107 N.J.L.J. 393
May 7, 1981
Lawyer Referral Service
To Service Real Estate Clients -
Corporation's Advertising Program for Attorneys
The New Jersey State Bar Association has presented the
Attorneys in this State have recently been solicited to participate in two organizations which generally function as referral services securing business clients for attorneys. May a New Jersey attorney ethically participate in these activities?
The two situations to which the inquiry relates are as follows.
A nationwide real estate agency desires to publish a booklet with
the names and addresses of participating attorneys who are available within certain municipalities and counties to represent
individuals in real estate transactions. In order to be listed an
attorney would pay $300 per year to the agency. The attorneys would
then be included in the booklet to be distributed to franchises of
the agency statewide. The result would be referrals by the local franchisees to the listed attorneys when there are real estate transactions in the same municipality where the lawyer maintains his office. The second situation involves a corporation organized for profit which is engaged in an advertising program for attorneys in the State. The corporation is owned and operated by laymen. It places advertisements in the print media under the heading "Attorneys at Law, Offices Throughout the State" or "Legal Services" or "The Professional Contacts Legal Group". The advertisements will list a number of types of legal services and corresponding fees, together with a toll-free 800 telephone number for prospective clients to call. They will then be referred to a participating lawyer in the region nearest the callers. No money is ever paid to the corporation by the client and all arrangements for payments are made directly with the participating attorney. The State is divided into regions and the number of attorneys who may participate is limited in each region. In order to participate in this cooperative advertising and referral service, the attorneys will be required to pay an annual membership fee of $300 per year plus additional charges on a monthly basis which will range from $50 to $150 depending upon the volume of business. While the monthly charges are referred to by the corporation as advertising charges, they do not bear a direct relationship either to the amount or the cost of the advertising done in any given monthly period.
DR 2-103(C) provides:
A lawyer shall not compensate or give anything of value to a person or organization to recommend or secure his employment by a client, or as a reward for having made a recommendation resulting in his employment by a client except that he may pay for public communications permitted by DR 2-l01 and the usual and reasonable fees or dues charged by a lawyer referral service operated, sponsored, or approved by a bar association.
In our opinion, the referral services which are proposed by the nationwide real estate agency as well as by the corporation for profit in its "advertising program for attorneys" are violative of the foregoing rule. Neither of the organizations in question qualifies as a lawyer referral service operated, sponsored or approved by a bar association.
While the profit corporation's proposal purports to be an advertising program, we regard it as a referral service, particularly since the additional charges, which are to be made on a monthly basis, do not bear any relationship to advertising but rather to the volume of business referred by the corporation. With respect to the proposed "advertising program" of the corporation for profit, we are also of the opinion that the arrangement is violative of DR 2-103(B)(l) in that its promotional opportunity is false, fraudulent, misleading or deceptive in that the corporation furnishes no legal services, nor is it authorized to furnish legal services under the law, and the designation of "Attorney at Law, Offices Throughout the State" or "The Professional Contacts Legal Group" is in reality a referral service which violates the Disciplinary Rule above referred to.