By Edward McIntyre
In the Beginning
It started when Dorian Jackson didn’t pay his LegalMatch.com subscription. The company sued. Jackson cross complained. He contended LegalMatch operated as an uncertified legal referral service (LRS), violating Business and Professions Code section 6155; his subscription contract, he argued, was illegal and unenforceable.
Round one was LegalMatch’s; the trial court said it wasn’t engaged in referral activity as section 6155 meant it. Round two, however, was Jackson’s. The court of appeal said LegalMatch was—using the plain meaning of “referral.” [Jackson v. LegalMatch.com (2019) 42 Cal.App.5th 760, 770-771.] Thus, its operations fell within the scope of section 6155. [Id. at p. 778.] The Supreme Court denied review on March 11, 2020.
The New Player
On March 20, the State Bar’s Office of General Counsel sent LegalMatch a cease and desist letter, demanding immediate shut-down, threatening suit—but, in its last paragraph, also giving the company a March 31 deadline to complete its LRS application.
The State Bar Sues
True to its threat, the State Bar sued LegalMatch on May 4, for alleged violation of section 6155, seeking injunctive relief and civil penalties. Of concern to lawyers, the State Bar alleged that not only LegalMatch, but also lawyers who accept, or had accepted, its referrals violate section 6155. Arguably a violation of section 6155 violates Rules 5.4(e) or 7.2(b), prohibiting accepting referrals from a service that doesn’t meet State Bar standards and paying for referrals.
Round Three went to LegalMatch; the court denied the State Bar’s TRO request. The State Bar predicated its motion on demonstrated facts: LegalMatch, after warning, was not a certified LRS; the court of appeal had determined its operation fell within section 6155’s scope; section 6155 mandated certification; the section provided for injunctive relief. QED!
But remember the State Bar’s March 20th cease and desist letter? With the March 31 deadline? LegalMatch’s counter to the TRO told the court it had met that deadline, filing an application to become a certified LRS. Besides, it argued, it had been around for some 19 years without any demonstrable public harm.
The court was not pleased. During a telephonic hearing, Judge Schulman said: “I’m disappointed with the state bar for failing to disclose the factual background leading to this application. I expected better of counsel representing the state bar.” The court denied the TRO, without prejudice. If the State Bar determined LegalMatch was not qualified for registration, it could apply again.
Registration Denied
By a 9-page, June 23, letter the State Bar denied LegalMatch’s application; it failed to meet minimum LRS standards. Among the cited deficiencies were insufficient evidence LegalMatch members had requisite malpractice insurance ($100,000/$300,000) and that panel members had competence in areas for which lawyers would be referred.
Everybody, Back to Court
On June 30th, the State Bar amended its complaint laying out its denial of LegalMatch’s application. On July 6th, Jackson filed a notice of related case of his LegalMatch suit, for which—same day—the State Bar filed a notice of support.
The Fight Gets Intense
On August 10th, LegalMatch filed its cross complaint. It sought a declaratory judgment that section 6155 is void as an unconstitutional infringement of its right to freedom of speech, guaranteed by both the California and the United States Constitutions. If its challenge succeeds, section 6155 and rules 5.4(e)and 7.2(b) could be gone.[1]
The State Bar Reversal
Then, on September 4th, the State Bar posted on its website a “Consumer Notice” in the “Public—Lawyer Referral Service” section. It warned that LegalMatch is not currently certified—followed by:
The State Bar has recently notified LegalMatch that its certification application was granted effective September 11, 2020. However, the State Bar has advised LegalMatch that it must cease and desist referring potential clients to its panel members until the operative date of its certification.
Wow!
Ethics and Discipline Implications
Members of the Association of Professional Responsibility Lawyers (APRL) report that some are currently representing, or have learned about, lawyers whom the State Bar’s Office of Chief Trial Counsel (OCTC) is investigating for possible discipline because they have used or are using LegalMatch.[2]
As of September 11th, does OCTC close those files as moot—in spite of the State Bar’s public position that lawyers who used LegalMatch before certification violated section 6155 and thus, arguably rule 5.4(e)? Or will those discipline cases continue?
After September 11th, will lawyers who now subscribe to LegalMatch have to engage in some resubscription process once is becomes a certified LRS, or may they continue using it as former subscribers? Will doing so be at their peril?[3]
Oh Yes, The State Bar’s Lawsuit
The court set an October 7th case management conference. Does certification of LegalMatch moot the State Bar’s case? The constitutional challenge to section 6155? Dismissals all around? Or will other, uncertified referral services pick up the First Amendment cudgel? Stay tuned.
Lookalikes
September 11, LegalMatch will be certified, legitimately available to California lawyers. But it’s not alone in the industry. There’s Martindale-Avvo.com, Avvo.com, Lawyers.com, Legalzoom.com, Nolo.com, Elocal.com, Legalbrandmarketing.com, etc., etc. None certified. Will the State Bar pursue any as it pursued LegalMatch? Or lawyers who use them?
Ethics and Discipline Tip
The SDCBA has a very successful certified LRS.[4] Soon, LegalMatch will also be legitimately available. The State Bar took a very public position that lawyers who use uncertified referral services violate section 6155. Will OCTC feel obligated to enforce that position?
Why risk potential discipline with an unregistered service? Likely better to use a certified LRS than to worry about a certified letter from OCTC referring to Rules 5.4 or 7.2(b) and section 6155.
[1] Are both the LegalMatch collection action and the State Bar’s injunction suit examples of the law of unintended consequences? LegalMatch ended up fighting for its life; the State Bar may have put section 6155 in constitutional jeopardy.
[2] State Bar rules mandate lawyer investigations remain confidential until a Notice of Disciplinary Charges is filed in State Bar Court. Consequently, the only evidence of such investigations is anecdotal.
[3] Is the only “certainty in this world … death and taxes”? Ben Franklin, Private Correspondence.
[4] Annually it refers thousands of clients to participating lawyers, generating millions in fees. For example, in 2018, it referred more than 30,000 clients, resulting in over $6.3 million in fees.