Category Archives: lawyer fee splitting

Four south Florida lawyers arrested for involvement for illegal personal injury solicitation and provider kickbacks

Hello everyone and welcome to this Ethics Alert which will discuss the recent arrests of four south Florida lawyers who are  alleged to have improperly and illegally obtained personal injury victims as clients and referred them to health care facilities which then paid them cash for the referrals.

According to media articles and criminal charging documents, four south Florida lawyers have been charged with crimes  ranging from money laundering to organized fraud and patient brokering.  The lawyers are Steven Slootsky, whose record Bar address is in Boca Raton, and Adam Hurtig, Mark Spatz, and Vincent Pravato, whose record Bar addresses are in Fort Lauderdale.  The lawyers were arrested on or about September 6, 2017.

The lawyers are alleged to have improperly and illegally obtained personal injury victims as clients and referred them to health care facilities which paid cash to the lawyers for the referrals.  According to arrest records, the lawyers allegedly paid runners from towing companies and body shops to improperly solicit victims of motor vehicle accidents.  Those individuals were allegedly then referred to clinics for medical treatment and the clinics would illegally pay for the referrals.

The arrest report states that the lawyers “were actively involved in illegal patient brokering and the unlawful solicitation of motor-vehicle accident victims throughout South Florida…after the patient was brokered to the health care facility, the facility was then able to begin treatment and bill the auto insurance companies for claims covered by the PIP benefits, which resulted in fraud on the insurance companies.”

It is illegal under federal law for a doctor, clinic, or other health care provider to pay for patient referrals and for a “patient broker” to receive kickbacks for sending patients to a health care provider.  It is also a violation of the Florida Bar Rules for an agent of a lawyer to improperly solicit a client, for a lawyer to pay non-lawyers and clinics for referrals, and for the lawyer to receive payment or a fee based upon an improper solicitation.  Of course, it is certainly a violation of the Florida Bar Rules to commit a crime.

Bottom line: I have heard anecdotally that these activities have been occurring in south Florida for many years (and potentially throughout our entire state, particularly in urban areas).  These lawyers are certainly presumed innocent unless and until they are proven guilty; however, if the allegations are shown to be true, this is an extremely unfortunate blight on the legal profession.  On the other hand, this could potentially discourage others from doing (or continuing to do) this in the future.

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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Proposed Florida Bar Advisory Opinion finds that lawyers may share fees with lawyers in firms owned with non-lawyers

Hello everyone and welcome to this Ethics Alert which will discuss Proposed Florida Bar Advisory Ethics Opinion 17-1 (June 23, 2017) which states that Florida Bar members may divide fees with out of state lawyers who are members of law firms which have non-lawyer ownership as permitted in the jurisdiction where the law firm is located.

The proposed ethics opinion is here:  https://www.floridabar.org/news/tfb-news/?durl=%2Fdivcom%2Fjn%2Fjnnews01.nsf%2F8c9f13012b96736985256aa900624829%2Fda5da7932958bb6a852581560062520c.  The proposed opinion is not final.  See below for details and opportunity to comment.

One of the issues that Florida lawyers who wish to co-counsel with out of state lawyers face is whether the lawyer can share fees with other lawyers who are members of law firm with non-lawyer owners as permitted in that jurisdiction.  Non-lawyer ownership of law firms is currently permitted in Washington, D.C. and the State of Washington in the U.S., the Canadian provinces Ontario, British Columbia and Quebec, the countries of England, Wales, Scotland, Germany, the Netherlands, Brussels, and New Zealand.

The Professional Ethics Committee was asked by the Florida Bar’s Board of Governors to opine on whether Florida lawyers are permitted divide fees with out-of-state lawyers who are members of law firms in which there is nonlawyer ownership because nonlawyer ownership is allowed in the jurisdiction where the other law firm is located.  The proposed opinion found that such fee sharing “in accordance with Florida rules, law, and ethics opinions does not violate the prohibition against fee sharing set forth in Rule 4-5.4.” (emphasis supplied)

According to the proposed ethics opinion,

“Florida Bar members frequently work with lawyers outside their firms in representing clients. Florida Bar members also co-counsel cases with lawyers who are admitted solely in jurisdictions outside of Florida. Lawyers admitted solely in jurisdictions outside Florida are authorized to provide legal services in Florida under limited circumstances. Co-counselling with out-of-state lawyers thus raises potential concerns regarding assisting in the unlicensed practice of law and improper division of legal fees. Florida Bar members may divide fees with lawyers from other jurisdictions only where the out-of-state lawyers are providing legal services to the same client that the out-of-state lawyers are authorized by other law to provide and only in compliance with Florida Bar rules. See, Rules 4-1.5(g), 4-5.4(a), 4-5.5, and Florida Ethics Opinions 90-8, 88-10, and 62-3.

