Ethics Opinion 302
Soliciting Plaintiffs for Class Action Lawsuits or Obtaining Legal Work Through Internet-based Web Pages
* [NOTE: See how Opinion 302 has been substantively affected by the amendments to the D.C. Rules of Professional Conduct that became effective on February 1, 2007]
It is permissible for lawyers to use Internet-based web pages to seek plaintiffs for class action lawsuits, provided they comply with all applicable D.C. Rules of Professional Conduct. It also is permissible for lawyers to obtain legal work through Internet-based web pages on which potential clients post requests for bids on legal projects.
Applicable Rules
- Rule 1.6 (Confidentiality of Communications)
- Rule 3.6 (Trial Publicity)
- Rule 4.3 (Dealing with Unrepresented Person)
- Rule 5.4 (Professional Independence of a Lawyer)
- Rule 7.1 (Communications Concerning a Lawyer's Services)
Inquiry
The Legal Ethics Committee has received numerous inquiries concerning lawyers' use of Internet-based web pages as a means of obtaining clients. One such inquiry asks whether the D.C. Rules of Professional Conduct prohibit an attorney from using the Internet in seeking plaintiffs for a class action lawsuit. Another asks whether it is permissible to obtain legal work through Internet services that offer web pages on which potential clients post requests for bids on legal projects. We address these inquiries together because each raises the general issue of Internet communications regarding lawyers' services.
With respect to the issue of using web pages to obtain plaintiffs in class action lawsuits, we have not been asked to evaluate any particular web site for its conformity to the D.C. Rules of Professional Conduct. As background to preparing this opinion, however, we visited a variety of web sites found through use of Internet search engines in order to see how lawyers are making use of new cyberspace technologies to communicate with potential clients. We came across hundreds of such web sites, ranging from extremely professional presentations to ones of marginal quality. Some described class action lawsuits that had already been filed; others contained information on class action lawsuits lawyers or sponsoring organizations were hoping to file, and urged visitors to contact the plaintiffs' attorneys to sign up for the suit. With respect to this latter group of web sites, it was often impossible to tell whether a lawyer was involved in the contemplated litigation. We discuss additional features of the web sites we examined in more detail below.
With respect to lawyers' use of web sites providing bulletin boards on which prospective clients post requests for bids to provide legal services, we found a handful of such web sites. Information at most of these sites was not available without registering to use the service, but one web site, which describes itself as the "premier business-to-business exchange for legal services," provided what appeared to be clear and comprehensive information to visitors from the general public. We therefore use this site as a template for our general discussion of web-based bulletin board services, without intending to pass judgment on the specifics of this particular service.
The site invites attorneys to register to bid on legal projects by submitting information about themselves, including their practice areas, firm size, location, years in business, technological capacities, and (at the option of the firm) its "diversity profile." Corporations are invited to post requests for proposals ("RFPs") on the web site. They may identify themselves or may, in "special circumstances" not further explained, post RFPs anonymously. Corporations may block other corporations from seeing their RFPs and may also select which registered law firms may view them. Law firms respond to RFPs by filling out a summary of their bid and fee structure, which they must submit to the corporation through the web site. The prospective parties may then correspond with each other, either through encrypted communications over the web site or off-line, at their own option. At the end of this process, corporations make their decisions about which law firm to hire for a particular posted project.
The web site sponsor states that it does not participate in any discussion corporations or law firms have during the selection process. It does offer, however, to assist corporations in preparing RFPs and to assist law firms in preparing their responding bids in appropriate formats as required by the corporations. It also states that it will assist corporations by seeking to register new law firms, by researching and recommending law firms not yet registered at the site, and by verifying bar admissions and good standing of counsel responding to RFPs. The web site sponsor charges a percentage fee (2%) of the amount paid by the corporation to the law firm selected for work, which the corporation pays directly to the web site sponsor at the same time that it pays its legal bills. The web site further discloses the principals in this venture, including its directors, managers, outside counsel, and advisory board, all of whom are described in depth; the user agreement; and mock sample RFPs and firm registrations.
