Three-For-Tuesday.

Any old radio station in your town (most probably one playing “Classic Rock”) can provide you with a Two-For-Tuesday, but where else will you find a Three-For approach to this otherwise underrated day of the week?

First, I recently let you know that Tennessee was in play with a proposed version of RPC 8.4(g) to make harassing and discriminatory conduct related to the practice of law a violation of the ethics rules.  The Tennessee Supreme Court has put that joint petition out for public comment and has set a March 21, 2018 deadline for submissions.  So, by the time we know the outcome of the joint petition, you’ll have had the chance to go see two highly-anticipated film adaptations of very good books, A Wrinkle in Time, and Ready Player One.

Second, I’ve written recently about how rare lawsuits tend to be where a lawyer or law firm sues another lawyer or law firm over marketing activities.  There are lots of reasons that firms can tend to be reluctant to file such suits, but if you are looking for various objective indications of just how harshly competitive the marketplace for legal services is getting these days – and how much lawyers perceive their futures to be at risk – the fact that such suits seem to be happening with greater frequency is one such indicator.  Here is a link to the latest example where one advertising law firm has sued another over advertising firm over the design of billboards and whether those are serving to mislead consumers into confusion over which is which.

One of the billboards says “Injured?  Results You Deserve.”  The other says “Injured?  Don’t stand alone.”  Now, neither one of them are exactly fabulous exemplars of good marketing I guess.  I mean, you might see the first one and think, I’m kind of a shiftless person and I’m not sure the accident was anyone’s fault.  I’d rather not get the result I deserve.  And the other one might strike you as tone-deaf if you were so badly injured that you can’t stand at all.

Either way though, let me say this, there is a movie out in theaters now called Three Billboards, and I think a good third one to put out on this Massachusetts interstate would be one that reads:  “Injured?  Not by my billboard.”

Third, and speaking of advertising, based on this recent headline out of Ontario, it appears pretty clear that my words of wisdom and encouragement to a throng of Canadian lawyers suggesting they chill out about advertising issues was not a butterfly-flapping-its-wings-bringing-about-global-change kind of moment, but more akin to the impact that a butterfly makes on the windshield of a moving car.  In keeping with today’s theme, while it is incredibly untimely as far as movie recommendations go, it is still true to say that if someone is going to force you to watch an Ashton Kutcher film, The Butterfly Effect is your best option.

RPC 8.4(g) – Tennessee is in play

I’m pleased to report that, yesterday, a joint petition was filed by the Tennessee Bar Association and the Tennessee Board of Professional Responsibility asking the Tennessee Supreme Court to adopt an RPC 8.4(g) patterned after the ABA Model Rule.

As I’ve written here in the past, I’ve long been hopeful (not necessarily optimistic but certainly hopeful) that states like mine would take action to enshrine a prohibition on harassment and discrimination into our ethics rules.

You can read the petition filed yesterday by clicking on this link: (filed_tsc_rule_8_rpc_8.4_g .)  As you’ll see, in my capacity as Chair of the TBA Standing Committee on Ethics and Professional Responsibility, I am one of the signatories on the petition.  I am certain that there will be some public comments filed in opposition to the petition, but I’d like to think that the fact that both the TBA and the BPR are behind this effort will make it more viable for the Court to grant the petition even in the face of some opposition.

More importantly, as a matter of principle, I think the petition is one that should be granted because the proposed rule is a good and necessary one.

We’ve made some very good additional revisions to the ABA Model Rule in our drafting process — additional revisions that even more clearly help delineate that the kind of conduct prohibited by this proposed rule is conduct that has no place in our profession but does not go so far as to infringe on important First Amendment rights of lawyers.

We made two prominent, and I think important, revisions in the new comment paragraphs that would elaborate on the new (g) provision.  Exhibit B to the petition offers a redline showing how what we have proposed differs from the language of the ABA Model Rule, but I will lay them out here because of the significance.

First, we have added the following final sentence to Comment [4]:

Legitimate advocacy protected by Section (g) includes advocacy in any conduct related to the practice of the law, including circumstances where a lawyer is not representing a client and outside traditional settings where a lawyer act as an advocate, such as litigation.

