IL Seeks Comments Relaxing Rules Regulating For-Profit Lawyer Matching Services

for-profit-lawyer-matching-services-illinoisCourt filings are down. Self-represented litigants are up.  Access to quality, affordable legal representation is hard to come by these days. In fact, according to the Legal Services Corporation’s 2017 Justice Gap report, 86% of the civil legal problems reported by low-income Americans received inadequate or no legal help last year.

Luckily, lawyers are getting creative.

Recently, the Illinois Supreme Court’s Attorney Registration and Disciplinary Commission, completed a comprehensive study to see how lawyers across the country are tackling this access to justice crisis. They found that one of the most innovative ideas considered by bar associations across the country were client lawyer matching services.

According to the study, there are a handful of lawyer matching services up and running across the country, even here in Illinois. The Los Angeles County Bar Association and the State Bar of Arizona recently implemented programs and the Chicago Bar Association’s Limited Scope Referral Program was launched last fall.

These lawyer matching services connect clients and lawyers through referral-type services operated by not-for-profit entities (in this case, bar associations) to handle aspects of client legal problems at a lower cost.

Currently, many states permit not-for-profit or bar association referral services approved by an appropriate regulatory authority to share fees with or receive payments from participating lawyers. However, they do not allow lawyers to share fees with for-profit entities, as it would be in violation of the Rules of Professional Conduct, specifically ABA Model Rule 7.2.

Although states generally have resisted for-profit lawyer referral services in the past, several have come forward proposing amendments to modify their Rules of Professional Conduct allowing it, including, Florida, Oregon, and North Carolina. Illinois may be the next.

In January 2018, the Chicago Bar Foundation (CBF) proposed amendments to the Illinois Rules of Professional Conduct, including Rule 5.4. It suggested Illinois add two new subsections, Rule 5.4(a)(5) and (6), to create a safe harbor for attorneys participating in lawyer referrals services while not directly regulating a lawyer’s participation with such entities.

At the same time, the CBF proposal states a lawyer can still pay an entity that connects potential clients with lawyers when that entity is not registered with the Commission, but the lawyer must use due diligence to evaluate whether participation with that entity complies with the requirements of this Rule.

The scholarly ARDC Report analyzes proposed rule changes, state ethics opinions as well as the potential Constitutional issues at stake. It concludes that allowing lawyers to join for-profit matching services, with light regulation of the services, would better protect clients, reduce the access to justice gap, and maintain the integrity of the legal profession.

As this issue continues to gain traction, the ARDC has outlined a draft framework included within its recent study (see Appendix 2) that would regulate both lawyers who participate in for-profit referral services and the services themselves.

The ARDC proposed framework would allow attorneys to participate in qualified lawyer-client matching services and to pay a percentage of legal fees earned to the for-profit service. The conditions would include registration of a qualified lawyer-client matching service with the ARDC; no interference with the attorney’s representation; and a requirement that the fees paid by the client should not exceed what the client would have been required to pay if the matching service had not been involved.

Currently, the ARDC seeks comments on the framework and the Rule amendments and additions. Those interested may email comments to information@iardc.org. The comment period is open now up until August 31, 2018.

Erika Kubik

Erika Kubik

Former Communications Specialist at Illinois Supreme Court Commission on Professionalism

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Erika Kubik

Erika Kubik

Former Communications Specialist at Illinois Supreme Court Commission on Professionalism

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