Traps for the Unwary – Avvo Legal Services Comes to Tennessee

I’ve written previously about the maelstrom of issues presented by Avvo’s expansion from its original core business as a lawyer rating service into new things such as Avvo Legal Services — an arrangement where it makes clients, who will have already paid Avvo for the legal services they want, available directly to lawyers to perform certain limited duration, flat rate services.  This is not lead generation, which finds blessing in a Comment to ABA Model Rule 7.2.  Avvo’s own marketing materials make this perfectly clear:

Get paying clients, not leads.

With more than 8 million visits to Avvo each month, we can connect you with clients who have already paid for limited-scope legal services.  There’s no chasing leads.

Earlier this week, Avvo Legal Services launched in 4 more states, including Tennessee.  Right around the beginning of 2016, I wrote a post about why I don’t think anyone can do business with Avvo Legal Services in my state unless they can show compliance with RPC 7.6.  From the best I can tell, Avvo Legal Services hasn’t registered appropriately — they are not listed here — and that’s no surprise because back when its General Counsel was kind enough to interact on my site with a comment, he stated that it wouldn’t be registering as an intermediary organization.

Fundamentally, as I hinted at in the second post I wrote about the ALS rollout, the problem for any lawyer trying to decide whether to take on the risk of working with Avvo Legal Services is that ALS continues to largely ignore the gap between what perhaps “ought” to be and what actually “is” when it comes to various attorney ethics rules.

It is hard to blame Avvo for that approach, of course, as it, and the folks behind it, are in the business of making money and aren’t going to be the people who are going to get in trouble if their business model is ruled not to comply with the attorney ethics rules.  The people at risk of getting into trouble in those circumstances are the lawyers that decide to do business with Avvo Legal Services.

I can’t find anything that would involve any changes to the Avvo Legal Services business model that would change my initial conclusion that Avvo is likely to be treated as an intermediary organization under RPC 7.6 in Tennessee.

Of course, even if I’m wrong about that, the second layer of risk for Tennessee lawyers is that the most likely routes that might exist for trying to categorize what is going on as something not regulated by RPC 7.6 will only strengthen concern that the “marketing fee” that the lawyer pays Avvo is really fee-sharing with a nonlawyer.

And, Avvo Legal Services certainly does its case against the idea that it is sharing fees no favors when its General Counsel tackles the issue with a statement (appearing in the Frequently Asked Questions part of this link) such as:

Fee splits are not inherently unethical.  They only become a problem if the split creates a situation that may compromise a lawyer’s professional independence of judgment.

 

Now, I have no personal beef with Josh King.  He has been kind enough to post comments at my blog before and. like me, he’s an active member of the Association of Professional Responsibility Lawyers, and he’s advocating for his client’s position.  But the assertion that fee splitting is not inherently unethical and that a fee split is only a problem if might compromise professional independence of judgment is simply not a correct statement of the law.  It perhaps ought to be how the ethics rules are set up and perhaps ought to be how lawyers are regulated, but it isn’t how things currently are.

In Tennessee and many other states, the sharing of legal fees with a nonlawyer is inherently not okay and only ethical if it can be shown to fit one of the exceptions in RPC 5.4(a).  Maybe those rules should be changed, but any lawyer agreeing to participate in an arrangement that runs afoul of them until any such change occurs is running a real risk.

Is it a risk worth taking for any particular individual lawyer?  Not my call to make, of course, but you’d have to be extremely desperate to take on that kind of risk for say the $109 you would get, after Avvo takes its $40 marketing fee, for doing a document review.

3 thoughts on “Traps for the Unwary – Avvo Legal Services Comes to Tennessee

  1. Brian –

    To the extent the Rules of Professional Conduct implicate First Amendment rights – and they surely do when they would restrict attorney participation in forms of advertising – those rules can only be interpreted in ways that meet constitutional requirements.

    The rationale for having a fee-splitting prohibition in the first place is that some such arrangements have the potential to cause interference with the lawyer’s independent professional judgment. But to be constitutional, such a rule must separate the mechanics of a fee split from the substance of fee splitting practices that might cause such interference. For example:

    • We permit fee splits with other lawyers, assuming (perhaps naively?) that our fellow lawyers would be above bring such pressures to bear.
    • We permit fee splits in circumstances such as credit card processing fees, where the split is incidental to the transaction, and we know that the credit card processor has no interest in interfering with the lawyer’s handling of the case.
    • And, of course, we permit fee splits in the world writ large, where lawyers “split” their fees, in the aggregate, with every person and entity they buy goods and services from.

    The payment for Avvo Legal Services is similar to a credit card processing fee – a fee that depends on the creation of an actual consumer transaction, but one in which the entity earning the fee has no plausible interest in compromising the attorney’s independent professional judgment. From the perspective of consumer harm – again, the only lens through which the RPCs can be lawfully interpreted – having a marketing fee triggered by signing a client is no different than the fact that we allow lawyers to use earned legal fees to buy reams of stationary or new iPhones. It’s just that somehow it FEELS different because it is conditioned on the actual transaction.

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