Tag Archives: Lawyer Referral Services

Potential Florida Bar ethics advisory opinion 17-2 will address lawyer referral fees and private client matching services

Hello everyone and welcome to this Ethics Alert which will discuss recent decision by the Florida Bar’s Board of Governors (BOG) to consider a potential ethics advisory opinion to address the ethics issues surrounding lawyer referral fees and private client matching services.  The advisory opinion has not been drafted; however, the draft opinion will be identified as Proposed Advisory Opinion 17-2.

The Bar review began after a lawyer sent an ethics inquiry to The Florida Bar asking whether lawyers could participate with a private lawyer referral service which planned to charge a different set fee depending upon the type of case referred.  The lawyer referred to the system “as a ‘pay-per-lead’ structure.”

The lawyer’s inquiry was referred to the BOG and, at its July 21, 2017 meeting in Miami, the BOG unanimously approved the recommendation of the Board Review Committee on Professional Ethics (BRCPE) that it be directed to prepare an advisory opinion on the inquiry, specifically whether lawyer referral services can charge a fee per referral and impose different fees for different types of cases.  The BRCPE has authority to decline drafting an opinion and the BOG could also decide not to issue the opinion if it is drafted.

If an ethics advisory opinion is drafted, it will address the ethics issues created when online entities (such as AVVO) rolled out programs which attempt to match potential clients with lawyers and which make different payments depending on the type of case.  The opinion would also address the Bar rules related to advertising and referral services.  Lawyers and others will be able to comment on the issues before any opinion is drafted and/or approved.

The Florida Bar Rules have long prohibited lawyers from sharing fees with private referral services.  The Bar’s Standing Committee on Advertising (SCA) also rejected “pay-per-lead” plans on previous appeals and the BOG rejected an appeal from a referral service that proposed a payment of $300.00 to participating lawyers for each referred and accepted case in 2012.

Other jurisdictions have published ethics opinions addressing these issues or are in the process of reviewing them.  As I reported in a recent Ethics Alert blog, New York Ethics Opinion 1132 (published August 8, 2017) found that New York lawyers are prohibited from participating in AVVO’s client referral services.  The opinion found that lawyers who participate in AVVO’s client referral services (and any similar services) would violate the New York Bar rules since they involve AVVO’s improper “vouching” for (recommendation of) the lawyer, improper lawyer referral fees, and improper fee sharing with a non-lawyer.

As background, The Florida Bar filed a petition with proposed Bar rule amendments with the Florida Supreme Court in 2015 addressing, inter alia, referral services that offer both legal and medical or other non-legal services. Those proposed rules would have allowed lawyers to participate in those services, as long as clients were informed about potential conflicts, there was no quid pro quo requiring the lawyer to send a referred client for medical or other services offered by the referral agency, and the lawyer’s independent judgment was not affected.

The Florida Supreme Court published an opinion on September 24, 2015 which declined to implement the rule revisions and instructed the Bar to draft rules that “preclude Florida lawyers from accepting referrals from any lawyer referral service that is not owned or operated by a member of the Bar.”    That opinion is here: 9/24/15 SC Opinion

The Florida Bar then filed revised rule amendments designating private entities which match lawyers with potential clients as “qualified providers” and requiring those entities to comply with the Bar rules, including a required review of the advertisements. Participating lawyers would not have been required to carry malpractice insurance.

The Florida Supreme Court heard oral argument in April 2017 and then published an order dismissing the petition on May 3, 2017. That order is here: 5/3/17 SC Order.  The order stated: “In this case, the Bar proposes amendments to rule 4-7.22 that do not comply with the Court’s direction concerning lawyer referral services that are not owned or operated by a member of the Bar and that seek to expand the scope of the rule to include “matching services” and other similar services not currently regulated by the Bar.

The May 3, 2017 Order also stated that the dismissal was without prejudice “to allow the members of this Court to engage in informed discussions with the Bar and those who are in favor or against the proposed regulation of matching and other similar services. The Court lacks sufficient background information on such services and their regulation at this time.”  A meeting was held at the June 2017 Bar Annual Convention in Boca Raton to discuss the issues and was attended by Justices, Bar officials, and representatives of private referral services.

The Bar’s Notice of the proposed ethics advisory opinion was published in the August 15, 2017 issue of the Florida Bar News.  The Bar’s Notice is here: 8/15/17 Notice of Proposed advisory opinion 17-2.

