SB37 - Attorneys: unlawful solicitations and advertisements.

Senate Bill No. 37 CHAPTER 645 An act to amend Sections 6153, 6155, 6157, 6157.2, 6158.4, 6158.5, and 6158.7 of, and to add Section 6156.5 to, the Business and Professions Code, relating to attorneys. [ Approved by Governor October 11, 2025. Filed with Secretary of State October 11, 2025. ] LEGISLATIVE COUNSEL'S DIGEST SB 37, Umberg. Attorneys: unlawful solicitations and advertisements. (1) Existing law makes it unlawful for any person, firm, corporation, partnership, or association to act as a runner or capper for any attorneys or to solicit any business for any attorneys in and about certain locations, including prisons, jails, and county hospitals, or in any public place or upon private property, as specified. Existing law also makes it unlawful for a person to solicit another person to commit or join in the commission of a violation of that provision. Existing law defines “runner or capper” for these provisions to mean a person, firm, association, or corporation acting for consideration in any manner or in any capacity as an agent for an attorney or law firm in the solicitation or procurement of business for the attorney or law firm, as provided. Existing law prescribes a schedule of punishments for violating these provisions, including imprisonment and fines, as specified. Existing law also prohibits an individual, partnership, corporation, association, or any other nongovernmental entity from operating for the direct or indirect purpose of referring potential clients to attorneys, and prohibits an attorney from accepting a referral of those potential clients, unless certain requirements are met. Existing law additionally prohibits a referral service from being owned or operated by those lawyers to whom more than 20% of referrals are made. Existing law makes an individual, partnership, association, corporation, or other entity that engages, has engaged, or proposes to engage in violations of these provisions liable for a civil penalty, as provided. This bill would additionally authorize any person to bring a civil action for a violation of these provisions for statutory damages, as provided, attorney’s fees, injunctive relief, and any other relief the court deems proper. The bill would require the court, in assessing the amount of statutory damages, to consider all relevant circumstances presented by the case, including the nature and seriousness of the misconduct and the defendant’s assets, liabilities, and net worth. (2) Existing law imposes various requirements on the ownership of a lawyer referral service. Existing law provides that certain provisions relating to these lawyer referral services requirements shall not be construed to prohibit attorneys from jointly advertising their services. Existing law states that permissible joint advertising, among other things, identifies by name the advertising attorneys or law firms whom the consumer of legal services may select and initiate contact with. This bill would also provide that permissible joint advertising requires that each participating attorney or law firm execute a joint advertising agreement with the entity managing the joint advertising agreement with the entity managing the joint advertising services, under which the attorney or law firm expressly takes liability for the content of the advertising. (3) Existing law prohibits an advertisement, as defined, made by an attorney or law firm from making various prohibited statements and requires the advertisement to include certain disclosures, as specified. Existing law defines “advertise” and “advertisement” for these provisions to mean any communication, as specified, that solicits employment of legal services provided by an attorney, agent of an attorney, or law firm, and is directed to the general public and is paid for by, or on the behalf of, an attorney. This bill would revise those definitions and would define “advertisement” for purposes of those provisions to mean any communication, through any written, recorded, or electronic means, whether available to or directed generally to members of the public or to a limited group of individuals, that provides information concerning a lawyer or the lawyer’s services for the purpose of encouraging individuals to secure the services of the lawyer or a law firm. The bill would define “advertise” for purposes of those provisions to mean to engage in any communication constituting an advertisement. (4) Existing law prohibits a legal advertisement from containing or referring to specified statements or representations, including prohibiting an advertisement from containing a guarantee or warranty regarding the outcome of a legal matter as a result of representation by an attorney, attorney’s agent, or law firm. This bill would additionally prohibit an advertisement from containing misleading, deceptive, or false statements, words, or phrases regarding a lawyer’s or a law firm’s skills, experience, or record, and would also prohibit an advertisement from containing references to a lawyer’s or a law firm’s recognition by, or awards from, an organization, unless the recognition or award is not conferred by virtue of being a member of the organization and the organization does not charge or solicit a fee, cost, or payment for the recognition or award. The bill would also require a legal advertisement to contain specified information conspicuously displayed, or intelligible, if spoken, including disclosure of the city, town, or county of at least one bona fide office location or the address of record listed with the State Bar of California (State Bar) for the lawyer or law firm, as specified. (5) Existing law authorizes a person claiming a violation of specified provisions of law governing false, misleading, or deceptive legal advertising to file a complaint with the State Bar and requires a copy of the complaint to be served simultaneously upon the advertiser. Existing law provides a process whereby an advertiser may voluntarily withdraw the advertisement, within specified timelines, before or after the State Bar makes a determination of whether substantial evidence of a violation exists. Existing law provides that the State Bar review procedure applies only to licensees and certified referral services. Under existing law, if the State Bar determines that substantial evidence of a violation exists and the licensee or certified lawyer referral service who broadcasts the advertisement fails to withdraw the advertisement within 72 hours, a civil enforcement action may be commenced for an amount up to $5,000 for each individual broadcast. This bill would require a copy of the complaint to be personally served simultaneously upon the advertiser. The bill would limit the 72-hour deadline to withdraw an advertisement to an electronic broadcast, and for any other medium would require notice of withdrawal to be submitted to the State Bar within 72 hours and withdrawal to occur as soon as practicable, not to exceed 30 days. The bill would extend the application of the State Bar review procedure to individuals or entities that participate in joint legal advertising arrangements in compliance with specified provisions. The bill would authorize a consumer who was misled by an advertisement in violation of the bill’s provisions to bring a civil action for specified damages and relief if the consumer first files a complaint with the State Bar under the above-described process, the State Bar determines that