Can Using Avvo Violate Your Bar's Ethics Rules?

Attorneys who market their services online can feel like they're facing a field of landmines when it comes to complying with their Rules of Professional Conduct. On one end of the spectrum, older rules fail to address online advertising or appear to prohibit common online practices that hadn't been conceived when the rules where adopted. On the other end, state courts and bar associations trying to keep up with technological advancements continuously advise on best practices and, as a practitioner, it can be hard to stay current.

Enter the New York State Bar Association's ethics opinion disapproving of lawyers participating in certain Avvo services. This is just one of the most recent ethics opinions that has law firms and marketers scrambling. Here we'll give you the lowdown on the NYSBA's opinion as well as opinions from some other jurisdictions addressing the ethics of Avvo Legal Services and similar lead generation / online legal service provision options.

The upshot? Even if you are a New York attorney or your jurisdiction similarly interprets its RPCs, the prohibition on certain activities with Avvo by no means applies to all participation with Avvo. Just as importantly, even if the RPCs on attorney advertising seem like a minefield, you are not alone: a good online marketing consultant for law firms should be able to talk you through Internet marketing options that are both consistent with your attorney advertising rules and offer a reasonable return on your investment.

Avvo Legal Services Explained

Avvo Legal Services is primarily at issue in the Avvo fees ethics debate. That's right, wipe the nervous sweat off your brow: it's not all participation with Avvo that the NYSBA and other jurisdictions have labelled as unethical.

Avvo Legal Services is a specific arm of Avvo, Inc. through which independent attorneys are contracted to provide legal services via the Avvo website. Here's how it works. When potential clients come to the site, they identify a particular type or "package" of legal services they need. The client is then offered a list of participating attorneys in their jurisdiction described as "top-rated attorneys" who, of course, are eligible to participate in part based on a minimum Avvo rating. The client then selects an attorney to contact them within one business day. Through the similar Avvo Advisor service, a client can opt to have a lawyer call them within a few minutes for a flat fee phone consultation. In this case, Avvo sends a text message to the relevant lawyers and the first to respond calls the client.

Here's the kicker: the client pays for the service via credit card through the Avvo site based on a price set by Avvo for the given service. Avvo then remits the fee to the attorney the next month. (Unless the client has successfully invoked Avvo's satisfaction guarantee and received a refund or switched lawyers.)

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The ethical debate at issue comes into play when an attorney is paid for legal services rendered. For each service the attorney has been paid for, Avvo charges the attorney a marketing fee. Generally, higher marketing fees correspond to more extensive and expensive legal services, but they do not conform to a specific percentage of the fee.

Avvo urges that any correlation between the price of a legal service and the associated marketing fee is not evidence of impermissible fee sharing between a lawyer and non-lawyer. Rather, as it argued in the New York ethics matter, the correlation results from the realities that more expensive legal services cost more to market, give rise to higher credit card processing fees, and incur more customer service costs on Avvo's end.

New York: Avvo Legal Services Marketing Fee is Improper Compensation for a Recommendation

On August 8, the NYSBA Committee on Professional Ethics issued advisory Opinion 1132, which concluded, point blank:

A lawyer may not pay the current marketing fee to participate in Avvo Legal Services, because the fee includes an improper payment for a recommendation in violation of Rule 7.2(a).

The relevant bit of New York's Rule 7.2(a) states:

A lawyer shall not compensate or give anything of value to a person or organization to recommend or obtain employment by a client, or as a reward for having made a recommendation resulting in employment by a client ... .

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It is worth noting for lawyers outside of New York that the rule is thus substantially similar to ABA Model Rule 7.2(b), which reads, in pertinent part: "A lawyer shall not give anything of value to a person for recommending the lawyer's services." In other words, the rest of us would do well to understand the New York committee's reasoning, since many jurisdictions adhere to similar rules.

