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Opinion #174. Legal Services Websites
Issued by the Professional Ethics Commission
Date Issued: October 10, 2000
QUESTION
Prompted by an inquiry presented through Bar Counsel, we address several ethical issues that should be considered by an attorney in Maine who wishes to participate as an attorney to whom cases are referred through a certain legal services website, which we will refer to as ?WebSite.com? or ?WebSite? in short form. The issues we address concern false advertising, paid publicity, paid referrals and mandatory withdrawal.
WebSite.com is an on-line website through which consumers can locate lawyers to provide particular kinds of legal services. Through the use of WebSite?s home page, a person seeking legal representation (the ?User?) is provided with a menu of legal categories from which to choose. For each category of law, WebSite provides a brief summary of the scope of the representation to be provided and information concerning the cost of the representation. Once the User chooses a type of representation, the User is provided a list of attorneys in WebSite?s network of attorneys who are geographically close to the User and who are potentially available to represent the User. If the User wishes to expand the geographic base of attorneys, the User can do so through a click of the mouse. The User can also click on information supplied by each participating attorney to WebSite about the attorney?s background, qualifications and experience. The User, rather than WebSite, decides which attorney to choose for representation.
WebSite advertises on both television and radio. In addition, WebSite advertises on its own site. For example, in its current site, WebSite states: ?[WebSite] offers a revolutionary approach to accessing quality legal services. Select a pre-screened, network lawyer in your community to personally handle your legal need for a low, flat fee.? The site contains a ?flat fee menu,? listing base prices for various kinds of legal services. It also states that ?How we do it? is to provide ?Quality Lawyers, Internet Efficiency, Great Prices.?
As currently devised for use in Maine, WebSite charges the User an administrative fee pursuant to a ?User Agreement? for the use of its website in locating a lawyer. Once the User decides which lawyer ?Member? he or she wishes to retain for representation, the User and Member enter into a fee agreement, subject to the fee limitations imposed on the Member by WebSite. WebSite collects the lawyer?s fee in advance through a credit card transaction. The fee is held in a trust account maintained by WebSite and is not paid over to the Member until the legal work is completed. If the User expresses dissatisfaction with the Member?s legal work, however, the legal fee is refunded to the User, so long as WebSite?s ?Ombudsman? agrees that a refund is in order. The refund does not necessarily include filing fees, taxes or ?other costs incurred servicing the User?s legal need.? Whether the fee is paid to the Member or refunded to the User, WebSite takes no share of the legal fee. Rather, it acquires its revenue by charging the User directly and by collecting fees for advertising posted by non-lawyers on its website.
An attorney who wishes to be a Member of WebSite?s network of attorneys must meet certain minimum qualifications, and enter into a ?Member Agreement.? The minimum qualifications include five years? experience, good standing in the bar, no discipline, three peer references, an office in the jurisdiction, and legal malpractice insurance with minimum limits of $100,000 per occurrence and $300,000 in the aggregate. Through the Member Agreement, the attorney also agrees, among other things:
to contact the User within two business days of being notified of a potential matter, assuming the Member agrees to the representation;
to be available to accept matters requested by Users of the website;
to provide legal services pursuant to a defined scope of work as described on the site, in accordance with WebSite?s published price and rate sheet;
to the money back guarantee advertised by WebSite;
to maintain the minimum malpractice insurance coverage;
to devote up to 5% of the total hours expended on WebSite matters in each calendar year to unpaid public interest legal services, as directed by the WebSite?s Pro Bono Foundation;
not to withdraw from representation of a User without the User?s consent;
to indemnify and hold harmless WebSite from all claims, including attorneys fees, arising out of the Member?s actions;
that WebSite is not liable for any direct, indirect, incidental, special, or consequential damages of any kind; and
that WebSite will not be responsible for any loss or claim arising out of errors or omissions in its site or the Member?s use of the website.
Participation by a Maine attorney in WebSite?s network arrangement raises three questions under Maine Bar Rule 3.9 concerning false advertising, paid publicity and paid referrals. First, to what extent, if any, is an attorney who becomes a Member of WebSite accountable under Maine Bar Rule 3.9(a) for the accuracy of any public communications by WebSite? Second, to what extent, if any, does an attorney?s participation in WebSite as a Member implicate any of the requirements of Maine Bar Rule 3.9(d) applicable to paid advertising? Third, would a Maine attorney participating in WebSite violate the prohibitions of Maine Bar Rule 3.9(f)(2) regarding paid referrals by accepting clients obtained through WebSite?
