Comments on: Maryland Bar Ruling Banning NonLawyer/Lawyer Referral Groups Discriminates Against Solo and Small Firms

By: Doe

Doe — Mon, 07 Nov 2005 01:56:03 +0000

The following is based on an actual situation:
A “service business” installed a manufacturer’s product and a part needed to be replaced, so the serviceman told the customer they ordered the replacement part and it would be there in a week. A few days later, out of the clear blue sky, the customer contacts the “service business” threatening to sue and demanding they immediately remove the installed product and they wanted their money back. The “service business” not wanting trouble sent the serviceman out that same day to remove the product. The refund check could not be issued until the original payment had cleared.
Within the next two days, the “service business” received a letter from an attorney demanding a hefty sum to settle with his clients (aka the customers), alleging several causes of action and threatening to report this “service business” The allegations in the letter were backed up with a competitor’s assessment. The competitor findings were based on his qualifications and experience. He found the “service business” did improper installment, estimated cost to fix damages and costs to replace the product. The assessments and costs totaled about 4 times as much as the original job the “service business” charged. The letter concluded if the demand amount was not received within a number of days his client would file a civil action. If a civil action is filed the “service business” will incur attorney fees to defend and the demand in the complaint will be higher.
The “service business” called the client’s attorney and explained he had the product removed at the customers request and disagreed with the allegations of improper installment and replacement costs. Thereafter the “service business” was served with a summons and complaint. The complaint formally restated that which was in the letter and true to the attorneys word, the demand was much greater.
To make a long story short, the “service business” had to get an attorney. The attorney having a gut feeling that something was out of whack started investigating.
Turns out, the attorneys in the law firm that represent the plaintiff all belong to different chapters of a “Referral Group” consisting of different types of non-attorney businesses. One attorney belongs to Chapter A, another belongs to Chapter B and anther to Chapter C. The attorney who belongs to Chapter C was the attorney who wrote the letter and signed the complaint. Lo and behold, the competitor business is a member of Chapter A.
Apparently the competitor business got wind of the customers problem with the faulty part upon installing the product and advised the customers that they had a law suit, referred them to attorney in Chapter A, and then the attorney in Chapter C (distancing the potential conflict issues) used the referring competitor to back up the demands.
Further investigation into the competitor revealed the competitor was not qualified as he represented and was actually unlawfully in business (Like a paralegal giving legal advice, that kind of unlawful) . . . .
This is where my story ends, I don’t know what the status is right now. But I just wanted to point out what kind of problems can arise from attorneys joining referral groups with non-attorneys. An unethical group of (or one) attorneys could actually conspire with other non-attorneys to create referrals for the attorneys and business for the non-attorneys. What’s worse, an ethical attorney who is in “good faith” relying on the relationships developed with the non-attorney business members could be lured into a false sense of trust by an unethical non-attorney looking for a fast buck.
Ethics rules differ from state to state on this subject -

By: Anonymous

Anonymous — Thu, 19 May 2005 13:11:45 +0000

Carolyn, you’re absolutely right. Is the bar association able to personally vouch for the attorneys on the bar referral list?
What a joke that they would carve out an exception for the association that’s not available to business owners interested in focusing time and attention on relationship marketing. I mean who amongst us doesn’t expect a referral back when we make one to a colleague. This decision was a feeble attempt to demonize a simple and innocent concept.
Overzealous bar counsel who couldn’t make it in the practice of law themselves is one of the things that pushes legitimate practitioners out, leaving clients with fewer choices.
If you ever wonder why these things are not directed at larger law firms take a look at who the officers of the bar associations typically are. How pathetic this whole scene is. I’m just glad to be officially retired from the practice of law. It’s no longer worth the headache with so many other non-regulated ways to help people.

By: Danny Bronski

Danny Bronski — Tue, 03 May 2005 11:05:57 +0000

Carolyn, you have put forth a very compelling and well thought out argument here.
On the one hand, I have a personal distaste for organizations like BNI. As a young solo eager to spread the word, I act as a professional networker as much as I do a professional attorney, and of course I tried a similar organization; it didn’t work for me because the pressure to refer without regard to the qualifications of the other members left a bad taste in my mouth.
On the other hand (and more importantly), we shouldn’t lose sight of the fact that BNI does not seriously compromise an attorney’s ability to use judgement as to when a referral is appropriate. Promoting only what you like and believe in is good business and not just good ethics, and a good attorney would not be swayed from this crede by subtle peer pressure.
As a more general (and more infuriating) matter, it seems that bar associations are more interested in regulating networking activities when solos are involved — ‘cuz I don’t see much attention paid to techniques used by those in larger firms. This ruling is nothing more than “de facto” discrimination against solos’ ability to market a practice. The presumption that we solos can’t be trusted to use judgment seems to hang in the air.
Twenty years from now we will all laugh at the pathetic attempts of bar associations and other annointed members of our profession to keep attorneys from being successful entrepreneurs within our profession.
Allowing entrepreneurial thinking (including the absence of overly broad and foolish restrictions on entrepreneurial activity) leads to innovation and ultimately better service and more value to clients, which should be the main goal of our profession and the main goal of those regulating it.

By: Carolyn Elefant

Carolyn Elefant — Tue, 03 May 2005 09:31:21 +0000

This is part of my point – lawyers like the above commenter are able to exercise discretion in making a decision about whether to join or not. And, perhaps it’s possible that BNI would allow a type of “education only” category where lawyers could attend to learn about other fields and pick up new marketing techniques and participate in the referral system to the extent permitted by applicable rules. I take issue with the Bar’s decision to ban BNI participation entirely and in so doing, prevent attorneys from exercising their own judgment.

By: Joel s.

Joel s. — Mon, 02 May 2005 11:41:50 +0000

Isn’t the distinction between BNI and, say, the Chamber of Commerce related to the fact that BNI exists ONLY for referrals? I don’t know. On the one hand, I think the bar ruling is overly broad; on the other hand, I attended a BNI meeting, and based on what I saw, I certainly wouldn’t feel comfortable becoming a member. I’m a solo practitioner, and the only people I come into contact with are my clients and other attorneys. If a client asks whether I know of someone who cleans rugs/sells jewelry/whatever, I’m happy to give a name if I know one. But (1) I’m certainly not going to initiate the referral discussion, (2) I’m only going to refer someone if I’m aware that they do good work and (3) I’m not going to violate rules (1) and (2) just because I think I can get reciprocal referrals for doing so. I felt uncomfortable with BNI because I felt like my choices were:
(a) Get referrals for other members, but make myself look unprofessional; or
(b) Fail to “pull my weight” in giving referrals.