Category Archives: LegalZoom

Florida Supreme Court adopts substantial revisions to Bar rules related to private lawyer referral services

Hello everyone and welcome to this Ethics Alert Update which will discuss the recent (March 8, 2018) Florida Supreme Court opinion approving amendments to Florida Bar Rule 4-7.22 related to private and for profit lawyer referrals.  The amendments substantially revise the current rule, including the broadening definitions, changing the name of the referral companies to “matching services” and “qualifying providers”, prohibiting fee splitting, and removing the previously required disclaimer that the entity is a lawyer referral service.  The Court’s opinion is here: http://www.floridasupremecourt.org/decisions/2018/sc16-1470.pdf  The rule amendments are effective April 30, 2018, at 12:01 a.m.

Amended Rule 4-7.22 specifically prohibits fee splitting between the referral entities and lawyers and prohibits deceptive, misleading, or false advertising by those entities.  Also, any private entities that connect consumers looking for legal services with lawyers will be called “qualifying providers” regardless of whether they are a “traditional” referral service (ASK-GARY, 411 PAIN) or a technology-based provider (AVVO, LegalZoom).

The Court rejected the Bar’s proposed referral rule amendments in 2015 stating that private referral service entities should only be owned by lawyers.  The Bar filed revised rules in 2016 and the Court issued an Order on May 3, 2017 rejecting the proposed rule revisions and dismissing the Bar’s Rules Petition without prejudice.  That Order stated that the revised rules failed to comply with the Court’s directive that lawyer referral services should be owned or operated only by a member of the Bar and sought to expand the scope of the rule to include “matching services” and other similar services not currently regulated by the Bar.

In its March 8, 2018 opinion, the Court implemented the Bar’s proposed rule amendments but stated that “(the amendments do not) resolve our concern with how some lawyer referral services operate in Florida, especially those that refer clients to other professionals and occupational disciplines for services arising from the same incident. The findings of the Special Committee (on Lawyer Referral Services) on this matter are troubling and we continue to believe additional measures are needed to ensure the public is not exposed to harm. We therefore direct the Bar to submit a petition within ninety days proposing amendments to rule 4-7.22, and any other rule necessary, to implement the Special Committee’s first recommendation.”

Bottom line:  The Florida Supreme Court has adopted the Bar’s revised referral rule, which will substantially change the current rule; however, the Court has indicated that it continues to believe that services which are owned by non-lawyers and make referrals of both lawyers and other professionals should be prohibited and directed the Bar “to submit a petition within ninety days proposing amendments to rule 4-7.22, and any other rule necessary, to implement the Special Committee (on Lawyer Referral Service)’s first recommendation.”

Lawyers who participates in referrals from a private entity (or is considering doing so), should carefully review the new rules, since the rule requires a lawyer who participates to insure that the private entity is in full compliance with the Bar rule.

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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Filed under 2018 Florida lawyer referral qualifying provider rule revisions, 2018 Florida lawyer referral service matching service rule revisions, Attorney Ethics, Florida Bar, Florida Bar 2016 Lawyer referral rule revisions, Florida Bar lawyer referral rule revisions, Florida Bar matching services, Florida Lawyer advertising rules, Florida Lawyer Referral Services, Florida Supreme Court, joe corsmeier, Joseph Corsmeier, Lawyer advertising, Lawyer advertising rules, Lawyer ethics, Lawyer Ethics and Professionalism, Lawyer matching services Avvo, Lawyer Referral Services, Lawyer responsibilities AVVO and Linkedin, LegalZoom

Federal lawsuit filed by patent firm alleges, inter alia, that nonlawyer LegalZoom employees engaged in UPL on trademark applications

Hello everyone and welcome to this Ethics Alert which will discuss the recent California federal lawsuit filed by Legalforce law firm which alleges, among other things, that nonlawyers at LegalZoom engaged in the practice of law on trademark applications.  The case style is Legalforce RAPC Worldwide, P.C.et al v. LegalZoom.com, Inc., et al, Case No. 5:17-cv-07194-NC (U.S. District Court, Northern District of California-San Jose Division).  The Complaint is here: https://www.scribd.com/document/367565873/Complaint-LegalForce-RAPC-v-LegalZoom

