Supreme Court rejects online attorney listings

Friday, July 9, 1999 | 11:09 a.m.

CARSON CITY -- The Nevada Supreme Court Thursday rejected the petition of a California company that wanted to operate a lawyer referral service on the Internet.

Examen Inc., based in Sacramento, sought approval from the court to set up a business that links clients and lawyers.

The company, which has operated in California since the early 1990s, signs up corporations, insurance firms and government agencies as members. It then contacts attorneys who, for an annual fee ranging from $100 to $195 depending on the size of the law firm, put their names on Examen's list. The lawyers agree to charge under a maximum fee set by Examen for a particular service.

Examen said it was not a lawyer referral service and said its members can select any attorney on the list. Under the contract between Examen and the attorney, a minimum fee of $85 would be paid Examen each time legal services are given for a new matter. Of that $75 comes from the attorney and $10 from the member.

The State Bar of Nevada recommended denial of the application. It said it was concerned because this was the first application for a strictly online service for legal matters. The bar raised numerous questions about the contract between Examen and the attorneys and it called Examen "the legal version of a health maintenance organization."

The Supreme Court rejected the claim from Examen that it was exempt from the rules governing the practice of law in Nevada. The court also refused to certify the company could act in the state.

The court said Examen may terminate the contract with an attorney but the lawyer does not have the same right. That's contrary to Supreme Court rules. The contracts between Examen and the attorneys do not disclose the nature of the legal services to be offered.

The court's unanimous decision said Examen has not presented any information on how it will market its plan to potential members.

"We are concerned that the requirements contained in the rules governing attorney advertising may not be satisfied," the decision said.

The court also objected to the proposed contract that Examen may disclose any information not privileged involving a case. It said that makes Examen "the sole judge whether a particular piece of information is or is not privileged. This is insufficient to protect both clients and lawyers."

The court said the California company failed to meet the requirements and it was not necessary to address the concern of the State Bar over the plans for almost exclusive use of the Internet to conduct business.