Discussion
We start our analysis by noting that, consistent with the approach of ethics committees in many other jurisdictions, we see nothing untoward in lawyers communicating about their services through web sites, provided that such communications comply with our general rules governing lawyer communications with clients.1 Indeed, questions regarding how a lawyer may use a web site in seeking to obtain clients are at bottom no different than any other question about lawyer communications about legal services. Such questions are governed by D.C. Rule 7.1.2 Unlike many other jurisdictions, D.C. does not have special rules or restrictions that apply to client solicitation; D.C. Rule 7.1 applies to all forms of lawyer communications about legal services. The touchstone of Rule 7.1 is whether lawyers' communications about themselves or their services are "false or misleading." 7.1(a). Thus, regardless of whether using web sites to obtain clients is viewed as advertising or solicitation, the same fundamental restriction prohibiting "false or misleading" communications will govern the analysis.
We note at the outset that many sources of law in addition to the D.C. Rules of Professional Conduct may apply to lawyer communications with potential class action plaintiffs. These sources of law include Federal Rule of Civil Procedure 23 and its state law counterparts, the orders of the court supervising the class action lawsuit once it has been filed, constitutional restrictions on regulating attorney communications with potential class action members as discussed in Gulf Oil v. Bernard, 452 U.S. 89 (1981), and so forth. As always, we assert no opinion on these other sources of law potentially relevant to the question of legal restrictions on a lawyer's ability to communicate with potential class action clients, but confine our discussion to the requirements of the D.C. Rules of Professional Conduct.
Another area of law we do not address concerns the applicability of other jurisdictions' rules of professional conduct and related choice of law issues under Rule 8.5. We note, however, that the distinctive nature of the communications medium under discussion deeply implicates these issues. The very name, "World Wide Web," highlights the reach of such communications far beyond the bounds of any particular legal jurisdiction. Not surprisingly, our search for web sites concerning class action lawsuits turned up English language sites from all over the world. We thus wish to emphasize at the outset that this opinion, limited to the application of the D.C. Rules of Professional Conduct to web sites seeking class action clients, in no way resolves questions of utmost importance to practitioners—namely, the potential applicability of other jurisdictions' rules of professional conduct.
With these caveats in mind, we turn back to the requirement of D.C. Rules of Professional Conduct 7.1 that lawyers' communications about their services not be false or misleading. There are a number of ways communication about a class action lawsuit could run afoul of this requirement. Most obviously, the communication must accurately state the nature of the lawsuit. In addition, a communication may be false or misleading if it uses words such as "Notice" or otherwise suggests that it is required or authorized by a court when that is not in fact the case. Cf. In re McKesson HBOC, Inc. Securities Litigation, 2000 U.S. Dist. LEXIS 5828 (N.D. Cal. May 1, 2000) (deciding issue under Fed. R. Civ. P. 23). As we noted in Opinion 249, Rule 7.1 allows truthful claims about lawyer specialization, provided that the basis for making the claim is capable of substantiation. Comparative claims about the superiority of the lawyer's services that cannot be substantiated are prohibited, as discussed under Rule 7.1(a)(2) comment [1]. Similarly, as we further noted in Opinion 249, lawyers may not make claims that they "can help you" since "there is no way such a claim can be accurate in the abstract and the practitioner cannot know whether or not he can help any client until some facts are known about the client's case."
Unlike other jurisdictions, D.C. does not prohibit the use of for-profit agencies to provide advertising or referral services to lawyers. Thus, lawyers may pay outside services or agents for posting information about pending or contemplated class action litigation from which the law firm stands to gain clients. This situation may in some circumstances be analogous to purchasing space in the yellow pages or newspaper to run a paid advertisement, which is permissible under Rule 7.1 as long as it is clear that the communication is a paid advertisement.
