Ride the Lightning

Virginia State Bar: Avvo Flat-Fee Service Unethical

November 8, 2017

As Virginia Lawyers Weekly (sub. req.) reported recently, the Virginia State Bar Counsel has voted, with only six dissenting votes, that lawyer-client matching services which advertise limited legal services for fixed rates and charge marketing fees to participating lawyers, violate Virginia's legal ethics rules.

The VSB Council recommended that Virginia join five other states where authorities have found participation in Avvo Legal Services to be unethical. Bar leaders cite concerns about handling client money and payments for referrals. Though the news is important, the adoption of the opinion must come from the Supreme Court of Virginia.

The Council voted on October 27^th to approve Legal Ethics Opinion 1885 over objections from an Avvo representative. Dan Lear, Avvo director of industry relations, said the proposed guidance would prevent lawyers from exploring new methods of reaching the public with innovative legal services.

I respectfully disagree with Dan, who I know and like. Innovative legal services have been widely accepted by the VSB. This opinion is really quite narrow and in keeping with our ethical rules.

The LEO would address only lawyers' participation in Avvo Legal Services – the fixed-fee limited-legal-service program – and not other Avvo products such as its lawyer ratings (which I regard as pretty much bogus – all sorts of mediocre lawyers seem to get a "10" rating and there are plenty of resources online to help you get that "10") and advertising functions. Dan said "hundreds" of Virginia lawyers are participating in Avvo Legal Services. Though he declined to give exact numbers, we frequently ask, when speaking at conferences, about participation – and I would guess he is probably right.

The hypothetical program addressed by the LEO advertises limited scope legal services for set fees. Under the hypothetical, the company collects the prepaid fee in full and deposits it in the lawyer's operating account when service is complete. The company then withdraws a marketing fee based on the amount of the client's payment. This, of course, is precisely what Avvo Legal Services does.

The VSB Standing Committee on Legal Ethics said the program violates rules requiring lawyers to hold advanced fees in their trust accounts and to refund any unearned fees. The hypothetical model (Avvo is not named specifically) also breaks rules against fee sharing and paying third parties for recommendations, according to the ethics committee.

President-elect Len Heath commented, "At the end of the day, Mr. Lear, what we're really worried about here is our clients and the protection of our clients and the protection of the public," Heath said.

As a past VSB President and the current Chair of the Study Committee on the Future of Law Practice, I can tell you that Virginia State Bar leaders fully understand that their duty is to protect the public – not to protect the jobs of lawyers. There may be lawyers who would welcome protectionism, but they do not receive it. I am proud of the VSB leadership which has steadfastly remained true to its core mission of protecting the public. I hope the Supreme Court adopts the opinion.

E-mail: Phone: 703-359-0700
Digital Forensics/Information Security/Information Technology
https://www.senseient.com
https://twitter.com/sharonnelsonesq
https://www.linkedin.com/in/sharondnelson
https://amazon.com/author/sharonnelson