“Florida Bar members are prohibited from partnering or sharing legal fees with nonlawyers. See, Rule 4-5.4. Most U.S. jurisdictions share a similar prohibition. The only United States jurisdictions that currently permit nonlawyer ownership of law firms are Washington, D.C. and Washington state. Nonlawyer ownership of law firms is permitted in Canadian provinces Ontario, British Columbia and Quebec, England, Wales, Scotland, Germany, the Netherlands, Brussels, and New Zealand.

“Requirements and limitations on nonlawyer ownership vary in jurisdictions that allow it.

“This opinion addresses Florida Bar members in co-counseling and dividing fees with out-of-state lawyers with whom the Florida Bar members are permitted to divide fees as noted above, and in which the out-of-state lawyers practice in law firms with nonlawyer ownership as permitted by the other jurisdiction.

“The committee is of the opinion that sharing fees with an out-of-state lawyer in accordance with Florida rules, law, and ethics opinions does not violate the prohibition against fee sharing set forth in Rule 4-5.4. A Florida Bar member should not be subject to discipline merely because a nonlawyer ultimately may receive some part of the out-of-state lawyer’s fee solely by virtue of being an owner of the out-of-state law firm. The Florida Bar member has no control over the organization and ownership of the out-of-state firm. The out-of-state law firm may be organized in accordance with the rules of its own jurisdiction. The fact that the nonlawyer ownership would not be permitted in Florida should not impact what the out-of-state lawyer is permitted to do under the rules of that jurisdiction. To opine otherwise unnecessarily places Florida Bar members at risk and deprives clients of counsel of their own choosing from other jurisdictions.

“Other jurisdictions that have addressed the issue have reached similar conclusions. See, ABA Formal Opinion 464 (2013); New York City Bar Formal Ethics Opinion 2015-8 (2015); and Philadelphia Bar Association Ethics Opinion 2010-7 (2010).

“ABA Formal Opinion 464 also cautions lawyers that they:

. . .must continue to comply with the requirement of Model Rule 5.4(c) to maintain professional independence. Even if the other law firm may be governed by different rules regarding relationships with nonlawyers, a lawyer must not permit a nonlawyer in the other firm to interfere with the lawyer’s own independent professional judgment. As noted above, the actual risk of improper influence is minimal. But the prohibition against improper nonlawyer influence continues regardless of the fee arrangement.

“The committee agrees with and adopts the reasoning of the ABA Standing Committee on Ethics and Professional Responsibility in formal opinion 464 above.

“Finally, the committee notes that this opinion does not address a Florida Bar member becoming a partner, shareholder, associate, or other formal arrangement in a law firm that is permitted to have nonlawyer ownership in its home jurisdiction and does so in compliance with the rules of its home jurisdiction. Neither does this opinion address the issue of a Florida Bar member who also is admitted to practice in another jurisdiction where nonlawyer ownership is permitted joining a law firm with nonlawyer owners under the rules of the other jurisdiction.”

___________________

1Alternative Law Business Structures ABA Issue Paper (April 5, 2011) available at:http://www.americanbar.org/content/dam/aba/administrative/ethics_2020/abs_issues_paper.authcheckdam.pdf.

Bottom line:  This ethics opinion finds that sharing fees with lawyers who are members of law firms which have non-lawyer ownership does violate not the prohibition against fee sharing set forth in Florida Bar Rule 4-5.4; however, the opinion is not final.

According to the Bar’s Notice:

“Pursuant to Rule 4(c) and (d) of The Florida Bar Procedures for Ruling on Questions of Ethics, comments from Florida Bar members are solicited on the proposed opinion. The committee will consider any comments received at a meeting to be held in conjunction with The Florida Bar’s Fall Meeting at 9:30 a.m. on Friday, October 13, 2017, at the Tampa Airport Marriott. Comments must contain the proposed advisory opinion number and clearly state the issues for the committee to consider. A written argument may be included explaining why the Florida Bar member believes the committee’s opinion is either correct or incorrect and may contain citations to relevant authorities. Comments should be submitted to Elizabeth Clark Tarbert, Ethics Counsel, The Florida Bar, 651 E. Jefferson Street, Tallahassee 32399-2300, and must be postmarked no later than 30 days from the date of this publication.”

