Topic: Plan to solicit bids by lawyers to perform legal services on internet
website; advertising, solicitation, and participation in a referral
plan; duties with regard to advertising fees, client confidentiality,
unauthorized practice of law, and conflicts of interest.
Digest: Lawyers may respond to an invitation to bid on legal projects through
an internet website where client's invitation is not initiated by
lawyer, where only the client is charged a fee, no legal fees are
shared with the service provider, and responding lawyers are not pre-screened,
approved, or otherwise regulated by the plan.
Code: DR 2-101; DR 2-103; EC 2-15; DR 3-101(B); DR 4-101(B); DR 5-105 (E); DR
May a lawyer ethically respond to an invitation to submit bids for
legal projects over the internet sponsored by a profit-making business
(the Provider ) that would facilitate the posting by potential
clients of legal projects on the companys website? An
attorney wishing to provide legal services for a project would submit
a profile, including the attorneys experience in the subject matter
of the representation, the estimated date of completion and the legal
fees to be charged. Under this arrangement, the only fee charged
would be imposed on the clients, who would be charged for obtaining access
to this information. The participating attorneys would not be assessed
a fee, share any legal fees with the Provider, or be pre-screened, approved,
or otherwise regulated or controlled by the Provider.
A growing aspect of the information revolution is ready access
to information about professional services, including lawyers and law
firms. The internet has become part of this revolution.
As a result, consumers of legal services can now obtain more information
to assist them in choosing an attorney without having to rely on a word-of-mouth
referral or the yellow pages. Plans like the one that is the
subject of this opinion are proliferating on the internet. Accordingly,
we take this opportunity to consider the ethics issues raised by an attorney's
participation in the proposed enterprise.
The Proposed Plan
A business has created an international attorney comparison
website that would allow potential clients to post legal projects
on the website. Attorneys interested in providing legal representation
in connection with a posted project are invited to submit profiles.
The attorney profile would include the attorney's qualifications,
the date on which the attorney expects to complete the project and
the attorney's proposed fee for the project. The potential client
could use the attorney profiles received to compare responding attorneys
and their respective proposals and assist in deciding whether to retain
one of them.
only fee that would be charged would be imposed solely on the potential
client, who would be charged for access to the information.
Participating attorneys would not be charged any fee, nor would the
Provider and the attorney share any fees. The fee charged to
the potential client by the Provider would be for using the website
to receive information provided by the attorneys, and would be separate
from any fee the attorney would charge the client for providing legal
services, which would be billed directly to the client.
of the attorneys submitting profiles would be screened or otherwise
approved by the Provider and the Provider would not in any way direct
or regulate the attorneys professional representation.
However, the Provider proposes to assist responding attorneys
in avoiding any potential conflicts by giving them the name of the
potential client and the name of any adverse party before any response
Advertising and Solicitation
It is well established that a lawyer or law firm may advertise and/or
solicit legal business through traditional means, such as newspapers or
radio, subject to the rules regulating lawyer advertising and solicitation.[1a]
We conclude that the use of the internet as the medium by which a lawyer
communicates advertising does not alter this basic conclusion.
any event, where, as here, a request for representation is initiated
by the client, not the lawyer, the Committee concludes that the act
of responding to a request over the internet for representation does
not, standing alone, constitute advertising or solicitation
as these terms are used in the New York Lawyers Code of
Professional Responsibility (the Code).[2a]
Although the Provider contemplates that participating lawyers will
contact prospective clients directly over the internet, the process
at issue here is initiated by, or on behalf of, the clients who, in
effect, have solicited those attorneys who are interested
to submit a bid on the project. As such, it is not functionally
different than any other bidding process that has become increasingly
common in selecting counsel. Indeed, such procedures often occur
following the publication of a Request for Proposals (RFP)
by a government or other organization, or, for that matter, any project
that is posted on a (real) bulletin board.[3a]
Indeed, some courts presiding over class actions recently have conducted
auctions, inviting lawyers to submit qualifications and
bids. See, e.g., In re Cendant Corp.