Second,  we have added a Comment [4a] not found in the Model Rule, that provides:

Section (g) does not restrict any speech or conduct not related to the practice of law, including speech or conduct protected by the First Amendment.  Thus, a lawyer’s speech or conduct unrelated to the practice of law cannot violate this Section.

I anticipate that our Court will likely put this proposed rule change out for public comment before the end of the year.

Advocating for attorney advertising.

So, back in August, I mentioned that I was going to have the opportunity to debate issues of lawyer advertising before an audience of top-notch Canadian lawyers in November.  This post is something of a coda to that post as I want to, very briefly, say a word or two about that talk.

It was, as I anticipated, a highly rewarding experience and all of the attorneys affiliated with The Advocates’ Society with whom I had the opportunity to meet and speak were delightful.

During the presentation, my job was to be the one to give voice to things that those assembled might not want to hear.  So, to start things off, I broke the news to them all that we don’t pronounce Hermitage, as in The Hermitage Hotel, in the fancy manner they were wont to do.  After having dealt that disappointing blow, I gave my pitch about what regulation of lawyer advertising should be, and what it shouldn’t be.

I tried to do so with a focus on things beyond just the protections afforded under our First Amendment for commercial speech because they don’t have anything quite the same under their nation’s law.

Those points – which I will happily repeat as many times as anyone ever gives me the chance to do so — are:

  • Ethical restrictions on lawyer advertising ought to pretty much start and end with prohibiting statements that are false or actually misleading.
  • It is pretty much a universal truth that the only people who complain about lawyer advertisements are other lawyers.
  • Those tasked with regulating attorney conduct don’t particularly like spending time adjudicating squabbles between lawyers about ads.
  • Consumers don’t get worked up about lawyer advertising at least in part because they get it.  If you are paying to advertise something, you are going to emphasize its good points.
  • But consumers also don’t get worked up about it because they don’t view it the way lawyers do.  There are still people out there who simply did not know they could hire a lawyer without having to pay money or who don’t know their problem might be something a lawyer could even help them with at all.
  • Some times the way those people learn this information is because they see some kind of lawyer advertisement in one place or another and, when they do, they don’t particularly think about whether or not it is something that you would think is “dignified.”
  • If you are motivated to want to impose stricter regulations on lawyer advertisements because of a concern that there is not enough public respect for our profession and advertisements that you think should be “beneath” lawyers fosters such disrespect, then I have a suggestion of how you could better direct your energies.
  • Imagine how much more could be done to foster better respect for our profession and what we do if we all focused our energies on encouraging communication of what it is that lawyers do, the role we play in society, and what we bring to the table that can help people in times of need for legal services, including helping educate them that their problem is one that could be helped by the work of a lawyer?

An open letter to Avvo

Dear Mark or Josh or Dan (or others at Avvo):

I am a lawyer of little relative influence but I know you are likely familiar with me because I have, time and time again here on my small platform written about the travails your business model is enduring as state after state issues ethics opinions warning lawyers who do business with you that they are acting unethically.  (And Josh has been kind enough to post comments here from time to time as well.)

It, of course, has happened again with the latest Virginia ethics opinion that has just been put out.  I won’t belabor anyone reading this with the breakdown of that opinion other than to say that it hits on many of the same problems that have been hit on by other states over the last couple of years (and a couple that come up less frequently as well).  I also know that you were actively engaged in trying to convince the powers-that-be in Virginia to not issue that opinion.  I’ve even read Dan’s oral remarks published online.

I also won’t do as I normally do and break down the analysis offered in this latest ethics opinion other than to say that this one – yet again – is correct in its interpretation and application of Virginia’s rules.  (At least it is correct as to the big, universally applicable rules impacting your current business model related to fee-sharing, payments for referrals, and the like.)  Of course it is.  These opinions keep coming out because the existing rules are pretty clear about the problems and why lawyers are prohibited from participating.

I’m also writing this as an open letter to urge Avvo – if it really is interested at heart in doing the things for the profession and consumers that it says it is interested in doing – to change its focus from trying to fight the issuance of ethics opinions in states or to then engage in criticism of those opinions as somehow incorrect or “part of the problem.”  Instead, your time and money should be shifted — if those are your real goals — to pursuing efforts to have the rules that currently prohibit lawyers from being involved with your business model changed.

