Friday, December 14, 2018

Where Avvo Legal Services left off, Basic Counsel picks up

Regular readers of this blog know I have been writing about Avvo Legal Services for a long time, and that I have expressed serious concerns about possible ethics violations in participating in it.  You also know that those concerns were shared by enough jurisdictions out there that Avvo Legal Services stopped providing services and is no longer in business.

But where it left off, a new platform has taken its place.  I have not reviewed the details on how it functions but from what little I have read so far, it is clear they are trying to address the concerns that made participating in Avvo such a risk for lawyers.

The new platform is called Basic Counsel and it seeks to enable attorneys to offer flat-fee, limited scope services, while complaying with every state’s professional conduct rules.

Bob Ambrogi, of Law Sites, describes the services in some detail here.  In a nutshell, consumers search or browse the site for the service they need in the location they need it. When a consumer buys a service, the fee is sent directly to the lawyer and Basic Counsel collects a separate “platform fee” from the consumer of 5 percent of the service cost (with a $10 minimum).  As the lawyer works on the client's case, the platform offers ways for the attorney to keep the client informed on the tasks progress and ways for attorney and client to communicate and share documents.

As Ambrogi points out, with regard to the potential ethics issues raised by a site such as this, there are clearly some differences between Basic Counsel and Avvo Legal Services.  For example, a concern of ethics bodies was that Avvo set the fee and defined the scope of the service. On Basic Counsel, the lawyer sets the fee and defines the scope.  Also, Avvo Legal Services collected the fee from the client and held it until the service was completed, which some said interfered with the lawyer’s duty to safeguard client funds. On Basic Counsel, the funds go directly to the lawyer.

Still another ethics issue for Avvo Legal Services was that it charged the lawyer a marketing fee, which some ethics bodies saw as fee splitting. Basic Counsel charges the client a platform fee, and Marchbanks says the fee is for the direct benefits the client obtains from using the platform — not for anything the attorney provides.

This sounds good, yet it is not clear to me how calling the fee a "platform fee" distinguishes it from Avvo's marketing fee when both are based on a percentage of the amount charged by the attorney.  It was that fact, which does not seem to be different in Basic Counsel's system, that got Avvo in trouble.  On the other hand, the percentage involved in Avvo was higher than the 5 percent charged by Basic Counsel.  In Avvo's case, the percentage also increased as the price for the services increased.

Why can't they make the platform fee a flat fee itself, not dependent on the value of the services?  It seems to me that would be a safer way to deal with this.  Otherwise, the door is still open for the interpretation that the fee constitutes sharing a fee with a non lawyer.

Having said that, as I have written about before many times, it is possible the rules can and will be changed to welcome this type of interaction because of the obvious benefits it provides to consumers.  But until that time, lawyers should be careful not to engage in conduct that has been interpreted to constitute sharing fees with non lawyers in violation of the rules.

Also, it is not clear whether lawyers should be concerned about confidentiality issues when it uses the platform to communicate and share documents with clients and prospective clients.

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