THE ALPS RISK MANAGEMENT REPORT
Looking to Expand your Client Base? Watch Out for Expanded Exposure.
By Sean T. O'Neil, Esq.
Several of our recent articles have discussed the idea that law practice is moving away from being a profession and toward being a business. I imagine that most of you could attest that your fellow lawyers recognize this, and that as a result, "competition for business" is growing tougher. In this enhanced competition, some lawyers are seeking creative new ways to attract new clients. Do these new business methods increase liability risks? If so, can the potential benefits make the risks worthwhile? This article will discuss the possible liability exposures in a few of the new business methods.
Some of our policyholders have asked us about the risks created by affiliating with a legal "help line." The help lines typically discuss general aspects of legally recognized injuries or matters in which an attorney's counsel is required. The help line may name a "sponsoring attorney" whom the viewer, reader or listener can call to further discuss possible rights, etc. The sponsor often is an attorney that practices in the area of law described in the help line. Some public telephone books offer help lines, which connect the caller to a general switchboard offering pre-recorded messages dealing with various areas of the law. The recorded message may name the "sponsoring attorney" in an introductory statement, or after the recorded message is complete. One can find other similar help lines on the radio or on television.
We recognize that affiliating with such help lines might introduce you to new
prospective clients. However, we have a few cautionary words for attorneys contemplating
such affiliation. First, check with your state's bar to see whether the affiliation is
permissible. In some instances, your state might prohibit participation in the help line.
See, e.g., Iowa Supreme Court Board of Professional Ethics and Conduct, Opinion Number
99-14 (March 8, 2000) (attorney's payment of fee for televised help line affiliation was
an improper referral fee). Second, be aware that the help line may only name you as a
sponsor, without giving you control over the content of the message within. A person
listening to the help line may believe that you are the person giving the recorded
information, and he may seek to hold you liable for his acts taken in accordance with that
information. Make sure that you have either the right to review and edit the help line
message, or the right to insert a clear disclaimer.
The disclaimer should be similar to one used in a web page i.e., it should state that the
information is not legal advice, and that by providing the information you do not intend
to create an attorney-client relationship. We have some sample disclaimers on our web
site; go to http:alpsnet.com/disclaim.htm for more detail.
Another method used to either gain new prospective clients, or supplement law practice income, is to have an ownership interest in a non-legal business. This is neither new nor uncommon, and on prior occasions we have discussed the associated dangers (see, e.g., On the Docket, Fall 1997). However, as more attorneys establish firm web sites and take part in e-commerce, new types of quasi-legal and non-legal business combinations have become more prominent. Thus, we have some new cautionary advice.
In my review of various law firm web pages, I have run across several firm sites that have affiliated web sites ("sister sites") to provide information which in some way relates to the firm's web page or the firm's practice. By itself, the use of a sister site is not improper, and can be innocuous. In fact, a few of the sister sites I've seen impress me with their innovative approaches to making the firm more accessible to the public. However, there can be dangers associated with the content of the sister site.
A common danger exists in sister sites that provide legal or quasi-legal information, but do not have an explicit disclaimer. Some lawyers may think that if the sister site does not facially appear to be a legal site, they don't need a disclaimer. However, elevating form over substance is imprudent. When a sister site's information is fairly detailed, it is easier for the viewer to construe that information as advice, rather than mere information. Further, when the sister site contains a hyperlink to the related law firm's web site, the information can look like something that the law firm either offers, or at least endorses. This can lead a nonlawyer viewer to believe (reasonably, I think) that the sister site essentially is a part of the firm.
Another potential problem with sister sites is that many bars prohibit their admitted attorneys from operating businesses that essentially are "feeders" for the attomey's law firm. See, e.g., Formal Opinion No. 1999-154, California State Bar; Opinion No. 239 of the Mississippi State Bar (May 22, 1997); Formal Opinion 87, Colorado Bar Association Ethics Committee (July 14, 1990; revised December 14, 1991; addendum issued 1995); Ethics Opinion No. 274, Oklahoma Bar Association (June 23, 1973). Whether the sister site may be an improper "feeder" depends upon the particular facts. Since the problem with "feeders" is that they impermissibly and indirectly solicit clients, a firm should avoid creating a sister site intended basically to help indirectly solicit legal business. See id.
Finally, you should be aware that the ABA has proposed revisions to Rules 7.1, 7.2 and 7.3 of the Model Rules for Professional Conduct, which govern an attorney's commercial speech. The proposed revisions make Rules 7.1, 7.2 and 7.3 more applicable to the new forms of commercial speech available through e-mail, Internet chat rooms, and web sites. See the ABA's "white paper" entitled, A Re-Examination of the ABA Model Rules of Professional Conduct Pertaining to Client Development in Light of Emerging Technologies, July 1998, at Appendix I (accessible from the ABA's web site at http:www.abanet.org/legalservices/whitepaper.htm). If you are using a sister site, or are considering a sister site, it would be worthwhile to review the proposed revisions and the ABA's rationale behind the revisions.
As with all of our risk management subjects, we urge you to use cautious, deliberate planning before either affiliating with a help line, or creating a sister site for any non-legal business in which you have an interest. A little prudent planning can take you a long way toward minimizing your exposure to risk in either endeavor.
About the Author
Mr. O'Neil is a staff attorney with the Attorneys Liability Protection Society (ALPS) in Missoula, Montana.