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Legal Marketing

Outsourcing Your Law Firm Advertising? Consider a Lead Generator Checklist

By William Hornsby

The ABA Model Rules have given the green light to lawyers interested in outsourcing their advertising through lead generators. Seemingly a growing number of lawyers are taking advantage of this client development technique. However, participation in a lead gen service can be an ethical minefield that puts participating lawyers at risk. This post looks at these ethics issues and encourages lawyers to create a checklist of things to consider before entering into an agreement with a lead generator.

Lead generators come in a variety of flavors. Ethics expert Megan Zavieh discusses a broad array of models in her post on this issue, including directories, referral services and client matching services. I’ve even seen LinkedIn referred to as a lead generator. This post, however, focuses on lead gen services that typically advertise under their own brand name, or no name at all, instead of the individual lawyers’ names, and use TV and social media advertising to gather leads and then parcel potential clients out to the participating lawyers.

While the comments to the ABA Model Rules explicitly indicate that a lawyer may participate in a lead generator program, they also clarify that the lawyer must comply with all the ethics rules surrounding that participation. (See Comment 5 to Model Rule 7.2.)

Law Firm Lead Gen Ethics Checklist

While lawyers considering participation in lead gen programs should review the rules of their own states to be certain they are in compliance, the following points provide a checklist to start that consideration.

1. Does the lead generator recommend the services of the participating lawyer?

While group advertisements are permissible, the ABA Model Rules and those of nearly every state draw a distinction between this type of advertisements and lawyer referral services. Lawyers may not pay to participate in for-profit lawyer referral services in most states. A key ingredient to a referral service is the recommendation of its participating lawyers. Therefore, if a lead generator operates in a way that recommends its individual participating lawyers, rather than giving the potential client the choice of lawyers, as a directory generally does, then the service is likely to be deemed a referral service rather than a group advertisement. Simply put, if a lead generator recommends the services of its participating lawyers, those lawyers are at risk of a violation of the ethics rules.

2. Does the lead generator advertise in a way that is false or misleading?

The prohibition against advertisements that are false or misleading is a cornerstone of our regulation of client development. This should be a simple and intuitive standard, but that is not necessarily the case. States have deemed the use of superlatives such as “top notch” or “the best and brightest” to be subjective terms that mislead potential clients. Similarly, images such as a map or globe suggesting that the advertiser has a national or international presence could be considered misleading. Some states impose limits on advertisements that set out prior results, testimonials, dramatizations and claims of expertise.

A few states have ethics opinions specifically governing lead gen programs, requiring the ads to inform viewers that the participating lawyers are selected based on a geographic area, that the program does not assess the prospective client’s legal needs, and that the program does not vouch for the participating lawyers’ qualifications.

The bottom line here is to avoid reliance on common sense and to do the research to determine if the lead gen ads are compliant with your state’s standards governing false or misleading advertisements.

3. Do the lead gen ads include all the required disclaimers and disclosures?

A few states require what we may call “ubiquitous disclaimers.” They have to be included with the advertisement in all circumstances. Other states have rules setting out “contingent disclaimers.” They are required if the ad includes specific representations. For example, some states require an explanation about a client’s obligation to pay court costs when commercials advertise “no recovery – no fee” or similar statements.

Does the lead generator protect the lawyers from states with disclaimer requirements by being certain to include them in the advertisements?

4. Does the program meet transparency requirements?

Some states require advertisements to identify a lawyer who is responsible for the contents of the ad. Presumably this will be the lawyer disciplinary entity’s contact if there is a complaint about the ad. Some states require an accompanying address, while others simply require “contact information,” which could be an email address. New York requires a telephone number as well. A few states specifically govern group advertisements and require the name of each participating lawyer to be included.

Again, participating lawyers need to be certain the lead gen program they are considering lines up with these obligations.

5. Does the lead generator comply with operational requirements?

Almost all states require lawyers to retain their advertisements for some period of time, usually a few years, along with a record of where and when those ads were disseminated. However, a few states require ads to be filed with the state so that it will have them available if there is a disciplinary complaint. Florida, Louisiana, Nevada and Texas take this a step further and require lawyers to submit their ads for review either prior to or at the time of their publication or broadcast. These states do have exemptions. For example, some preclude the filing of websites. What is important, however, is that lawyers participating in lead gen programs have clarity about who is responsible for the retention, filing and screening obligations.

6. Is the flow of money consistent with the state ethics rules?

Lawyers may generally pay for advertisements with a set fee for time and space. Think, for example, of the good old Yellow Pages. Lawyers paid $XX for a full-page, half-page or smaller listing for the year in which the directory was published. This payment was set regardless of the fees the ad generated. No clients, no fees — the ad still cost $XX. A thousand clients and a million dollars — the ad still cost $XX.

While lead gen programs can generally charge a per lead cost, they still cannot predicate that cost on the number of leads that are converted to clients or the dollar amount the lawyer ultimately generates from those clients. The cost must be $XX per lead, regardless of the number that are converted and the revenue generated from those cases.

Lawyers need to be aware of the prohibitions on the division of fees with lead gen programs.

7. Is the lead gen program consistent with the lawyer’s obligation to maintain confidentiality?

While client confidentiality is readily understood, not everyone has a handle on the obligations a lawyer has to prospective clients, who have turned to them for representation but may never become a client. Is the lead gen program operated in a way that respects the lawyer’s obligations to prospective clients, as well as those who are current or past clients? Does the program attempt to monetize the information it obtains through its outreach? And if so, is this consistent with the lawyer’s obligations of confidentiality?

Lead generator programs have enormous potential to expand a lawyer’s client base, but they also carry the risk of ethics breaches. The Consumer Attorney Marketing Group has a white paper on the ethics of the lead generator model, which dives into details on each of the issues set out here. It’s worth a look and can be downloaded here. As a bonus, the organization has gathered an up-to-date databank of the advertising ethics rules for each state in conjunction with the white paper.

Illustration ©iStockPhoto.com

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William Hornsby William Hornsby

Will Hornsby is an attorney focused on the professional responsibility of innovative and tech-based legal services. After serving as staff counsel in the ABA’s Division for Legal Services for 30 years, Will now champions access to legal services through his law firm at www.willhornsbylaw.com. He writes and speaks extensively on issues of ethics, technology and client development. Follow him on Twitter at @willhornsby.

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