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Avvo Advisor: Should Texas Lawyers Join?

Feb. 23 2016

UPDATE: Avvo has fixed one of the potential issues we identified, the need to make clear to potential clients that the lawyer has paid a fee for the service.

Avvo, the legal directory platform which also allows non-lawyers to ask lawyers questions informally, has introduced fixed-fee legal services online. Prices range from $39 to $599 for a wide range of both business and consumer services. The process for the client is fairly simple: Choose a legal service, pay, and, in the simplest case, get a phone call for the $39 15 minute legal consultation. The FAQs for lawyers spell out the rest of the process. The lawyer is paid monthly, receiving the entire fee in a deposit from Avvo to their bank account. Avvo then withdraws their fee for advertising from the lawyer’s account. The entire fee schedule is not available for review, but appears to be about 25% of the lawyer’s fee.

While no definitive ethics opinion in Texas addresses whether this is fee splitting,  Avvo argues that the payment structure is not fee splitting but rather payment of an advertising fee by a lawyer. Texas Ethics Opinion 573 issued in 2006 addresses situations where a lawyer “obtains information over the internet from potential clients about their legal problems and forwards the information to lawyers who have paid to participate in the internet service.” The opinion concludes that such services must meet six tests:

1) The process of selecting lawyers to handle particular cases must be automated, with no discretion used.
2) The service must

“ensure that a reasonable potential client understands

(a) that only lawyers who have paid a fee to be included in the Service will be given the opportunity to respond to the potential client and

(b) that the Service makes no assertions about the quality of the lawyers included in the Service.

The Service must not state that it is making referrals of lawyers or describe itself in such a way that would cause a reasonable potential client to believe the Service is selecting, referring and recommending the participating lawyers. The Service must ensure that a reasonable potential client either understands that the Service is open to all licensed lawyers or, if there are limits on the number or qualifications of lawyers who may participate in the Service, understands the nature of those limits.”

3) The advertising fee charged by the service must be reasonable.
4) The service must not unreasonable restrict lawyer participation in the service, by either high fees or tightly drawn geographical limits.
5) Every initial communication from the lawyer is considered advertising information, and must so state. Further, the communication must indicate that the lawyer is responding through the service based on geographic and practice area, and that the lawyer has paid a fee to participate in the service.
6) The lawyer cannot communicate with the client in person, by telephone or other electronic means, unless the client has requested such communication.

It is uncertain whether several of these requirements are met by Avvo. Automation of selection and reasonable restrictions seem to be used by the service. The 25% fee is not usual in lawyer advertising, though certainly payment for actual purchase rather than mere publicity is not usual in internet advertising. The initial communication requirements and restrictions seem to be in the hands of the lawyer, not the service.

The service’s duties to assure that potential clients know the lawyer is paying a fee and know that only lawyers who have agreed to pay a fee will respond does not appear to be clear in the process of signing up for legal services. No statement about quality of the lawyers is made, but it isn’t disclaimed, either. The nature of the limits on lawyers does not seem to be clearly expressed to potential clients.

Assuming Avvo was acceptable in Texas, lawyers should not stop doing what lawyers ordinarily do in practice just because the service is provided online. Avvo, to their credit, suggests that lawyers have clients sign a fee agreement, and provides a suggested form. Lawyers also should run conflict checks before taking on cases through Avvo.

The regulatory environment for lawyer advertising is evolving. First amendment claims regarding restrictions on advertising may exist. While there are some potential problems with Avvo, they might be easily solved, or be determined to be unduly restrictive. Lawyers must carefully consider ethics opinions regarding internet advertising before making decisions.

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