New Lunar Year, New Lunar Rule?

Okay, the title is something of a stretch to acknowledge that today marks the beginning of a new lunar year, the Year of the Pig. Nothing about what I have to say relates to the moon or anything Lunar.

But I did want to continue one part of the discussion begun in Las Vegas last month, and truly follow through on my insistence about how what happens in Vegas shouldn’t just stay in Vegas this time, by sharing the text of a proposed new Model Rule that I drafted and that we kicked around during a panel discussion at the APRL Mid-Year Meeting.

The general topic is what to do with the rules, if anything, to address the reality of online lawyer matching services and other similar platforms that are benefiting consumers by helping connect consumers who are willing to pay a certain price point for legal services and lawyers who are willing and able to deliver those services at that price point but that are always in tension with the current ethics rules because of restrictions on lawyers providing compensation for referrals or recommendations and related restrictions on fee sharing.

We have a rule here in Tennessee which I believe to be substantively bad, but the architecture of the rule is pretty good if you change its goals. Sort of like an old house with really good bones but simply god-awful interior decorations. That rule is RPC 7.6 and imposes certain registration requirements and limitations on things denominated as “intermediary organizations.” Long time readers of this blog, might remember this post about how I believed RPC 7.6 applied to Avvo Legal Services back when that was still in operation.

The rule I have drafted as a conversation starter uses the architecture of the Tennessee rule but is designed to provide a more permissive and more flexible approach to the topic.

Implementation of such a rule would likely also require changes to Model Rules 5.4 and 7.2 to make clear that payments to intermediary organizations are not prohibited as fee sharing or prohibited by the restrictions on payment for referrals, and the accompanying Comment would likely need a paragraph to make clear certain things that are not intended to be swept up as an intermediary organization, but carts and horses and all of that.

The draft is posted below, all feedback is most welcome.


Proposed Model Rule 7.7:  Intermediary Organizations
(a)  An intermediary organization is a lawyer referral service, lawyer matching service, or other similar organization which engages in referring consumers of legal services to lawyers or facilitating the creation of attorney-client relationships between consumers of legal services and lawyers willing to provide assistance.


(b)  A lawyer may make a payment to an intermediary organization, including a payment that would be considered sharing of an attorney fee with an intermediary organization, in connection with any referral or facilitation of a relationship with a client as long as:


                (1)  The relationship between the lawyer and intermediary organization is fully disclosed to the client including, if requested by the client, the amount of any payment made by lawyer to the intermediary organization;
                (2)  The cost to the lawyer of any payment to the intermediary organization is not passed on to the client; and
                (3)  The lawyer does not permit the intermediary organization to direct or regulate the lawyer’s professional judgment in rendering legal services to the client.

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