In other situations, however, the relationship between the lawyer and the web site host may be less obvious. Here, as Rule 7.1(b) (5) and accompanying Comment [6] explain, a lawyer who employs a paid intermediary in seeking legal business must take all reasonable steps to ensure that the potential client is informed of the consideration paid by the lawyer to the intermediary and the effect of such payment on the fee charged.3 Thus, attorneys must disclose their financial relationship to third-party intermediaries hosting web sites through which the lawyer may gain legal business. In our search of web sites advertising for plaintiffs for class action lawsuits, we came across many sites in which the affiliation between a lawyer and the group or individual sponsoring the web site was unclear. This may well have been because no lawyer was affiliated with the contemplated litigation. In cases in which a lawyer is financially affiliated with an organization or individual who is advertising for potential plaintiffs for contemplated class action litigation, however, this relationship must be made clear to potential clients.
Lawyers' financial interests in class action litigation raise still another concern under D.C. Rule of Professional Conduct 4.3. As Rule 4.3 provides, a lawyer who represents a client in a matter may not state or imply to unrepresented persons that the lawyer is disinterested when the unrepresented person might assume the lawyer is providing disinterested advice with regard to the matter. Lawyers sponsoring web sites describing contemplated or pending class action lawsuits in which they are involved obviously are not disinterested, both because they are representing clients with interests in the litigation and because the size of their fees may depend in part on the number of class action members they are able to obtain. Thus, lawyers engaged in Internet communications about class action lawsuits must disclose their interests in the legal issues or cases under discussion. Lawyers may not pretend that information provided on a web page or in another cyberspace format is from a disinterested perspective, motivated merely by a desire to inform the public about legal matters.
Finally, we note in passing that lawyers' web site communications about a class action lawsuit could potentially raise issues under Rule 3.6, which concerns lawyer statements about a case being tried to a judge or jury. Rule 3.6 applies to lawyer statements that "a reasonable person would expect to be disseminated by means of mass public communication." Since web sites with unrestricted public access provide such a means of mass public communications, lawyers should ensure that web site communications to the general public do not create "a serious and imminent threat to the impartiality of the judge or jury."
In sum, use of web sites as a means of obtaining plaintiffs for class action lawsuits in many ways resembles the use of other forms of mass media, such as newspaper advertisements, and can be analyzed in much the same way. In other respects, however, cyberspace communications raise new issues by virtue of the distinctive nature of the technology. For example, because web pages allow multi-layered communications, questions may arise about whether a visitor to a web page may be misled because relevant disclosures are hidden many clicks away from the main pages. Indeed, on some of the web sites we examined, relevant disclosures, such as the relationship between a group of lawyers and the class action litigation being discussed, were buried in links several clicks removed from the main pages. The information needed to prevent a web site communication from being false and misleading should be readily available to visitors. Here a helpful analogy might be fine print in a newspaper ad; the relevant question would be whether the public to which the communication is being directed would be likely to be misled or deceived by the web site's design and layout.
Practitioners may be guided in designing web sites by the advice of e-commerce experts. One such e-commerce expert suggests that key disclaimers be provided on "click through" boxes or pages, which require visitors to verify they have read important information by clicking on a specified area of the screen before proceeding. See Walter A. Effross, "A Web Site Checklist," Legal Times, Mar. 1, 1999. Prof. Effross further emphasizes the need to take care in designing web sites that allow visitors to send e-mail to a site owner. Indeed, in our survey, we found quite a few sites that invited potential class action members to submit detailed profiles about themselves to the web site sponsor. Lawyers may want to use "click through" pages with disclaimers to ensure that visitors are not misled about the nature of the relationship established through such communications. Lawyers should also take steps to ensure that they are receiving the e-mail sent to them via their web pages. Lawyers may want to state that they will send a reply message confirming that e-mail communications have been received, and caution visitors not to assume that their message has been received until they have received such confirmation. This confirmatory message might also present an opportunity to clarify the nature of the relationship formed by such communications.
Following yet other suggestions of Prof. Effross, lawyers may want to take steps to standardize the responses visitors can make to web pages so that visitors cannot communicate online about matters other than those about which the lawyers are seeking information. Effross further notes that web sites can include disclaimers stating that they are not intending to solicit clients outside particular jurisdictions, or may take even stronger measures such as accepting communications only from persons with zip codes within appropriate jurisdictions. These suggestions do not, of course, serve as a definitive guide concerning the safeguards lawyers should institute in using web sites to obtain legal business; given the rapid pace of technological development in this area, additional protections may be warranted in the future.