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

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Proposed Florida Bar Advisory Opinion finds that lawyers may share fees with lawyers in firms owned with non-lawyers

Hello everyone and welcome to this Ethics Alert which will discuss Proposed Florida Bar Advisory Ethics Opinion 17-1 (June 23, 2017) which states that Florida Bar members may divide fees with out of state lawyers who are members of law firms which have nonlawyer ownership as permitted in the jurisdiction where the law firm is located.

The proposed ethics opinion is here:  https://www.floridabar.org/news/tfb-news/?durl=%2Fdivcom%2Fjn%2Fjnnews01.nsf%2F8c9f13012b96736985256aa900624829%2Fda5da7932958bb6a852581560062520c.  The proposed opinion is not final.  See below for details and opportunity to comment.

One of the issues that Florida lawyers who wish to co-counsel with out of state lawyers face is whether the lawyer can share fees with other lawyers who are members of law firm with non-lawyer owners as permitted in that jurisdiction.  Non-lawyer ownership of law firms is currently permitted in Washington, D.C. and the State of Washington in the U.S., the Canadian provinces Ontario, British Columbia and Quebec, the countries of England, Wales, Scotland, Germany, the Netherlands, Brussels, and New Zealand.

The Professional Ethics Committee was asked by the Florida Bar’s Board of Governors to opine on whether Florida lawyers are permitted divide fees with out-of-state lawyers who are members of law firms in which there is nonlawyer ownership because nonlawyer ownership is allowed in the jurisdiction where the other law firm is located.  The proposed opinion found that such fee sharing “in accordance with Florida rules, law, and ethics opinions does not violate the prohibition against fee sharing set forth in Rule 4-5.4.” (emphasis supplied)

According to the proposed ethics opinion,

“Florida Bar members frequently work with lawyers outside their firms in representing clients. Florida Bar members also co-counsel cases with lawyers who are admitted solely in jurisdictions outside of Florida. Lawyers admitted solely in jurisdictions outside Florida are authorized to provide legal services in Florida under limited circumstances. Co-counselling with out-of-state lawyers thus raises potential concerns regarding assisting in the unlicensed practice of law and improper division of legal fees. Florida Bar members may divide fees with lawyers from other jurisdictions only where the out-of-state lawyers are providing legal services to the same client that the out-of-state lawyers are authorized by other law to provide and only in compliance with Florida Bar rules. See, Rules 4-1.5(g), 4-5.4(a), 4-5.5, and Florida Ethics Opinions 90-8, 88-10, and 62-3.

“Florida Bar members are prohibited from partnering or sharing legal fees with nonlawyers. See, Rule 4-5.4. Most U.S. jurisdictions share a similar prohibition. The only United States jurisdictions that currently permit nonlawyer ownership of law firms are Washington, D.C. and Washington state. Nonlawyer ownership of law firms is permitted in Canadian provinces Ontario, British Columbia and Quebec, England, Wales, Scotland, Germany, the Netherlands, Brussels, and New Zealand.

“Requirements and limitations on nonlawyer ownership vary in jurisdictions that allow it.

“This opinion addresses Florida Bar members in co-counseling and dividing fees with out-of-state lawyers with whom the Florida Bar members are permitted to divide fees as noted above, and in which the out-of-state lawyers practice in law firms with nonlawyer ownership as permitted by the other jurisdiction.

“The committee is of the opinion that sharing fees with an out-of-state lawyer in accordance with Florida rules, law, and ethics opinions does not violate the prohibition against fee sharing set forth in Rule 4-5.4. A Florida Bar member should not be subject to discipline merely because a nonlawyer ultimately may receive some part of the out-of-state lawyer’s fee solely by virtue of being an owner of the out-of-state law firm. The Florida Bar member has no control over the organization and ownership of the out-of-state firm. The out-of-state law firm may be organized in accordance with the rules of its own jurisdiction. The fact that the nonlawyer ownership would not be permitted in Florida should not impact what the out-of-state lawyer is permitted to do under the rules of that jurisdiction. To opine otherwise unnecessarily places Florida Bar members at risk and deprives clients of counsel of their own choosing from other jurisdictions.

“Other jurisdictions that have addressed the issue have reached similar conclusions. See, ABA Formal Opinion 464 (2013); New York City Bar Formal Ethics Opinion 2015-8 (2015); and Philadelphia Bar Association Ethics Opinion 2010-7 (2010).