According to the Notice:  “The Board Review Committee on Professional Ethics will consider adopting a proposed advisory opinion at the direction of The Florida Bar Board of Governors based on an inquiry by a member of The Florida Bar, at a meeting to be held on Thursday, December 7, 2017, from 1-3 p.m. at the Ritz-Carlton on Amelia Island.” and “comments from Florida Bar members are solicited on the issues presented. Comments must contain Proposed Advisory Opinion number 17-2, must clearly state the issues for the committee to consider, may offer suggestions for additional fee arrangements to be addressed by the proposed advisory opinion, and may include a proposed conclusion. 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.”

Bottom line:  If the ethics opinion is drafted and approved, Florida will join the growing list of jurisdictions addressing “marketing fees” taken from fees paid by private online entities to lawyers participating in client generation services.  This ethics opinion (like all ethics opinions) would be advisory and for guidance only.

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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New York ethics opinion finds that fees paid to Avvo for legal services violate referral, fee splitting, and advertising Bar Rules

Hello everyone and welcome to this Ethics Alert which will discuss recent (August 8, 2017) New York Ethics Opinion 1132 which found that lawyers in New York are prohibited from participating in AVVO’s client referral services.  This opinion found that the referral services violate the Bar rules since they involve improper “vouching for” (and recommendation of) the lawyer, improper lawyer referral fees, and fee sharing with a non-lawyer.

The companion New York Ethics Opinion 1131 (August 8, 2017) sets forth the structures of various web-based services and attempts to explain how those services could comply with the New York Bar Rules.  Both New York State Bar Ethics Opinions are here: http://www.nysba.org/EthicsOpinion1132/ and here: http://www.nysba.org/EthicsOpinion1131/ .

NYSBA Ethics Opinion 1132 states that, since Avvo Legal Services provides ratings of lawyers using the service based on various qualifiers such as years in practice, information provided by the lawyers, volunteer bar work and other publicly available information, and offers to find a client “the right” lawyer with a money-back guarantee, there is an implied recommendation as to the lawyer’s “credentials, abilities, competence, character, or other professional qualities”; therefore, the marketing fee is “an improper payment for a recommendation in violation the New York  Bar Rules.

The opinion also states that since “the Avvo website also extols the benefits of being able to work with highly rated lawyers,” it creates a reasonable impression that it is recommending its top-rated lawyers. and the satisfaction guarantee “also contributes to this impression.”

“Avvo is giving potential clients the impression that a lawyer with a rating of ‘10’ is ‘superb,’ and is thus a better lawyer for the client’s matter than a lawyer with a lower rating. Avvo is also giving potential clients the impression that Avvo’s eligibility requirements for lawyers who participate in Avvo Legal Services assure that participating lawyers are ‘highly qualified.’” The opinion states that Avvo Legal Services’ “satisfaction guarantee” also contributes to the impression that Avvo is recommending its lawyers’ services “because it stands behind them to the extent of refunding payment if the client is not satisfied.”

According to the opinion, Comment 1 of New York Rule 7.2 prohibits a lead generator not only from stating that it is recommending a lawyer, but also from implying or creating a reasonable impression that it is making such a recommendation.

NYSBA Ethics Opinion 1132 concludes:

“This opinion does not preclude a lawyer from advertising bona fide professional ratings generated by third parties in advertisements, and we recognize that a lawyer may pay another party (such as a magazine or website) to include those bona fide ratings in the lawyer’s advertisements. But Avvo Legal Services is different.  It is not a third party, but rather the very party that will benefit financially if potential clients hire the lawyers rated by Avvo.  Avvo markets the lawyers participating in the service offered under the Avvo brand, generates Avvo ratings that it uses in the advertising for the lawyers who participate in Avvo Legal Services, and effectively ‘vouches for’ each participating lawyer’s credentials, abilities, and competence by offering a full refund if the client is not satisfied. As noted earlier, Avvo says: ‘We stand behind our services and expect our clients to be 100% satisfied with their experience’” Accordingly, we conclude that lawyers who pay Avvo’s marketing fee are paying for a recommendation, and are thus violating Rule 7.2(a).”

NYSBA Ethics Opinion 1131 sets forth the structures of various web-based services and attempts to explain how those services could potentially comply with the New York Bar Rules.  That opinion concludes:

“A lawyer may pay a for-profit service for leads to potential clients obtained via a website on which potential clients provide contact information and agree to be contacted by a participating lawyer, as long as (i) the lawyer who contacts the potential client has been selected by transparent and mechanical methods that do not purport to be based on an analysis of the potential client’s legal problem or the qualifications of the selected lawyer to handle that problem; (ii) the service does not explicitly or implicitly recommend any lawyer, and (iii) the website of the service complies with the requirements of Rule 7.1.  A lawyer who purchases such a lead to a potential client may ethically telephone that potential client if the potential client has invited the lawyer selected by the service to make contact by telephone.”

