Texas Attorneys Can Participate In Online Legal Matching Service

Mary Alice Robbins
Texas Lawyer
Monday, August 28, 2006

Lawyers can pay a fee to participate in an online service that matches subscribing lawyers with potential clients, as long as the service exercises no discretion in those match ups, the Professional Ethics Committee for the State Bar of Texas has determined.

Opinion 573, issued in July, revisits an issue that the 11-member committee considered a year ago.

In August 2005, the committee indicated in Opinion 561 that Texas lawyers cannot participate in a privately sponsored Internet site that obtains information about potential clients' legal problems and forwards the information to one or more lawyers who subscribe to the service. The committee concluded in 2005 that participating in such a legal matching service would violate the anti-solicitation provisions of Texas Disciplinary Rules of Professional Conduct 7.03(b) and 7.04.

But Peter Kennedy, attorney for San Francisco-based LegalMatch Inc., which asked the committee in December 2005 to take another look at the issue, says committee members did not do an about-face.

"They distinguished their earlier opinion on a key fact, that the service doesn't use discretion in forwarding information to attorneys," says Kennedy, a shareholder in Austin's Graves, Dougherty, Hearon & Moody. "Rather than some human being saying this kind of case sounds right for this kind of lawyer, the software behind the Web site does the matching."

"This opinion and Opinion 561 address the fine line between solicitation and advertising when you use a nonlawyer, for-profit Internet service to obtain clients," says Paul Koning, a partner in and head of the professional defense practice group at Hughes & Luce in Dallas.

Koning says the state's disciplinary rules prohibit solicitation by nonlawyers on behalf of lawyers for a fee but allow advertising.

The committee issued its latest opinion after the Federal Trade Commission staff advised John Glancy, the committee's chairman, in a May 26 letter: "Online legal matching services have the potential to lower consumer costs of obtaining information about the price and quality of legal services, which is likely to lead to more intense competition among attorneys, ultimately benefiting Texas consumers. At the same time, we see no indication that consumers are likely to suffer harm from online legal matching services that would justify banning them."

Anna Ostrovsky, LegalMatch's general counsel, says a consumer enters base information about his or her legal problems at the service's Web site and answers a series of intake questions that mirror a consultation with an attorney in the area of law in which the consumer is interested. The consumer can consider the responses from attorneys in the privacy of the consumers' home, she says.

At least four other states — Rhode Island, North Carolina, South Carolina and Utah — have formal opinions authorizing attorneys to participate in such services, Ostrovsky says.

Glancy, senior vice president and general counsel of Dallas-based Holly Corp., declines comment on Texas' Opinion 573. "The opinion stands on its own," Glancy says.

In the opinion, the committee specifies the elements necessary for an online client-attorney matching service to constitute a permissible advertising or public relations service under the Texas disciplinary rules. As noted in the opinion, the service must utilize a wholly automated computerized process, without exercising any discretion, to identify lawyers for a potential client based on the information that the client and subscribing lawyers provide. The service also must include disclaimers notifying the potential client that only lawyers who pay the service's fee will be given an opportunity to respond to the clients, and the service can make no assertions about the quality of the participating lawyers.

The opinion requires that the matching service charge a reasonable fee to subscribing lawyers and prohibits the service from unreasonably limiting the number of lawyers participating by using a high fee structure or finely drawn geographic or practice areas. Koning says it's clear under the opinion that the Internet service provider must receive a fixed-fee amount, not a percentage of a lawyer's fee.

Under the opinion, a lawyer's initial communication with a potential client who has been identified by a matching service must be by electronic means and must clearly state that the communication consists of advertising information. The opinion prohibits a lawyer from making live, interactive communication with the client until the client requests such communication.

Koning says the burden is on the participating lawyer to make sure that the service complies with the opinion as long as the lawyer is a member. That could require the lawyer to pretend he or she is a client and sign up with a service to see what kind of information the service sends, Koning says. Participating in such a service that doesn't meet the opinion's requirements would be in violation of the ethical rules and someone could initiate grievance proceedings against that lawyer, he says.