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California Legal Ethics

Court of Appeal Finds LegalMatch.com an Unauthorized Legal Referral Service

Posted by David Carr | Dec 01, 2019 | 0 Comments

A very significant new decision from the First Appellate District, Division 4 has found LegalMatch to be an unauthorized legal referral service (Jackson v. LegalMatch.com, case no. A152442, filed 11/26/19.)  The decision reverses a trial court decision after trial that LegalMatch.com was not engaged in referral service activity within the meaning of Business and Professions Code section 6155 and remands the case back to the trial court on the issue of whether LegalMatch is culpable of “unclean hands” that bar its ability to recover unpaid subscription fees from attorney Dorian Jackson.

The Court of Appeal bottomed its analysis on the plain language of section 6155.  The section says that “[a]n individual, partnership, corporation, association, or any other entity shall not operate for the direct or indirect purpose, in whole or in part, of referring potential clients to attorneys, and no attorney shall accept a referral of such potential clients,” unless “[t]he service is registered with the State Bar of California and . . . is operated in conformity with minimum standards for a lawyer referral serviceestablished by the State Bar” or “is operated in conformity with” standards set by the Supreme Court.  The Court of Appeal noted that section 6155(h)(1) provides that “[p]ermissible joint advertising,among other things, identifies by name the advertising attorneys or law firms whom the consumer of legal services may select and initiate contact with,” while subdivision (h)(2) statesthat “[c]ertifiable referral activity involves, among other things, some person or entity other than the consumer and advertising attorney or law firms which, in person, electronically, or otherwise, refers the consumer to an attorney or law firm not identified in the advertising.”

The appellate court agreed with Jackson the trial court  erred when it found that LegalMatch did not engage in referral activity because it did not exercise judgment on a client's legal issues. It also found that the term “referral” was not ambiguous and that the “plain and commonsense” meaning of “referral” was clearly applicable to the services that LegalMatch provided, referring clients to lawyers who paid a fee to be matched to clients

Section 6155 provides no definition of “referring” or “referral.” Instead, the statutory text appears to focus on the actof connecting potential clients with attorneys, with the additional requirement that the covered individual or entity operate for the direct or indirect purpose of doing so. (§ 6155, subd. (a).) Read in the context of the statute, the plain meaning of the term “referral” means no more than the “act or an instance of sending or directing to another for information, service, consideration, or decision.” (Black's Law Dict. (11th ed.Westlaw2019).)

LegalMatch.com is only one of many similar services that have proliffered in the last two decades.  One can wonder that it took the civil courts so long to interpret the very broad and very clear language of the statute.

Moreover, as paying for referrals from an uncertified legal referral service is a cause for discipline under Rule of Professional Conduct 7.2(b)(2), lawyers who are paying subscription fees to services like LegalMatch are subject to potential State Bar action.  The Office of Chief Trial Counsel (OCTC) has shown no interest in prosecuting such cases since 1996 when it initiated several such cases against lawyers participating in uncertified legal referral service.  Those cases were settled for low-level discipline, private and public reprovals.  This opinion, assuming it survives the inevitable appeal, may push OCTC to prosecute these types of cases again.

On the other side of the equation, the LegalMatch opinion comes at a time when the various groups are pushing for a relaxation of the rules regarding non-lawyer participation in the marketing and delivery of legal services., under the rubric of increasing access to legal services.  It can be expected that those forces will meet this opinion with calls for the amendment or repeal of section 6155, The certification process for legal referral services is cumbersome and only a few legal referral services operating on a for-profit basis have been certified.  I have counseled many lawyers interested in establishing referral services who have abandoned the idea after an exploration of just what is required.

The LegalMatch opinion is certainly timely and any lawyer utilizing such services should be aware of its implications.

About the Author

David Carr

Biography David C. Carr ~ Ethics Lawyer   David C. Carr, an attorney in private practice in San Diego, California, specializes in ethics advice to lawyers, California State Bar discipline defense, and attorney licensing.

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