Lawyer contacts with potential class action members through Internet communications are potentially less intrusive than in-person contacts, but lawyers must nevertheless take care that, in communicating with potential clients over the Internet as in any other form of communication, they conform to the restriction in Rule 7.1(b)(3) against seeking employment by a person who has not sought the lawyer's advice where "the potential client is apparently in a physical or mental condition which would make it unlikely that the potential client could exercise reasonable, considered judgment as to the selection of a lawyer." Likewise, Rule 7.1(c) provides that lawyers may not assist organizations in promoting the use of their services or those of other affiliated lawyers if the promotion activity involves the use of "coercion, duress . . . or vexatious or harassing conduct." Thus lawyers may not use Internet communications in a vexatious or harassing manner.
Practitioners must also, of course, ensure that they have in place workable means of conducting conflicts checks and otherwise assessing the suitability of any potential client before agreeing to the representation. The fact that communications about the lawyer's services are occurring over the Internet does not in any way minimize the attorney's obligations to avoid conflicts of interest.
Finally, our topic raises the question of preserving confidentiality in communicating with clients over the Internet. As we have already discussed in Opinion 281 (1998), the transmission of information from a lawyer to a client by unencrypted electronic mail will not violate Rule 1.6 unless special circumstances require greater means of security. All of the same considerations we discussed in Opinion 281 would apply in analyzing the need to encrypt e-mail communications in the context at issue here.
* * *
We now turn to inquiries we have received on the subject of attorneys' use of web sites on which clients post requests for bids of legal projects. Our response to such inquiries is motivated in part by the Association of the Bar of the City of New York's ("ABCNY") recent release of an opinion approving this practice with certain restrictions. New York City Ethics Op. 2000-1 (2000).
Yet another of the many ways in which the cyberspace communications revolution has affected law practice is in the birth of web sites offering a service, perhaps best analogized to a bulletin board, on which potential clients may post legal projects and invite attorneys to bid on them. This practice, as the ABCNY noted, is similar to the Requests for Proposals procedure already used by the government and increasing numbers of other clients to select counsel for particular legal projects. The ABCNY, applying the New York Lawyer's Code of Professional Responsibility, approved the use of an Internet-based legal services bidding system in its Opinion 2000-1, provided that four conditions obtain: (1) the client's invitation is not initiated by the lawyer; (2) the fee charged is paid only by the client; (3) no legal fees are shared with the service provider, and (4) the responding lawyer is not pre-screened, approved, or otherwise regulated by the web site sponsor. Although we concur with the ABCNY's basic views about the type of Internet-based bidding system described above, the differences between our legal ethics rules and those of New York lead us to different conclusions about the restrictions to be imposed on this practice.
At the outset, we note that we see no ethical evils lurking in the practice; on the contrary, we view it as a potentially positive development in more efficiently matching attorneys and clients seeking legal services. As we noted in Opinion 225 (1992), where we discussed law firms' participation in prepaid legal services programs, this "committee encourages the development of new approaches to the provision of legal services, so long as those approaches conform to the general and accepted norms of ethical conduct designed to protect the public and the profession" (quoting D.C. Bar Op. 91 (1980)).
Again, the touchstone for analyzing such communications is the Rule 7.1(a) standard barring lawyer communications about their services that are "false or misleading." Accordingly, lawyers participating in Internet-based bidding systems must satisfy themselves that their responses to requests for bids on legal projects are not false or misleading in the ways discussed above or in other ways. Claims lawyers make about their services must be evaluated in light of their likelihood to mislead or deceive their intended recipient.
