By David Majchrzak and Edward McIntyre
19.4.4 Jackson v. LegalMatch.com (2019) 42 Cal.App.5th 760 – Court of Appeal of California, First Appellate District, Division Four (November 26, 2019 [modified December 17, 2019])
Issue:
Does an online service that provides to potential clients the names of lawyers who provide services in a particular practice area and geographic region provide lawyer referral services within the meaning of Business and Professions Code section 6155?
Analysis:
Yes. LegalMatch, an online service company, connects individuals seeking legal assistance to lawyers who purchase a LegalMatch subscription. Potential clients fill out a prescribed form giving geographic location and type of legal service desired (e.g., criminal law, intellectual property, family law, etc.) and, if the potential client chooses, additional information about the client’s needs. The potential client must accept LegalMatch’s terms and conditions, including that Legal Match does not screen or vouch for any of its lawyer users or screen the potential client’s information. LegalMatch then provides the potential client’s information to subscribing lawyers in the geographic area and legal area of expertise that matches the potential client’s information. Lawyers may then evaluate the information and decide whether to communicate with the potential client. If they do, they must use LegalMatch’s platform for at least the first communication. Lawyers, whose numbers are limited within their geographic area and category of expertise by an algorithm, must pay an annual or multi-year subscription.
When LegalMatch sued Jackson for non-payment of his subscription, he cross-claimed that LegalMatch was an uncertified lawyer referral service, operating in violation of Business & Professions Code section 6155, which, inter alia, requires registration with the State Bar.
The trial court determined that LegalMatch did not engage in referral activity and that it did not operate for the direct or indirect purpose of engaging in referral activity because LegalMatch did not exercise any judgment on any legal issue and did not evaluate the consumer’s input to generate a conclusion that a legal issue was presented.
On an issue of first impression, the Court of Appeal reversed. In its statutory interpretation, the First Appellate District gave a “plain and commonsense” meaning to the term “referral”—not defined in section 6155—that focused on “the act that an individual or entity commits in sending potential clients to an attorney.” It also found this reading of the term “referral” consistent with section 6155’s purpose to regulate unlawful solicitation and “ambulance chasing.” Among other things, it allows lawyer referral services to operate only so long as they registered with the State Bar and comply with standards the State Bar or Supreme Court set.
The court further found that its interpretation was consistent with section 6155’s Legislative history. The court rejected LegalMatch’s argument that the court had to use the ABA Model Rules’ definition of a referral service because, for statutory interpretation, the text and purpose control. Further, while the ABA Model Rules may be helpful, they are not binding in California. The court remanded to the trial court LegalMatch’s unclean hands argument to bar Jackson’s claim that section 6155 prohibited enforcement of his subscription contract.
Notes:
As of the date of this publication, a petition for review was pending before the Supreme Court of California.
David Majchrzak and Edward McIntyre are co-editors of Ethics Quarterly.