So why were the fees here improper, as opposed to mere marketing fees? The Committee relied on its analysis of whether Avvo Legal Services, while acting in part as a "lead generator," is effectively recommending the participating attorneys. And it concluded that Avvo is recommending them, because Avvo does not merely list lawyer profiles and contact information, but rates lawyers and touts its ratings as a tool to help consumers assess a lawyer. Indeed, the Avvo website and ads makes assertions such as:

  • Avvo ratings will help clients find "the right" lawyer
  • Avvo allows you to “work with highly rated" lawyers
  • On Avvo you can “search top-rated lawyers"
  • On Avvo “we only work with highly qualified attorneys”

Finally, the Committee stated that its conclusion was bolstered by Avvo’s satisfaction guarantee, which "contributes to the impression that Avvo is 'recommending' the lawyers on its service because it stands behind them to the extent of refunding payment if the client is not satisfied."

New Jersey, Pennsylvania, Ohio and South Carolina: Participation in Avvo Legal Services Results in Improper Fee Sharing and is Otherwise Unethical

New York is not the only jurisdiction to disapprove participation with Avvo Legal Services. The New York committee acknowledged, but found it unnecessary to reach, questions such as whether these services constitute improper fee sharing or violate other Rules of Professional Conduct. Other states have considered, however, some of the myriad other potential problems attorney ethics rules may pose for services like Avvo Legal Services, LegalZoom and RocketLawyer, such as (citations are to the ABA Model Rules):

  • Fees may constitute impermissible fee-sharing with a non-lawyer (Rule 5.4(a))
  • Payment process and fee structure may result in commingling of funds and otherwise violate trust account requirements (Rule 1.15)
  • The marketing company's involvement may interfere with the lawyer's exercise of independent legal judgment (Rule 5.4(c)) and may jeopardize confidentiality of the lawyer-client relationship (Rule 1.6)

June 2017 joint opinion of the Supreme Court of New Jersey Advisory Committee on Professional Ethics, Committee on Attorney Advertising and Committee on the Unauthorized Practice of Law concluded that participation with Avvo Legal Services violated New Jersey's fee-splitting prohibition and involved impermissible fees paid by the lawyers for recommendations or referrals. The opinion suggested that LegalZoom and RocketLawyer, conversely, were structured such that each could likely qualify as a permissible legal service plan (but neither LegalZoom nor RocketLawyer had, at the time, registered their legal service plans with the New Jersey Administrative Office of the Courts, as required).

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In 2016, the Pennsylvania Bar Association Legal Ethics and Professional Responsibility Committee's Formal Opinion 2-16-200 concluded that a hypothetical program akin to Avvo Legal Services threatened lawyers' professional independence by virtue of impermissible fee sharing. The Supreme Court of Ohio Board of Professional Conduct's Opinion 2016-3 asserted, like the New York opinion, that hypothetical Avvo Legal Services-esque marketing fees would not truly constitute mere advertising fees or costs associated with a permissible lawyer referral service, but would be improper referral fees. The Ohio opinion also acknowledged that participation in such services, depending on their structure, could violate fee-splitting prohibitions and other ethics rules. And South Carolina's Ethics Advisory Opinion 16-06 similarly concluded that such arrangements violate both fee-sharing and referral fee prohibitions.

Avvo: Ignore the Ethics Opinions — This Isn't Impermissible Fee-Splitting — and Sign Up with Us!

Avvo, for its part, has no intention of taking this beating lying down. Most states' ethics opinions are merely advisory, after all. And options like Avvo Legal Services both help newer lawyers build their practices and fulfill a consumer need for affordable legal advice. Avvo specifically advises lawyers in its Attorney FAQ for Avvo Legal Services:

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Fee splits are not inherently unethical. They only become a problem if the split creates a situation that may compromise a lawyer’s professional independence of judgment. We believe that Avvo Legal Services fees, if deducted 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 from your operating account.

Florida: Bar Calls for Regulation; Supreme Court Calls for Severe Curtailment

Never to be outdone when it comes to attorney advertising regulations, in 2016 the Florida Bar proposed an overhaul of the Florida advertising rules pertaining to use of all lawyer referral services, including "private matching companies" like Avvo, LegalZoom and RocketLawyer. The general idea, according to comments by the Board Review Committee on Professional Ethics Chair, Carl Schwait, was to provide "bright line" guidance by

do[ing] away with all definitions [of lawyer referral services, legal directories, and the like] and say[] that any entity or any person that is in the business for profit of matching a lawyer and a consumer . . . must follow certain protocols and rules if they are to have lawyers participate in their service.

