Concept
No Payment for Recommendations
Permitted means of advertising and payment for recommendations
No Payment for Recommendations
A lawyer may not “compensate, give or promise anything of value to a person for recommending the lawyer's services,” except as the rule's own exceptions allow.1 This is the second check on any marketing plan. The first asks whether the lawyer may use a given medium. This one asks what the lawyer pays, and to whom, in return for being recommended. A plan can pass the first check and fail the second, because permission to speak through a medium is not permission to buy someone else's endorsement. The general prohibition comes first in the analysis, since each exception works by lifting one particular kind of payment out of its reach.
The prohibition has two elements, and a violation needs both. The first is that the lawyer compensates, gives, or promises something of value. Those three verbs cover paying after the fact, handing over a gift, and committing to a reward not yet delivered. A lawyer who tells a referral source that everyone sent over will be taken care of has therefore broken the rule before anything changes hands. Value also reaches past cash. A personal-injury lawyer who promises a chiropractor two basketball tickets for every patient sent to the office has promised something of value, and the tickets are the price of the referrals. The second element is a recommendation, meaning that a person steers a prospective client toward the lawyer by pointing, vouching, or sending the client over. The recommendation is the recipient's voice and not the lawyer's, which is what separates it from an advertisement, where the lawyer's own message travels through a medium.
The same two elements show what the rule leaves alone. A former client who tells a neighbor that a lawyer handled a matter well has made exactly the kind of recommendation the stylist made. Word of mouth from satisfied clients was the traditional way lawyers found business, even in the years when almost no other marketing was tolerated.2 The first element is missing, however, if the lawyer gave and promised the former client nothing, so no violation occurs. A closer case is a payment to a newspaper at its published rate to print an announcement of the lawyer's availability. The newspaper receives money and carries the lawyer's name to its readers, yet the first exception answers the question: a lawyer may pay the reasonable costs of advertisements or communications that the Rule permits.3 That exception keeps the prohibition from swallowing the permission to advertise.
The prohibition rests on three concerns. The first is the lawyer's independence. The profession has long distrusted financial arrangements with nonlawyers because they are likely to undermine the lawyer's professional independence, and Rule 5.4(a) bars the sharing of legal fees with a nonlawyer to protect the lawyer's independence of judgment.4 A lawyer who depends on a paid referral source faces the same pressure. The source's interest in the next payment is not the client's interest, and the lawyer may hesitate to give advice that displeases the source. The second concern is enforcement. As Professors Rotunda and Dzienkowski put it, the Rules do not apply to nonlawyers, so the bar would have trouble regulating the profession if nonlawyers outside law firms had a reason to profit from the practice of law.5 A paid referral source is exactly such a person, and the Rules reach the lawyer who pays but not the recommender who is paid. The third concern is what the client sees. The Court in Bates accepted restrained advertising because it helps the public choose lawyers intelligently.6 Information that a lawyer publishes under the lawyer's own name serves that purpose. A purchased recommendation, by contrast, sounds like disinterested advice while hiding a financial stake the client cannot detect.
Accuracy is a separate requirement, and it does not rescue a paid recommendation. Rule 7.1 supplies the standard that governs all regulation of attorney advertising and solicitation: a lawyer may not make a false or misleading communication about the lawyer or the lawyer's services.7 The two rules operate independently. A lawyer's message can be truthful and still violate the ban on paying for recommendations, and a free recommendation can be lawful while the lawyer's own message is misleading.
The sections that follow take up the exceptions. The widest is payment of advertising costs, and several narrower ones deal with legal service plans, referral services, the purchase of a practice, reciprocal referrals, and nominal thank-you gifts. On an exam, the usual trap pairs a lawful medium with a payment to a person who sends clients over. An answer that confirms the channel is open has finished only the first check and still owes an analysis of whether anything of value was compensated, given, or promised to someone for recommending the lawyer. The opposite error treats every payment connected with getting clients as forbidden, which overlooks that paying the cost of a permitted advertisement falls within an exception.