A few days ago, I reported that the NY state bar association issued an opinion holding it would be unethical to participate in Avvo Legal Services. See here. Now comes news that the Florida Bar’s Board of Governors has decided to prepare an advisory opinion on whether lawyers could participate with a private lawyer referral service which charges a different set fee depending upon the type of case referred. Without mentioning it, of course, this description refers to the Avvo Legal Services scheme which has now been rejected in every ethics opinion that has considered the question.
The Florida Bar has in the past attempted to change the state rules to allow lawyers to participate in private referral services, but the Florida Supreme Court rejected the idea. In fact, it published an opinion on September 24, 2015 which instructed the Bar to draft rules that “preclude Florida lawyers from accepting referrals from any lawyer referral service that is not owned or operated by a member of the Bar.” Given this background it will be interesting to see if the Board of Governors attempts to revise its position or follows the lead of the Court. For more on the news from Florida go here.
For some of my previous posts on Avvo go here and scroll down.
Friday, August 18, 2017
Wednesday, August 9, 2017
NY State Bar Association issues opinion holding participating in Avvo Legal Services is unethical
The New York State Bar Association’s Committee on Professional Ethics has issued a new opinion holding that participating in Avvo Legal Services violates the state’s rules of professional conduct. In particular, the opinion holds that a lawyer paying Avvo’s current marketing fee for Avvo Legal Services is the equivalent of making an improper payment for a recommendation in violation of Rule 7.2(a).
As long time readers of this blog know, the opinion is similar to opinions in Ohio, Pennsylvania, South Carolina and New Jersey. And, as I have argued many times, no one should be surprised by the conclusions reached in these opinions because the analysis is consistent with the text of the rules. You can read my article on the subject here, which was published just after the first couple of those opinions were issued.
In that article, I pointed out that because the comment to rule 7.2 states that lawyers are banned from paying a lead generator “if the lead generator states, implies, or creates a reasonable impression that it is recommending the lawyer,” lawyers paying Avvo should be concerned with the possibility that their state disciplinary authority might argue that by providing Avvo’s own “ratings,” as opposed to client ratings, Avvo creates the impression that Avvo is recommending some lawyers more than others.
That question had not been approached back when I wrote that. Now it has. While the other opinions have mostly emphasized the issue of whether paying Avvo’s fees constitutes sharing fees with a non-lawyer, the NYSBA opinion focuses on that precise point. You can read the full opinion of the New York State Bar Association’s Committee (Opinion 1132 (8/8/17)) here.
As the Committee explains “[i]f the lawyer is paying [Avvo’s] fee solely to obtain advertising and marketing services from Avvo, then the lawyer is not giving Avvo something “of value” to recommend the lawyer, but is instead paying Avvo for marketing services, which does not violate Rule 7.2(a). If, however, the marketing fee also includes a payment to Avvo for recommending the lawyer, then the payment constitutes giving something “of value” for a recommendation, which does violate Rule 7.2(a).”
After discussing Avvo’s business model, the Committee concluded that Avvo does seem be recommending lawyers and, thus, lawyers who pay Avvo’s fee would be in violation of the rule. This is so, according to the opinion, because Avvo does more than merely list lawyers, their profiles, and their contact information. Avvo also gives each lawyer an Avvo rating, on a scale from 1 to 10 in a way that suggests mathematical precision. Also, some of Avvo’s ads expressly state that the Avvo Rating enables a potential client to find “the right” lawyer or “the right lawyer for their needs.”
Based on this, the committee found that “[t]hrough these statements and through Avvo’s description of its rating system, Avvo is giving potential clients the impression that a lawyer with a rating of “10” is “superb,” and is thus a better lawyer for the client’s matter than a lawyer with a lower rating.” Thus, the opinion concludes that “the way Avvo describes in its advertising material the ratings of participating lawyers either expressly states or at least implies or creates the reasonable impression that Avvo is “recommending” those lawyers.”
In addition, the opinion pointed out (but did not resolve) more issues raised by participation in Avvo Legal Services, including:
(1) the fact that Avvo sets the amount of the legal fee for each service raises questions about whether a participating lawyer can deliver competent legal services for Avvo’s chosen price and whether a lawyer is allowing Avvo to interfere in the lawyer’s independent professional judgment regarding how much time to spend on a matter.
(2) the marketing fee raises questions about whether lawyers who participate in Avvo Legal Services are improperly sharing legal fees with a nonlawyer.
(3) Avvo’s satisfaction guarantee raises questions about confidentiality. If clients call Avvo to complain, does the “documentation” that Avvo asks for or receives include “confidential information” within the meaning of Rule 1.6(a)?
