State Bar solicits member comments on ethics issue

The growth of online for-profit matching services raises questions about attorney ethics.

A proposed advisory opinion by the State Bar of Michigan (SBM) Professional Ethics Committee concludes that participation in such a service that matches prospective clients with lawyers for a fee is not ethically permissible if the attorney's fee is paid to and controlled by a non-lawyer and the cost for the online matching service is based on a percentage of the attorney's fee paid for the legal services provided by the lawyer.

The proposed advisory opinion says that a Michigan lawyer participating in this business model:

• Violates Rule 6.3(b),  which prohibits a lawyer from participating in for-profit lawyer referral services;

• Violates Rule 5.4, which prohibits a lawyer from sharing fees with a non-lawyer;

• Violates Rule 7.2(c), which prohibits a lawyer from giving anything of value to recommend a lawyer’s services unless it is a reasonable payment for advertising the lawyer's services, the usual charges for a not-for-profit lawyer referral service, or payment for the sale of a law practice;

• Subverts compliance with Rule 1.15, which requires a lawyer to safeguard legal fees and expenses paid in advance by depositing them in a client trust account until the fee is earned and expense incurred;

• Impedes compliance with Rule 1.16(d) requiring any unearned prepaid fees and unexpended advances on costs must be refunded;

• Assists in the unauthorized practice of law in violation of Rule 5.5(a) to the extent the online service holds itself out as a provider of legal services and guarantees satisfaction; and

• Violates Rule 5.3 to the extent that the conduct of the matching service when performing administrative “back office” services traditionally done through the law firm does not comport with the professional obligations of the lawyer.

A number of other states have addressed this issue.

Members of SBM and the public are encouraged to submit comments in a form at www.michbar.org /opinions/ membercomments;  email  r25ethics@michbar.org; or mail to R-25 Ethics, State Bar of Michigan, 306 Townsend St., Lansing, MI 48933. Comments should be submitted by July 16.

After the comment period closes, the SBM Board of Commissioners will consider whether to approve or modify the opinion.

Neither informal opinions of the SBM Professional Ethics Committee nor formal advisory ethics opinions have the force and effect of law. They provide guidance only and may not be relied upon as an absolute defense to a charge of ethical misconduct.