“ABA Formal Opinion 464 also cautions lawyers that they:

. . .must continue to comply with the requirement of Model Rule 5.4(c) to maintain professional independence. Even if the other law firm may be governed by different rules regarding relationships with nonlawyers, a lawyer must not permit a nonlawyer in the other firm to interfere with the lawyer’s own independent professional judgment. As noted above, the actual risk of improper influence is minimal. But the prohibition against improper nonlawyer influence continues regardless of the fee arrangement.

“The committee agrees with and adopts the reasoning of the ABA Standing Committee on Ethics and Professional Responsibility in formal opinion 464 above.

“Finally, the committee notes that this opinion does not address a Florida Bar member becoming a partner, shareholder, associate, or other formal arrangement in a law firm that is permitted to have nonlawyer ownership in its home jurisdiction and does so in compliance with the rules of its home jurisdiction. Neither does this opinion address the issue of a Florida Bar member who also is admitted to practice in another jurisdiction where nonlawyer ownership is permitted joining a law firm with nonlawyer owners under the rules of the other jurisdiction.”

___________________

1Alternative Law Business Structures ABA Issue Paper (April 5, 2011) available at:http://www.americanbar.org/content/dam/aba/administrative/ethics_2020/abs_issues_paper.authcheckdam.pdf.

Bottom line:  This ethics opinion finds that sharing fees with lawyers who are members of law firms which have non-lawyer ownership does violate not the prohibition against fee sharing set forth in Florida Bar Rule 4-5.4; however, the opinion is not final.

According to the Bar’s Notice:

“Pursuant to Rule 4(c) and (d) of The Florida Bar Procedures for Ruling on Questions of Ethics, comments from Florida Bar members are solicited on the proposed opinion. The committee will consider any comments received at a meeting to be held in conjunction with The Florida Bar’s Fall Meeting at 9:30 a.m. on Friday, October 13, 2017, at the Tampa Airport Marriott. Comments must contain the proposed advisory opinion number and clearly state the issues for the committee to consider. A written argument may be included explaining why the Florida Bar member believes the committee’s opinion is either correct or incorrect and may contain citations to relevant authorities. Comments should be submitted to Elizabeth Clark Tarbert, Ethics Counsel, The Florida Bar, 651 E. Jefferson Street, Tallahassee 32399-2300, and must be postmarked no later than 30 days from the date of this publication.”

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

Leave a comment

Filed under Attorney Ethics, Ethics Opinion sharing fees with non-lawyer owned law firms Rule 4-5.4, Fee sharing with non-lawyer owned firms, Florida Bar, Florida Bar ethics opinion sharing fees with non-lawyer owned law firms, joe corsmeier, Joseph Corsmeier, Lawyer ethics, Lawyer Ethics and Professionalism, Lawyer ethics opinions, lawyer fee splitting, Lawyer referral fees, Lawyer sharing fees with non-lawyers, Non-lawyer ownership of law firms

New Jersey joint ethics opinion finds that fees paid to Avvo for client referrals violate New Jersey Bar rules

Hello everyone and welcome to this Ethics Alert which will discuss the recent New Jersey joint ethics opinion which found that lawyers in New Jersey are prohibited from participating in client referral services provided by AVVO because the services involve improper lawyer referral fees and fee sharing with a non-lawyer.  The joint ethics opinion is here: https://www.dropbox.com/s/5plgfqgi26zuym1/ACPE%20732%20Avvo%2C%20LegalZoom%2C%20Rocket%20Lawyer%206.21.17.pdf?dl=017  and the New Jersey Supreme Court Notice to The Bar of the joint ethics opinion is here: https://www.judiciary.state.nj.us/notices/2017/n170621i.pdf

The joint ethics opinion found that none of the legal service plans interfered with the independent professional judgment of participating lawyers, and Avvo’s procedure of holding fees until the legal services are performed does not violate lawyer trust account rules.

The joint opinion also describes the services offered by three companies’ websites.  Avvo offers two legal services products through its website: “Avvo Advisor” and “Avvo Legal Services”.  Individuals who use “Avvo Advisor” pay a flat fee for a 15-minute phone conversation with a lawyer, while consumers who use “Avvo Legal Services” purchase specific services, such as an uncontested divorce, for a flat fee.  Avvo then deposits the flat fee into the lawyer’s bank account and withdraws a “marketing fee.”