The opinions also briefly discuss the potential confidentiality issues related to AVVO’s “money back guarantee”.

Bottom line:  New York has now joined the list of jurisdictions finding that Avvo’s “marketing fee” taken from fees paid to lawyers using its client generation services violate ethics rules and are impermissible referral fees.  This New York ethics opinion (like all ethics opinions) is advisory only; however, it is the most recent finding that the fee charges in AVVO’s plan constitute improper referral fees and fee sharing.  Other jurisdictions (such as a pending North Carolina opinion) may also publish ethics opinions in the future.  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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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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Florida Supreme Court dismisses Florida Bar’s petition proposing substantial revisions to lawyer referral service rules

Hello everyone and welcome to this Ethics Alert Update which will update my August 1, 2016 Ethics Alert and will discuss the recent Florida Supreme Court Order (May 3, 2017) dismissing the Bar’s petition for approval of the proposed substantial revisions to the Bar Rules related to lawyer referral services.

The proposed rules would have substantially revised the current rules, changed the name of the referral companies to “matching services” and “qualifying providers”, specifically prohibited fee splitting and deleted the disclaimer that the entity is a lawyer referral service.  The proposed rules would not have limited ownership to lawyers only or referrals to lawyers only.

The case is: In Re: Amendments to the Rules Regulating The Florida Bar-Subchapter 4-7 (Lawyer Referral Services, Case No.: SC16-1470 and the Supreme Court’s Order May 3, 2017 is here:  https://efactssc-public.flcourts.org/casedocuments/2016/1470/2016-1470_disposition_138549.pdf

Under the proposed amendments, which were approved by the Florida Bar Board of Governors in 2016, any private entities that connect consumers looking for legal services with lawyers would have been called “qualifying providers” regardless of whether they were “traditional” referral services (such as ASK-GARY or 411 PAIN) or a technology-based provider (such as AVVO or LegalZoom).

The Florida Bar’s website has a page summarizing the proposed rule revisions as well as a frequently asked questions section and comparison chart.  The link to that page is here:  http://www.floridabar.org/proposedlrsamend#Overview.

The May 3, 2017 Florida Supreme Court Order states:

Previously, in In re Amend. to Rule Reg. The Fla. Bar 4-7.22—Lawyer Referral Services, 175 So. 3d 779, 781 (Fla. 2015), the Court rejected amendments to Rule Regulating the Florida Bar 4-7.22 proposed by The Florida Bar and directed the Bar to propose amendments that “preclude Florida lawyers from accepting referrals from any lawyer referral service that is not owned or operated by a member of the Bar.” In this case, the Bar proposes amendments to rule 4-7.22 that do not comply with the Court’s direction concerning lawyer referral services that are not owned or operated by a member of the Bar and that seek to expand the scope of the rule to include “matching services” and other similar services not currently regulated by the Bar. (emphasis supplied).

The Court having considered the Bar’s prior petition, the amendments proposed in this case, the comments filed, the Bar’s response, and having had the benefit of oral argument, the Bar’s petition in this case is hereby dismissed without prejudice to allow the members of this Court to engage in informed discussions with the Bar and those who are in favor or against the proposed regulation of matching and other similar services. The Court lacks sufficient background information on such services and their regulation at this time.

No rehearing will be entertained by this Court.

Bottom line:  As I previously stated, if approved by the Florida Supreme Court, the proposed revisions would have substantially altered the rules for lawyer referral services; however, the proposed rules would not have limited ownership to lawyers nor referrals only to lawyers.  This Order makes it clear that the that the proposed rules “do not comply with the Court’s direction concerning lawyer referral services that are not owned or operated by a member of the Bar and that seek to expand the scope of the rule to include ‘matching services’ and other similar services not currently regulated by the Bar.”

The Florida Bar will now ponder the language of the Supreme Court’s Order in considering potential future proposed lawyer referral rule revisions.  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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South Carolina ethics advisory opinion states that matching legal services such as those offered by Avvo are prohibited

Hello everyone and welcome to this Ethics Alert which will discuss the recent South Carolina ethics advisory opinion which states that marketing fees to non-lawyer companies collected as part of legal fees are prohibited.  The advisory opinion is here: http://www.scbar.org/Bar-Members/Ethics-Advisory-Opinions/Opinion-View/ArticleId/2455/Ethics-Advisory-Opinion-16-06

The July 14, 2016 ethics advisory opinion discusses a marketing program and fee arrangement similar to the one used by Avvo Legal Services.  Avvo states that the service matches lawyers willing to provide specific legal services to clients who pay a fee to Avvo, which includes a marketing fee.  Lawyers who participate then receive earned fees from Avvo once a month and Avvo takes its marketing fee from the lawyers in a separate transaction.

