Casting for Clients
With the Help of the Internet, Lawyers Compete for Business
Posted Mar 1, 2004 3:08 AM CDT
By Terry Carter
Randolph M. James does a lot more than simply hang out a shingle to announce his solo law practice in Winston-Salem, N.C. That would be like fishing in a pond with a cane pole.
He’s trawling the seas.
And he’s casting ever-widening nets. James still runs an ad in the Yellow Pages, though he’s been shrinking it the past few years, down to dollar-bill size from three-fourths of a page. The smaller one costs him $36,000 a year and he plans to cut back more, keeping just enough space to list practice areas and, most important, his Web site address.
Feeling his way around in recent years, James tried paying $1,500 for referrals from a products liability Web site and got nothing for it. It might be that consumers searching the Web for a lawyer understand terms like “lemon law” better than they do “products liability.” He also pays a bit more than $100 annually to subscribe to www.bigclassaction.com, but the big one hasn’t come his way yet.
Business did pick up and James started getting some good cases when Martindale-Hubbell’s www.lawyers. com, which handles his Web site, entered into agreements with MSN.com, America Online and others to boost rankings in search engines. Suddenly he was hearing from a lot more prospective clients by e-mail, which has the added value of being more efficient than fielding phone calls. Lawyers.com is one of several better-known lawyer-client matching services that either survived the dot-com bust of a few years ago or took advantage of its lessons.
“I’m staying pretty busy and getting my share of work,” says James, who has a wide-ranging practice that includes personal injury, construction law and professional liability. “Work tends to find prominent, cutting-edge attorneys, but if you’re like the rest of us, you’ve got to find the work yourself or make sure it finds you.”
In 1977, just four years before James started practicing law, the U.S. Supreme Court struck down some prohibitions against lawyer advertising. That launched a revolution in how lawyers and clients find one another. And this has quickened with computerization and the Internet.
“Since I started practicing law, the phenomenon of how you find clients has become just that--a phenomenon,” says James.
It’s A New Game
From the biggest firms with $400,000-a-year marketing directors to the small-town solos with bare-bones Web sites, lawyers are becoming more earnest and sophisticated about trawling for clients.
It’s no longer a matter of word-of-mouth or country club contacts. Many of the new far-reaching efforts to find clients are by solos and small-firm practitioners.
As might be expected, successes are sometimes balanced by transgressions as some push boundaries too far too fast, sometimes to a criminal fault. And some are concerned about overfishing the grounds, as more and more lawyers compete for fewer clients. “There is so much going on that it’s difficult to keep up with all of it,” says Gary A. Munneke, a former chair of the ABA Law Practice Management Section who has written extensively on legal marketing. “Technology has propelled new marketing techniques beyond the traditional professional’s ability to process the changes in the competitive marketplace, particularly in the past few years.”
But what Munneke calls the “traditional professional” is fast becoming a thing of the past. A generation or two of lawyers have come along since the advent of lawyer advertising, many of them since the more subdued early efforts gave way to “Crazy Eddie”-style TV ads and billboards touting payment for pain. Law students and young lawyers today don’t look askance at them; they’re a fact of life, along with the proliferation of ways to jockey for clients.
A confluence of factors explains why and how lawyers are now trawling for clients, says Stephen Gillers, who teaches ethics at the New York University School of Law:
• Court decisions since 1977 have knocked down a number of prohibitions against soliciting clients.
• Since 1971, the percentage of lawyers in the population has more than doubled.
• Law firms have become more entrepreneurial.
• Computerization and other technology aid case management on a large scale.
• A proliferation of Web sites and other Internet solutions help lawyers and clients find one another.
“They feed on each other,” Gillers explains. “Greater volume makes it easier to amortize the cost of mass marketing, which produces greater volume. Fifty years ago, practitioners could handle only a fraction of what high-volume firms do today. Back then they were always at risk of neglecting matters. Now there are technical systems that effectively prevent that.”
Much of what is new in how lawyers and clients find each other is taking place on the Internet. It has enhanced already established marketing techniques, such as advertising, lawyer networks and other affiliations, and it has created new opportunities. It doesn’t take much effort to find a lawyer on the Internet or, for that matter, a cause of action. Some Web sites, such as www.classaction.com and the one for class-action king Milberg Weiss Bershad Hynes & Lerach, encourage potential litigants to fill out forms online to see whether they qualify for any established class actions or to suggest other possible ones.
One entrepreneur who gained success with a Web site for business-to-business sales of goods and services branched out in 2001 to go after the legal market. This is being done with a slew of individual Web sites, all under the umbrella of www.worldjustice.com. They include lawyer-client matching, lawyer-to-lawyer referrals, expert witness directories, advocacy groups and more, including the one that James, the North Carolina lawyer, subscribes to for class actions.