The Member Agreement proposed by WebSite also raises a fourth ethical issue, namely, can a Maine attorney, consistent with Maine Bar Rule 3.5(b), make an unqualified agreement not to withdraw from representation of a User without the User?s consent.
OPINION
For the reasons expressed below, we answer these questions as follows. [1]
First, we conclude that, within the meaning of Bar Rule 3.9(a), an attorney-Member of WebSite uses, assists in or participates in the use of WebSite?s communications to the public that relate to or concern Members or the obtaining and provision of legal services from and by Members (as opposed to the non-legal advertisements also posted by WebSite on its Internet site). This means that an attorney cannot be a Member if the attorney knows that any of the pertinent communications by WebSite contains a false, fraudulent, misleading, or deceptive statement or claim as defined in Bar Rule 3.9(b).
Second, it is our opinion that the public communications by WebSite that relate to or concern Members, or the obtaining and provision of legal services from and by Members, is ?paid advertising? within the meaning of Bar Rule 3.9(d) and that, accordingly, to the extent such advertising is communicated to the public by use of radio, television or an Internet site, the attorney must approve and retain a prerecording of the advertising.
Third, we do not believe that a Maine lawyer who participates in WebSite under its present User fee structure would violate the provisions of Maine Bar Rule 3.9(f)(2) relating to paid referrals.
Fourth, in light of the provisions of Maine Bar Rule 3.5(b) concerning mandatory withdrawal, a Maine lawyer cannot make the unqualified agreement called for in WebSite?s Member Agreement that the lawyer will not withdraw from representation of a User without the User?s consent.
False Advertising
A Maine lawyer may not participate in any form of false advertising. Maine Bar Rule 3.9(a) provides:
(a) False Advertising Forbidden. A lawyer shall not, on behalf of the lawyer or any affiliated lawyer, knowingly use, or assist or participate in the use of, any form of public communication containing a false, fraudulent, misleading, or deceptive statement or claim. A public communication is any communication, through mass media, direct mail, or other means including professional cards, announcements, letterheads, office signs, and similar accouterments of a law practice. [2]
The preliminary question posed here is whether a lawyer, by virtue of being a Member, uses, assists, and/or participates in public communications made by WebSite to consumers. We answer this question in the affirmative. The essence of the arrangement between the Member and WebSite is that the Member gives WebSite the ability to furnish access to the Member?s services on agreed terms, while the Member, in turn, gets to be on a limited list of lawyers to whom Users are referred. The communications by WebSite to consumers are clearly intended to generate clients and to create expectations within those clients concerning both the Member and important aspects of the relationship between the Member and the client. In this important and dispositive sense, a lawyer who signs up as a Member therefore uses, assists, or participates in the use of public communications made by WebSite to potential and actual consumers of legal services. [3] Therefore, to the extent that a lawyer-Member of WebSite knows that any such communication by WebSite contains a false, fraudulent, misleading, or deceptive statement or claim, the lawyer violates Maine Bar Rule 3.9(a) if he or she continues to be a Member. [4]
Paid Publicity
The second consideration for lawyers is the impact of Maine Bar Rule 3.9(d) relating to paid publicity. The rule states:
(d) Paid Publicity. A lawyer shall not compensate or give anything of value to a representative of the press, radio, television, or other communication medium in anticipation of, or in return for, professional publicity in a news item. A paid advertisement must be identified as such unless it is apparent from the context that it is a paid advertisement. If a paid advertisement is communicated to the public by use of radio or television, it shall be prerecorded, approved for broadcast by the lawyer, and the lawyer shall retain the prerecording as approved for two years. If a public communication is transmitted through the mails, the lawyer shall retain a copy of such communication for two years following the mailing.
