Ethics Advisory Committee
Topic: attorneys participating in websites providing a fixed-fee legal referral service
From the Opinion
The fixed-fee legal referral service works as follows:
- Attorney signs up for the service by agreeing to offer certain flat fee services.
- The fee for the service is set by the internet advertising directory website(service).
- The service makes the referral to the attorney, who then contacts the client to arrange a meeting and begin the representation.
- The service handles payment processing from the client and holds the funds until the service is completed.
- Upon completion of the work, the service transfers the full amount of the fee to attorney’s account.
- Upon completion of the work, the service charges the attorney a “per service marketing fee” which seems to be based upon the service provided and is only incurred when the lawyer provides the service. For example, the fee for an uncontested divorce may be $995, and the fee is $200, while the fee to start a single member LLC is $ 595, and the fee is $125.
- Does the arrangement above violate the prohibition against sharing fees with a non-lawyer as described in Rule 5.4?
- Alternatively, does the arrangement violate the “reasonable costs of advertisements or communications” as described in Rule 7.2 (c) (1)?
The arrangement described herein violates the prohibition of sharing fees with a non- lawyer as described in Rule 5.4(a). In the alternative, assuming, for the purposes of this question only, that the arrangement does not violate Rule 5.4(a), the arrangement would violate the Rule 7.2(c) prohibition of paying for a referral and is not saved by the exceptions found in Rule 7.2(c)(1), (2), or (3).
South Carolina Rule of Professional Conduct: 5.4(a); 7.2(c) (1), (2) and (3).
South Carolina Ethics Advisory Opinion 16-06 is available at https://www.scbar.org…