Indiana ethics opinion finds that AVVO Advisor services may violate referral, fee splitting, and advertising rules

Hello everyone and welcome to this Ethics Alert which will discuss recent (April 2018) Indiana Ethics Opinion 1-18 which found that AVVO’s client referral services may violate Indiana Bar rules related to fee sharing with a non-lawyer, improper referral fees to a non-lawyer entity, potentially misleading communications, and the lawyer’s obligations related to professional independence and disclosure of limited representation. The Indiana ethics opinion is here:  https://www.in.gov/judiciary/discipline/files/dc-opn-1-18.pdf

The ethics opinion describes and summarizes the AVVO Advisor program (and any other similar online non-lawyer legal referral services) business model as follows:

Technology and increasing competition in the legal profession and business in general have driven the expansion of a variety of online legal services. Significant growth has been apparent among online service providers offering consumers fixed-fee, limited scope services provided by local attorneys. Typical business models set a fixed fee for various legal services with a local attorney performing the actual legal work. The company, not the attorney, defines the types of legal services offered, the scope of the representation, the fees charged, and other parameters of the legal representation.

Common features of these arrangements include: 1) prearranged fees established by the online company; 2) a “marketing fee” received by the online company; 3) addition of a local attorney to a database accessible to and used by the prospective client to select the attorney; and 4) a caution from the online company that an attorney may decline representation, but that repeated refusals could result in the removal of the attorney’s name from the database.

According to the AVVO webpage, “Avvo Legal Services is currently available in these US states: Arizona, California, Colorado, Connecticut, Florida, Georgia, Illinois, Massachusetts, Maryland, Michigan, Minnesota, Missouri, Nevada, New Hampshire, North Carolina, New Jersey, New York, Ohio, Oregon, Pennsylvania, South Carolina, Texas, Utah, Virginia, Washington, and Wisconsin.” The listed practice areas include:  “Bankruptcy and debt, Business, Criminal defense, Divorce and separation, Family, Estate planning, Immigration, Landlord or tenant, Real estate” and states “If you need to update your practice area percentages, simply edit your Avvo profile.”

Under the AVVO Advisor business model, the potential client visits the AVVO website, selects the legal services needed, and pays Avvo a fixed fee.  Avvo then arranges for an “experienced lawyer” to return the prospective client’s call “within minutes.”  If a lawyer decides to participate, he or she agrees to provide certain legal services for a fixed fee.  Examples include a $39.00 flat fee for a “15-minute Family advice session”; a $995.00 flat fee for filing of an “uncontested divorce”; and a $295.00 flat fee for creating a “last will and testament”.

After the lawyer provides the legal services, Avvo sends the lawyer “100% of the client’s payment” and the lawyer sends to AVVO,  “(as) a completely separate transaction”, a “per-service marketing fee.”  According to AVVO’s “Attorney FAQ for Avvo Legal Services”, “Prices for these (legal) services vary from $295 for services like creating a last will and testament (individual), up to $2995 for preparing and filing a family green card application. Any applicable filing fees are not included in the price of the service; clients should pay those separately”.

“You (the lawyer) pay a marketing fee. As a separate transaction, we withdraw a per-service marketing fee from your withdrawals account. Fees are $40 – $400, depending on the service.”  The Attorney FAQs also state that “Attorneys in Florida who offer 15-minute advice sessions must carry at least $100,000 in legal malpractice insurance. This requirement does not currently apply to document review or start-to-finish services.”

Bottom line:  Indiana has now joined a lengthening list of jurisdictions which have published ethics opinions stating that the “AVVO Advisor” business model may violate lawyer ethics rules, including, in this opinion, the Indiana Bar rules related to fee sharing with a non-lawyer, payment of referral fees to a non-lawyer entity, potential misleading communications, and the lawyer’s obligations related to professional independence and disclosure of limited representation.  Other jurisdictions may publish ethics opinions in the future.  Stay tuned…

…and be very 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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About jcorsmeier

Joseph A. Corsmeier is an “AV” rated attorney practicing in Clearwater, Florida. He concentrates his practice primarily in the areas of defense of attorney disciplinary matters before The Florida Bar, attorney admission matters before the Florida Board of Bar Examiners, and professional license and disciplinary matters before the Boards of the State of Florida. He provides expert analysis and opinion on conflict of interest and other attorney disqualification and legal malpractice issues and he testified as an expert in the Florida courts. He served as an Assistant State Attorney in the Sixth Judicial Circuit from 1986 to 1990 where he prosecuted felonies exclusively from June 1987, and as Bar Counsel for The Florida Bar’s Department of Lawyer Regulation from 1990 to 1998. He also practices in the areas of estate planning and Medicaid qualification, workers’ compensation, and labor law. Mr. Corsmeier is the author of numerous articles for various bar publications, has spoken at numerous local and statewide seminars on various topics, including ethics and professionalism, and was an instructor of legal ethics for paralegals at Rollins College until the Tampa campus closed. He received his undergraduate degree from Florida State University and his J.D. from Mercer University. He is admitted to practice in all Florida Courts, the Supreme Court of the United States, the United States Court of Appeals for the Eleventh Circuit, and the Middle District of Florida. He is a member of The Florida Bar, American Bar Association, the Association of Professional Responsibility Lawyers, and the Clearwater and St. Petersburg Bar Associations.
This entry was posted in Attorney ethics, Attorney Ethics sharing fees, Ethics Opinion AVVO Advisor, Indiana ethics opinion 18-1- AVVO Advisor violation of fee, referral and other Bar rules, joe corsmeier, Joint New Jersey ethics opinion- AVVO legal services are improper fee sharing and referral fees, joseph corsmeier, Lawyer Ethics, Lawyer ethics AVVO and matching services- fee splitting and sharing, Lawyer ethics opinions, Lawyer ethics opinions Avvo - improper fee splitting and referral fees, Lawyer ethics- AVVO lawyer independent professional judgment, Lawyer sharing fees with non-lawyers, New York ethics opinion- AVVO legal services improper fee sharing, referral fees, and recommendations, Uncategorized and tagged , , , , , , , , , , . Bookmark the permalink.

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