Ethics Complaint Tests Internet Marketing Method

Ethics Complaint Tests Internet Marketing Method

An ethics complaint looming over hundreds of attorneys nationwide will test the boundaries of lawyer advertising on the Internet. The complaint, filed with disciplinary authorities in 47 states — including Maryland —against 550 attorneys, targets not only the owner of Web sites that offer free consultations with attorneys, but all the lawyers who participate in the sites. The Web sites purport to copy the pay-per-click model used by Google Adwords and other advertising regimes that tie fees to performance. If a potential client contacts an attorney whose name is listed on one of the Web sites, the firm pays a fee to the sites' owner. The complaint contends there is nothing new about the business model — it's an old-fashioned fee for referral that violates the rules of professional conduct.
The complainant, Connecticut lawyer Zenas Zelotes, identified 17 Maryland lawyers in his complaint. Most appear to be solos or in small practices. Of those identified, just one — Paul G. Tolzman of LeViness, Tolzman & Hamilton — is in a firm that advertises heavily in other media. Tolzman declined to comment, saying he had not seen the complaint. The Office of Maryland Bar Counsel, as is its policy, would neither confirm nor deny receiving a complaint from Zelotes.
Clash of old and new
Zelotes' action, in addition to representing perhaps the largest legal ethics complaint in history, is being viewed as a significant step in reconciling 19th-century ethics rules with 21st-century technology. The Internet has expanded lawyer advertising beyond state and national borders. But this widespread use of the World Wide Web raises ethical issues. A major question prompted by Zelotes' complaint is whether the Web sites are strictly a medium of advertisement or a paid referral service. Advertisements that merely alert potential clients to a law firm's services are allowed under the Maryland Rules of Professional Conduct, said Abe Dash, who teaches professional responsibility at the University of Maryland School of Law. However, the rules would be breached if the Web sites actually refer would-be clients to particular attorneys and receive a fee from the firms in return, adds Dash, a professor emeritus at the school. "It's a toughie," Dash said when asked on which side of the advertisement/paid-referral line the Web sites fall. "It depends on exactly what they're doing. " The governing standard in Maryland is MRPC 7.2(c), he said. The rule states that "a lawyer shall not give anything of value to a person for recommending the lawyer's services. " An exception to the rule permits lawyers to "pay the reasonable cost of advertising. " In other words, Dash said, "if the [online] network is just listing your name, that's fine"; however, "you're not supposed to pay anyone for making a recommendation. " Dash, noting the fee paid by attorneys, said the Web sites do not appear to be a simple advertisement in which a lawyer's promotional materials are posted for a one-time price. Instead, the sites apparently direct potential clients to specific lawyers, who then pay the Web sites' owner if they are contacted. "You can't pay them for each client you get; then you're sharing fees. This to me is bordering on sharing fees. " The Maryland State Bar Association's Ethics Committee has not addressed the issue of whether such online fee arrangements violate ethical rules but plans to do so beginning this month, according to panel members.
The examination will start with the drafting of an opinion that will then be circulated among the committee before a final opinion is approved. The process could take months, members said. In the meantime, two Maryland attorneys mentioned in Zelotes' complaint say their relationship with the Web sites is not a breach of ethics but a valid advertising effort to reach more potential clients. "I view it as marketing," said Richard B. Rosenblatt, of the Law Offices of Richard B. Rosenblatt PC in Rockville. "They are able to reach people that I am unable to reach by my Web site. " Rosenblatt said he did his "due diligence" before signing on with the Web service. During his examination, Rosenblatt said he noticed many attorneys were using the service. "I just felt comfortable it was not an ethical violation," he said. Attorney Christopher M. Fascetta, also named in Zelotes' complaint, said his use of the Web service is not only ethical but helps people in need of legal services to find a lawyer. "It lets a lot of people get in touch with attorneys they wouldn't get in touch with," said Fascetta, of Christman & Fascetta LLC in Towson.
Territorial referrals
Zelotes' complaint alleges that several Web sites run by Chicago attorney Kevin Chern (including totalattorneys.com and totalbankruptcy.com) violate ABA Model Rule 7.2, which, like Maryland's rule, puts limits on payments for legal referrals. The Web sites offer consumers a free consultation with an attorney. Attorneys who participate in a Web site have an exclusive contract with Chern for their ZIP code. When a consumer contacts the Web site through an online form, the lawyer in that consumer's territory pays Chern a fee for the information. Chern claims this is a cooperative advertising arrangement permitted under professional rules, and attorneys are paying him for the cost of licensing the Web site and marketing costs. This is a "natural extension of marketing models that are ubiquitous across the Internet," Chern said. But according to the complaint, the Internet is just a smokescreen for old-style pay-to-play. "He's trying to say this just shows how wonderful the Internet is. That's a bunch of crap," said Zelotes, who filed the complaints after he was solicited to participate in the Web sites and read the contract for participating attorneys. Zelotes contends the fee, $65 per referral, has nothing to do with traffic. "You could get a million clicks and it has no correlation to the compensation paid," he said. Legal ethics experts expressed concern over the exclusive nature of the referrals. "Consumers are automatically going to be referred to one lawyer that basically owns that ZIP code," said Jim McCauley, ethics counsel for the Virginia State Bar. "The theory is you should be making referrals based on who is the best lawyer for that particular case," said Lawrence Fox, a partner with Drinker Biddle & Reath in Philadelphia and former chair of the ABA committee on ethics and professional responsibility. "If lawyers are not allowed entrée into the exclusive referral contract ... it would raise ethical whiskers. " Hearings ahead Chern, who said that more than a million consumers have submitted requests for free consultations through his various Web sites since 2005, denied he is operating legal referral sites, noting the disclaimers on the Web sites stating they are not law firms or legal referral services. The first decisions are expected to come out of Connecticut, where three judiciary panels have found probable cause for disciplinary hearings scheduled for November against five attorneys in the state. Mark Dubois, chief disciplinary counsel for the Connecticut judicial branch, the prosecutor in the case, suggested that even if the sites operate as described by Chern, pay-for-performance legal advertising has already been found by three local judiciary panels to violate professional rules similar to Maryland Rule 7.2. Dubois, who does not even own a cell phone, fields questions and complaints daily about ethical limits on lawyers' use of Internet sites, social media and other technology. "Some people argue the Internet is simply a tool by which people either comply with or break the [ethics] rules that have been around for a century. Others argue the Internet is a whole new area of social interaction requiring a new approach," he said. David Atkins, the attorney representing the five Connecticut lawyers, could not comment on the case. If Connecticut finds that the Web sites violate ethics rules, Zelotes predicted a domino effect in other states. If this form of Web site is allowed to proliferate, he predicted "disastrous repercussions" for the legal profession. "Everyone and their mama would be out harvesting contact information," he said.
Copyright 2009 Dolan Media Newswires
The Daily Record (Baltimore, MD)
Dolan Media Newswires