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Friday, Apr 19, 2024

Lawyers Shouldn’t Buy Their Leads

By BARRY P. GOLDBERG This morning (and every morning) as I get to my law office in Woodland Hills, I am pelted with companies trying to sell me new case “leads.” Here are excerpts from two emails I received: • “Get personal injury leads right from the people in your region and land deals in minutes. Leads delivered straight to your inbox with permission for you to call without you having to lift a finger.” • “We provide injured victim inquiries for your area . . . There are three requirements for participation: five years in practice, good standing with the bar and an effective intake system.” This is bad and contrary to law. Any marketing fool without a law license can obtain “leads” by creatively leveraging the internet, social media, print, radio and TV advertising. Consumers see ads and think they are contacting a particular lawyer with an effective value proposition. These lead generators simply sell the leads gathered to marginally qualified attorneys who pony up big money monthly and yearly. There is never a requirement that the attorney have any knowledge or expertise in the particular area whatsoever. It is not hard to see that non-attorneys selling leads to the highest bidder is often not in the consumers’ best interests. Moreover, this rewards attorneys who fail to earn a favorable reputation and, in many cases, cannot adequately attract potential new clients on their own. I am personally aware of a “one star” lawyer who generates over $1 million a year buying leads. These “unregistered” lead generators are bad for consumers and have the real potential to further damage the reputation of the legal community. The Business and Professions Code regulates entities that refer potential clients to attorneys: “An individual, partnership, corporation, association, or any other entity shall not operate for the direct or indirect purpose, in whole or in part, of referring potential clients to attorneys, and no attorney shall accept a referral of such potential clients,” unless “the service is registered with the State Bar of California and . . . is operated in conformity with minimum standards for a lawyer referral service established by the State Bar” or is operated in conformity with standards set by the Supreme Court. The “minimum standards” for a legal and registered lawyer referral service are demanding and help ensure that consumers are referred to professional and competent attorneys. In addition, the State Bar requires that a certain amount of fees generated by a certified attorney referral service be for the benefit of the public through various outreach programs and services. The service must also reapply and requalify on a regular basis. Lead generation companies sidestep regulation, do not ensure competence and provide no public service whatsoever. As the current president of the San Fernando Valley Bar Association and longtime chairman of its attorney referral service, of course I have an axe to grind with these rogue referrers. The referral service is understandably getting killed by these professional marketers making it more and more difficult to compete. There is still hope. The issue is now before the courts in a case styled Jackson v. LegalMatch, wherein LegalMatch denied that it is a traditional referral service subject to regulation. However, the Court of Appeal recently held that LegalMatch was indeed engaged in referral activity contrary to the law. Without belaboring the procedural posture and legislative history provided in the decision itself, the Court of Appeal concluded that LegalMatch did engage in referral activity, stating that “a referral occurs when an entity engages in the act of directing or sending a potential client to an attorney. The act of referring is complete when LegalMatch routes a potential client to attorneys who match the geographic location and area of practice – regardless of whether LegalMatch exercises legal judgment on an individual’s issue before communicating that information to lawyers on its panel.” The Court’s simple conclusion is that “the act of sending the information to the selected lawyers constitutes and completes the referral” for the purposes of the Business and Professions Code. It is not difficult for anyone who has been exposed to lawyer marketing to realize the conclusion from the LegalMatch case could be applied to many different lead generation platforms which may be operating illegally and without proper oversight. Even though lead generation has become commonplace, most companies operate outside of the law. More importantly, “no attorney shall accept a referral of such potential clients.” It is just a matter of time until attorneys will face discipline for accepting “leads delivered straight to their inbox without … having to lift a finger.” Barry P. Goldberg heads his personal injury law firm in Woodland Hills and is president of the San Fernando Valley Bar Association.

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