering a description of the lawyers’ qualifications and the cost of their services relative to other lawyers who offer similar services. Arguably, such a for-profit referral service would be able to match potential clients with appropriate lawyers more effectively and efficiently than not-for-profit models and thus make legal services more accessible and affordable.[3]
The Commission nevertheless decided to retain the restriction on paying others for a recommendation. Concerns were raised that, by removing the restriction, for-profit entities would develop undue influence over the channeling of professional work, even if they do not have the expertise to do so. Moreover, there was concern that such entities might wield inappropriate influence over lawyers who want to be recommended, despite the restrictions contained in Rule 5.4. For these reasons, the Commission’s current proposal retains the current prohibition against paying for a recommendation, but clarifies what counts as a “recommendation.”
[1] A related question is whether such fees would be considered an impermissible form of fee sharing under Rule 5.4. There is considerable case law and numerous ethics opinions that define a “legal fee” for purposes of Rule 5.4, and the Commission concluded that no additional guidance is necessary to address the issue. See, e.g., State Bar of Ariz. Ethics Op. 00-10 (2000); Va. State Bar Ethics Op. 1712 (1998); ABA Comm. on Ethics & Prof’l Responsibility, Formal Op. 88-356 (1988).
[2]D.C. Rules of Prof’l Conduct 7.1(b)(2) (“A lawyer shall not give anything of value to a person (other than the lawyer’s partner or employee) for recommending the lawyer’s services through in-person contact”); D.C. Bar Ethics Op. 342 (2007).
[3] The proposal also would be consistent with the Commission’s proposed approach to outsourcing under Rule 5.3. In particular, proposed Comment [4] to that Rule provides that, “[w]hen using such services outside the firm, a lawyer must make reasonable efforts to ensure that the services are provided in a manner that is compatible with the lawyer’s professional obligations.” The premise of that proposal is consistent with the idea that lawyers should be permitted to pay others to perform services on the lawyer’s behalf as long as the services are performed in a manner that is consistent with the lawyer’s own professional obligations.