Legal matchmaking sites have been around since the dawn of the Internet, and ethics committees in many states are still struggling with how to deal with them—do these services constitute permissible marketing, or do they violate rules against fee sharing and paid recommendations? As with so many legal questions, the answer is “it depends.”
New legal matchmaking sites are entering the marketplace at a breakneck pace. That is because there is money to be made, and the territory has not yet been fully settled. These services match individuals and entities in need of legal services with a qualified attorney who can meet their needs. In many ways, they are taking over the function that has largely been the domain of large law firms. For example, one matchmaking site advertises that all of its lawyers are vetted, go through a reference check, and must pass a face-to-face interview before being matched with a prospective client. Avvo offers a popular service that has recently been called into question by the New York state bar ethics committee.
The ethics committee recently released two opinions—one outlining a general guidance on lawyer matching services, and one finding that Avvo’s service violates New York’s ethics rules. Every state has its own ethical rules that attorneys must abide by, but there appears to be a general trend that these services are potentially problematic for attorneys. For example, three web-based services that match litigants with attorneys (including Avvo) have recently been blacklisted in New Jersey, due to concerns over illicit fee sharing and referral fees. Some other states where this issue has been similarly addressed include Ohio, Pennsylvania, Maryland, and South Carolina. In order to know whether one of these services could get you into trouble, you would need to consult the ethics rules of the state where you are barred and practice.
In New York, for example, Rule of professional conduct 7.2(a) prohibits lawyers from paying nonlawyers for recommendations. Avvo’s Legal Services program allows prospective clients to choose lawyers for a fixed fee. Avvo then pays each participating attorney all of the legal fees generated through Avvo by that attorney in the previous month, and charges each attorney a “marketing fee” for the legal service that they generated during the prior month. Because Avvo gives lawyers a “rating,” the ethics committee found that it created the reasonable impression that Avvo was recommending these participating lawyers.
Although the opinion of the state bar’s ethics committee is only advisory, they are widely regarded. The New York state bar president has indicated that lawyers who continue to participate in Avvo’s program do so at their own peril. The ethics committee made clear, however, that advertising bona fide professional ratings generated by third parties remains permissible. The distinction between that and Avvo Legal Services is that Avvo is not a disinterested third-party. Rather, they stand to benefit financially if the potential client hires the recommended lawyer.
Avvo continues to provide this service in New York and has stated it would back any lawyers who face disciplinary action for their participation. To date, it does not appear that any lawyers have been disciplined in New York for participating in Avvo’s service.
If your firm decides to use a legal matchmaking service, it is critical to stay up to date on ethical implications. Signing up for Google alerts when new decisions are issued may be a good place to start.