Leads and referral fees
Can a law firm pay for leads or referrals?
Paying for advertising is fine almost everywhere. Paying someone to recommend you, or for a specific injury client, often isn't. Where the line sits in the US, Canada, Australia and the UK.
By Santiago Alvarez, Founder, Ad Hoc Digital
Last updated
The short answer
If you read one part of this page, read this.
Yes, in most places, if what you're paying for is advertising rather than a recommendation. In the US, ABA Model Rule 7.2(b) and its comment [5] allow paying a lead generator as long as it doesn't recommend you, its pay doesn't split your fee, and its messages aren't misleading. New York, Texas, Florida and Illinois add their own conditions.
Outside the US the lines are sharper. Ontario caps referral fees between lawyers and bans rewards to non-licensees. In England and Wales, LASPO section 56 bans referral fees in personal injury claims, and Queensland, New South Wales and the ACT make paying for injury claim referrals a criminal offence, with a carve-out for advertising to the public.
We run ads in firms' own accounts and never take a share of a client's fees, and we see firms weigh lead vendors against their own ads every week. This is a plain summary for marketing planning, not legal advice. Check the current rule with your bar or law society. We work with law firms across the US and Canada, and also in Australia and the UK.
Where the line is
You can pay to be seen. You generally can't pay someone to recommend you or to hand you a specific client.
Every rule below is a version of that distinction. Places differ on the middle: lead generators, directories and per-case pricing.
- Advertising: allowed
ABA comment [3] lists print and online directory listings, newspaper ads, TV and radio airtime, domain names, sponsorships, internet-based ads and group advertising. It also allows paying employees and vendors for marketing, like publicists and website designers.
- Recommendations: not allowed
Comment [2] says a communication recommends a lawyer if it endorses or vouches for the lawyer's credentials, abilities, competence or character. Paying for that is banned unless an exception in 7.2(b) applies. A directory listing by practice area, without more, isn't a recommendation.
- Lead generators: allowed, with conditions
Comment [5] allows paying for leads if the generator doesn't recommend you, the payment is consistent with the fee-division and independence rules (1.5(e) and 5.4), and it doesn't state or imply that it's recommending you, referring for free, or has analyzed the person's problem.
The other ABA exceptions in 7.2(b): a legal service plan or a not-for-profit or qualified referral service's usual charges, buying a practice, non-exclusive reciprocal referral deals the client is told about, and nominal thank-you gifts that aren't expected as payment. Our ABA Model Rules guide covers the rest of Rule 7.2.
US states
Most US regulators accept pay-per-lead, and each adds a condition about how lawyers are chosen or what the vendor says.
These are the state rules and opinions we read on official pages. Each one turns on the same three questions: who picks the lawyer, what the consumer is told, and how the vendor is paid.
| Jurisdiction | Rule or opinion | What it requires |
|---|---|---|
| New York | NYSBA Opinion 1131 (2017) | Lawyer chosen by transparent, mechanical methods; no recommendation; the site meets the advertising rules |
| New York | NYSBA Opinion 1267 (2024) | A site promising "carefully vetted" lawyers with excellent qualifications is recommending them; paying it violates Rule 7.2(a) |
| New York | NYSBA Opinion 1294 (March 2026) | Neutral, disclosed selection criteria, no recommendation, and a price that doesn't vary with whether a hire results or the size of the fee |
| Texas | Opinion 573 (2006) | Wholly automated selection, consumers told only paying lawyers respond and no quality claims are made, and a reasonable fee |
| Florida | Rule 4-7.22 | Directories and lead generators are "qualifying providers": no fee sharing, no in-person solicitation, yearly report to the Bar, at least 4 firms participating, the lawyer's office city disclosed |
| Illinois | Rule 7.2(c) to (f), July 2025 | Disclose the relationship and fees to the client; no outcome-based or percentage-of-fee charges; pay per lead or a reasonable flat fee per hire allowed |
| California | B&P 6152, 6155; Rule 7.2(b) | Referral services must be State Bar certified; paid runners and cappers are unlawful |
Florida puts the burden on the lawyer. Under 4-7.22(e), a lawyer who doesn't do due diligence on a provider, or doesn't stop participating within 30 days of the Bar saying it's noncompliant, is responsible for the provider's breaches. Our Florida Bar guide has the full rule, and the New York guide covers the 2026 changes.
