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November 04, 2017 Practice Points

Online Attorney Referral Services Implicate Legal Ethics Issues

In an age where people turn to Google as a first step in solving their problems, how should attorneys seek to engage potential clients online?

By Nicholas Reuhs

Over the last several years, attorney-client matching services such as Avvo have become a popular way for attorneys—especially those at smaller law firms and solo practitioners—to meet potential clients and generate new business. However, these online referral services, and especially Avvo, have recently run into legal ethics roadblocks.

Avvo’s approach is unique compared to other online referral services because Avvo directly charges the client a flat rate for a defined legal service, and passes the fee along to the attorney. Avvo then charges a marketing fee in a separate transaction that some states have characterized as illicit client fee-splitting.

Just weeks ago, the Virginia State Bar Association’s standing committee on legal ethics issued an opinion outlining a handful of ways that these services violate the state’s attorney ethics rules. The proposed opinion suggests that these services are problematic in that they involve paying for referrals, implicate issues with the attorney’s duty to safeguard client funds, and involve fee sharing with non-lawyers.

Virginia’s proposed opinion comes on the heels of a similar opinion issued in New York. Other states have similarly taken issue with Avvo’s fee structure, including New Jersey, Ohio, Pennsylvania, and South Carolina. Although online advertising is necessary for today’s legal industry, practitioners should think carefully about which referral services they employ.

Nicholas Reuhs is a partner with Ice Miller LLP in Indianapolis, Indiana.

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