You are fighting a losing battle in trying to change the outcomes of ethics opinions.  You could, however, be fighting a winning battle if you made active efforts to file petitions with the appropriate bodies in various states to propose revisions to the ethics rules that would permit participation with your service and other companies doing similar things.

For example, just about anyone who wants to in my state could file a Petition with the Tennessee Supreme Court and propose changes to the ethics rules which here are housed in Supreme Court Rule 8.  There are pretty similar processes in many jurisdictions.  (I would have thought y’all might have worked this notion out by now given how differently you’ve watched things appear to go in North Carolina where you’ve been participating in efforts to change the rules rather than efforts to try to get someone to issue an opinion that would pretend the rules don’ say what they say.)

I can’t guarantee how successful you would be in obtaining satisfactory rule revisions in jurisdictions but I’d bet a shiny quarter or two that your batting average will be greatly improved upon how you are doing in terms of favorable ethics opinions versus unfavorable ethics opinions.

I reckon that this open letter will likely have the same effect of most open letters written by human beings, but . . . at least I’ll still feel better for having said it.

This Florida lawyer should not have “Went for It”

I had it in mind that I might write a little something about the Pennsylvania lawsuit against the Morgan & Morgan firm over lawyer advertising issues, but Karen Rubin and the fine folks at The Law for Lawyers Today beat me to that punch with a nice piece at their site that you can read at this link.

So, instead, but still staying on the general theme of lawyer advertising issues, I’m going to focus just a bit on a story coming out of what is often thought of as “ground-zero” in the U.S. when it comes to the battle over lawyer advertising issues — Florida.  It is a tale of a lawyer who is being suspended for one year over conduct involving solicitation of a client.  (Should you want to, you can read the full per curiam opinion of the Florida Supreme Court in Florida Bar v. Dopazo here.)

The opinion mostly focuses on the question of what was the right amount of punishment, deciding to increase the suspension from the 60 days that was recommended to a full one-year suspension.  That isn’t my interest for today.  My interest for today is to use this case as a reminder of a few things in the context of larger issues that are going on in the world of lawyer advertising (and, in particular, the APRL effort to persuade the ABA to revise the Model Rules to streamline the restrictions on both general advertising and solicitation).

Those who study questions of legal ethics or attorney advertising or both will remember that the only U.S. Supreme Court case to uphold a restriction on attorney advertising efforts as constitutional is Florida Bar v. Went For It.  The restriction upheld there was the 30-day off limits concept for soliciting representation by mail from folks affected by disaster or traumatic personal injury in any fashion.

Dopazo’s conduct not only ran afoul of prohibitions on in-person solicitation but was well within that kind of 30-day off-limits period and would have been prohibited in any form or fashion.

In March 2007, days after her son suffered traumatic brain injury as the result of a motor vehicle injury, Penny Jones was approached at Jackson Memorial Hospital Ryder Trauma Center  by Dopazo, who successfully solicited her to become a client of his for a fee.  There was no prior relationship between Jones and Dopazo, nor were his legal services sought by her or anyone acting on her behalf.

No one who is out there actively advocating for revisions to the ethics rules addressing lawyer advertising and solicitation is pushing a rule revision that would permit this kind of in-person solicitation in a hospital even if a jurisdiction did not also have some version of a 30-day off-limits period.  Even those of us who question the fairness of 30-day off limits provisions because they only prohibit communications from one side of things -_ the side seeking to provide representation — are in favor of restrictions on in-person solicitation by lawyers of strangers.

Those of us who are actively advocating for changes though are very much in favor of trying to not have these sort of situations — which can be adequately addressed by simple prohibitions — drive the discourse to try to justify more expansive restrictions on commercial speech.  Among the many reasons for that are the kinds of unnecessary and unneeded restrictions that can come to pass because of expansions of such concepts.

Using my own state as an example, over time our rule imposing a version of the 30-day off limits provision has now been expanded to prevent lawyers from sending letters to strangers offering to provide representation in a divorce matter within 30 days of the filing of a divorce.  I’ve written in the past about the problems I have with that concept (if you click through that link which gives you an electronic/pdf-ish version of The Memphis Lawyer magazine from 2015, you’ll need to go to pages 14-15 to read the column).

So, unquestionably, this Florida lawyer’s situation is one that the ethics rules ought to prohibit.  But the fact that such conduct was engaged in does not provide a basis for saying that the rules aren’t in need of reform.