Canada
Canadian law societies allow paying for advertising but ban rewards to non-lawyers for referring clients.
Ontario, British Columbia and Alberta all have a rule 3.6-7. Ontario also caps what one lawyer may pay another.
- Ontario: a capped referral fee between licensees
Rule 3.6-6.1 allows a referral fee between lawyers and paralegals only with a signed agreement on the Law Society's form, and caps it at 15% of the fees on the first $50,000 plus 5% above that, to a maximum of $25,000. The fee must appear on the client's account.
Rule 3.6-7 bans giving any financial or other reward to someone who isn't a lawyer or paralegal for referring clients, and 3.6-7.1 catches doing it indirectly. Its commentary says anything that has the effect of rewarding a referral breaches the rule unless done primarily for other bona fide purposes.
- British Columbia: reasonable promotion, no referral rewards
Rule 3.6-7 (amended November 2024) bans referral rewards to anyone but another lawyer. Commentary [1] still allows reasonable promotional spending that might bring referrals generally, including occasionally entertaining referral sources.
- Alberta: advertising costs, not per-matter pay
Commentary [2] to Rule 3.6-7 in the 2026 Code says lawyers may pay non-lawyers for direct and reasonable advertising costs, including a lawyer referral service, and pay people for general marketing, provided the pay is not directly related to a specific client matter.
The phrase that matters in Alberta, "not directly related to a specific client matter", is the one a per-signed-case vendor fails. Our Ontario rules guide and BC and Alberta guide cover the rest of each code.
Australia
Three Australian jurisdictions make paying for an injury claim referral a criminal offence, and all three exempt public advertising.
The claim farming laws target people who contact injured people and sell them on to law firms. NSW and the ACT define a referral to include disclosing a claimant's personal details.
| Jurisdiction | The ban | Advertising carve-out |
|---|---|---|
| Queensland | PIPA s 71: no giving or receiving consideration for a claim referral (300 penalty units); s 71B: no approaching people to solicit claims; s 71D: fees not recoverable after a conviction | s 70(2): advertising or promotion to the public or a group isn't a claim referral; s 71A excludes non-cash gifts or hospitality of $200 or less |
| New South Wales | Claim Farming Practices Prohibition Act 2025 s 6: no paying or receiving consideration for referring a personal injury claim (500 penalty units); "referral" includes disclosing a claimant's personal details | s 7: advertising, marketing or promoting a law practice to the public, and paying for it, isn't an offence |
| Australian Capital Territory | Civil Law (Wrongs) Act pt 15.4A, s 221C: no fee or benefit for a claim referral (300 penalty units); s 221B: no paid contact with claimants; motor accident claims are outside this part | s 221D: advertising to the public or a group, and fees for it, are excluded |
Read together, paying a vendor per injury lead is the risky shape in all three places: Queensland bans consideration for any referral of a claimant for a service, and in NSW and the ACT handing over a person's details is itself a referral. Paying for ads that run to the public is exempt. Our guides to Queensland personal injury advertising and NSW personal injury advertising cover the advertising limits.
England and Wales
Solicitors can't pay or receive referral fees in personal injury work, and must disclose any referral arrangement in other work.
LASPO 2012 section 56 sets the personal injury ban. The SRA's code sets disclosure duties for every referral and introducer.
- LASPO s 56: a regulated person breaches the section by paying or being paid for referring "prescribed legal business", which means claims for damages for personal injury or death. A referral is giving someone the information a provider would need to make an offer to the client. Payment includes any consideration except reasonable hospitality.
- SRA Code of Conduct for Solicitors 5.1 (applied to firms through the Code for Firms): tell clients about any financial interest an introducer has, tell them about any fee sharing, put fee sharing in writing, make no referral payments for clients in criminal proceedings, and don't take clients an introducer acquired in a way that would breach SRA rules.
- SRA Code 5.2: if the SRA thinks you made or received a referral fee, it's treated as one unless you show otherwise.
- SRA comparison website guidance: a subscription fee to be listed, paid whether or not leads arrive, isn't a LASPO referral fee; nor is a fee per quote sent where the firm doesn't receive the consumer's name and contact details.
