In its first ever formal advisory ethics opinion, the Indiana Supreme Court Disciplinary Commission addressed whether attorneys could use an online legal referral service in exchange for a marketing fee. Lawyer
The inaugural opinion found that using an online legal referral service could result in the violations of several ethics rules. Specifically, the Commission noted that the use of a legal referral service may violate Indian Rule of Professional Conduct 5.4(a), which forbids lawyers from splitting their fees with non-lawyers, especially when the referral service charges the lawyer a “marketing fee” every time the lawyers earns a fee.
The opinion was issued in response to the Commission’s observed trend in complaints filed against lawyers arising from the use of online legal referral services. In the opinion, the Commission concluded that a lawyer’s use of such a referral service would risk violations of several ethical rules.
In addition to improper fee splitting, the Commission noted that lawyers also risk violating Rule 5.4(c), which requires lawyers to maintain professional independence, by allowing the referral service to direct the lawyers’ work. Such a situation typically arises when the lawyer fails to conduct an actual consultation. Furthermore, the opinion states that the referral business model raises concerns with respect to Rule 1.2(c), which sets forth that a lawyer can limit his or her representation if it is reasonable to do so and the client gives informed consent. The Commission expressed concern that the referral service would fail to give the client full disclosure that is required for informed consent.
The Commission also advised that Rule 7.1, which governs communications concerning a lawyer’s services, may also be implicated if the referral service falsely inflates the abilities of the lawyers being referred. Lastly, the Commission cautioned that referral fees are not equivalent to advertising costs.
Read the full opinion here