(N.B. You might be asking yourself why in the world a lawyer is being disciplined in 2017 for misconduct that happened in 2007.  The opinion elaborates that it was not the target of the solicitation who complained about Dopazo but rather that the Florida Bar only learned of the incident in 2011 as a result of the findings of an FBI investigation of this lawyer over alleged payments to non-lawyers for a client recruitment scheme involving medical clinics.  Interestingly, the delay in the prosecution of the case from 2011 to 2015 was, in fact, taken into account as a mitigating factor when concluding that the appropriate discipline was a one-year suspension.)

More fuel for the advertising rule reform fire.

So, I’m getting a very wonderful opportunity to participate in a debate about lawyer advertising in November in Nashville at The Advocates’ Society annual meeting.  A throng of lovely Canadian attorneys will be traveling to our state capital for a two-day meeting.

I say all of this for two reasons:

Reason the first – today I had the chance to meet the other folks involved (albeit by telephone) to generally lay out what we might talk about.  It was a fascinating experience leaving me with the impression that just as our neighbors to the north were about 15 years behind us in allowing lawyers to advertise, they are still about 15 years behind us on the “what to do about the scourge of lawyer advertising timeline?”

In Canada, particularly Ontario, rules revisions have been recently adopted to impose more regulations on lawyer advertising with worries aimed at things like advertising second opinion services, and undignified locations or contents of advertisements including awards received, and whether lawyers can advertise for cases where they plan to then refer the matter out because they aren’t licensed in the jurisdiction or not capable of handling the matter.

Here in the United States though, the trend is hopefully now moving toward relaxing the marginalia of the restrictions and to streamlining regulations to simply, but strongly, prohibit actually false and misleading advertisements.

Reason the second — not everywhere in the United States is that necessarily the trend.  I was reminded of that fact when reading about this lawsuit filed in Utah over an application of Utah’s approach to prohibiting celebrity endorsements of a lawyer or law firm.  You can read the lawsuit filed by the firm, coincidentally doing business as “The Advocates,” here.

The short version of the story, laid out with a level of incredible politeness that would make even a Canadian law firm proud, is set out in the “Nature of the Action” paragraph of the lawsuit:

Plaintiffs advertise their legal services by way of live and sometimes pre-recorded interviews including statements of lawyers of the firm, radio personalities and others occurring and read during the course of regular programming of certain radio broadcasts, and during regular programming breaks (collectively, “Live Ads”).  Based on obiter dicta contained in an opinion issued November 12, 2014 by the Utah Bar’s Ethics Advisory Opinion Committee, the Utah Bar Office of Professional Conduct (“OPC”) has interpreted and applied Rule 7.2 of the Utah Rules of Professional Conduct to proscribe Plaintiffs’ Live Ads.  With respect and gratitude for the Utah Bar and its Commissioners’ service to the members of the Bar, and with deference to their discretion, Plaintiffs courteously bring this Complaint seeking this Court’s interpretation and declaration of the parties’ rights and obligations under the First Amendment’s protection of commercial speech and other implicated constitutional protections.  Plaintiffs fully intend to abide by the Utah Rules of Professional Conduct as well as the high ethical standards they have set for themselves.  While they believe that their Live Ads at issue in this Complaint are protected speech and fall within the Rules, Plaintiffs will yield to the courts’ final decision, regardless of the outcome.

Setting aside the general silliness of being worried that modern consumers will somehow be tricked by a celebrity endorsement in a lawyer advertisement, and setting aside the additional general silliness that such a concept would extend to radio hosts/DJs reading live advertisements of lawyers and law firms, the whole genesis of Utah’s position that a celebrity endorsement is prohibited by the ethics rules is a pretty interesting example of writers of an ethics opinion losing the plot.

The lawsuit doesn’t explicitly say it, but Utah RPC 7.2 does not contain any direct prohibition on a celebrity endorsement.  The closest that rule would get to such a result is either to misread and expand subsection (b) of its rule which declares:

(b) If the advertisement uses any actors to portray a lawyer, members of the law firm, or clients or utilizes depictions of fictionalized events or scenes, the same must be disclosed.

or to conclude that subsection (f) of the rule doesn’t permit paying a celebrity as being a reasonable expense of an advertisement.

