Disbar the Connecticut 5

No, not really. I don’t care whether they get disbarred or let off.

A lawyer can’t pay a nonlawyer for a referral. This is an uncontroversial proposition. In Connecticut, paying a nonlawyer for a referral can even be a felony. So when five Connecticut lawyers signed on to pay totalbankruptcy.com $65 per referral, they shouldn’t have been terribly surprised to find themselves the subjects of a Memorandum of Fact and Law by Disciplinary Counsel (via Simple Justice).

TotalBankruptcy.com, in its bottom-of-the-page low-contrast disclaimer, calls itself a “cooperative advertising website”—a claim handily dispensed of by the Disciplinary Counsel:

This $65 per contact price is fixed, and not contingent on the number of attorneys “sponsoring” Total Bankruptcy, distinguishing it from a cooperative advertising model.

Saying it in a disclaimer doesn’t make it true. Lawyers know that. And Total Bankruptcy’s website sure looks, to the desperate-by-definition potential client seeking bankruptcy, like a referral site if not a full-blown law firm. Disclaimer notwithstanding, it is designed, I would argue, to look like a referral site.

Boosters of online marketing (like Carolyn Elefant) are up in arms:

If the bar wants to prohibit TotalBankruptcy as unethical so be it, as long as it does so prospectively.

(Carolyn also analogizes TotalBankruptcy to Google’s pay-per-click. She quotes a small part of the Disciplinary Counsel’s rationale for distinguishing Total Bankruptcy from pay-per-click, but leaves out the meat of it as well as a crucial word in a key sentence, so that it appears in her post that the Disciplinary Counsel is just haggling over the price. This is far from the truth.)

Carolyn’s indignation is misplaced. If the bar is correct that Total Bankruptcy is in fact an unauthorized referral system in violation of the rules, then this should come as no surprise to the lawyers disciplined: they were, after all, paying to have cases steered toward them, and only toward them. Total Bankruptcy was serving the role of Ollie’s cabdriver; I doubt that Ollie claimed surprise when he got indicted because the law doesn’t specifically forbid barratry by cab drivers.

We don’t get a free bite at the apple every time the next shiny place to advertise comes around just because it’s not explicitly forbidden; it’s our responsibility as lawyers to know whether their advertising passes muster or not, and to avoid advertising that might violate the rules. Being dazzled by “Web 2.0” bullshit is not, and should not be, a defense to a claim of unethical conduct by a lawyer. As Eric Turkewitz first said (and I shamelessly stole):

outsourcing marketing = outsourcing ethics

When it comes to marketing, let the buyer beware.

1 Comment

  1. Mark,

    Thank you for writing about the other side of this issue – though I don’t agree with the analogy between the Ollie cabdriver situation and Total Bankruptcy. As you point out in your post on the cabbie, he waits outside the jail and catches clients at their most vulnerable. In my view, the Ollie cabdriver situation would be unethical whether he gets a fee or not, because it’s a face to face solicitation. The fact that lawyers pay to get access to the fruits of this solicitation compounds the problem even further.

    The TotalBankruptcy situation is very different. Consumers arrive at the site through searches that they initiate. Moreover, there’s nothing on the site that forces them to hire a lawyer. Truth be told, I don’t find the site very effective – it is very generic – and my guess is that most consumers bypass it in favor of a site by a local attorney.

    But there’s another issue with TotalBankruptcy that I posted on today (after you’d written this post). If you look at the language of Rule 7.2, it does not prohibit “for fee referrals.” Rather, it states that “a lawyer may not give anything of value for a recommendation.” To me, this changes this equation entirely. A recommendation is proactive; for example, I can imagine Ollie’s cabdriver telling clients “Have I got a great lawyer for you!” By contrast, what if Ollie’s cabdriver kept stacks of criminal lawyers business cards in his cab (and lawyers paid for that privilege) and consumers could take a card or not. The cabbie served as a conduit, just as Total Bankruptcy serves as a conduit or a pass through.

    Also, in my view, the TB issue is a very gray area. Ethics violations, like criminal charges, require some element of intent – and here, I am quite confident that these lawyers did not believe or intend to violate rules. After all, for-fee directories have been lawful for years – they too, are “for fee referrals.” The pricing scheme of $750/month for 30 click throughs applied whether lawyers actually received a call from the client or a case. In the Ollie Cabdriver case, lawyers pay only when they actually get a client; here, they paid for 30 click throughs, just as you’d pay for 10,000 eyeballs or other type of metric. Given this uncertainty, I believe that the participating lawyers should have the benefit of the doubt.

    I do agree with you on one point – you can’t outsource ethics. And I think that my earlier post was too easy on the lawyers to the extent that I gave them a pass for simply inquiring about the ethics of the system and relying on TotalBankruptcy’s assurances. After reading the TB response in the ethics case, I see that the analysis, though prepared by some well reputed lawyers, was pretty lightweight. I too assumed that the analysis would be worth relying on because of who prepared it, and I was wrong in that regard.

    As for online marketing, while I am a fan, I’m not a huge booster of these services, which in many ways are very much like 1-800 lawyers and the like. I think many online marketing schemes (like Legal Match) are overpriced and don’t produce much value. But I’d prefer to see them regulated by market forces, rather than the bars – unless there’s clear evidence that the continuation of these services harms consumers.

    Carolyn

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