The lawsuit was filed in the California Northern District Court on December 19, 2017 by Legalforce, which states that it is “the largest law firm filer of trademarks before the USPTO in each of the last 5 years”.  The Complaint alleges that LegalZoom has engaged in “unauthorized practice of law, false advertising, unfair competition and other claims with respect to preparation and filing of trademark applications” before the U.S. Patent and Trademark Office.  The U.S. Patent and Trademark Office and the State Bars of Arizona, California and Texas are also named as defendants.

The lawsuit claims that the plaintiffs applied for two trademarks through LegalZoom and that the services provided constitute the practice of law. The complaint states that LegalZoom “trademark document specialists” who were not lawyers “provided legal advice to the plaintiffs by selecting classification and modifying the goods and services description from the template thereby applying specific law to facts.” The plaintiffs state that they recorded and transcribed relevant conversations with LegalZoom employees.

The lawsuit seeks a declaration that LegalZoom’s actions constitute the practice of law and that the company engages in false and misleading advertising and unfair competition, and requests a permanent injunction prohibiting LegalZoom from engaging in the practice of law and other acts, compensatory and punitive damages, and restitution.

Bottom line: This patent law firm is suing LegalZoom for, among other things, engaging in the unlicensed practice of law and false advertising in federal court.  The lawsuit also names USPTO, a federal agency, and two state Bars as defendants.  If the court ultimately grants the injunction and rules in favor of the law firm (or refuses to grant the injunction and rules in favor of LegalZoom), it would be a very significant development in this area.

Stay tuned…and be careful out there.

As always, if you have any questions about this Ethics Alert or need assistance, analysis, and guidance regarding ethics, risk management, or other issues, please do not hesitate to contact me.

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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Filed under joe corsmeier, Joseph Corsmeier, LegalForce v. LegalZoom federal lawsuit alleging UPL and deceptive advertising, LegalZoom, LegalZoom federal lawsuit, Unauthorized practice of law

California law requires California Bar to split into mandatory regulatory and voluntary trade association entities

Hello everyone and welcome to this Ethics Alert which will discuss the recent California law that requires the California Bar to split into separate regulatory and trade association entities, which appears to be in response to the U.S. Supreme Court’s North Carolina dental antitrust case in 2015.  The State Bar of California’s press release announcing the “historic” law is here: http://www.calbar.ca.gov/About-Us/News-Events/News-Releases/ArtMID/10234/ArticleID/525/State-Bar-prepares-to-implement-historic-reforms-followingGov-Brown-signature-on-the-agency%E2%80%99s-annual-fee-bill

According to the State Bar press release: “Today (October 2, 2017) Gov. Jerry Brown signed SB 36 into law, the fee bill for the State Bar of California. In addition to setting the annual licensing fee for lawyers, SB 36 includes historic reforms for the public protection agency.”

Under the law, effective in 2019, the California Bar will act only as the disciplinary and regulatory agency and membership will be mandatory for all of the state’s lawyers.  The current 19-member Bar board will transition into a group of 13 individuals serving four-year terms.  Six of the 13 members must be members of the public.  All board members will be appointed by the California Supreme Court, the state legislature, and the governor and will no longer be elected.

A separate nonprofit entity will be created for trade association activities and will include all Bar sections.  Membership in that entity will be voluntary and will include an annual membership fee.

The California Bar must also comply with a California Supreme Court policy to identify and address any proposed decision of the board of trustees which raises antitrust concerns.  This requirement is clearly an attempt to avoid allegations of antitrust violations which were found by the U.S. Supreme Court in North Carolina State Board of Dental Examiners v. Federal Trade Commission, No. 13–534. (USSC February 25, 2015).

In that 2015 case, the USSC found that the North Carolina dental regulatory board, which was made up of primarily dentists, did not have state-action antitrust immunity in its attempts to prohibit non-dentists from providing teeth-whitening services to the public.