Litig., 182 F.R.D. 144, 150 (D.N.J. 1998) (There is an emerging
trend in common fund class actions for courts to simulate the free
market in the selection of class counsel. The use of an auction
to select counsel in a securities class action was pioneered. . .
.); In re Auction Houses Antitrust Litig., Civ.
Action No. 00 Civ. 0648 (LAK), 2000 WL 460355 (S.D.N.Y. April 20,
a Lawyer Referral Plan
We also conclude that a lawyers involvement in responding to an invitation
to bid pursuant to the plan described here, would not violate the
provision in DR 2-103(B) proscribing participation in certain for-profit
referral plans. Because no fee is paid by the lawyer to the
Provider to obtain employment, the plan at issue, therefore, lacks
the essential element regulated by DR 2-103(B).[4a]
In this respect, it resembles other plans considered and approved
by both the New York County Lawyers Association and the New York State
County 721 (1997), the New York County Lawyers Association considered
a network of lawyers, law students, and legal workers that sponsored
an internet home page through a local internet provider. The provider
allowed the organization to include an on-line Attorney Referral
Board as part of its home page, at no extra charge to the lawyers.
When an internet user (i.e., potential client) clicked on the
Attorney Referral Board, the screen showed a directory of legal subject
areas which was in turn linked to a brief description of each area of
law and a listing of attorneys who practice in each area. The
County Lawyers determined that this plan is permitted under DR 2-103(B),
We do not view the listing described by the inquirer as a prohibited
for-profit referral service because the user will select the attorneys
whom he or she chooses to contact... and no payment is to be made to the
internet provider on the basis of matters actually generated by the listings.
the State Bar Association in N.Y. State 659 (1994) determined that,
consistent with DR 2-103(B), a lawyer may allow a car dealer to
give car buyers an information package which includes the
lawyers advertising materials as long as the lawyer does not pay
the auto dealer a fee to distribute the materials, does not discuss
the lawyers advertisement with customers, and the advertising
materials comply with DR 2-101.
the plans considered above, the plan at issue here involves no payment
by the lawyer to the Provider. Under the circumstances,
we conclude that the internet plan described to us does not come within
the purview of DR 2-103(B).
Confidentiality, Conflicts of Interest
A number of ethics committees have addressed the problem of an attorneys
use of the internet to communicate with clients or prospective clients.
The starting point, of course, is DR 4-101(B) which prohibits a lawyer
from knowingly revealing client confidences or secrets and requires
a lawyer to use reasonable care to protect client confidences and secrets.
We do not believe that there is anything inherently improper about using
the internet as a means generally to communicate with a client, especially
given recent laws precluding unauthorized interception of internet transmissions.
See The Electronic Communications Privacy Act, 18 U.S.C.
§ 2510 et seq. Of course, a lawyer may come into
possession of certain highly confidential or especially sensitive information
that warrants more protection than the internet currently is able to
provide and which should be communicated through another more secure
means. We agree with the recent decision by the New York State
Bar Association which concluded that, based on recent steps taken to
criminalize the unauthorized interception of e-mail, lawyers may
in ordinary circumstances utilize unencrypted internet e-mail to transmit
confidential information without breaching their duties of confidentiality
under Canon 4 to their clients . . . N.Y. State 709 (1998).
In reaching this conclusion, however, the New York State Bar Association
cautioned that circumstances may exist in which a particular e-mail
transmission is at such heightened risk of interception or is of such
an extraordinarily sensitive nature, that a more secure means of communication
than unencrypted internet e-mail should be chosen. Id.;
cf. N.Y. City 1994-11; N.Y. City 1998-2. Although it is
possible that the profiles could contain at least some information that
might be considered to be a confidence, such as the anticipated
cost of the legal project, there is nothing that would appear to be
especially sensitive warranting extraordinary protection. Accordingly,
we believe that use of the internet is appropriate to convey the profiles
contemplated by the Provider.