There has been a shakeout among lawyer-client matching services over the past few years, with the dot-com bust bringing down a bunch of them. They all were trying to make money as brokers between lawyers and clients without violating rules against fee splitting. Usually, they charge lawyers for listings.
Gone are www.americounsel.com with Harvard Law School professor Arthur Miller as pitchman; the big one, www.uslaw.com; and one that managed to sign up lawyers despite its name, www.sharktank.com.
This kind of service is being refined now by the likes of West Group subsidiary FindLaw and Martindale-Hubbell, with their lawyer-directory-driven approaches bringing some order to the chaos of the Web.
The other big one, www.LegalMatch.com, was launched in 1999. Potential clients fill out forms online detailing their circumstances and problems. Interested lawyers in the pertinent ZIP codes and practice areas look them over and indicate whether they are interested. Then the potential clients are given options for lawyers to contact--ranging from less experienced and thus less expensive to high-dollar representation.
LegalMatch CEO Dmitry Shubov says the company has grown to 200 employees since it began and, though he won’t detail how many lawyers he’s signed up, the number is in the thousands. He says tens of thousands of searchers come to the site each month looking for lawyers.
Initially, LegalMatch offered a money-back guarantee to lawyers who did not recover the cost of the service through fees from new clients it generated. The money-back program was dropped about a year ago, Shubov says, “because it got the wrong mindset in attorneys who would say after two weeks that they just want their money back.” Also, he says, “So many are renewing and coming to us that we no longer have to worry about the credibility issue.”
One New York City lawyer says he tried LegalMatch a few years ago and got a refund after trying, unsuccessfully, to make it work for him.
“I’ve also tried a couple of others--one is a big name company in the law--and had absolutely no results,” says Jeffrey Bloom, who does immigration law and criminal defense in Flushing, N.Y. “Now I’m listed with a Web site that concerns strictly immigration law and have gotten 20 or 30 clients. The first one was worth five times the money it cost me.”
He pays that site, www.ILW.com, $199 a year.
Most of LegalMatch’s clients are paying between $4,000 and $30,000 a year in three-year contracts, depending on level of experience, practice areas and geographic location, Shubov says.
LegalMatch recently struck a deal with the Utah State Bar to take over its lawyer referral service. LegalMatch also has an agreement with FindLaw that brings in potential cases through that Web site.
LegalMatch’s format goes beyond traditional referral services offered by bar associations and other nonprofits, which usually list lawyers’ names on a rotation basis. Often, a percentage of any lawyers’ fees go to the referral service. But such fee-splitting isn’t permitted with for-profit enterprises such as LegalMatch.
Angst over Advertising
While these matching services are controversial among lawyers from the old school, controversy has always accompanied the practice of trawling for clients. The battles over lawyer advertising are no exception.
The advertisement at the heart of the U.S. Supreme Court’s 1977 door-opening decision in Bates v. State Bar of Arizona was tame considering what has followed. The firm Bates & O’Steen had run an ad simply listing “reasonable rates” and detailing the costs of routine matters such as divorce, adoption and bankruptcy.
Many bets are off as far as what is permitted today. And contingency-fee plaintiffs lawyers have been the most controversial and at the forefront in both volume and experimentation with advertising over the years.
It was still notable and, to some shocking, in 2001 when San Francisco’s now-defunct Brobeck, Phleger & Harrison became the first big nationwide firm to advertise on television. The $3.5 million ad campaign included 30-second spots on CNN.
Plaintiffs lawyers who concentrate on trying cases, or at least on preparing for trial and thus getting better settlement offers, decry the lawyers who undertake massive advertising and few trials. These so-called advertisers refer many cases to other lawyers for doing the work and get percentages of any damage awards or settlements.
Then there’s John Morgan of Orlando, Fla. He says he spends $10 million a year on ads, including 97 billboards across the state showing his dead-serious face, and 500 TV and radio ads daily. All carry his “For the People” message, as does www.forthepeople.com. What sets Morgan apart is the fact that he’s put together a firm of 90 lawyers who critics grudgingly admit are very good at old-fashioned, lots-of-homework lawyering.
Morgan says that soon after he finished law school in 1982, he visited lawyers who were advertising and got some of them to give him difficult cases they didn’t want to take to trial. He saw the power of advertising and the kinds of cases that were coming in.