What the lawsuit does explain is that the notion that Utah Rule 7.2 prohibits a celebrity endorsement in an advertisement only comes about because a total non-sequitur was thrown into a Utah ethics opinion that was issued to address the question: “What are the ethical limits to participating in attorney rating systems, especially those that identify ‘the Best Lawyer’ or ‘Super Lawyer’?”

You can go read Utah Bar Ethics Advisory Committee Opinion 14-04 for yourself here, but it truly does bizarrely just add a last sentence in an otherwise unrelated paragraph that says “a lawyer who pays a celebrity or public figure to recommend the lawyer violates Rule 7.2.”  That foray down a rabbit trail actually drew a dissent from a member of that committee to the ethics opinion which is itself not something you see every day.

Efforts to restrict lawyer ads really do cloud the minds of otherwise reasonable and intelligent folks.

It’s been a while.

Today I’m going to splice together two short discussions about topics that I haven’t mentioned in a while.  (And, for any fans of the podcast U Talking U2 to Me that are out there, you do have to read the title of this post to sound like the first words of this remake right here.)

I have not written in a while of an instance of a lawyer getting into disciplinary trouble over saying too much in the process of withdrawing from a client representation.  But it’s happened again, so it’s worth reminding people not to do that.

A week ago, the Ohio Supreme Court issued its opinion affirming a recommended one-year suspension (but with all of the suspension stayed) for a divorce lawyer who paired an affidavit with his motion to withdraw from a client’s matter.  The Ohio court succinctly laid out the problematic contents of the affidavit:

In the affidavit, he recounted communications he had had with
[the client] about the scope of his representation and his compensation, accused her of refusing to pay his agreed-upon fees “without cause,” and disclosed legal advice that he had given her. He also described [the client]’s discharge of him as “retaliatory” and alleged that it had “occurred because of [his] advice to her
concerning her objectionable and potentially illegal actions” relating to her ex-husband, which he characterized as “a problem similar to the one [he] experienced in [his] previous representation of her.”

The Ohio opinion not only cogently walks through why the lawyer’s attempted arguments that such disclosures were permitted to be made under exceptions set out in Ohio’s Rule 1.6(b) weren’t triggered, but also stresses another point too often overlooked by lawyers even when they might have justification to make certain disclosures:

Finally, even if [the lawyer] had reasonably believed that Prof.Cond.R. 1.6(b) permitted him to disclose [the client]’s allegedly fraudulent conduct, the means by which he chose to do so were improper. The comments to Prof.Cond.R. 1.6 clarify that when a lawyer believes that disclosure of client information is
necessary, the lawyer should first seek to persuade the client to take suitable action to obviate the need for the attorney’s disclosure and that a disclosure adverse to the client’s interest should be no greater than necessary to accomplish the purpose. Prof.Cond.R. 1.6, Comment 16. And “[i]f the disclosure will be made in connection with a judicial proceeding, the disclosure should be made in a manner that limits access to the information to the tribunal or other persons having a need to know it and appropriate protective orders or other arrangements should be sought by the lawyer to the fullest extent possible.” Id. Here, [the lawyer] failed to notify or communicate with [the client] about the allegations in his affidavit prior to filing it, and he did not attempt to limit public access to the document.

Another topic I haven’t mentioned in a while is ABA Model Rule 8.4(g) and how it’s playing in various states.  You will recall on at least one occasion when I did write about it, I mentioned how one of the ABA’s talking points was that somewhere north of 20 states already had black-letter rules in one form or fashion making acts of discrimination unethical.

About three weeks ago, one of those states, Vermont, just decided to scrap its version of such a rule and replace it with a Rule 8.4(g) that is substantially equivalent to the ABA Model Rule.  You can read the order of the Vermont Supreme Court adopting such a rule which will become effective on September 18, 2017 here.

Here’s something you don’t see every day: Brave Law Firm sues a competitor.

I’ve written here pretty frequently about issues of lawyer advertising.  I am too lazy today to try and go find links to other posts of mine in which I have stated that the overwhelming majority of disciplinary complaints filed over lawyer advertisements are filed by other lawyers.  Not always competitors, sometimes lawyers on the other side of the v, but just about always by lawyers.