An inquirer has asked whether the restriction articulated by the ABCNY against lawyers paying a fee to access web sites containing postings of legal projects applies under the D.C. Rules of Professional Conduct. We conclude that it does not. The ABCNY's views are based on the New York State ethical prohibition against participation in for-profit referral plans. D.C. Rule 7.1, on the other hand, as we have already noted, explicitly permits the payment of consideration to a non-lawyer intermediary to assist a lawyer seeking employment. Comment [6] to Rule 7.1 explains that this rule "permits a lawyer to pay another person for channeling professional work to the lawyer. . . . Likewise, a lawyer may participate in lawyer referral programs and pay the usual fees charged by such programs." Thus, it is permissible under the D.C. Rules of Professional Conduct for lawyers to pay a fee or other consideration in order to access a web site containing postings of legal projects. Rule 7.1(b)(5) provides that lawyers must take "all reasonable steps to ensure that the potential client is informed of (a) the consideration, if any, paid or to be paid by the lawyer to the intermediary, and (b) the effect, if any, of the payment to the intermediary on the total fee to be charged." Thus, lawyers paying fees to participate in a web-based bidding service must inform potential clients in their bids on a legal project of the consideration paid in order to access the web site and the effect, if any, of this payment on the proposed fee to be charged the client.
Our rules lead us to a different approach than that of the ABCNY with respect to another consideration in the use of Internet-based bidding services as well. In its Opinion 2000-1, the ABCNY analyzed whether the Internet-based bidding procedure violated restrictions on solicitation contained in the New York Lawyer's Code of Professional Responsibility that do not exist in the D.C. Rules. The ABCNY concluded that the described bidding procedure did not violate New York's anti-solicitation rules because all communications between potential clients and lawyers were initiated by the potential clients.
The ABCNY reasoned that it was "the clients who, in effect, have 'solicited' those attorneys who are interested to submit a bid on the project" and thus concluded that the Internet-based bidding system was permissible, provided that clients initiated all communications with lawyers. The same analysis does not apply under the D.C. Rules of Professional Conduct, because application of the D.C. Rules does not turn on the sometimes fine distinction between advertising and solicitation. Instead, Rule 7.1, as most relevant here, prohibits a lawyer from soliciting employment through an intermediary only if the solicitation involves use of a statement that is false or misleading. Rule 7.1(b)(1).
The ABCNY opinion further notes that the arrangement it reviewed did not permit the Internet service to screen, approve, or otherwise direct or regulate attorneys' professional presentations in their RFP responses. The sample site we examined for purposes of preparing this opinion similarly focuses its offers of support services on corporations seeking law firms rather than on law firms responding to RFPs. Unlike the arrangement reviewed by the ABCNY, however, the sample site we reviewed does offer to assist law firms in responding to RFPs in order to ensure compliance "in appropriate formats as required by the corporations." We view such limited involvement in law firms' formulation of RFP responses as permissible under Rule 5.4, since it appears intended merely to ensure that potential clients' informational needs are met. It does not, in other words, appear that the Internet service intends to "direct or regulate the lawyer's professional judgment in rendering such legal services," which would be prohibited under Rule 5.4(c).
The ABCNY opinion states that any fee a law firm pays to a service provider cannot be linked to or contingent on the amount of legal fees the lawyers obtain from a posted project. We agree with this aspect of the ABCNY's opinion, since such an arrangement would violate D.C. Rule 5.4's prohibition against lawyers sharing legal fees with non-lawyers. See Opinion 286 (payment to non-lawyer of referral fee contingent on or tied to a lawyer's receipt of legal fees constitutes an impermissible sharing of fees). The web site we examined in preparing this opinion appears to avoid such problems because it is the client who pays all charges for using the Internet service. These charges are calculated as a portion of the legal bills the client incurs in using a lawyer obtained through the Internet service, but since it is the client who pays the Internet service these bills, there is no impermissible fee sharing under Rule 5.4.
