Is BNI an Ethics Trap for Attorneys? – Direct Networking for Attorneys
We have been discussing Internet marketing in our blogs for the past few weeks because Internet marketing is the new frontier, but is there still a place for old school direct networking? What do we mean by direct networking? The best examples would be BNI, Inns of Court, Chambers of Commerce, etc. These are organizations who sponsor meetings that members usually are required to attend in order to build relationships and expand their network. The purpose of joining these organizations is to expand your own network by connecting it to the networks of other members. These types of groups can present problems for attorneys because of ethical requirements that regulate our behavior, but for the most part, attorneys may participate if they are careful to avoid certain pitfalls.
I don’t think there has ever been a time in the history of practicing law when making new contacts didn’t benefit one’s practice. It’s true that a lot of our marketing is now done on the Internet. It’s undeniably important to market online and many attorneys benefit from Pay for Lead, legal matching, social media presence, etc., but we ignore direct networking opportunities at our own professional peril. It’s great to get new clients from anywhere, but you cannot beat the loyalty and longevity of clients you develop through personal relationships. It always has been the mantra of marketing experts that the best return on investment for marketing is to direct your marketing toward the people you already know. Direct networking expands that crucial segment of your market – people who you actually know and with whom you interact.
What are the pitfalls? Most state’s ethical rules prohibit attorneys from compensating or rewarding people for referring cases to them. Rule 7.2(b) of the ABA Model Rules of professional conduct provides that, “A lawyer shall not give anything of value to a person for recommending the lawyer’s services . . .” While there are exceptions to this rule, some state bars have specifically determined that attorneys may not belong to organizations in which membership is dependent on the number of leads the member passes. For instance, Virginia determined,
“When membership in a lead-sharing organization is dependent on the number of leads a member passes, the Committee finds that this type of membership requires the lawyer to exchange something of value for referrals.
“The rationale against permitting a lawyer to make such exclusive or quid pro quo referrals is that this activity may compromise the professional judgment of the lawyer. Rule 5.4 precludes the lawyer from allowing another person who recommends the lawyer from directing or regulating the lawyer’s judgment. A lawyer who is beholden to an organization may feel obligated to accept a case he is not competent to handle, or conversely, a lawyer may be obligated to refer a client to a particular member specialist when a non-member specialist may be better suited to meet the client’s needs. Either of these situations may put the client’s interests at risk.” http://www.vacle.org/opinions/1846.htm
Virginia, and other states that made similar determinations, seem to assume that once an attorney becomes a member of the organization, an attorney would necessarily act in a way that violated the ethics rules simply because it might be in the attorney’s financial interest to do so. Attorneys regularly decline to do things that might be in their financial interests because they are ethically prohibited. What makes this situation so different? On the other hand, Florida took a more practical approach stating that “joining a BNI chapter does not violate Florida Bar rules as long as the lawyer does not solicit cases or make referrals to another professional as a quid pro quo for obtaining referrals from that individual.” http://tinyurl.com/zx7esqa
The Virginia position seems to be that if there is the potential for inappropriate conduct, you can’t join the group. Florida took a more practical approach.
Members of these networking organizations are not required to refer to everyone in their group. However, they are expected, but not required to refer business to someone in the group. It’s not intended to be a quid pro quo. Reciprocity is not a requirement. Semantics? Maybe, but if you act ethically it should sort itself out. Not every group is going to be a good match for you. In practice, if there is no one in the group you feel comfortable referring to, you should not be in that group. Find another group where you fit better and you will avoid the ethical problems outlined by the Virginia bar.
The other concern that some bar associations have about attorneys joining networking organizations is that member attorneys may violate the rules against direct solicitation. In many of these groups, you have the opportunity to make short pitches to the group and any visitors present and to even ask to meet a particular person for purposes of acquiring their business. While it’s true that attorney members may be in violation of the prohibition against direct solicitation if they specifically ask another member for their business, this is easily avoidable by simply not doing so. You know, like you don’t do so whenever you meet people individually or in a large group.
We are in the middle of a marketing evolution/revolution for attorneys and it will be interesting to see where it goes.
The Virginia position seems to be that if there is the potential for inappropriate conduct, you can’t join the group. Florida takes the position that you can join the group as long as you don’t violate the state’s ethical requirement. Virginia seeks to avoid not only the appearance of impropriety, but the potential of impropriety while Florida trusts the attorney to adhere to the rules regardless of the potential for ethical violations. If the group’s rules explicitly require reciprocal referrals I don’t think Florida would overlook that and trust the attorney to find a way around the rule. However, Florida specifically addressed BNI groups and representatives from BNI assured the Florida bar that their rules do not require such reciprocity and specifically require that members adhere to the ethical requirements of their own professions.
We are in the middle of a marketing evolution/revolution for attorneys and it will be interesting to see where it goes. It does seem that the relaxation or expansion of the rules to accommodate the realities of Internet marketing is spilling over into traditional forms of marketing. While we are rethinking the existing ethical rules as they may apply to the Internet, it’s prompting us to reconsider that reasoning for the rules in the first place. We are asking ourselves whether the rules offer the protection they intended to provide and even whether that protection was necessary in the first place.
This evolution may ultimately help ethical attorneys compete with attorneys who do not feel similarly constrained by the rules and who engage in such practices as paying “translators” and body shops for referrals. Gone are the days when all we had to do was worry about our business cards, the sign on our door and a discreet listing in the yellow pages. It now takes much more than that to compete. The advantage has shifted from the older, more established attorneys and firms to the more easily adaptable, technically savvy younger attorneys. However, attorneys of any age can participate in direct network marketing. They need only avoid the ethical pitfalls.
Carl P. DeLuca, Esq