While that remains true, it is rare that you ever see one lawyer or law firm sue another lawyer or law firm over advertising.  Earlier this month, one such lawsuit was filed.  That lawsuit is captioned Brave Law Firm, LLC v. Truck Accident Lawyers Group, Inc. et al. and was filed in federal court in Kansas. Here is link to the lawsuit (07914726612 brave law firm) if you desire to go read the whole thing.

There are lots of reasons why such lawsuit filings are infrequent.  The fact that in order to come up with a claim for damages a firm is likely going to have to demonstrate losing some clients to the other firm that can be traced to the advertisements in question is usually a pretty solid reason not to do it.  Instead, it is much simpler for a firm or lawyer who wants to complaint to file a disciplinary complaint because any rules infractions won’t turn on whether or not your firm was actually harmed by what the other lawyer was doing.

This suit though provides the basis for the roadmap that you’d see in terms of causes of action for such a lawsuit, including a Lanham Act claim and the relevant state law claim for tortious interference with a business relationship.

What makes the lawsuit a particularly interesting read, however, is that it levels its attacks against advertisements that defendant lawyer’s firms have made about past successes but it does not involve exactly the kind of complaints you often expect hear made about such things.  It does not undertake an assault on the advertisements as being misleading because advertising that you obtained a multi-million dollar recovery for a litigant might arguable mislead a potential client into thinking that such outcomes are achievable in their case as well.

Instead, it challenges the very veracity of the advertised outcomes themselves. The core allegations from the Complaint in this regard are as follows:

29. As one recent example, Defendants Brad Pistotnik and Brad Pistotnik Law, P.A. ran a series of advertisements touting their alleged results [NB: you can see an actual screenshot in the complaint itself but I have not included it]

30. The disclaimer at the bottom of the screen is consistent with the content of the entire ad and explicitly states that the “Amounts are gross recovery before fees and expenses.”

31. Instead, the actual “gross recovery” before fees and expenses was $387,018.00, or 16% of what was advertised.

32. This advertisement is literally false because there was no “gross recovery” of $2,400,000 by any person(s) in the case referenced in the advertisement, either before or after legal fees and expenses.

33. In addition, this advertisement is literally false as it advises the viewer that “Our past performances are no guarantee of future results” when, in fact, the “past performance” referenced in the advertisement never happened at all.

[snip]

35. As another example, all of the Defendants widely disseminated advertisements claiming that they obtained a jury verdict of $4,100,000 in a personal injury case.

36. This same advertisement also advised that the jury awarded a punitive damage award of $2,500,000 to the alleged client.

37. These advertisements were, and are, literally false as the “gross recovery” in that case was approximately $850,000.00 and the jury did not award any punitive damages to the plaintiffs.

38. Other advertisements ran by the Defendants featured other literally false “gross recoveries” via alleged verdicts including ones for $1,100,000, $845,000, and $401,000.00.

39. In addition to advertising alleged “gross recoveries” via jury verdicts that never actually happened, the Defendants also advertised purported settlements that never happened.

40. As one example, all of the Defendants advertised that they had settled a case for $9,000,000 on behalf of a former client.

41. This settlement did not happen as advertised because Defendant Bradley A. Pistotnik and the AAPLO had been terminated by the client prior to the settlement occurring and the settlement was actually obtained by another lawyer, apparently
in another state, but at various times each of the Defendants has claimed it as their own.

Obviously, if such facts could be proven, then disciplinary exposure for the lawyer responsible for such advertisements would be in the mix as well and, might I add, would be within the ambit of the kind of more limited, and more focused, ethics rules on lawyer advertising that are being advocated for adoption as a revision to the ABA Model Rules.

Given that the complaint reads like someone has provided the Brave Law Firm with some significant behind-the-scenes knowledge, it appears possible that there could be more interesting developments arising if this suit moves forward.  For example, I’d be interested to know if someone previously employed by one of the defendants now works for the plaintiff.  Unless the Brave firm got all of this information from people free to share it, then one would think potential counterclaims could get thrown into the mix in the future.

New Jersey weighs in as well, reminding us the difference between “is” and “ought.”

My last two posts have focused on the pretty wide-ranging and very thought-provoking work (and work product) of the Oregon State Bar Futures Task Force.  I do plan to return to the topics because there is more in that report worth discussion, but we are taking a break from that with this post.

Let’s move from the West Coast to the East Coast and talk today about a joint opinion issued in New Jersey last week because it offers something of a juxtaposition for discussion of the future of legal ethics.

