3 New Ethics Opinions Guide New York Lawyers on Marketing Issues

Newsletter-2123473_1920The New York State Bar Association Committee on Professional Ethics issued three opinions within the past several months that provide guidance for New York lawyers on marketing issues. Opinion 1129, issued in July 2017, addresses attorney newsletters. Opinion 1131, covering payment for marketing or lead generation fees, and Opinion 1132, discussing the use of Avvo Legal Services, were both issued on August 8, 2017.

Future posts will discuss these opinions in more detail, but here are the basics, with links to the full opinions for your review. 

Attorney Newsletters and the Advertising Rules

Opinion 1129 addresses whether attorney newsletters must comply with the attorney advertising and solicitation rules contained in Rule 7.1 and 7.3, where the newsletter would be distributed to customers of one of the firm’s former clients and would include information provided by the former client. It also discussed whether it would be permissible for the firm to send a newsletter that would be partially paid for by the former client.

The opinion clarifies that a newsletter which provides information about the lawyer or law firm, including information about the firm’s achievements, cases, or personnel, will be considered to have a primary business purpose, and will qualify as advertising. In this case, since the newsletter was being sent to a targeted group (customers of the third party), if the newsletter were considered advertising, it would also be considered a solicitation and must comply with both Rules 7.1 and 7.3.

The opinion found that it would be permissible for the firm to include information supplied by a third party in a newsletter, but it would be the responsibility of the firm to ensure that the newsletter did not contain statements or claims that were false, deceptive or misleading.

Finally, the committee found that it would be permissible for the law firm to accept payment to defray the costs of publishing the newsletter if the firm did not receive payment for referring clients to the third party, and the newsletter did not include an express or implied recommendation of the third party’s services. But the opinion cautioned that the law firm might consider whether taking payment from a third party to help with the cost of publishing the newsletter might preclude the firm from representing clients in transactions involving that third party due to a conflict of interest.

Payment of Marketing Fees for Lead Generation

Opinion 1131 addresses payment for potential client leads to a for-profit website on which potential clients provide contact information and agree to be contacted by a participating lawyer. The Committee found that such payments are permissible if the selection of the lawyer is not based on an analysis of the potential client’s legal issue or the lawyer’s qualifications or ability to handle that problem, the service does not purport to recommend the lawyer (either directly or by implication) and the website through which the leads are generated complies with the requirements of Rule 7.1 on lawyer advertising.

In short, “if the Service complies with the advertising rules and the lawyer’s payment is reasonable for that form of advertising, a lawyer’s using the Service will not run afoul of Rule 7.2 unless the Service is deemed to “recommend” the lawyer.”

It is worth noting that Opinion 1131 overrules – at least in part – Opinion 902 issued in 2012, in which the Committee held that a lawyer could not pay a marketing company a fixed fee each time the marketer made an introduction to a potential client. Opinion 1131 finds that payment of a marketing fee is permissible if “the lawyer is paying the Service a fixed sum to participate, unrelated to the lawyer’s retention or the amount the lawyer charges in legal fees.”

Use of Avvo Legal Services

In contrast to Opinion 1131, Opinion 1132 finds that the marketing fee lawyers must pay to participate in Avvo Legal Services constitutes an improper payment for a recommendation, which violates New York Rule of Professional Conduct 7.2(a). While New York has found that payment of fees for other lead generation services is not prohibited, the Committee relied on two factors in distinguishing Avvo Legal Services from those other services: the use of Avvo’s rating system and the way that rating system is marketing to consumers, and Avvo’s “satisfaction guarantee.” According to the opinion, the combination of these factors implies that Avvo recommends all lawyers who participate in Avvo Legal Services and that they are “highly qualified.”