The UK test turns on information. Paying for exposure is fine; paying for a named person's details in an injury claim isn't. Our SRA marketing rules guide covers the rest of the solicitor rules.
Google Local Services Ads
Local Services Ads charge per lead, and no adopted ethics opinion we found names them.
Google charges a set amount per valid lead, never a share of the fee, and the charge doesn't depend on whether the person hires you.
Google's help page says you pay for valid leads and set a bid as the maximum you're willing to pay per lead. A lead is a call, message, voicemail or booking request; a missed call is charged only during business hours and ad schedule if the caller stays on the line more than 20 seconds; and repeat contact from the same person within 15 days isn't charged again. Our Local Services Ads vs Google Ads guide compares the two models.
The one bar that drafted an opinion on it, North Carolina, published Proposed 2021 FEO 5 on a pay-per-lead program that recorded calls, then withdrew it in April 2022. Its Journal said a platform-specific opinion wouldn't help and reminded lawyers to investigate any advertising program before joining. We found no adopted opinion naming Local Services Ads anywhere in this guide.
Before you sign
Six questions to put to any lead or referral vendor before you pay it.
The answers map straight onto the rules above. If a vendor won't answer one in writing, that's your answer.
How is the lawyer chosen?
Mechanical, neutral and disclosed criteria (location, practice area, order of response) fit New York and Texas. "We match you with the right lawyer" doesn't.
What does the consumer see?
Ask for screenshots. Look for recommendation language, quality claims, or anything implying the service is free or analyzed their case.
How is the price calculated?
Per lead or flat listing is the common safe shape. A percentage of your fee is fee sharing in most places, and outcome-based pricing is out in Illinois.
Is it exclusive, and can you leave?
Illinois treats exclusivity requirements as interference. Everywhere, you want to be able to stop.
Does anyone contact people directly?
Cold calls, texts or DMs to injured people are solicitation for a lawyer, and claim farming in Queensland, NSW and the ACT.
Are calls recorded, and who keeps them?
North Carolina's withdrawn opinion still left lawyers with a duty to investigate how a platform handles prospective client information.
What we see
We see the same pattern often: firms that bought leads for years, then built sources they own.
Some vendors comply, and some leads sign. But firms that come to us after lead vendors usually describe shared leads, rising prices and nothing left when they stop paying.
A landlord-side real estate lawyer came to us in debt after burning thousands on bought leads; he's had $30,000 to $50,000 months for over two years. A DUI solo who had tried SEO, PPC, social and purchased leads made $13,500 from $600 in ad spend on Local Services Ads. A Toronto solo who relied on an inconsistent lead vendor signed a first client within a day of launching Google search ads.
Here's the math we walk firms through, as a hypothetical. A vendor charges $200 per lead; the firm buys 25 a month ($5,000) and signs 4, so $1,250 per signed case. The same $5,000 in the firm's own Local Services Ads account is paid straight to Google on the firm's card, and the reviews, account history and data stay with the firm. The cost per signed case guide has the full method.
That's also how we work: ad spend goes to Google or Meta from the firm's own accounts, and we never take a share of a client's fees. For personal injury firms in particular, that keeps the referral-fee rules out of the relationship entirely.
Common mistakes
Where firms go wrong.
The lead and referral arrangements we most often see firms sign without reading the rule first.
Paying a percentage of the fee
A share of your legal fee is fee splitting with a non-lawyer in most US states, banned in Ontario, BC and Alberta, and outcome-based or percentage pricing is excluded in Illinois.
Vendors that say they recommend you
New York's Opinion 1267 found a site promising carefully vetted lawyers with excellent qualifications was recommending them. Read the vendor's consumer-facing copy, not just the contract.
Buying injury leads in England, Wales or eastern Australia
LASPO s 56 and the Queensland, NSW and ACT claim farming laws treat paying for an injury claimant's details as a referral fee or offence.
No due diligence on file
Florida and Illinois both put the burden on the lawyer to check the provider. Keep the vendor's written confirmation and review it yearly.
Thank-you gifts that become payments
The ABA allows nominal gifts not expected as payment. A standing $100 per referral to a chiropractor is a payment.
Real results
What this looked like for real firms.
Firms that moved from bought leads to sources they own.
Identifying details are anonymized to protect our clients. Individual result, not a promise or prediction of any specific outcome for your firm.