On June 21, 2017, three committees of the Supreme Court of New Jersey – the Advisory Committee on Professional Ethics, the Committee on Attorney Advertising, and the Committee on the Unauthorized Practice of Law — issued a Joint Opinion announcing that lawyers in New Jersey can’t get involved with Avvo Legal Services, Rocket Lawyer, or LegalZoom.  In fact, you don’t actually have to read much further than the title of the Joint Opinion to get the gist of it as it is entitled:

Lawyers Participating in Impermissible Lawyer Referral Services and Providing Legal Services for Unregistered Legal Service Plans — Avvo, LegalZoom, Rocket Lawyer, and Similar Companies

As indicated, the opinion explains that there are two problems: one that plagues Avvo Legal Services under their analysis, and another that plagues LegalZoom and Rocket Lawyer.  The message New Jersey is sending reads as one that as starkly different from Oregon’s message.

But, and here’s what makes all of this both complicated, fascinating to discuss, and extremely important:  the analysis New Jersey offers is not wrong.

As to lawyer participation in services like LegalZoom and Rocket Lawyer, which offer something that New Jersey refers to as a legal services plan — and the choice to see them that way and call them that is an important one — the problem for New Jersey lawyers is described in a way that appears much less pervasive than as to other companies operating in the space – that these companies simply are not properly registered in New Jersey.  I’ve written in the past about the barrier that Tennessee’s special RPC 7.6 can create for attorney participation in programs if they can be considered an intermediary organization.  New Jersey has a particular registration requirement for companies that provide “legal service plans.”  That rule is RPC 7.3(e)(4).

The opinion walks through each of the requirements ending with the registration requirement that appears in RPC 7.3(e)(4)(vii).  The opinion indicates that, regardless of anything else, neither of those companies have registered their plans and, thus, lawyers cannot participate.  The implication is that the only obstacle standing between New Jersey lawyers and signing up for plans offered by Rocket Lawyer or LegalZoom is proper registration.  The opinion doesn’t pull back the curtain to make plain for the reader whether there is any institutional barrier that makes it impossible for Rocket Lawyer or LegalZoom to choose to register.  But, the joint opinion certainly appears to strongly imply that lack of registration is the only problem.

As to participation with Avvo Legal Services, the New Jersey joint opinion has serious problems to point out – problems that would require a change in business model altogether to be solved.  The problems voiced by the New Jersey joint opinion are ones that have been expressed before in a number of other states and, in fact, the New Jersey opinion unsurprisingly explicitly cites to those other ethics opinions from Ohio, South Carolina, and Pennsylvania.  Avvo’s marketing fee requires a lawyer to improperly share fees with a nonlawyer in violation of New Jersey Rule 5.4.  The opinion, in a way that when truly contemplated seems like piling on, also goes after the same payment as being the payment of impermissible referral fees in violation of New Jersey’s Rules 7.2(c) and 7.3(d).

Back in February 2016, I wrote a lengthy post that was a barely-veiled critique of the arguments Avvo kept making in terms of their efforts to defend their business model over how they were trying to blur the distinction between what is, and what ought to be, when it comes to whether participating lawyers were complying with the ethics rules.

The difference between the message being sent in New Jersey and developments in Oregon may be just as simply summed up though.

Perhaps, the gap between the two approaches is only as big as the difference between what is and what ought to be.

More of me weighing in on Oregon weighing in on the future

For those that missed my post earlier this week on the release of the Oregon State Bar Futures Task Force report, you can read that post here and get caught up.

Today, I want to offer some thoughts on one of the three Recommendations made by the Regulatory Committee of the Futures Task Force.  It is likely the most important of the Recommendations but certain to be the most controversial as well.

Recommendation 2: Revise Rules of Professional Conduct to Remove Barriers to Innovation.

This recommendation is comprised of four parts.  I’ll list them in the order they are presented, even though that is not the order in which I want to discuss them.

2.1  Amend current advertising rules to allow in-person or real-time electronic solicitation, with limited exceptions.

2.2  Amend current fee-sharing rules to allow fee sharing between lawyers and lawyer referral services, with appropriate disclosure to clients.

2.3  Amend current fee-sharing and partnership rules to allow participation by licensed paraprofessionals.

2.4  Clarify that providing access to web-based intelligent software that allows consumers to create custom legal documents is not the practice of law.