substantial evidence of a violation exists, and the advertiser does not withdraw the advertisement, or the advertiser withdraws the advertisement, but then subsequently rebroadcasts the advertisement, as provided. The bill would authorize a civil action under these circumstances for the damages described above, or for statutory damages, as provided, attorney’s fees, injunctive relief, and any other relief the court deems proper, as provided. (6) Existing law prohibits, in advertising by electronic media for compliance with certain provisions, a message from being false, misleading, or deceptive, and requires the message as a whole to be factually substantiated. Existing law provides that a violation of this prohibition and requirement, among other provisions, is cause for discipline by the State Bar, as specified. This bill would expand the types of violations that would be a cause for licensee discipline, including, but not limited to, the provision prohibiting an advertisement from containing any false, misleading, or deceptive statement, or from omitting any fact necessary to make the statements made, in light of circumstances under which they are made, not false, misleading, or deceptive. (7) Existing law excludes media in which advertising in displayed and advertising agencies that prepare advertising content from specified provisions regulating to legal advertisement content. This bill would also exclude broadcasters that disseminate advertisements from the provisions regulating legal advertisement content. (8) This bill would make conforming changes. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: NO Local Program: NO Bill Text The people of the State of California do enact as follows: SECTION 1. Section 6153 of the Business and Professions Code is amended to read: 6153. (a) A person, firm, partnership, association, or corporation violating subdivision (a) of Section 6152 is punishable, upon a first conviction, by imprisonment in a county jail for not more than one year or by a fine not exceeding fifteen thousand dollars ($15,000), or by both that imprisonment and fine. Upon a second or subsequent conviction, a person, firm, partnership, association, or corporation is punishable by imprisonment in a county jail for not more than one year, or by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code for two, three, or four years, or by a fine not exceeding fifteen thousand dollars ($15,000), or by both that imprisonment and fine. (b) A person employed either as an officer, director, trustee, clerk, servant or agent of this state or of any county or other municipal corporation or subdivision thereof, who is found guilty of violating any of the provisions of this article, shall forfeit the right to their office and employment in addition to any other penalty provided in this article. (c) Any person may bring a civil action for a violation of subdivision (a) of Section 6152 for the following remedies: (1) Statutory damages of a minimum of five thousand dollars ($5,000) up to a maximum of one hundred thousand dollars ($100,000) per violation, or three times the amount of actual damages, whichever is larger. The amount of statutory damages in this subdivision shall be determined pursuant to subdivision (d). (2) Attorney’s fees. (3) Injunctive or declaratory relief. (4) Any other relief the court deems proper. (d) In assessing the amount of statutory damages, the court shall consider any one or more of the relevant circumstances presented by the case, including, but not limited to, the nature and seriousness of the misconduct, the number of violations, the persistence of the misconduct, the length of time over which the misconduct occurred, the willfulness of the defendant’s misconduct, and the defendant’s assets, liabilities, and net worth. (e) The right of action under this section exists independently of any enforcement action or inaction by any governmental agency or official. SEC. 2. Section 6155 of the Business and Professions Code is amended to read: 6155. (a) An individual, partnership, corporation, association, or any other nongovernmental entity shall not operate for the direct or indirect purpose, in whole or in part, of referring potential clients to attorneys, and no attorney shall accept a referral of such potential clients, unless all of the following requirements are met: (1) The service is certified by the State Bar of California and is operated in conformity with minimum standards for a lawyer referral service established by the State Bar and approved by the Supreme Court. (2) The combined charges to the potential client by the referral service and the attorney to whom the potential client is referred do not exceed the total cost that the client would normally pay if no referral service were involved. (b) A referral service shall not be owned or operated, in whole or in part, directly or indirectly, by those lawyers to whom, individually or collectively, more than 20 percent of referrals are made. For purposes of this subdivision, a referral service that is owned or operated by a bar association, as defined in the minimum standards, shall be deemed to be owned or operated by its governing committee so long as the governing committee is constituted and functions in the manner prescribed by the minimum standards. (c) None of the following is a lawyer referral service: (1) A plan of legal insurance as defined in Section 119.6 of the Insurance Code. (2) A group or prepaid legal plan, whether operated by a union, trust, mutual benefit or aid association, public or private corporation, or other entity or person, which meets both of the following conditions: (A) It recommends, furnishes, or pays for legal services to its members or beneficiaries. (B) It provides telephone advice or personal consultation. (3) A program having as its purpose the referral of clients to attorneys for representation on a pro bono basis. (4) A nonprofit organization that partners with a referral service as provided in this article. (d) The following are in the public interest and do not constitute an unlawful restraint of trade or commerce: (1) An agreement between a referral service and a participating attorney to eliminate or restrict the attorney’s fee for an initial office consultation for each potential client or to provide free or reduced fee services. (2) Requirements by a referral service that attorneys meet reasonable participation requirements, including experience, education, and training requirements. (3) Provisions of the minimum standards as approved by the Supreme Court. (4) Requirements that the application and renewal fees for certification as a lawyer referral service be determined, in whole or in part, by a consideration of any combination of the following factors: a referral service’s gross annual revenues, number of panels, number of panel members, amount of fees charged to panel members, or for-profit or nonprofit status; provided that the application and renewal fees are reasonable and necessary to cover the cost of the program and established by the State Bar through the rulemaking process. (5) Requirements that, to increase access to the justice system for all Californians, lawyer referral services establish separate ongoing activities or arrangements that serve persons of limited means. (6) Partnerships or agreements between a referral service and a participant’s nonprofit organization to refer potential clients for assista [Text truncated for display. Full text available on Congress.gov.]