The ethics opinion found the “marketing fee” is an impermissible referral fee, and not a permitted fee for the cost of advertising, as well as an impermissible shared fee between a lawyer and the non-lawyer.  The ethics opinion referred to ethics opinions in Ohio, South Carolina, and Pennsylvania that found marketing fees charged by “Avvo-type companies” were improper referral fees or constituted impermissible fee sharing.

The opinion found that services provided by LegalZoom and Rocket Lawyer appear to comply with the ethics rules if they were registered with the courts’ administrative office, as required by New Jersey’s rules.  LegalZoom’s “Business Advantage Pro” and “Legal Advantage Plus” charge a flat monthly fee for legal advice and consumers can purchase additional services from participating lawyers at a discounted rate.  LegalZoom keeps the monthly subscription fees.  Rocket Lawyer’s legal services plan charges a flat fee for limited legal advice on document-related matters and a free 30-minute lawyer consultation.  Rocket Lawyer keeps the subscription fees and participating lawyers can offer legal services at discounted rates.

Bottom line:  This ethics opinion is the most recent which has reviewed the recent legal services plans of AVVO (and other entities) and found that the fee charges in AVVO’s plan constitute improper referral fees and fee sharing.  Other jurisdictions may weigh in with their own ethics opinions in the future (or the rules may be changed).  Stay tuned…

…and 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

 

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Filed under Attorney Ethics, AVVO fee sharing and referral fee plans, Avvo legal services, er ethics opinion Avvo lawyer matching services improper fee splitting and referral fees, Florida Lawyer Ethics and Professionalism, joe corsmeier, Joseph Corsmeier, Lawyer ethics, Lawyer Ethics and Professionalism, lawyer fee splitting, Lawyer responsibilities AVVO and Linkedin, LegalZoom, New Jersey joint ethics opinion improper referral fees and fee sharing and

ABA Ethics Opinion provides ethics requirements when lawyer receives an earned fee in which another lawyer has an interest

Hello everyone and welcome to this Ethics Alert which will discuss the recent ABA Formal Ethics Opinion which addresses the ethical requirements when a lawyer receives an earned fee that is subject to a fee sharing arrangement and both lawyers have an interest in the fee.  The opinion is ABA Formal Opinion 475 (December 7, 2016) and is online here: http://www.americanbar.org/content/dam/aba/administrative/professional_responsibility/aba_formal_opinion_475.authcheckdam.pdf.  The opinion discusses the ABA Model Rules which apply when lawyers agree to properly share a fee and one lawyer receives the earned fee.

According to the ABA opinion, “Model Rule 1.5(e) provides for the division of fees between lawyers who are not in the same firm.  A division of a fee “is a single billing to a client covering the fee of two or more lawyers who are not in the same firm.”  Rule 1.5(e) provides that such agreements are permissible only if the division is proportionate to the services performed by each lawyer or both lawyers assume joint responsibility for the representation, the client agrees to the arrangement including the share each lawyer ‘will receive, the arrangement is confirmed in writing, and the total fee is reasonable. Model Rule 1.15(a) provides in pertinent part that a lawyer shall hold property of…third persons that is in a lawyer’s possession in connection with a representation separate from the lawyer’s own property.’”

The opinion states that “(t)he receiving lawyer…must, under Rule 1.15(a), deposit the funds in which co-counsel holds an interest in an account (typically a trust account) separate from the lawyer’s own property. Rule 1.15(d) requires the lawyer who receives the earned fees subject to a division agreement to promptly notify the other lawyer who holds an interest in the fee of receipt of the funds, promptly deliver to the other lawyer the agreed upon portion of the fee, and, if requested by the other lawyer, provide a full accounting.”

“Finally, if there is any dispute as to the interest of the receiving lawyer and the lawyer with whom the receiving lawyer is dividing a fee, Rule 1.15(e) requires that the receiving lawyer keep the disputed funds separate from the lawyer’s own property until the dispute is resolved.”

Bottom line:  “A lawyer may divide a fee with another lawyer who is not in the same firm if the arrangement meets the requirements of Model Rule 1.5(e). When one lawyer receives an earned fee that is subject to such an arrangement and both lawyers have an interest in that earned fee, Model Rules 1.15(a) and 1.15(d) require that the receiving lawyer hold the funds in an account separate from the lawyer’s own property, appropriately safeguard the funds, promptly notify the other lawyer who holds an interest in the fee of receipt of the funds, promptly deliver to the other lawyer the agreed upon portion of the fee, and, if requested by the other lawyer, provide a full accounting”.  (Most states, including Florida, the same or substantially similar rules).

