New Jersey Supreme Court declines to review ethics opinion finding that AVVO’s referral program violates Bar Rules

Hello everyone and welcome to this Ethics Alert which will discuss the recent New Jersey Supreme Court Order denying a petition requesting review of the New Jersey Ethics Opinion which found that AVVO’s referral program violated that state’s Bar rules.  The case is In the Matter of the Advisory Committee on Professional Ethics Joint Opinion 732, The Committee on Attorney Advertising Joint Opinion 44, and the Committee on the Unauthorized Practice of Law Joint opinion 45, September Term 2017, Case No. 079852.  The Order is here is here: https://images.law.com/contrib/content/uploads/documents/399/11771/Avvo-Cert-Order.pdf

The June 1, 2018 Order denied a petition for certification by Consumers for a Responsive Legal System, an organization that represents Avvo and other online companies providing lawyer referrals.  The petition requested that the Court review a June 21, 2017 joint ethics opinion which found that Avvo facilitates improper fee-splitting and may not be utilized by New Jersey lawyers.

The joint opinion was issued by the New Jersey Advisory Committee on Professional Ethics, the NJ Committee on Attorney Advertising and the NJ Committee on the Unauthorized Practice of Law.  The Attorney General’s Office, representing the committees, and the New Jersey State Bar Association opposed the petition.  I blogged about the joint opinion in my Ethics Alerts here: https://jcorsmeier.wordpress.com/2017/06/27/new-jersey-joint-ethics-opinion-finds-that-fees-paid-to-avvo-for-client-referrals-violate-new-jersey-bar-rules/ and the joint opinion is here: https://www.dropbox.com/s/5plgfqgi26zuym1/ACPE%20732%20Avvo%2C%20LegalZoom%2C%20Rocket%20Lawyer%206.21.17.pdf?dl=0

The joint opinion was issued in response to a bar association inquiry requesting an opinion on “whether it is ethical for lawyers to participate in certain online, non-lawyer, corporately owned services to the public” specifically naming Avvo, LegalZoom and Rocket Lawyer and their referral programs.  The opinion found that the LegalZoom and Rocket Lawyer programs would be ethical if the programs were registered with the state; however, the opinion found ethics issues with the structure of Avvo’s “pay-for-service” programs and stated that lawyers are prohibited from participating in those programs.

According to the joint opinion, Avvo offers “Avvo Advisor”, which permits customers to buy a 15-minute telephone conversation with a lawyer for a $40.00 flat rate with Avvo keeping a $10.00 “marketing fee”, and “Avvo Legal Services,” where customers would pay flat fees to Avvo for legal services that would be provided by AVVO affiliated lawyers.  Avvo would then pay the lawyer and keep a “marketing” fee.  “The participating lawyer receives the set price for the legal service provided, then pays a portion of that amount to Avvo”. “The label Avvo assigns to this payment (“marketing fee”) does not determine the purpose of the fee. … lawyers pay a portion of the legal fee earned to a nonlawyer; this is impermissible fee sharing.”

The joint opinion also found that marketing fees that lawyers would be required to pay Avvo are not for advertising but are an impermissible “referral fee” under the definitions in New Jersey Bar Rules 7.2(c) and 7.3(d).  In addition, holding the lawyer’s fee until the service is provided violates the requirement that a lawyer maintain funds in a trust account under the rules.

The joint opinion concluded: “New Jersey lawyers may not participate in the Avvo legal service programs because the programs improperly require the lawyer to share a legal fee with a nonlawyer in violation of Rule of Professional Conduct 5.4(a), and pay an impermissible referral fee in violation of Rule of Professional Conduct 7.2(c) and 7.3(d).”

Bottom line:  The New Jersey Supreme Court’s denial of the petition to review the joint opinion leaves New Jersey as one state which has determined that a lawyer’s participation in the “AVVO Advisor” and “AVVO Legal Services” lawyer referral plans is a violation of that state’s lawyer ethics rules.

Be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19 N. Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Joseph Corsmeier

about.me/corsmeierethicsblogs

 

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