Can a Michigan lawyer pay an annual fee to a for-profit lawyer referral service that controls the advertising and gives the lawyer no chance to review it?
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This page answers the general question as of 1989. Ezel answers yours: whether it's allowed on your facts, under the current Michigan Rules of Professional Conduct, with citations.
Plain-English summary
A for-profit corporation headed by a nonlawyer ran a lawyer referral service. Lawyers paid a $250 annual registration fee to be listed in one legal field, with $50 for each additional field, and also agreed to remit $30 for each referral case undertaken. The corporation advertised on television and other media, with no mechanism for a lawyer to control the content. Callers were screened by problem type and given three lawyers' names on a rotating basis, with no representation about fees, and participants agreed to route any further referrals back through the service.
The Committee applied MRPC 7.1, which permits only public communications that are not false, fraudulent, misleading, or deceptive. Quoting RI-7, the Committee held that a lawyer cannot let an organization handle marketing with no lawyer review, because the lawyer retains a duty to assure communications about the lawyer's services are proper. Because the plan provided no mechanism for lawyers to review the advertisements, it violated the rule.
The Committee then applied MRPC 7.2(c), which allows a lawyer to pay the reasonable cost of permitted advertising and the usual charges of a not-for-profit referral service. This service was for profit, so it did not fall within the not-for-profit exception, and (citing RI-9) a lawyer may not pay a fee to a referral venture where the participating lawyer's fee is allocated to an expense other than advertising. Participation as constituted would therefore be improper.
Currency note
This opinion was issued in 1989 and interprets the Michigan Rules of Professional Conduct as they then stood. The MRPC have since been amended, and later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.
Common questions
Q: Can a lawyer pay a for-profit lawyer referral service?
A: Per the opinion, no. The Committee held that MRPC 7.2(c) permits a lawyer to pay only the usual charges of a not-for-profit referral service, so paying a for-profit service whose fee is allocated to expenses other than advertising is improper.
Q: Why does it matter that the lawyer cannot review the service's ads?
A: The opinion concluded that, even though a lawyer need not review an organization's entire marketing plan, the lawyer keeps a duty under MRPC 7.1 to assure that communications about the lawyer's services are not misleading; a plan with no review mechanism violates that duty.
Q: Does a per-referral payment to the service change the analysis?
A: The opinion treated the arrangement, including the $30-per-referral remittance, as a for-profit referral fee outside the MRPC 7.2(c) not-for-profit exception, reinforcing that the fee was not limited to the reasonable cost of advertising.
Background and rules framework
The opinion interprets MRPC 7.1 (Communications Concerning a Lawyer's Services; the Model Rule 7.1 counterpart) and MRPC 7.2(c) (Advertising; the Model Rule 7.2 counterpart), which permits paying the reasonable cost of advertising and the usual charges of a not-for-profit referral service. The Committee applied the lawyer-review duty articulated in RI-7 and the advertising-allocation limit from RI-9.
Citations and references
Rules of Professional Conduct:
- MR 7.1 / MRPC 7.1 (communications concerning a lawyer's services)
- MR 7.2 / MRPC 7.2(c) (paying for recommendations; not-for-profit referral charges)
Other opinions cited:
- RI-7: lawyer's duty to review marketing of an organization
- RI-9: fee allocated to an expense other than advertising is impermissible
See also
- Mich Ethics Op. R-8: For-Profit Referral Service
- Mich Ethics Op. R-6: Lawyer Referral Service Rules
- Mich Ethics Op. RI-9: Group TV Advertising Venture
- Mich Ethics Op. RI-7: Prepaid Legal Plan Control
Source
Original opinion text
Reproduced from the official source for research purposes. The linked source is authoritative.
RI-24
May 18, 1989
SYLLABUS
A lawyer may not ethically participate in a referral service where there is no review of advertisements by participating lawyers, or the participating lawyer pays an annual fee to a for-profit referral service.
References: MRPC 7.1, 7.2(c); RI-7, RI-9.
TEXT
A corporation, organized for profit, and headed by a nonlawyer operates a lawyer referral service. Under the plan, lawyers pay a $250.00 annual registration fee to be listed in one particular legal field. Each additional listing in a separate legal field requires a $50.00 annual payment. The corporation advertises on television and through other media. There is no mechanism for the lawyer to control the content of the advertising. There is a representation that no specific lawyer or law firm will be mentioned in the advertisement. The essence of one of the television advertisements is as follows: a person holding a phone book open to the pages of lawyer ads looks bewildered and says "Your fingers could get awfully tired walking through this." Then the referral service name and phone number is given.
A potential client who contacts the referral service is screened for the type of legal problem. The caller is then given the names of three lawyers who have paid for listings in that particular legal specialty. The lawyers' names are given out on a rotational basis. There is no obligation for the lawyer to accept a particular case. There is no representation made as to the fees to be charged by a particular lawyer. The plan literature contains, among other provisions, the following:
"I (the Attorney) agree to remit to (Corporation) an additional $30 for each referral case I undertake . . . .
"That each participating attorney shall promptly report the result of the referral to [corporation] on forms furnished by [corporation]. Failure to do so may result in a halt of referrals offered to that attorney . . . .
"That a participating attorney who finds that a referred client needs to be referred to another attorney, for whatever reasons, will utilize the [corporation] Lawyer Referral Service for such referral."
A lawyer asks whether participation in the referral service is proper. MRPC 7.1 provides:
"A lawyer may, on the lawyer's own behalf, on behalf of a partner or associate, or on behalf of any other lawyer affiliated with the lawyer or the lawyer's law firm, use or participate in the use of any form of public communication that is not false, fraudulent, misleading or deceptive. A communication shall not:
"(a) contain a material misrepresentation of fact or law, or omit a fact necessary to make the statement considered as a whole not materially misleading;
"(b) be likely to create an unjustified expectation about results the lawyer can achieve, or state or imply that the lawyer can achieve results by means that violate the Rules of Professional Conduct or other law; or
"(c) compare the lawyers' services with other lawyers' services, unless the comparison can be factually substantiated."
As the plan is presently formulated, there is no review of advertisements by participating lawyers. In RI-7, this Committee said:
". . . the lawyer would permit the organization to be responsible for marketing without review by the lawyer. Although the lawyer could not be expected to review the entire marketing plan of the organization, a lawyer has a duty to assure that communications about the lawyer's services are not false, fraudulent, deceptive or misleading, do not contain a material misrepresentation of law or fact, are not likely to create an unjustified expectation, and are not improper solicitation." MRPC 7.1 and 7.3.
The plan violates ethics rules by not providing a mechanism for lawyer review of advertisements.
MRPC 7.2(c) provides:
"(c) A lawyer shall not give anything of value to a person for recommending the lawyer's services, except that a lawyer may pay the reasonable cost of advertising or written communication permitted by this rule and may pay the usual charges of a not-for-profit lawyer referral service or other legal services organization."
The plan in question does not fall within the second exception to MRPC 7.2(c), to wit: the plan is a for profit referral service. A lawyer may not pay a fee to participate in a referral venture where the participating attorney's fee is allocated to an expense other than advertising. RI-9.
Therefore, participation in the service as constituted would be improper.
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