The application of Rule 3.9(d) depends on whether the lawyer who participates as a Member of WebSite has ?paid? for WebSite?s advertisements. ?Paid? means compensating or giving something of value in exchange for an advertisement. In contract law, it is equivalent to the giving of consideration. In the case of WebSite, Members incur a number of obligations that have value. These obligations include, among other things, agreements to handle legal matters for the flat fees imposed by WebSite or at certain hourly rates, to maintain minimum malpractice insurance coverage, to devote 5% of the Member?s total hours expended on WebSite matters to pro bono work as directed by WebSite, and to indemnify and hold harmless WebSite from claims arising from the Member?s actions. We do not opine whether any one of these obligations, standing alone, would rise to the level of a payment under Rule 3.9(d). We do believe, however, that collectively the promises mentioned above amount to the giving of substantial value and therefore a payment under the Rule. In singling out these obligations, we do not mean to suggest that none of the other bulleted promises set forth earlier in this Opinion could be deemed to constitute payment.
Since in our view a lawyer-Member is paying for WebSite?s ads, the obligations imposed by Rule 3.9(d) apply to the Member. WebSite?s radio and television ads must be prerecorded and approved for broadcast by the Member. The Member must retain the prerecording, as approved, for two years.
In our opinion, these prerecording, approval and retention requirements also apply to the legal services advertisements that WebSite places on its Internet site. We note that Rule 3.9(d), by its explicit terms, states that these requirements apply to paid advertisements communicated ?by use of radio or television.? In our opinion, however, the drafters intended these requirements to apply generally to public broadcast telecommunications, as opposed to print media, with radio and television being in existence at the time they wrote the rule. The Internet, as far as constituting a public accessible medium, did not exist at the time Rule 3.9(d) was promulgated. Yet today?s Internet, in our view, is similar to the public broadcast media that the drafters specifically addressed in Rule 3.9(d). The Internet is an advertiser?s mass marketplace, having the capacity to reach an audience as large as that served by radio and television. The public can now access the equivalent of radio and television broadcasts over the Internet. Just like radio and television, what one sees or hears on the Internet can evaporate once the communication has ended. Accordingly, the need for ?the creation of a probative base for the operation of Rule 3.9(a)? [5] exists. Because of these similarities between the Internet and radio and television, the precautionary measures prescribed by Rule 3.9(d), which were created to provide a means to enforce Rule 3.9(a), should be applied with equal vigor to WebSite?s Internet legal services advertising.
Paid Referral
We turn to Rule 3.9(f)(2) and address the question whether WebSite?s financial arrangement with Users and Members constitutes the compensation or giving of value by a lawyer to an organization to recommend or secure employment by a client. Rule 3.9(f)(2) states:
(2) A lawyer shall not compensate, or give anything of value to, a person or organization to recommend or secure employment by a client, or as a reward for having made a recommendation resulting in employment by a client, except that a lawyer may pay for public communication permitted by these rules and may pay the usual and reasonable fees or dues charged by a lawyer referral service operated, sponsored, or approved by a bar association.
As indicated above, it is our view that, under WebSite?s arrangement, a Member is giving something of value to WebSite in return for being listed on its site as one of its network attorneys. In Opinion No. 135 (1993), however, this Commission opined that paid lawyer advertising through the use of ?law lists? or ?directories? fit within the exception contained in the rule for ?public communication permitted by these rules.? The basis for our opinion was the historical treatment of such ?law lists? and ?directories? by the Bar at large, and the fact that the Bar, with equal consistency, has tolerated the practice of advertising and solicitation by lawyers through such means. As a result, a majority [6] of this Commission was persuaded that had the drafters of the Maine Bar Rules intended to prohibit the practice of lawyers paying for advertising in law lists and directories, they would have done so explicitly, which they did not.
We are of the opinion that, as currently devised, WebSite?s arrangement for listing its Members on its site is the functional equivalent of such a law list or directory and that a lawyer?s use of it for that purpose does not violate Rule 3.9(f)(2). We note that WebSite does not recommend any specific lawyer to a User. Rather, it provides the User with a list of lawyers who do work in the area of the law of interest to the User and who are in geographic proximity to the User. If the User wishes to expand the list of attorneys to a larger geographic area, the User can. The User is not ?steered? by WebSite to any particular lawyer, but makes his or her own decision.
Mandatory Withdrawal
Under WebSite?s proposed Member Agreement, a Member attorney must agree that the attorney ?shall not withdraw from representation? of a User who becomes an ?Eligible Client? [7] ?until he or she has . . . obtained Eligible Client?s consent ??