The South Carolina advisory opinion states that this type of fee arrangement/program constitutes improper fee sharing with non-lawyers, and, in the alternative, constitutes improper payment of a referral fee to a non-lawyer, which is also prohibited.

According to the opinion, “In the situation described above, the service collects the entire fee and transmits it to the attorney at the conclusion of the case. In a separate transaction, the service receives a fee for its efforts, which is apparently directly related to the amount of the fee earned in the case. The fact that there is a separate transaction in which the service is paid does not mean that the arrangement is not fee splitting as described in the Rules of Professional Conduct.”

“A lawyer cannot do indirectly what would be prohibited if done directly. Allowing the service to indirectly take a portion of the attorney’s fee by disguising it in two separate transactions does not negate the fact that the service is claiming a certain portion of the fee earned by the lawyer as its ‘per service marketing fee.’”

The opinion also states that marketing fees must represent the reasonable cost of the service, and these fees do not meet that criteria.  “Presumably, it does not cost the service any more to advertise online for a family law matter than for the preparation of corporate documents. There does not seem to be any rational basis for charging the attorney more for the advertising services of one type of case versus another.”

“The service, however, purports to charge the lawyer a fee based on the type of service the lawyer has performed rather than a fixed fee for the advertisement, or a fee per inquiry or “click.” In essence, the service’ s charges amount to a contingency advertising fee arrangement rather than a cost that can be assessed for reasonableness by looking at market rate or comparable services.”

Avvo representatives have previously stated that their “matching services” fee arrangement does not violate lawyer disciplinary rules.  I discussed Avvo’s program in my January 15, 2015 Ethics Alert, which is here:  https://jcorsmeier.wordpress.com/2016/01/25/lawyer-directory-website-avvo-is-offering-fixed-fee-legal-services-on-a-limited-basis-and-plans-to-expand-the-services/

An online FAQ about the legal services program 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 stated 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.”

Bottom line:  The South Carolina ethics advisory opinion makes it clear that Avvo’s (and other similar) “matching service” arrangements constitute improper fee splitting and improper referral fees.  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 their jurisdictions Bar rules before considering participation in the service.

Disclaimer:  this Ethics Alert 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.

Please note:  Effective June 27, 2016, my new office address is:

29605 U.S. Highway 19 N., Suite 150, Clearwater, Florida 33761

E-mail addresses and telephone numbers below will remain the same. 

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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Florida Bar’s Board of Governors will vote on substantial revisions to Bar rules related to lawyer referral services

Hello everyone and welcome to this Ethics Alert blog which will discuss the proposed revisions to the lawyer referral Bar rules which would change the names to “matching services” and “qualifying providers” and substantially revise the existing referral rules.  The proposed rule revisions are here:  http://www.floridabar.org/TFB/TFBResources.nsf/Attachments/D8FFF4171E28E5C085257FA300648D6B/$FILE/4-7.22%20et%20al%20legislative.pdf?OpenElement

The proposed rules address for-profit companies that link lawyers with consumers needing legal work and are designed to prevent fee splitting between those companies and lawyers and protect the public from deceptive, misleading, or false advertising by those companies.  Under the proposed amendments, any private entities that connect consumers looking for legal services with lawyers are called “qualifying providers” regardless of whether they are a “traditional” referral service (ASK-GARY, 411 PAIN) or a technology-based provider (AVVO, LegalZoom).

The Florida Bar’s Board of Governors (BOG) received an updated report on May 20, 2016 from Carl Schwait, chair of the Board Review Committee on Professional Ethics.  That BOG committee was working on the rules with the BOG’s Technology Committee, chaired by board member John Stewart, since last year when the Florida Supreme Court rejected the Bar’s proposed rule amendments on for profit lawyer referral services.

The BOG is scheduled to vote on the proposed amendments at its July 29, 2016 meeting.  If approved, the amendments must be filed with the Supreme Court by August 15, 2016 and the Court must also approve and issue an Order implementing them.