We also agree with the ABCNY that potential confidentiality and conflicts problems may arise under the contemplated arrangement. The inquirer in the ABCNY case proposed to assist responding attorneys in avoiding potential conflicts troubles by giving attorneys the name of the potential client on whose project they intended to bid, along with the name of the adverse party, if any. We agree with the ABCNY's observation that such a procedure, though well meaning, poses potential problems where providing this information could result in disclosure of secret client information, such as an intent to file a future lawsuit or concern about a potential source of liability exposure. The web site we examined attempts to mitigate these problems in several ways, including by blocking corporations from seeing each other's RFPs, allowing RFP access to only those law firms a corporation authorizes, and permitting anonymous RFP postings in some (undefined) circumstances. These procedures help protect against conflicts and confidentiality problems, but do not fully solve them. In particular, we are troubled by the possibility that an unsophisticated client could disclose in an RFP information that could be potentially damaging to it if viewed by lawyers having a conflict of interest. Lawyers should thus assure themselves that any Internet bidding service in which they participate has adequate procedures in place to avoid such problems.
Law firms must also conduct their own internal conflicts reviews in the course of the procedure contemplated for making matches between law firms and clients. Because the procedures we reviewed allow for direct communications between a lawyer and potential client after the first contact, to which the web site sponsor would not have access, it would appear that law firms could rely on their usual protections for confidential information and procedures for undertaking conflicts checks.
To summarize, our approach differs from the ABCNY's in that the D.C. Rules of Professional Conduct allow lawyers to initiate communications with potential clients and to pay a fee to access web sites containing postings of legal projects. On the other hand, we agree with the ABCNY that, when lawyers pay a fee to use such services, the lawyers' charge should not be linked to the size of the legal bills they generate through the service. We also agree with the ABCNY that such services are permissible to the extent that web site sponsors are not involved in directing or regulating attorneys in such a way as to interfere with lawyers' professional judgment in how they would render legal services. Finally, we agree that lawyers must ensure that web sites they use to bid on legal projects have taken adequate steps to protect against confidentiality and conflict of interest problems.
In closing, we reiterate that this opinion discusses the rules that apply to attorneys making use of web sites providing legal project bidding services only to the extent that our rules provide the applicable rules of decision. Questions that arise about substantive law, unauthorized practice of law, and the applicability of other states' rules of professional conduct by virtue of the accessibility of Internet sites to lawyers outside this jurisdiction, are beyond the scope of this committee's mandate.
Inquiry No. 00-8-25
Adopted: November 21, 2000
1. Other opinions that have concluded that lawyers may advertise legal services on a web page or through other electronic means include N.Y. State Legal Ethics Op. 709 (1998) (“Advertising via the Internet . . . is permissible as long as the advertising is not false, deceptive or misleading, and otherwise adheres to the requirements set forth in the Code”); Conn. Legal Ethics Op. 97-29 (1997) (In our opinion the same rules apply to Internet advertising that apply to advertising in other media); Ill. Legal Ethics Op. 96-10 (1997) (“The Committee believes that the existing Rules of Professional Conduct governing advertising, solicitation and communication concerning a lawyer’s services provide adequate and appropriate guidance to a lawyer using the Internet.”); Utah Legal Ethics Op. 97-10 (1997) (attorneys may advertise their legal services through Internet provided they comply with states’ ethics rules governing advertising); N.C. Legal Ethics Op. RPC 239 (1996) (“All communications by a lawyer concerning the lawyer or the lawyer’s services including communications via computer, are subject to the prohibition . . . against false or misleading communications.”); Pa. Legal Ethics Op. 96-17 (1996) (“Any content that would be permissible under [our rules] should also be permissible on a web page,” with the fundamental restriction being against “false or misleading communication about the lawyer or the lawyer’s services”).
2. D.C. Rule of Professional Conduct Rule 7.1(a) provides:
A lawyer shall not make a false or misleading communication about the lawyer or the lawyer’s services. A communication is false or misleading if it:
(1) Contains a material misrepresentation of fact or law, or omits a fact necessary to make the statement considered as a whole not materially misleading; or
(2) Contains an assertion about the lawyer or the lawyer’s services that cannot be substantiated.
3. Rule 7.1(b)(5) provides that a lawyer should not solicit employment if “the solicitation involves the uses of an intermediary and the lawyer has not taken all reasonable steps to ensure that the potential client is informed of (a) the consideration paid by the lawyer to the intermediary, and (b) the effect, if any, of the payment to the intermediary on the total fee to be charged.”