In our opinion, a Maine lawyer cannot make such an unconditional agreement consistent with Maine Bar Rule 3.5(b). [8] This follows from the fact that there are certain situations under Rule 3.5(b) where withdrawal is mandatory. For example, a lawyer must withdraw from representation if the lawyer knows or should know that his or her continued employment would result in a violation of the Maine Bar Rules. Since withdrawal is mandatory in this and the other situations outlined in Rule 3.5(b), a lawyer cannot agree under all circumstances that he or she will not withdraw without the client?s consent.
DISSENTS
Partial Dissent by One Member
This Member of the Commission dissents from that portion of the Commission?s opinion that pertains to paid referrals under Rule 3.9(f)(2). Although the circumstances are less egregious than those described in Opinion 135 with respect to the Foreclosure Network, the arrangement between the WebSite and its members nevertheless constitutes a ?recommendation (for) employment? which violates the rule for the reasons expressed in the dissent to that opinion.
In Opinion 135, the majority relied heavily on the fact that law lists had for years been recognized as an exception to the rule that attorneys could not ethically pay others to recommend their employment. Obviously, no argument based on the historic tolerance of ?approved? law lists can be made with respect to the Internet. For this reason also, therefore, Opinion 135 does not support the conclusion of the majority that Rule 3.9(f)(2) is not violated.
Although WebSite?s current practice does not comply with Rule 3.9(f)(2), it would appear that it could bring itself within the rule by making minor changes in its advertising. The rule is only violated if a person or organization ?recommend(s)? the employment of an attorney. Thus, if WebSite were to eliminate references in its advertising such as that it had ?pre-screened? its attorneys and that it is providing ?quality legal services,? its law list could become a neutral ?public communication? permitted by the rule.
This Member also joins in the following partial dissent of another Member.
Partial Dissent by Another Member
This Member joins in the well-reasoned opinion as a whole except for the conclusion that the prerecording, approval, and retention requirements of Rule 3.9(d) apply to the legal service's advertisements that appear on Website even to the extent that they are not readily viewable on a television.
Rule 3.9 generally applies by its terms to all forms of public communication. The first sentence of Rule 3.9(d), similarly, expressly applies to all forms of communication media. By contrast, the portion of the rule that imposes the prerecording, approval, and retention requirements expressly applies only to communications to the public through the use of radio and television. Thus, for example, the drafters excluded from the reach of these requirements advertisements on buses, advertisements in event brochures and programs, and oral testimonials delivered at live events and conferences.
Importantly for present purposes, in defining what media would be subject to the three requirements, the drafters chose to use a list of specific media, rather than a description of media characteristics, or a general statement of attributes (e.g., "any media which by its nature does not leave a clear record of what the ad was") followed by a nonexclusive listing of examples (e.g., "such as radio and television"). This latter, more open-ended approach to defining subject matter under the rules was not unknown to the drafters, and is in fact used in Rule 3.9(b). In short, if the drafters of the Rule had wanted to include all media like television and radio (the essential premise of the majority's reasoning), they could have done so, and they knew how to do so.
Given the language and structure of the Rule in question, this Member is therefore particularly reluctant to rest an opinion upon the conclusion, reached by the majority, that the drafters would have included the Internet in the exclusive listing of media subject to the prerecording, approval and retention requirements had they considered the issue on the basis of what is now known. Several additional considerations reinforce this reluctance.
First, it is not necessarily obvious that the drafters would have reasoned in the manner that the majority presumes. Differences in the context and focus with which a user searches out and comes into contact with an Internet site, as opposed to a television ad, might have been deemed dispositive. Similarly, the fact that such a user might make a record of the Internet ad on his or her own computer might have been seen as warranting different treatment. Alternatively, the drafters might have decided to rethink the rule altogether, reasoning that the slim benefits of the requirements are less needed today in view of the increased ability of users and enforcers to record or otherwise prove the content of ads on all media given the prevalence of VCR's and the digitalized streaming of all forms of electronic media across computer networks. In short, if we were to ask the "what if" hypothetical, then the question we would ask is not, "What would the drafters have done in 1990 or 1994 had they considered the possibilities of the Internet?" Rather, we would ask, "What would the drafters have done if they had considered the entire state of affairs and technologies as they now exist?" We do not know, and we are not the rules committee.