As in the past, Avvo’s chief legal officer, has posted a short response to the opinion, but, also as in the past, it is weak and again bases part of the argument on the wrong the constitutional standard.
Yet, Avvo can count one small "victory" in the NYSBA opinion. Avvo always refers to its fee as "marketing fee" -- not as just "fee" -- perhaps thinking that if you repeat something enough times people will begin to believe it. And it works. While other opinions have held that merely because Avvo says the fee is for "marketing" (by which they really mean "advertising"), it does not make it so, the NYSBA opinion states explicitly that Avvo’s website is an “advertisement.” According to the opinion, "[t]he Avvo website is a public communication on behalf of each participating lawyer, about that lawyer, for the primary purpose of helping the participating lawyers obtain employment by potential clients who use the Avvo website."
As long time readers of this blog know, the opinion is similar to opinions in Ohio, Pennsylvania, South Carolina and New Jersey. And, as I have argued many times, no one should be surprised by the conclusions reached in these opinions because the analysis is consistent with the text of the rules. You can read my article on the subject here, which was published just after the first couple of those opinions were issued.
In that article, I pointed out that because the comment to rule 7.2 states that lawyers are banned from paying a lead generator “if the lead generator states, implies, or creates a reasonable impression that it is recommending the lawyer,” lawyers paying Avvo should be concerned with the possibility that their state disciplinary authority might argue that by providing Avvo’s own “ratings,” as opposed to client ratings, Avvo creates the impression that Avvo is recommending some lawyers more than others.
That question had not been approached back when I wrote that. Now it has. While the other opinions have mostly emphasized the issue of whether paying Avvo’s fees constitutes sharing fees with a non-lawyer, the NYSBA opinion focuses on that precise point. You can read the full opinion of the New York State Bar Association’s Committee (Opinion 1132 (8/8/17)) here.
As the Committee explains “[i]f the lawyer is paying [Avvo’s] fee solely to obtain advertising and marketing services from Avvo, then the lawyer is not giving Avvo something “of value” to recommend the lawyer, but is instead paying Avvo for marketing services, which does not violate Rule 7.2(a). If, however, the marketing fee also includes a payment to Avvo for recommending the lawyer, then the payment constitutes giving something “of value” for a recommendation, which does violate Rule 7.2(a).”
After discussing Avvo’s business model, the Committee concluded that Avvo does seem be recommending lawyers and, thus, lawyers who pay Avvo’s fee would be in violation of the rule. This is so, according to the opinion, because Avvo does more than merely list lawyers, their profiles, and their contact information. Avvo also gives each lawyer an Avvo rating, on a scale from 1 to 10 in a way that suggests mathematical precision. Also, some of Avvo’s ads expressly state that the Avvo Rating enables a potential client to find “the right” lawyer or “the right lawyer for their needs.”
Based on this, the committee found that “[t]hrough these statements and through Avvo’s description of its rating system, Avvo is giving potential clients the impression that a lawyer with a rating of “10” is “superb,” and is thus a better lawyer for the client’s matter than a lawyer with a lower rating.” Thus, the opinion concludes that “the way Avvo describes in its advertising material the ratings of participating lawyers either expressly states or at least implies or creates the reasonable impression that Avvo is “recommending” those lawyers.”
In addition, the opinion pointed out (but did not resolve) more issues raised by participation in Avvo Legal Services, including:
(1) the fact that Avvo sets the amount of the legal fee for each service raises questions about whether a participating lawyer can deliver competent legal services for Avvo’s chosen price and whether a lawyer is allowing Avvo to interfere in the lawyer’s independent professional judgment regarding how much time to spend on a matter.
(2) the marketing fee raises questions about whether lawyers who participate in Avvo Legal Services are improperly sharing legal fees with a nonlawyer.
(3) Avvo’s satisfaction guarantee raises questions about confidentiality. If clients call Avvo to complain, does the “documentation” that Avvo asks for or receives include “confidential information” within the meaning of Rule 1.6(a)?
As in the past, Avvo’s chief legal officer, has posted a short response to the opinion, but, also as in the past, it is weak and again bases part of the argument on the wrong the constitutional standard.
Yet, Avvo can count one small "victory" in the NYSBA opinion. Avvo always refers to its fee as "marketing fee" -- not as just "fee" -- perhaps thinking that if you repeat something enough times people will begin to believe it. And it works. While other opinions have held that merely because Avvo says the fee is for "marketing" (by which they really mean "advertising"), it does not make it so, the NYSBA opinion states explicitly that Avvo’s website is an “advertisement.” According to the opinion, "[t]he Avvo website is a public communication on behalf of each participating lawyer, about that lawyer, for the primary purpose of helping the participating lawyers obtain employment by potential clients who use the Avvo website."
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