The South Carolina Bar’s Ethics Advisory Committee issued an opinion last month (Ethics Advisory Opinion 16-06) concluding that Avvo Legal Services violates the prohibition of sharing fees with a non-lawyer.
[T]he 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 further holds that the fee arrangement would violate the prohibition against giving anything of value to a person for recommending a lawyer’s services.
Bottom line: we built Avvo Legal Services at every turn to delight consumers. We’re happy to entertain any feedback from Bars if they think we are doing something that is hurting consumers. But we’re not going to hobble the product just to comply with misguided regulatory interpretations.
To “delight consumers”? What consumer doesn’t want to be delighted, even if this is one of the most inane things to say to lawyers. But what is worse is that Josh, because he’s just an incredibly gracious guy, is “happy to entertain any feedback from Bars.” Are you? Are you happy? Are you happy to “entertain.” because ethics isn’t what bars say, but whatever Avvo deems worthy. How kind of Avvo to “entertain” ethics.
Josh gave another version of the spin to the ABA Journal.
King says Avvo Legal Services is a “marketplace,” rather than a referral service, and the fees paid by lawyers to Avvo “scale very directly” with the costs incurred by Avvo. The costs of legal services provided through the marketplace range from $39 to $4,000, and that results in different credit card fees and different risks in the event of refunds, King says.
The ethics rules, King adds, should be interpreted based on potential consumer harm, and lawyer advertising rules should be narrowly tailored to avoid First Amendment violations. “We really built the product looking at the consumer benefit and trying to navigate through the rules,” he said.
This is a pretty fair representation of the issues at stake here. Business trying to skim a piece out of the legal profession aren’t subject to the ethical proscriptions of deceit, and so they can puff all they want, use happy marketing language to make an obvious referral service a “marketplace,” as if calling a cow a horse means you can milk it**. And relating their fees to the legal fees isn’t fee splitting, but “scal[ing] very directly” because reasons.
But enough with noting the never-ending spin that Josh gets paid well to do full time. Sure, he’s been selling a false flavor of ethics, because if you repeat bullshit enough, lawyers will start believing it and it won’t seem nearly as wrong when the desperate and stupid hop aboard the train. And make no mistake about it, Avvo’s shtick relies on lawyers being desperate and stupid, the ones who lack the capacity to grasp why Josh’s spin is nonsense.
Let’s instead go to what this is really all about. Avvo can sell legal services like laundry detergent to an unsuspecting and ignorant public. There are tons of hungry lawyers whose practices are dead in the water and are sucking wind. They’ll do anything for business. Some are the lawyers who think that if they get a cool logo, this will make them successful lawyers. Others have just given up, fighting the tide of cut-rate, low-rent lawyers who see the internet as an ethics-free zone and do anything they can, lie through their teeth, to get a fee.
Avvo wants its piece of that pie, and by connecting a clueless public with desperate lawyers, wants to take a percentage out of the middle. Avvo isn’t doing this because they’re great humanitarians, but because it’s a for-profit business. There’s nothing wrong with that, and nothing wrong with lying about their motives, but at least appreciate that it’s all a lie.
To have laundry detergent lawyers to sell, Avvo puts commercials on TV and fixes low prices. If you want them to send you business, you do it at the prices they set. These are the prices they can sell, and you can take them or not. But you won’t get a text message from Avvo with a prepaid client unless you play by their rules.
Are these lawyers competent? Are the prices adequate? Will lawyers short-cut their representation because they’re being paid just enough to buy a super-sized Slurpee? Who cares? The lawyer’s phone rings, which beats the hell out of a silent phone and he gets to play lawyer, even if he could earn more as the assistant manager at Dairy Queen, and Avvo gets a piece of every referral. And it’s not as if the clients, oops, consumers, would know the difference between competent representation and a shit show if it bit them in the ass.
That’s the business model. The argument is that the old one isn’t working, that clients can’t find lawyers, that lawyers charge more than clients want to pay and that competence is an irrelevancy in this new world where lawyers aspire to mediocrity anyway.
Is this the future of law? Avvo’s betting the farm on it, and that lawyers are either too stupid to grasp the lie or too desperate to care. Is it better to split your pittance of a fee with Avvo or sit in your office staring at the silent phone? Cut the ethics crap, this is purely a business decision. Of course, there is one other alternative, but most lawyers don’t have the legs for it.
*In an inexplicable twist of irony, Josh is a regular lecturer on ethics for Avvo and other legal techs, where he teaches his flavor of Avvo Ethics that bears no relation to ethics as recognized by anyone else. Attendees get CLE ethics credit for listening to Josh spin his view of ethics that, coinicidentally, would entitle Avvo to a third of every legal fee in America.
**Yeah, horses are mammals and are technically milkable too.