As you know, ABA Model Rule 5.4 prevents a lawyer from sharing fees with non-lawyers other than in some limited cases. This is also true in most, if not all jurisdictions. Do lawyers violate this rule if they try to attract clients by sharing a percentage of the fee with the service that provides the means for the lawyers to communicate with the possible clients?
This is the business model of the daily coupon system now known as "Groupon" which offers customers discounted deals for future services.
Given the slow economy, many lawyers are looking for ways to attract new clients so it was inevitable that someone would think of using groupon to do so thus raising the question regarding fee-sharing.
At least two states have now published ethics opinions on the issue and both found that using groupon as an advertising method would not violate the rules that ban sharing fees with a non-lawyer. The North Carolina State Bar so concluded in its Formal Ethics Opinion 10: Lawyer Advertising on Deal of the Day or Group Coupon Website (July 14, 2011) (available here) and the South Carolina Bar did so in its Ethics Advisory Opinion 11-05 (available here). The Virtual Law Practice blog comments on them here.
Given that Groupon takes 50% each time a customer buys the coupon, a lawyer who gets clients' fees through a Groupon deal is, in fact, sharing the fee with Groupon. But I guess I understand the reasoning behind the opinions. The fear behind the ban on sharing fees with non-lawyers is that the non-lawyers could exercise influence over the lawyers thus threatening the lawyers' duty to exercise independent professional judgment. That is not likely to be a problem with Groupon.
Having said that, the fact that it is not unethical to use Groupon to attract clients, does not mean it is a good idea, according to solo practitioner and popular blogger Carolyn Elephant who says that "Groupon’s potential fee-splitting issues that the bar decisions resolve are the least of its problems for lawyers. In my opinion, the ethics decisions are a no-brainer: regulators have no choice but to lighten up on performance-based online advertising (like Google Ads) where participants pay only for results. If not, small firms won’t be able to compete online with large shops which will always have the resources to pay out of pocket for ads and directory listings. So I never got too excited about Groupon’s ethical implications. Instead, I wouldn’t recommend Groupon because the business model simply DOES NOT WORK!" Read her full comment here.
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