Now, that third sub-part creates a spoiler for another of the three Regulatory Committee recommendations – Implement Legal Paraprofessional Licensure.  Given the way those programs have played out to date in a number of other jurisdictions, I don’t think that is going to do much to turn any tides, so for now I’m going to pass on discussing it.  (If you want to delve into it, you can read all of thoughts of the Futures Task Force on that subject and the entirety of the 90+ page report behind the Executive Summary here.)

The fourth one – making clear that certain software programs that let someone through self-help generate customized legal documents — is a perfectly fine idea and, in this day and age, seems very difficult to argue against.  With each passing day, the notion that there are certain legal problems that states cannot allow be served through software programs that do for certain legal problems what tax return software programs do for income taxes seems harder and harder to justify.  But, I’m not sure that such a clarification is what is standing between better access to legal services for consumers and where things are today.  I tend to think that, in part, because those services already exist and are in pretty wide use because companies already make them available and consumers already use them.

The first one about changes to the advertising rules is most certainly a provision I would support (and have supported in past posts).  Virginia has just done something similar with its recent rule revisions.  But again, I don’t know that this change would be something that, as a response or solution to trying to improve public access to legal services, will make any real difference.  Why do I say that?  It is currently not at all very difficult to create an online platform in which it is the consumers that make the first communication effort so that lawyers can respond to it rather than initiate it.  As long as that is true, then lawyer advertising rules prohibiting solicitation do not present any barrier at all to getting consumers in need of legal services and lawyers with the time and ability to provide the services together.

That leaves the second subpart.  And that is the one where I suggest, respectfully, all the marbles are located for lawyers.

The notion of changing the ethics rules to allow lawyers to share fees in a particular matter with nonlawyers, as long as there is full, appropriate disclosure to the consumer of what is taking place.

The specific proposal Oregon’s Task Force has offered is for its current RPC 5.4(a)(5) that only references bar-sponsored or not-for-profit referral services to be revised to read instead as follows:

(a)  A lawyer or law firm shall not share legal fees with a nonlawyer, except that

***

(5) a lawyer may pay the usual charges of a lawyer-referral service, including sharing legal fees with the service, only if:

(i) the lawyer communicates to the client in writing at the outset of the representation the amount of the charge and the manner of its calculation, and

(ii) the total fee for legal services rendered to the client combined with the amount of the charge would not be a clearly excessive fee pursuant to Rule 1.5 if it were solely a fee for legal services, including fees calculated as a percentage of legal fees received by the lawyer from a referral.

That is an action that would, overnight, make pretty much every technological innovation already available (or even conceivable) viable for lawyers to participate in as a way of delivering legal services to consumers and businesses.  It would also allow many existing operators in the legal space to spend less time on trying to come up with workarounds about not being engaged in making referrals in their business model to try to assuage concerns that lawyers who use their platforms will be the subject of disciplinary complaints.

In short, that recommendation appears to me to the one that must be discussed and debated and decided on before any evaluation can be made about what any of the other ones might mean or accomplish.

If Oregon follows through, it seems difficult to speculate that one or more other states won’t follow.  And, if the experience of those states shows that full disclosure of the sharing arrangement, plus compliance with the other ethics rules requiring exercise of independent professional judgment and not allowing interference with that judgment, then it will seem very difficult for any jurisdiction to argue against doing the same.

It is inherently a controversial topic because the prohibition against fee sharing with nonlawyers is viewed by many as a bedrock principle of our profession.  But — if the underlying premise of that bedrock principle is restated as preserving the independent professional judgment of lawyers from undue influence by others — then the Oregon proposal that would allow fee sharing, require fulsome disclosure to the consumer involved about that arrangement could still readily be expected to serve that bedrock principle and protect consumers while benefiting consumers because – though not highlighted in the Report, RPC 5.4(c) would still be in force as well.

(c) A lawyer shall not permit a person who
recommends, employs, or pays the lawyer to render
legal services for another to direct or regulate the
lawyer’s professional judgment in rendering such legal
services.

Existing models of the online approach to pairing lawyers and consumers in need of legal services could almost all be placed into this bucket and, thus, lawyers using these services would still have maintain their independent professional judgment and refuse and resist efforts to compromise it.