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An ethics complaint looming over hundreds of attorneys nationwide will test the boundaries of lawyer advertising on the Internet.

The complaint, filed in 47 states against 550 attorneys, targets not only the owner of a website that offers free consultations with attorneys, but all of the attorneys who participate in the site.

The website purports to copy the pay-per-click model used by Google Adwords and other advertising regimes that tie fees to performance.

The complaint, however, contends that there is nothing new about the business model – it’s an old-fashioned fee for referral that violates the rules of professional conduct.

In addition to representing the largest legal ethics complaint in history, the case is being viewed as a late but significant step in reconciling 19th century ethics rules with 21st century technology.

The Internet has expanded lawyer advertising beyond state and national borders and any attorney’s wildest dreams. But while ethics opinions have dribbled out of state bar associations on various Internet advertising issues, this case will draw some bright lines.

“We are all following this case. Is this a clever marketing tool, or is this a violation of the ethics rules?” asked Nancy Rapoport, a professor of ethics and bankruptcy at the University of Nevada in Las Vegas.

The first decisions will come out of Connecticut, where three judiciary panels have found probable cause for disciplinary hearings scheduled for November against five attorneys.

total attorneys.com

The complaint alleges that several websites run by Chicago attorney Kevin Chern (including totalattorneys.com and totalbankruptcy.com) violate ABA Model Rule 7.2, which puts limits on payments for legal referrals.

The websites offer consumers a free consultation with an attorney. Attorneys who participate in a website have an exclusive contract with Chern for their area code. When a consumer contacts the website through an online form, the lawyer in that consumer’s territory pays Chern a fee for the information.

Chern claims this is a cooperative advertising arrangement permitted under the rules, and attorneys are paying him for the cost of licensing the website and marketing costs.

This is a “natural extension of marketing models that are ubiquitous across the Internet,” Chern told Lawyers USA.

But according to the complaint, the Internet is just a smokescreen for old style pay-to-play.

“He’s trying to say this just shows how wonderful the Internet is. That’s a bunch of crap,” said

Zenas Zelotes, the Connecticut attorney who filed the complaints after he was solicited to participate in the websites and read the contract for participating attorneys.

Zelotes contends the fee, $65 per referral, has nothing to do with traffic.

“You could get a million clicks and it has no correlation to the compensation paid,” he said.

Legal ethics experts expressed concern over the exclusive nature of the referrals.

“Consumers are automatically going to be referred to one lawyer that basically owns that zip code,” said Jim McCauley, ethics counsel for the Virginia State Bar.

“The theory is you should be making referrals based on who is the best lawyer for that particular case,” said Lawrence Fox, a partner with Drinker Biddle & Reath in Philadelphia and former chair of the ABA committee on ethics and professional responsibility. “If lawyers are not allowed entrée into the exclusive referral contract … it would raise ethical whiskers.”

Chern, who said that over a million consumers have submitted requests for free consultations through his various websites since 2005, denied that he is operating legal referral sites, noting the disclaimers on the websites stating they are not law firms or legal referral services.

Hearings set

Five attorneys in Connecticut (not including Chern, who is not licensed in Connecticut) will face disciplinary charges.

Mark Dubois, chief disciplinary counsel for the Connecticut judicial branch, the prosecutor in the case, suggested that even if the sites operate as described by Chern, pay for performance legal advertising has already been found to violate Rule 7.2 by three local judiciary panels.

Dubois, who does not even own a cell phone, fields questions and complaints daily about ethical limits on lawyers’ use of Internet sites, social media and other technology.

“Some people argue the Internet is simply a tool by which people either comply with or break the [ethics] rules that have been around for a century. Others argue the Internet is a whole new area of social interaction requiring a new approach,” he said.

Connecticut also criminalizes legal referral fees, and Zelotes has filed criminal complaints with two states, but Dubois said those cases it’s unlikely even the civil cases will result in significant punishment, unless the attorneys have prior disciplinary transgressions.

David Atkins, the attorney representing the five lawyers, could not comment on the case.

Once Connecticut decides the issue, other states will tee up on their cases.

If Connecticut finds that the website violates ethics rules, Zelotes predicted a domino effect among other states.

If this form of website is allowed to proliferate, he predicted “disastrous repercussions” for the legal profession.

“Everyone and their mama would be out harvesting contact information,” he said.

Zelotes is also urging the U.S. Bankruptcy Trustee in Illinois to “drop the hammer” on Chern.

Such action could include disgorgement of referral fees that were split without approval of the bankruptcy court.

Questions or comments can be directed to the writer at: sylvia.hsieh@lawyersusaonline.com

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