Although well meaning, the Providers stated intention prospectively to
provide interested attorneys with the names of the potential client
and any adverse parties does raise a confidentiality concern.[5a]
To be sure, providing such information to prospective lawyers would
facilitate the requisite conflicts checks. See DR 5-105(E).[6a]
However, providing this information to a lawyer prematurely
could result in divulging confidences and secrets that could harm
the client, such as the identity of a client who contemplates filing
a possible lawsuitinformation that might impel an adversary to
sue preemptively. The Provider, therefore, should establish procedures
to avoid prematurely revealing on the internet information about the
clients identity in connection with the invitation for bids, unless
precautions are taken to assure that the client would not be better
off waiting until a tentative selection of counsel is made before the
identities of the client and others who may be involved are revealed.
We also note that a response by a lawyer to a client posting a legal project
on the internet who resides outside of New York can raise issues about
whether the provision of legal advice or assistance to such a client
comports with DR 3-101(B), governing unauthorized practice. DR
3-101(B) states that a lawyer shall not practice law in a jurisdiction
where to do so would be in violation of regulations in that jurisdiction.
This will depend on whether the particular legal services to be provided
would constitute the unauthorized practice of law in the other jurisdiction.
Although it is beyond the scope of this Committees jurisdiction
to determine whether lawyers licensed in New York may lawfully provide
legal services to clients who reside in other states or countries, we
caution lawyers who respond to invitations over the internet to be familiar
with the laws of the other jurisdictions governing unauthorized practice.[7a]
See Shapero v. Kentucky State Bar Assn., 486
U.S. 466, 473 (1988); In re: Koffler, 51 N.Y.2d 140, 432 N.Y.S.2d
872, 875 (1980) (direct mail solicitation of potential clients by
lawyers is constitutionally protected commercial speech). The
only caveat, which applies as well to advertising, is that communications
to prospective clients must not contain any statements or claims that
are false, deceptive or misleading and should otherwise conform to
the limitations imposed by DR 2-101(C) concerning references to credentials,
other clients, and legal fees. See infra, note
See DR 2-101; DR 2-103.
We express no view as to whether a more targeted type of plan
would involve solicitation requiring ethical regulation.
DR 2-103(B) provides as follows: A lawyer shall not compensate
or give anything of value to a person or organization to recommend
or obtain employment by a client, or as a reward for having made a
recommendation resulting in employment by a client, except that a
lawyer may pay the usual and reasonable fees or dues charged by a
qualified legal assistance organization or referral fees to another
lawyer as permitted by DR 2-107.
We note that the service has pledged not to direct or regulate
in any way the attorney's professional judgment. Such a policy, if
followed, would obviate any potential issue raised by the proscription
against third party interference set forth in DR 5-107(B), which states:
Unless authorized by law, a lawyer shall not permit a person who recommends,
employs, or pays the lawyer to render legal service for another to direct
or regulate his or her professional judgment in rendering such legal services,
or to cause the lawyer to compromise the lawyer's duty to maintain the
confidences and secrets of the client under DR 4-101(B).
In New York, DR 5-105(E) requires that lawyers and law firms
maintain an accurate record-keeping system of current and prior engagements,
and must check those records before undertaking a new matter to assure
that there will be no violation of the conflicts rules because of
a current or past representation. See DR 5-105; DR 5-108.
In N.Y. State 709 (1998), the State Bar opined that practicing
law for clients in conjunction with the internet does not give
rise to any exemption from the fundamental obligation to avoid conflicts
and not to undertake a new representation without checking to assure
that it does not create an impermissible conflict,(citing N.Y.
State 664 (1994) (requiring conflicts check by lawyer providing specific
legal advice to clients by means of 900 telephone
In Birbower, Montabano, Condon & Frank v. Superior Court,
70 Cal. Rpt. 2d 304 (Cal. Sup. Ct. 1998), the California Supreme Court
held that a New York law firm that represented a California company
in an arbitration proceeding engaged in the unauthorized practice
of law in violation of a California statute. Another jurisdiction
might have taken a different view than that of California regarding
the New York law firm's conduct.