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Round Two Begins In Legal Advertising Debate

Grievance panel ruling doesn’t mark end of web site controversy

By DOUGLAS S. MALAN

After more than eight months of speculation, hundreds of attorneys who paid to put their names on a web site designed to help generate business leads likely won’t face sanctions from ethics officials in Connecticut or any of 46 other states.

A three-person panel of Connecticut’s Statewide Grievance Committee has dismissed the cases of five Connecticut-licensed bankruptcy attorneys whose names were on a web site run by Chicago-based Total Attorneys. That ruling signaled the end of an ethics battle between Norwich bankruptcy attorney Zenas Zelotes and lawyers he claimed were violating Practice Book rules by improperly paying money for client referrals.

But Zelotes shows no sign of slowing down.

Last week, he filed a motion in Connecticut Bankruptcy Court to reopen a case handled by Matthew Rousseau, a Massachusetts-based bankruptcy lawyer licensed to practice in Connecticut. Zelotes now is challenging Total Attorneys on the federal level, claiming that its business arrangements with attorneys who sign up for the online service equate to attorneys paying for referrals, which is a felony in Connecticut.

“We brought this issue to the forefront of the minds of the bar,” Zelotes said. “It’s created a much-needed dialogue that just didn’t exist.”

The case, In re Bell, is before Chief Judge Albert S. Dabrowski in Hartford. The question of whether laws might have been broken was not answered by the Statewide Grievance Committee.

Total Attorneys, which runs five web sites, including one dedicated to bankruptcy lawyers, charges participating attorneys $65 for every person in their zip code who uses the web site and enters contact information seeking legal assistance. The company describes its service as group advertising for solos and small firms and says it does not run afoul of any state ethics rules or criminal laws.

‘Destructive Force’

Certainly not everyone is thrilled that the battle will go on.

“[Zelotes] has become such a destructive force in our business,” said one lawyer who was involved in the Connecticut grievance process. “He’s just trying to drive people away [from Total Attorneys] by fear. He seems to be in the business of driving us crazy.”

Rousseau was one of the five lawyers who were cleared by the three-person panel on Jan. 15. The other lawyers are Gregg Wagman, Steven Lesko, Kenneth Lenz and Russell Small. They were among more than 550 attorneys in 47 states that Zelotes targeted with his ethics complaints filed last April.

In total, there are 12 Connecticut attorneys against whom probable cause was found to further investigate their affiliation with Total Attorneys. Manchester lawyer and state Rep. Ryan Barry is among them, and the complaints against the remaining seven attorneys are expected to be dismissed in the near future.

Connecticut was the only state to find probable cause and hold a formal hearing to answer questions about the ethical nature of the Total Attorneys business. Many states’ disciplinary authorities were waiting on Connecticut’s decision before taking any action on Zelotes’ ethics complaints.

Zelotes’ bankruptcy court challenge came just a few days after the grievance panel’s dismissal and before the full-length decision has been released. The dismissal means that the Connecticut panel was not convinced that lawyers’ participation with Total Attorneys violated an ethics rule that prohibits lawyers from paying money to a third party to recommend that lawyer’s services. The panel determined that the Total Attorneys web site made no recommendations of lawyers but simply pointed people toward lawyers within the same zip code.

“My clients believed from the outset they made a good-faith effort to comply with the restrictions on lawyer advertising,” said Pullman & Comley partner David P. Atkins, who presented the arguments at a November hearing. Atkins and Pullman & Comley associate Marcy Tench Stovall represented three of the five attorneys, including Rousseau.

Attorneys Kimberly A. Knox and Brendon P. Levesque, partners of Horton, Shields & Knox, represented Wagman and Lenz.

“We were confident that this was attorney advertising,” Knox said of the Total Attorneys model. “Our clients are thrilled with the [grievance panel’s] decision.”

Raymond A. Garcia, of Garcia & Milas in New Haven, serves as local counsel for Total Attorneys. He had no comment about Zelotes’ attempts to take his fight to the federal level. “We’re just waiting for the full-length decision from the grievance committee right now,” Garcia said.

Though the grievance committee’s ruling has no impact on any action in federal court, the panel’s analysis could be valuable for the defense.

Less Participation

Kevin Chern, an Illinois lawyer who is the president of Total Attorneys, told the Law Tribune last month that Zelotes’ actions have “diverted a significant amount of time and money that would otherwise have been dedicated to continued development of our products and services.”

The company also has become more transparent with lawyers, Chern said, by providing copies of Zelotes’ grievance complaint and the company’s defense of its business.

In Connecticut, there’s been a drop-off in participation. As of late last week, four attorneys in Connecticut did business with Total Attorneys through the company’s web sites that cater to people seeking legal assistance for DUI, divorce, criminal defense, bankruptcy and personal injury. The company’s web sites operate similarly in terms of how they connect potential clients to attorneys in the network.

One Connecticut attorney severed ties with Total Attorneys last month.

“The [grievance panel’s] decision was correct,” the attorney said. “It’s just group advertising.” But apparently the attorney was nervous enough about getting caught up in the controversy that he dropped his affiliation with the company, though he refused to discuss his motivations.

Mark Carbutti, a Wallingford personal injury lawyer who is on the Total Attorneys network, said he is convinced that Total Attorneys operates a group advertising business.

“By no means is it something that represents a significant portion of my business,” Carbutti said. “It’s part of our marketing and advertising and a way for us to get the message out to people we couldn’t reach otherwise.”

Chief Disciplinary Counsel Mark Dubois, who presented arguments at the grievance hearing last November, said the panel’s dismissal may indicate that the state’s ethics rules need to be updated to address the use of new online technology in doing business.

“Connecticut is one of the states that has adopted a fairly aggressive advertising regulation regime, including registration [with the Statewide Grievance Committee] of web sites, Twitter and social media accounts if used for advertising, so our judges have decided this is an area we should be involved in,” Dubois said. “We may propose some rule clarifications.” •