The regulation of lawyers (and other licensed professionals) in Florida and other states is implemented through boards, commissions, committees, or other similar entities which investigate and make findings.  In Florida, there is no separate trade association; however, findings by Bar Counsel, grievance committees, and the Bar Board of Governors are subject to review by the Florida Supreme Court.

I previously blogged about North Carolina State Board of Dental Examiners v. Federal Trade Commission and its aftermath in my Ethics Alerts here: https://jcorsmeier.wordpress.com/2015/03/17/u-s-supreme-court-opinion-finds-that-there-is-no-automatic-antitrust-immunity-for-state-professional-licensing-boards/, here: https://jcorsmeier.wordpress.com/2015/06/24/legalzoom-files-federal-antitrust-lawsuit-against-the-north-carolina-state-bar-citing-2015-ussc-dental-board-case/, and here: https://jcorsmeier.wordpress.com/2015/10/28/legalzoom-settles-multi-million-dollar-antitrust-suit-against-the-north-carolina-state-bar-with-agreement-to-continue-operating/

In some states, these antitrust issues are most likely not in play.   For example, the Illinois Attorney Registration and Disciplinary Commission oversees the registration and discipline of attorneys and all Illinois lawyers are required to pay dues to that entity.  All final disciplinary orders are also issued by the Illinois Supreme Court.  The Illinois State Bar Association is a separate voluntary association which engages in trade association activities.

Bottom line: This California law is clearly in response to (and an attempt to overcome) the antitrust issues identified by the U.S. Supreme Court in North Carolina State Board of Dental Examiners v. Federal Trade Commission.  Will other states follow?  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

Joseph Corsmeier

about.me/corsmeierethicsblogs

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Filed under Attorney discipline, Bar regulation and antitrust, California law requiring split of Bar regulation and trade association activities, joe corsmeier, Joseph Corsmeier, Lawyer discipline, Lawyer ethics, LegalZoom, LegalZoom antitrust, North Carolina Dental Board, North Carolina dental whitening case and UPL

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

Washington State Bar suspends some ethics opinions because of antitrust concerns arising from 2015 U.S. Supreme Court opinion

Hello and welcome to this New Year’s Eve 2015 Ethics Alert blog which will discuss the recent decision of the Washington State Bar to suspend some ethics opinions because of antitrust concerns arising out of the U.S. Supreme Court’s February 2015 opinion in North Carolina State Board of Dental Examiners v. Federal Trade Commission.  I previously blogged about the Supreme Court’s decision here: USSC NC dental licensing opinion, the LegalZoom antitrust lawsuit in North Carolina based upon the USSC opinion here: LegalZoom filed antitrust lawsuit against NC Bar and the settlement of that lawsuit here:  LegalZoom settles antitrust lawsuit against NC Bar.

According to a recent ABA Journal article, the Washington State Bar Association has advised its ethics committee to stop issuing ethics opinions which could be interpreted as having the effect of restraining trade in the legal services market.  The bar stated that it suspended the opinions so it could “proceed very deliberately” in the wake of the U.S. Supreme Court’s February 2015 opinion in North Carolina State Board of Dental Examiners v. Federal Trade Commission. 

That U.S. Supreme Court decision permitted an antitrust action against the North Carolina state dentistry board for its decision prohibiting non-dentists from whitening teeth to proceed. The opinion stated that when a state board is controlled by active market participants in the market it regulates, state-action antitrust immunity cannot be applied unless the restraint of trade is affirmatively expressed by state policy and the policy is actively supervised by the state.

Bottom line:  This is more fallout from the 2015 USSC Dental Board decision.  As I have stated in my previous blogs, there have been lawsuits against state Bars in the past attacking the entity’s state action immunity.  The Supreme Court opinion refers to three specific cases and appears to suggest that these cases should be interpreted to mean that only the actions of a state entity which is actively supervised by the state (i.e. the Supreme Court in the case of a state Bar) have antitrust immunity and the rest of the entity’s actions may not have such immunity.

I wish you and yours a very happy and healthy 2016!