The Florida Bar’s website has a page summarizing the proposed revisions to the rules and also has a frequently asked questions section and comparison chart.  The link to the page is here:  http://www.floridabar.org/proposedlrsamend#Overview and the summary of the proposed rule changes is below:

OVERALL CHANGES TO RULE

Terminology

“Qualifying Provider” instead of “lawyer referral service”

Some states prohibit for-profit lawyer referral services

States that prohibit for-profit lawyer referral services define them differently than Florida – some on-line matching services are not considered referral services in some states

Broader definition of “qualifying provider” including:

Directories

On-line matching services

Group or pooled advertising programs

Tips or leads programs

REQUIREMENTS RETAINED

Ads for qualifying providers must comply with lawyer advertising rules

Lawyers may not divide fees with qualifying providers (except non-profit Florida Bar and voluntary bar lawyer referral services)

Qualifying providers must match consumers only to those authorized to provide the services in Florida

Qualifying providers must respond to official bar inquiries within 15 days

Qualifying providers may not state or imply bar endorsement (except non-profit Florida Bar and voluntary bar lawyer referral services)

Qualifying providers must use their actual names or a registered fictitious name

DELETED REQUIREMENTS

Malpractice insurance

Lawyer referral services and other qualifying providers find it difficult if not impossible to obtain malpractice insurance that covers lawyers who are in different firms

Most lawyers are not required by bar rules to carry malpractice insurance (currently only lawyers participating in either for-profit or Florida Bar or voluntary bar lawyer referral services or Florida bar-approved group or pre-paid legal insurance plans are required to carry malpractice insurance)

Disclaimer in all ads that it is a lawyer referral service

Some states prohibit for-profit lawyer referral services

States that prohibit for-profit lawyer referral services define them differently than Florida – some on-line matching services are not considered referral services in some states

Requiring the disclaimer creates problems in states where lawyer referral services are prohibited

Fewer requirements allow Florida Bar members to participate with more qualifying providers without having to be concerned that they cannot meet bar requirements

Disclaimer in all ads that lawyers pay to participate

It is obvious to most consumers that they are for-profit

Some qualifying providers do not charge lawyers to participate, but make money by selling advertising space or by charging consumers to participate

Requirement that all services provide The Florida Bar quarterly with names of all those authorized to act on behalf of the service

Fewer requirements allow Florida Bar members to participate with more qualifying providers without having to be concerned that they cannot meet bar requirements

Qualifying providers are required to respond to official bar inquiries, so if the bar needs the information, the bar can request it at that time

CHANGED REQUIREMENT

Report to the bar of the names of all participating lawyers changed from quarterly to annual

Fewer requirements allow Florida Bar members to participate with more qualifying providers without having to be concerned that they cannot meet bar requirements

Qualifying providers are required to respond to official bar inquiries, so if the bar needs the information, the bar can request it at that time

NEW REQUIREMENTS

Qualifying providers:

may not require or pressure the lawyer to provide cross referrals

must give participating lawyers documentation of compliance with bar rules

must disclose participating lawyers’ location by city, town or county when the referral is made

may not use a name or otherwise imply to the public that the qualifying provider is a law firm, can practice law or directly provide legal services

REQUIREMENTS CONSIDERED BUT NOT RECOMMENDED 

Florida Supreme Court requested amendment that requires that lawyer referral services be owned or operated by a Florida Bar member

The BRC and Technology Committees discussed extensively and voted not to include the proposal

The Court already has regulatory authority over participating lawyers

Lawyers will become scapegoats for unscrupulous services

Services who are in compliance should not be penalized

Rules should be no more restrictive than is necessary to protect the public and ensure lawyer’s adherence to professional requirements

Defining ownership and operation is difficult and no parameters have been provided by the Court

FILING

Amendments will be considered for final action by The Florida Bar Board of Governors at its July 29, 2016 meeting in Miami Beach Comments may be sent to eto@floridabar.org – if filed with the bar by June 30, they will be provided to the board for its meeting

Petition to amend the rule will be filed with the Florida Supreme Court August 15, 2016

Comments may be filed directly with the Florida Supreme Court between August 15, 2016 and September 15, 2016

Bottom line:  If these rules are approved by the BOG (and the Florida Supreme Court), they will substantially change the landscape for lawyer referrals and the requirements for providers and lawyers to participate in “matching services”; however, although the Florida Supreme Court strongly suggested that only lawyers own the services, the rules do not limit ownership nor do they limit the referrals only to lawyers.

Be careful out there!

 Disclaimer:  this Ethics Alert 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.

Please note:  Effective June 27, 2016, my new office address is:

29605 U.S. Highway 19 N., Suite 150, Clearwater, Florida 33761

E-mail addresses and telephone numbers below will remain the same. 

My main office number, (727) 799-1688, is temporarily unavailable due to a telephone company issue.  Please call (727) 286-6625 (my rollover number) if you need to contact me immediately.   Thank you. 

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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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.

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Clearwater, Florida 33759

Office (727) 799-1688

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jcorsmeier@jac-law.com

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