Thursday, April 28, 2016

Podcast: interview with Legal Zoom

Last year I posted a link to a podcast on LegalZoom with its CEO, John Suh (see here).  The Legal Talk Network has a new one here.  You can listen to is by clicking the play button below or by going to the link.

ABA issues new ethics opinion on splitting fees under Model Rule 1.5(e)

EThe Standing Committee on Ethics and Professional Responsibility of the ABA recently issued a new ethics opinion reviewing the details on splitting fees under Model Rule 1.5(e).  You can read and download the opinion here.  (Remember the the opinions are available free for a limited time.)

The opinion is fine.  I don't think there is really anything in it that we didn't know already.  Here is the summary:  "Rule 1.5(e) allows lawyers who are not in the same firm to divide a fee under certain circumstances. A lawyer who refers a matter to another lawyer outside of the first lawyer’s firm and divides a fee from the matter with the lawyer to whom the matter has been referred, has undertaken representation of the client. Fee arrangements under Model Rule 1.5(e) are subject to Rule 1.7. Unless a client gives informed consent confirmed in writing, a lawyer may not accept a fee when the lawyer has a conflict of interest that prohibits the lawyer from either performing legal services in connection with or assuming joint responsibility for the matter. When one lawyer refers a matter to a second lawyer outside of the firm and the first lawyer either performs legal services in connection with or assumes joint responsibility for the matter and accepts a referral fee, the agreement regarding the division of fees, including client consent confirmed in writing, must be completed before or within a reasonable time after the commencement of the representation."

You can read more on the Opinion at Lawyer Ethics Alerts Blog, Professional Liability Matters, The ABA Journal, and Lawyers for the Profession.

Interestingly, the Court of Appeals in Illinois recently issued an opinion on the splitting fees that illustrates how the ABA's opinion could be applied.  In Naughton v. Pfaff,  a referring attorney sought to recover under an oral fee-sharing agreement with another attorney, alleging that the receiving attorney breached his fiduciary duty by failing to obtain the client's signed consent. The Court held that both attorneys have a non-delegable ethical obligation to ensure that the client agrees in writing to a fee division. Absent the client's signed consent, the attorneys' agreement violated the Rules of Professional Conduct and thereby precluded recovery.  These are the consequences of not getting client consent, which the ABA Opinion explains should be done before the beginning of the representation.  Go here for a discussion of the case.

Wednesday, April 27, 2016

I just posted a short article on SSRN on Indiana's opinion regarding confidentiality and reporting child abuse

Last year, the Ethics Committee of the Indiana Bar Association issued an opinion on whether an attorney has to comply with the state's mandatory child abuse disclosure statute.  I did not like the opinion and wrote about it here and here.  I looked further into it and wrote a short article.  If you are interested, you can read it on SSRN.  Feel free to send me your comments.

Tuesday, April 12, 2016

Saturday, April 9, 2016

Is it ethical for a firm to pay Uber to provide transportation for clients

Over at My Shingle (a blog I recommend, by the way), Carolyn Elefant discusses whether it is ethical for a law firm to pay a client's transportation costs via Uber.  Does paying for a taxi (or a rental car) for a client constitute a violation of the rule that bars attorneys from providing financial assistance to clients?  (This is assuming the client is involved in litigation because the rule does not apply if the attorney-client relationship relates to transactional matters.)  If so, why would using Uber be different?   Carolyn argues Uber is different.  You can read her comment here.

Avvo now offers free legal forms

A few days ago, Avvo announced it has started yet another new law practice related service:  Avvo Legal Forms, which offers free legal forms.  According to one report, Avvo describes the forms as “a selection of no-cost, high-quality legal forms for family, business, estate planning and real estate.” So far, Avvo Legal Forms lists just 20 available forms. But Avvo says that it expects to have more than 200 forms available by the end of the year. The forms include a “wizard” feature to assist in filling them out, as well as e-signature capability."  

This new venture places Avvo in competition with LegalZoom and Rocket Lawyer, both of whom have been offering legal forms for some time.  Only, and big, difference is that Avvo is offering the forms for free.

And free is good, right?  Well, yes and no.  Free is good if you are only thinking about the initial cost.  But cost also must take into account quality because if the product is lousy it may end up costing the consumer more in the long run.

I have not looked at the Avvo website carefully nor at the forms so I can't comment on the quality, but the first review I saw (Adams on Contract Drafting) calls it "a real stinker."  You should read the review to get the details.  One part of the argument is that the forms are sloppy, imprecise, confusing, etc - in other words that they are not very good.  The other part of the argument is that Avvo's business model creates a race to the bottom where lawyers are willing to give up quality of service in general, which in the end is bad for consumers.  [Interestingly, this was part of the argument originally made against allowing attorneys to advertise (remember Bates?).]

Avvo, on the other hand, as it has done in the past, claims that what it is doing is providing avenues for people to get better access to legal representation.  But I find the way Avvo explains its position curious.  In an interview in Law Sites, Avvo's CEO states that "By providing free legal forms, Avvo Legal Forms is an attempt to get in front of consumers who would otherwise go to paid form sites such as LegalZoom and RocketLawyer and bring them to Avvo, where they can be introduced to Avvo’s various services for connecting consumers with lawyers."  Also, in the comments to the review itself, Avvo's general counsel wrote:  "While our forms are designed to cover a wide range of basic situations . . . they’re not – or at least, shouldn’t be – comparable to a lawyer’s custom work product. And that’s where your post misses the larger point: we believe that many consumers who are currently trying to go it alone would benefit from counseling with an experienced attorney. The purpose of our forms is to give those do-it-yourselfers a frictionless starting point, while also making it as easy as possible for them to step up to a paid legal check-up of what they’re doing (or full-on legal representation if they find their situation is more complex)."

So, am I reading too much between the lines here or does this sound like they are admitting that the free forms are just bait so the prospective clients feel they actually need to consult a lawyer after all, and to get the consumers to pay Avvo to connect them with the lawyer?   Here's how Avvo's CEO put it, after all:  "Our belief is if we can get in front of these consumers at the time that they think they need DIY and get them — I guess the term is upsold — but introduce them to our directory or our Q&A or Avvo Advisor, then we can start tapping into this market of people who wouldn’t mind having a lawyer involved."

Looked at this way, the free legal forms is just a way to attract prospective clients to Avvo's other services where Avvo operates as a lead generator for lawyers who pay Avvo's fees.  For my comments on Avvo's other services go here and here.

You should also read the comment posted by Matthew Kreitzer below the review in Adams on Contract Drafting in which he argues that there is “a disconnect between the ideal of what websites like Avvo are trying to accomplish, and what the likely end result will be.”  Go read the comment to see his full argument.