Lawyers and Social Media in 2017
Must-have Apple Watch and iPhone apps for lawyers

Virginia Bar Nixes Online Attorney-Client Matching Service

Stacked3Here is this week's Daily Record column. My past Daily Record articles can be accessed here.

*****

In recent months, I’ve written about a handful of ethics opinions from different jurisdictions whereby the ethics committees rejected the use of various online lawyer lawyer directories and lawyer-client matching services such as Avvo, Legal Zoom, and Rocket Lawyer. Virginia now joins their ranks with the issuance of Legal Ethics Opinion 1885.

At issue in this opinion was whether a lawyer may ethically participate in an online attorney-client matching service (ACMS) which operates as follows:

The prospective client selects the advertised legal service and chooses a lawyer identified on ACMS’s website as willing to provide the selected service. The prospective client pays the full amount of the advertised legal fee to the ACMS. Thereafter, the ACMS notifies the selected lawyer of this action, and the lawyer must call the prospective client within a specified period. After speaking to the prospective client, and performing a conflicts check, the lawyer either accepts or declines the proposed representation.

Under this arrangement, if the lawyer accepts the representation, the lawyer agrees to undertake a limited scope representation of the client. Upon completion of the representation, the ACMS deposits the legal fee into the lawyer’s operating account and then electronically withdraws a “marketing fee” from the same account as payment to the ACMS for participation in the matching service.

Although the Legal Ethics Committee did not specify the name of the matching service in the opinion, the setup described is the same as Avvo’s.

Of note, the Committee expressed concern regarding the fact that the ACMS, rather than the lawyer, controlled the attorney fees while the case was pending. According to the Committee, this arrangement circumvented the ethical requirements that lawyers are duty-bound to adhere to:

A Virginia lawyer who participates in the service rendered by the ACMS cannot comply with this Rule of Professional Conduct because she is not, and has never been, the custodian of the advanced fee. She has ceded control of that fee to the ACMS, which decides how to dispose of the client’s fees, both earned and unearned. A lawyer must not accept a legal matter under an arrangement which requires that she delegate the function of holding and disposing of the client’s advanced legal fees to a lay entity. In accepting such representation, the lawyer also violates Rule 1.16(a)(1), which prohibits any representation which would result in the lawyer’s violation of the Rules of Professional Conduct.

The Committee also determined that the business model of the ACMS involved improper legal fee sharing with a non-attorney and was thus unethical, despite the fact that the fee in question was referred to as a “marketing fee”: “Calling the online service’s entitlement a “marketing fee” does not alter the fact that a lawyer is sharing her legal fee with a lay business.”

For those reasons, and others, the Committee concluded that it was impermissible for Virginia attorneys to provide legal services through the ACMS in question:

(A) lawyer who participates in an ACMS using the model identified herein violates Virginia Rules of Professional Conduct because she:

cedes control of her client’s or prospective client’s advanced legal fees to a lay entity;
undertakes representation which will result in a violation of a Rule of Professional Conduct;
relinquishes control of her obligation to refund any unearned fees to a client at the termination of representation;
shares legal fees with a nonlawyer; and
pays another for recommending the lawyer’s services.

This opinion, and the others recently issued, do not preclude lawyers from participating in online lawyer-client matching services. Instead, it’s important to understand both the setup of the particular online service and the ethical rules of your jurisdiction prior to signing up for the service. Read any applicable ethics opinions that have been handed down in your jurisdiction and then carefully choose services with business plans that comport with your ethical obligations.

Nicole Black is a Rochester, New York attorney, author, journalist, and the Legal Technology Evangelist at MyCase, intuitive web-based law practice management software for solo and small law firms. She is also the author of the ABA book Cloud Computing for Lawyers, co-authors the ABA book Social Media for Lawyers: the Next Frontier, and co-authors Criminal Law in New York, a West-Thomson treatise. She is the founder of lawtechTalk.com and speaks regularly at conferences regarding the intersection of law and technology. She can be reached at niki@mycase.com.