FAQ
Questions lawyers ask us.
Straight answers to the questions that come up most.
Is it legal for lawyers to buy leads?
In most US states, yes, under ABA Model Rule 7.2 comment [5] and state equivalents, if the vendor doesn't recommend you, isn't paid a share of your fee, and its messages aren't misleading. Outside the US, Canada allows advertising costs but not referral rewards to non-lawyers, and injury claim referrals are banned in England and Wales and parts of Australia.
Can a lawyer pay a referral fee to a non-lawyer?
Generally no. ABA Rule 7.2(b) bans paying anyone for a recommendation outside its exceptions, and Ontario, BC and Alberta's rule 3.6-7 bans rewards to non-lawyers for referrals. Nominal, unexpected thank-you gifts are allowed under the ABA rule. Payments to another lawyer are a separate question, such as Ontario's capped fee under 3.6-6.1.
What is Ontario's referral fee cap?
Rule 3.6-6.1 caps a referral fee between licensees at 15% of the fees on the first $50,000 and 5% of fees above that, to a maximum of $25,000. It requires a signed referral agreement on the Law Society's form, and the fee must be noted on the client's account.
Are Google Local Services Ads a referral service?
No adopted ethics opinion we found says so either way. Google charges a set price per valid lead and nothing based on the fee or outcome. North Carolina's 2021 proposed opinion on a pay-per-lead program was withdrawn in 2022. How LSA charges is in our LSA lead credits guide.
Can I pay a lead generator per signed client?
It depends where. Illinois' comment [7] allows a reasonable flat fee per connection that becomes a client. New York's Opinion 1294 required a price that doesn't vary with whether a hire results. Alberta bars pay directly related to a specific client matter. Check your own rule before agreeing to per-case pricing.
Can solicitors in England pay for personal injury leads?
Not for a named claimant's details. LASPO s 56 bans paying or receiving referral fees in personal injury and death claims, and a referral includes passing on the information needed to make an offer. The SRA says a flat listing fee on a comparison site, or a per-quote fee without contact details, isn't a referral fee.
Do you sell leads to law firms?
No. We run marketing in each firm's own ad accounts, the firm pays the platforms directly, and we never take a share of a client's fees. Schedule a consultation if you'd like to compare what you pay a vendor with what your own ads would cost.
Where we do this
The services this guide touches.
What this looks like when we run it for a firm, with a demo for your practice on each page.
Sources
Where these facts come from.
Official pages we read when writing this page. Platforms and rules change, so check the current version before you act on any of it. This is marketing guidance, not legal advice.
- American Bar Association, Model Rule 7.2: Advertising
- American Bar Association, Comment on Model Rule 7.2
- New York State Bar Association, Ethics Opinion 1131
- New York State Bar Association, Ethics Opinion 1267: Paying for a recommendation or referral
- New York State Bar Association, Ethics Opinion 1294: Solicitation, advertisement, lead generators
- Texas Center for Legal Ethics, Professional Ethics Committee Opinion 573
- The Florida Bar, Handbook on Lawyer Advertising (13th ed., December 2025), Rule 4-7.22
- Illinois Courts, Rule 7.2: Advertising (effective July 1, 2025)
- Law Society of Ontario, Rules of Professional Conduct, Chapter 3
- Law Society of British Columbia, Code of Professional Conduct, Chapter 3
- Law Society of Alberta, Code of Conduct (version 2026_V1)
- Queensland Legislation, Personal Injuries Proceedings Act 2002
- Parliament of New South Wales, Claim Farming Practices Prohibition Bill 2025 (as passed by both Houses)
- ACT Legislation Register, Civil Law (Wrongs) Act 2002, Part 15.4A
- legislation.gov.uk, Legal Aid, Sentencing and Punishment of Offenders Act 2012, section 56
- Solicitors Regulation Authority, Code of Conduct for Solicitors, RELs, RFLs and RSLs
- Solicitors Regulation Authority, Engaging with comparison websites
- Google Local Services Help, How leads work
- North Carolina State Bar, The Difficulty of Opining on Internet Advertising Programs Such as Google's LSA Program
Written by
Founder of Ad Hoc Digital. Leads strategy and works directly with every client firm on AI search, Local Services Ads, Google Ads and Meta ads.
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