State Bar Sues LegalMatch.com for Operating Uncertified Legal Referral Service

The State Bar of California has filed an action in San Francisco Superior Court alleging that LegalMatch.com is operating as an uncertified legal referral service.

This comes after the California Supreme Court’s denial of LegalMatch.com’s petition for review of the Court of Appeal decision in Jackson v. LegalMatch.com on March 11, 2020.

It also comes after LegalMatch.com has been operating for more than 20 years.  After a brief flurry of activity in the late 1990’s, the State Bar ignored uncertified legal referral services and LegalMatch.com and many similar businesses have operated with impunity.  No longer.  Mr. Jackson and the Court of Appeal have forced the State Bar’s hand, with some nudging from the Supreme Court.

Attached to the complaint as Exhibit A is a letter to LegalMatch.com dated March 31, 2020, from Alison Lippa, Assistant General Counsel of the State Bar.  It details LegalMatch.com’s failed efforts to submit an application to become a certified legal service after the Jackon decision came down, efforts that failed in part because of the requirement that lawyers who participate in a certified legal referral service have malpractice insurance.  It also references an earlier exchange of correspondence between Leah Wilson, former Executive Director of the State Bar, and LegalMatch.com, where LegalMath.com sought assurances that lawyers who accepted referrals would not be subject to State Bar discipline.  Ms. Wilson, pointedly, could offer no such assurance.

Lawyers who accept referrals from an uncertified legal referral service could be subject to discipline under several legal theories.  Business and Professions Code section 6155(a) says that no lawyer shall accept referrals from an uncertified legal referral service.  A violation of that section could be prosecuted as a violation of Business and Professions Code section 6068(a), the “gateway” statute that says that it is an attorney’s duty to support the law (see In the Matter of Lilley (Review Dept. 1991) 1 Cal. State Bar Ct. Rptr. 476.)  Such a referral might also violate Business and Professions Code section 6152, which prohibits capping, again through 6068(a) gateway.  This stature also makes capping a crime.  Finally, Rule of Professional Conduct 7.2(b) prohibits payment “for the purpose of recommending or securing the services of the lawyer or the lawyer’s law firm” subject to an explicit exception for payment to a certified legal referral service (Rule 7.2(b)(2).)

Will the State Bar’s Office of Chief Trial Counsel (OCTC) actually prosecute lawyers for participating in uncertified legal referral services?

It did in the 1990s;  those cases were all settled for reproval level discipline, all but one private reprovals.

It may again.  It can’t be ruled out, especially given the recent zeal displayed by OCTC in seemingly trivial matters.  In the words of one State Bar discipline defense attorney, “no fish is too small to fry.”  Perhaps they will merely rely on the in terrorem effect of the recently filed action against LegalMatch.com.  OCTC is largely moved by complaints and few, if any, complaints are made that involve uncertified legal referral services. But OCTC is not limited to complaints and can open its own investigations, dubbed SBIs, for “State Bar Investigations.”  Discovery in the LegalMatch.com action might yield a list of potential targets and a few might be prosecuted, just to put some teeth into that in terrorem effect.

In the meantime, lawyers who use these services are assuming the risk, a risk difficult to quantify.

 

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