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

NOTICE OF CONFIDENTIALITY:  This electronic communication and the information contained herein is legally privileged and confidential proprietary information intended only for the individual and/or entity to whom it is addressed pursuant to the American Bar Association Formal Opinion No. 99-413, dated March 10, 1999 and all other applicable laws and rules.  If you receive this transmission in error, you are advised that any disclosure, copying, distribution, or the taking of any action in reliance upon the communication is strictly prohibited.  Any unauthorized use, distribution, or disclosure of this communication is strictly prohibited.  If you have received this in error, please notify us immediately by return e-mail at the above telephone number and then delete message entirely from your system.  Thank you for your cooperation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Filed under .S. Supreme Court, Attorney Ethics, Bar antitrust, BAR UPL antitrust, joe corsmeier, Joseph Corsmeier, Lawyer antitrust, Lawyer ethics, LegalZoom, LegalZoom antitrust, North Carolina Dental Board, Uncategorized

LegalZoom files federal antitrust lawsuit against the North Carolina State Bar citing 2015 USSC dental board case

Hello everyone and welcome to this Ethics Alert which will discuss the recent antitrust lawsuit filed on June 3, 2015 by LegalZoom against the North Carolina State Bar alleging antitrust violations.  The case is LegalZoom.com, Inc. v. North Carolina State Bar, et al, (U.S. Middle District, North Carolina) Case No.: 1:15-CV-439.  The formal Complaint (WSJ link) is at http://online.wsj.com/public/resources/documents/2015_0604_legalzoom.pdf.

The Complaint was filed on June 3, 2015 and seeks injunctive relief for antitrust violations as well as damages, claiming that the North Carolina State Bar is has “engaged in unauthorized and anticompetitive conduct illegally and unreasonably restraining trade in the Relevant Market” by prohibiting LegalZoom from offering prepaid legal services plans in that state.  As support for the claims, the Complaint cites a recent U.S. Supreme Court decision on the prohibition of non-dentists from providing teeth whitening services in North Carolina.

According to the Complaint, in 1991, the North Carolina state legislature “removed from the State Bar any power over prior and continuing approval of prepaid legal services plans, leaving to the State Bar only the ministerial task of keeping a registration list of plans sold in North Carolina.  The State Bar, however, defied the Legislature. Over time, the State Bar unilaterally and ultra vires reassumed and exercised the power the Legislature had removed. The State Bar adopted – without legislative authority or active State supervision – a restrictive definition of what constitutes a prepaid legal services plan, and then began to refuse to ‘accept’ for registration plans that purportedly did not meet its own definition, excluding those plan providers from the Relevant Market.”  The Complaint states that the Bar rules require the prepaid plans to be paid in advance of any immediate need, and any legal services provided must be provided by lawyers licensed in the state.

In support of the allegations, the Complaint cites the February 2015 U.S. Supreme Court decision North Carolina State Board of Dental Examiners v. Federal Trade Commission, which is here: http://www.supremecourt.gov/opinions/14pdf/13-534_19m2.pdf.  The North Carolina State Board of Dental Examiners opinion held that a dental regulatory board made up mostly of dentists does not have state-action immunity in an antitrust action and authorized a Federal Trade Commission challenge to the dental board’s prohibition of the provision of teeth whitening services by non-dentists.  The opinion also found that when a state board is controlled by market participants in the occupation that it regulates, state-action antitrust immunity does not accrue unless the restraint of trade that is being challenged is affirmatively expressed as state policy and the policy is actively supervised by the state.

Bottom line: It should be very interesting to watch this case unfold.  When the USSC opinion in North Carolina State Board of Dental Examiners v. Federal Trade Commission was rendered on February 25, 2015, there was much analysis/commentary in the media regarding the potential vulnerability of state Bars to an antitrust challenge if it could be shown that they were controlled by market participants (lawyers) in the occupation being regulated (the law).  This appears to be the first shot across the bow.  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.

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 Bar antitrust, joe corsmeier, Joseph Corsmeier, Lawyer antitrust, LegalZoom, LegalZoom antitrust