In effect, to comply with Florida rules, an attorney making use of online referral services of any kind would have to ensure that the service, itself, met a string of requirements intended to avoid ethics violations.

But the Supreme Court of Florida rejected the proposal, emphasizing the "dangers that non-lawyer-owned, for-profit referral services pose to members of the public — who may be especially vulnerable after they suffer an injury, or when they face a legal matter that they never anticipated." The Court concluded, instead, that additional restrictions were "absolutely necessary to protect the public from referral services that improperly utilize lawyers to direct clients to undesired, unnecessary, or even harmful treatment or services." Its solution? The Court directed the Bar to propose amendments to Rule 4-7.22 "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 re Amend. to Rule Reg. The Fla. Bar 4-7.22—Lawyer Referral Services, 175 So. 3d 779, 781 (Fla. 2015).)

The ultimate outcome in Florida is, as yet, unclear: a subsequent Supreme Court of Florida order on the matter issued on May 3, 2017 and the ball is in the Bar's court for the moment. Suffice to say: Florida lawyers be wary!

North Carolina: It's All Good! Proposed Rule Amendments Would Buck the Trend on Online Legal Services

At the other end of the spectrum, North Carolina is considering amendments to its Rules of Professional Conduct that would make room for provision of legal services through third-party online providers. Specifically, updates to its Rule 5.4 on Professional Independence of a Lawyer would preclude any automatic assumption that fees for marketing or lead generation necessarily interfere with a lawyer's independence of professional judgment. Further, an updated Comment to Rule 1.15 on Safekeeping Property would specify, in essence, that an attorney may still comply trust accounting rules even if a client's funds are initially paid to a trustworthy intermediary.

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North Carolina thus appears open to bucking the trend by opening the door to programs like Avvo Legal Services — at least in theory. As acknowledged by Suzanne Lever, Assistant Ethics Counsel for the North Carolina State Bar, questions remain. Indeed, if one reviews the proposed new Comment [2] to Rule 5.4, the factors bearing on whether participation in such programs interferes with a lawyer's professional judgment still might rule out Avvo's particular model under an analysis like that of the NYSBA Committee's advisory Opinion 1132.

Upshot: Should You Be Worried About Whether Your Online Marketing Violates Ethics Rules?

As always, attorneys engaging in advertising online have a duty to keep up with their own Rules of Professional Conduct. And, as the advisory opinions reviewed here suggest, the nuances of interpretation can be as many and varied as for other areas of law. Fun, right? To stay safe, here is what we suggest when things are gray under your rules:

  • For highly-debated programs like Avvo Legal Services, the risk-averse lawyer should follow his or her jurisdiction's advisory opinions, request an individual ethics ruling, or seek advice from an ethics hotline, if available. If you find risk exciting, it's not our place to tell you that you can't be that guy or gal on the cutting edge, bucking advice and assuming that the rules will ultimately catch up with technological trends in service delivery. But you'd at least do well to A) know what's in your rules and the advisory opinions interpreting them, and B) consider how likely you are to face discipline in your jurisdiction for eschewing them, right or wrong.
  • For online lead generation options such as some other Avvo services and choices provided by Martindale-Hubbell, SuperLawyers, and myriad others: know your rules but don't panic. Even New York permits use of standard lead generating services. Read your rules and make use of that free ethics hotline if you have one.
  • Generally with regard to online marketing, work with a marketer familiar with the advertising constraints faced by attorneys. Although no marketer should hold him- or herself out as an expert on your particular bar rules, marketers who focus on law firms should have some insight into what kinds of activities raise red flags and what other folks in your profession and jurisdiction are doing. The "been there, done that" input of a specialized marketer can go a long way in jumpstarting your review of your own bar constraints so you feel comfortable making decisions about how to proceed ethically. Further, if you hit an apparent roadblock, a marketer who works primarily with law firms should be able to talk through your concerns and offer alternative marketing ideas and options for you to consider.

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