Lawyers must be aware that, according to this recent ABA opinion (which is not binding), when there is a fee sharing arrangement (referral or co-counsel fee), and the lawyer receives funds to which another lawyer has an interest, the receiving lawyer must hold the funds in a separate account, safeguard the funds, promptly notify the other lawyer, and provide an accounting if requested by the other lawyer.

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

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Lawyer directory website Avvo is offering fixed fee legal services on a limited basis and plans to expand the services

 

Hello and welcome to this Ethics Alert blog which will discuss the recent decision by the lawyer directory website Avvo to offer legal services to individuals through selected lawyers for a fixed fee and charge the lawyers a marketing fee to participate.  An ABA article dated January 12, 2015 discussing Avvo’s plans is here: ABA 1-12-16 Avvo legal services article

According to the ABA article, Avvo recently began testing the new service and it plans to offer the services more broadly over the next few months.  The service is called Avvo Legal Services offers a variety of limited-scope legal services at a fixed fee. The legal services include review of legal documents such as business contracts and nondisclosure agreements as well as more complicated matters such as uncontested divorces and citizenship applications.

According to the article, Laura Moriarty, Avvo’s vice president of communications, stated that Avvo is testing the service in Atlanta, Chicago, Dallas, Houston and Phoenix and will begin offering the services in additional markets in February 2016. “Moriarty declined to identify the markets where it will initially be offered except to confirm that one will be Massachusetts.”

The ABA article states that “Avvo first got into the business of offering legal advice last year when it launched Avvo Advisor, a service that provides on-demand legal advice by phone for a fixed fee of $39 for 15 minutes. With this new service, Avvo will determine the types of services to be provided and the prices. Attorneys who sign up will be able to select which services they want to offer. When a client buys a service, Avvo sends the client’s information to the attorney. The attorney then contacts the client directly and completes the service.”

“Clients will be able to choose the attorney they want from a list of those within their geographic area who have registered to participate. Clients pay the full price for the service up front.  After the service is completed, Avvo sends the attorney the full legal fee, paid once a month for fees earned the prior month. As a separate transaction, the attorney pays Avvo a per-service marketing fee. This is done as a separate transaction to avoid fee-splitting, according to Avvo. Attorneys pay nothing to participate except for the per-case marketing fee.”

“Among the services to be offered will be document review for $199, for which the attorney will pay a $50 marketing fee; formation of a single-member LLC for $595, with a $125 marketing fee; uncontested divorce for $995, with a $200 marketing fee; and green card application for $2,995, with a $400 marketing fee.  The terms of the service require attorneys to contact a new client within one business day for a 30-minute introductory call. If the attorney determines the client is not the right fit, the attorney can decline the representation.”

An online FAQ about the legal services on Avvo’s website states that “(l)ocal clients purchase legal services, choose the attorney they want to work with, and pay the full price of the service up front. The chosen attorney then completes the service for the client and is paid the full legal fee. As a separate transaction, the chosen attorney pays a per-service marketing fee for the completed, paid service.

Avvo General Counsel Josh King also states in the FAQ that Avvo is not acting as a lawyer referral service and that lawyers should not be concerned about fee splitting since “(f)ee 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. We believe that Avvo Legal Services fees, like credit card fees, would involve the sort of technical fee split that would not create such a potential for compromise. Nonetheless, we have tried to keep things simple and clear by making the per-service marketing fee a separate charge.”  The FAQ is here:  Avvo legal services FAQ

Bottom line:  Although it is clear that AVVO (a third party non-lawyer website) is attempting to structure this legal services arrangement in a way to avoid ethics issues, whether this arrangement is ethical or unethical is subject to further analysis and interpretation by each jurisdiction regarding fee splitting and potential lawyer referral issues.  Lawyers who are interested in participating should carefully review their jurisdiction’s Bar rules and/or consult with and consult their Bar or consult with a lawyer familiar with the Bar rules before agreeing to participate.

Be careful out there!

Disclaimer:  this e-mail is not an advertisement and does not contain any legal advice 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.

2454 McMullen Booth Road, Suite 431

Clearwater, Florida 33759

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

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Filed under Attorney Ethics, Avvo legal services, joe corsmeier, Joseph Corsmeier, lawyer fee splitting, Lawyer Referral Services