“I decided to run two parallel paths,” Morgan says. “I started advertising, but I kept practicing law and got on the board of the Florida Academy of Trial Lawyers. And I was active in the community and taking other lawyers to lunch. It all converged, and we now have a generation of lawyers who grew up with advertising and think nothing of it. It used to be hard to recruit somebody, but now the best lawyers are recruiting us.”
And they get plenty of work. Morgan, Colling & Gilbert has a 24-hour call center fielding about 1,000 phone calls daily. A team of 28 investigators looks into potential cases, and the firm signs about 1,600 clients each month.
“I told the guys I was with a while back that you can either eat or be eaten,” says Morgan. But bringing in clients for his firm is not all that Morgan can eat, or all the lawyers he cares to feed. He’s also helping others around the country do the same thing.
Among his many side businesses and subsidiaries are a company offering three seminars annually around the country, titled “Mass Torts Made Perfect,” and an advertising agency for lawyers called “Practice Made Perfect.”
The seminars draw about 600 each, he says. The ad agency works with only one lawyer in a particular television market. It targets markets and packages ads for the lawyers. “We’re in 20 cities now and about to really roll it out in earnest,” Morgan says.
Still, most of those interviewed agree that the primary means for lawyers to get clients is still the old-fashioned one: word of mouth. That might be because most people deal with lawyers so infrequently, if at all, and they fear being taken or getting bad results. If they hear that the friend of a friend used a particular lawyer and is not worse for having done so, that’s often enough.
But just the same, the trawl nets are out there.
The increased efforts by lawyers casting for clients and cases in recent years have sometimes been more than controversial or problematic. Several high-profile cases last year cast a darker shadow over certain client development practices.
Last summer, three young California lawyers with a fast-growing, lucrative practice resigned from the state bar, which had suspended their licenses and was prosecuting them for allegedly shaking down small businesses. Known as the Trevor Law Group, the Beverly Hills lawyers sued thousands of small businesses for technical violations of a consumer-protection statute. They gleaned the information from state government postings on the Internet.
According to the state attorney general’s office, many of those suits were brought by a dummy corporation the lawyers founded. The defendants, primarily restaurants and auto repair shops, often paid as much as $2,500 to settle matters that had merited no more sanction from the state than mention on lists of technical violators.
The lawyers’ resignations ended the bar’s prosecution, but the attorney general’s office filed a civil lawsuit against the firm that alleges unfair business practices. It seeks restitution of settlement money and civil penalties.
A lawsuit filed last year in Jefferson County, Miss., alleged that some lawyers used fake victims in lawsuits against a diet-drug manufacturer, adding to that jurisdiction’s reputation for having more lawsuits than residents. Other suits are cropping up against lawyers and law firms that are alleged to amass cases for settlement with no intention of ever taking them to trial and thus selling the clients short for their own gain. Also last year, three New York City lawyers were charged with fraud for allegedly conspiring with workers at insurance brokerages and medical facilities to file phony auto accident claims.
And, as screening for toxic-tort victims has increased and become increasingly controversial, Wyeth Inc., which created a settlement trust for those injured by the diet drug fen-phen, sued a physician for alleged fraud. The company claims she reviewed 10,000 echocardiograms for 25 law firms and earned more than $1 million in finding 40 percent to 70 percent of them showed serious heart damage. Earlier, the suit alleges, the same doctor had been involved with a published study that found such damage only 5 percent of the time.
The physician’s lawyer has replied in court papers that she acted in good faith and that Wyeth is scrambling because it set aside too little for the fund. Castle v. Crouse, No. 03-5252 (E.D. Pa.).
Whether the allegations stick in these cases, the complaints resonate among those who see a bad side to some aspects of trawling for clients.
“What we have with some of this is modern-day hospital chasing,” says Lester Brickman, who teaches legal ethics at the Benjamin N. Cardozo School of Law at Yeshiva University in New York City. “They’re not just chasing ambulances anymore. This is wholesale. I think modern client recruitment techniques in the aggregative litigation, such as class actions and consolidations, are effectively eliminating restrictions on solicitation.”
Brickman is a noted critic of the mass screenings in tort cases, particularly for asbestos-related disease. So many so-called nonimpaired victims have been found this way in recent years that the plaintiffs bar has, uncharacteristically, split on a major issue. Some want to create an inactive docket that would extend the statute of limitations for those who have not yet become impaired by their asbestos exposure, letting them sue if and when they become impaired. Others want to press all claims now.
The ABA House of Delegates adopted a policy in February 2003 that calls for federal legislation that would limit active cases to those who meet certain medical standards of impairment, and the creation of an inactive docket for nonimpaired asbestos victims.
-- Terry Carter
Terry Carter is a senior writer for the ABA Journal.