Second, the pertinent requirements do not play a sufficiently integral role in the overall protection of the public and clients so as to create a strong need to stretch the language of the rule beyond what one can fairly say is written. The requirements in question do not define or in any way address conduct that might be characterized as malum in se. Rather, they are essentially administrative rules, presumably intended to enhance the ability to prove wrongdoing in advertising when it occurs. There is not, in short, a conflict between plain language and central purpose of the type that might allow a body charged with interpreting ethical rules to go so far in saying that the rules must be applied not as written, but as they would have been written. Instead, this is an area in which lawyers should have some reasonable assurance that they can tell what they are supposed to do by reading the rules as they are written.
For the foregoing reasons, this Member respectfully dissents from only that portion of the majority opinion that holds that the recording, approval, and retention requirements of Rule 3.9(d) apply to the legal service's advertisements that appear on Website even to the extent that they are not readily viewable on a television.
Footnotes
[1] Nothing in this opinion should be read as indicating that there is anything ethically wrong with the idea of participating in a legal services website or using the Internet in other ways to match clients with lawyers. Indeed, the Internet offers many possibilities for improving access to legal services in countless ways. We stress, however, that when lawyers use this as well as any other means for marketing their services, they remain responsible for any transgressions of the ethics rules arising out of their chosen marketing method and the public communications associated therewith.
[2] Rule 3.9(b) defines false advertising as follows:
(b) False Advertising Defined. Without limitation, a false, fraudulent, misleading, or deceptive statement or claim includes a statement or claim that:
(1) Contains a material misrepresentation of fact or law;
(2) Omits to state any material fact necessary to make the statement, in the light of all circumstances, not misleading;
(3) Is intended or is likely to create an unjustified expectation;
(4) Violates Rule 3.8;
(5) Is intended, or is likely, to convey the impression that the lawyer is in a position to influence improperly any court, tribunal, or other public body or official; or
(6) Contains a representation or implication that is likely to cause an ordinary prudent person to misunderstand or be deceived thereby, or fails to contain reasonable warnings or disclaimers necessary to make the representation or implication not deceptive.
[3] We are aware that WebSite also runs paid advertising by other vendors for their products and services. Our opinion today is limited to communications by WebSite that relate to or concern Members or the obtaining and provision of legal services from and by Members.
[4] We note, as an example of what prospective Members should pay attention to, that WebSite currently tells the public that there is a ?Money-Back Guarantee,? yet attorneys fees and costs are not automatically refunded in the event of User dissatisfaction. Rather, a WebSite Ombudsman must agree that the User has reasonable grounds to be dissatisfied with the quality, rather than the result, of the legal services rendered and the refund does not necessarily include filing fees, taxes ?or other costs incurred servicing the User?s legal need.? Moreover, under the WebSite User Agreement, it is not clear that the User would be entitled to a refund of the ?User fee? under any circumstances. At best, any refund of the User fee is discretionary with WebSite. As another example, WebSite previously represented to the User that the Member attorneys were ?Approved? when in fact there was no process of approval beyond the minimum requirements to become a Member. We understand that a recent revision deleted the word ?Approved? from the site.
[5] See Reporter?s Notes to Maine Bar Rule 3.
[6] Two members of the Commission dissented from the opinion.
[7] A User becomes an Eligible Client after the User selects an Attorney from a list of potentially available WebSite Members, purchases a legal service through a credit card transaction, and responds to a series of on-line questions relevant to the selected legal service.
[8] Maine Bar Rule 3.5(b) provides:
(b) Mandatory Withdrawal.
(1) If a lawyer knows, or should know, that the lawyer or a lawyer in the lawyer's firm is likely or ought to be called as a witness in litigation concerning the subject matter of the lawyer's employment, the lawyer and the lawyer's firm shall withdraw from representation at the trial unless the court otherwise orders. This rule does not apply to situations in which the lawyer would not be precluded from accepting employment under Rule 3.4(g)(1)(i).
(2) A lawyer representing a client before a tribunal, with its permission if required by its rules, shall withdraw from employment, and a lawyer representing a client in other matters shall withdraw from employment if:
(i) The lawyer knows, or should know, that the client is bringing the legal action, conducting the defense, or asserting a position in the litigation, or is otherwise having steps taken, merely for the purpose of harassing or maliciously injuring any person;
(ii) The lawyer knows, or should know, that the lawyer's continued employment will result in violation of these Rules;
(iii) The lawyer's mental or physical condition renders it unreasonably difficult for the lawyer to carry out the employment effectively; or
(iv) The lawyer is discharged by the client.
