Avvo was launched in 2007 as an online directory of lawyers to provide consumers with access to lawyers’ profiles. In 2014, Avvo expanded its services from merely providing a directory of lawyers to providing a way to connect prospective clients with lawyers through a website called Avvo Advisor. Sometime later, Avvo expanded its services again into what it called Avvo Legal Services,7 which it described as “an online legal services marketplace.”8 Until it was discontinued, this program offered to provide access to limitedscope legal services through a network of attorneys.
Should attorneys be concerned about participating in programs like Avvo Legal Services? Because there is no finding from any state’s supreme court on the ethics issues presented,9 the answer to this question is not straightforward. Avvo tried to assure lawyers that participating in its program did not raise any ethical concerns.10 Yet, given recent ethics opinions in multiple jurisdictions that are based on principles that apply in almost every jurisdiction, it is fair to say that participation in programs like Avvo Legal Services as it was originally constituted does raise a number of concerns for the lawyers involved.
What was “Avvo Legal Services”?
Avvo Legal Services was an online platform designed to connect potential clients with lawyers who were available to provide limitedscope legal services. The way the system worked was relatively simple. Potential clients went to the Avvo website and provided some information about their legal needs. Based on that information and the potential client’s location, Avvo generated a list of attorneys from which the potential client could choose an attorney with whom the potential client wanted to work. After the client chose an attorney, the client paid the full price to purchase the legal services. The price for the legal services to be provided was set by Avvo, not by the lawyer who provided the services. Avvo collected the payment before the services were rendered and kept it until the attorney chosen by the client completed the service for the client. After the attorney completed the legal services, Avvo sent the attorney the amount paid by the client and, in a separate transaction, withdrew what Avvo called a “marketing fee” directly from the attorney’s operating account. The amount of the marketing fee the attorney paid Avvo varied depending on the cost of the legal service that was provided by the attorney. The more expensive the services were, the higher the marketing fee was. Avvo and the lawyer would then go through the same process every time a new client chose the lawyer again.11
Given its business model, Avvo Legal Services was neither a law firm nor a pre-paid or group legal service plan.12 Moreover, more than likely it would not have been considered a referral service because it did not exercise discretion in order to determine which attorneys to recommend to the clients.13 Instead, Avvo Legal Services would more likely have been considered a “lead generator,” a concept that is now recognized in the ABA Model Rules of Professional Conduct.14
In 2012, the ABA amended the Comment to Model Rule 7.2 to “help guide the growing industry of lead generation services (and the lawyers who use those services).”15 The new language recognizes the differences between ads, referrals and leads, which is critical to understanding how the conduct of attorneys involved with programs like Avvo Legal Services is likely to be regulated because, although lawyers have a constitutionally protected right to advertise,16 they are generally banned from giving anything of value to a person for recommending the lawyer’s services.17
Based on these distinctions, according to Comment  to Model Rule 7.2 a lawyer may pay a nonlawyer lead generator only if the lead generator does not recommend the lawyer,18 and the payment to the lead generator is “consistent with” the rule that bans splitting fees with nonlawyers and with the rule that regulates a lawyer’s right to advertise.19 For this reason, whether Avvo’s business model was consistent with these rules of professional conduct is precisely the issue that jurisdictions have been analyzing in their ethics opinions.
What were some of the concerns?
The most common concern raised in ethics opinions about Avvo Legal Services was whether paying a fee based on a percentage of the legal fee paid by the client constituted a violation of the ban on sharing fees with nonlawyers.20 Obviously, this is an important question for the lawyers involved, so Avvo tried to reassure lawyers21 that they did not have to worry about this issue because (1) lawyers paid Avvo’s fee in a separate transaction, (2) Avvo’s fee was a “marketing fee” as opposed to a legal fee, (3) fee sharing is not inherently unethical, and (4) attempts to regulate the conduct of the lawyer paying the fee would be unconstitutional.22
These issues were not as clear cut as Avvo suggested. Model Rule 5.4(a), which has been adopted in almost all U.S. jurisdictions, provides that it is unethical for a lawyer to share a legal fee with a nonlawyer except under four enumerated circumstances, none of which apply to the business arrangement that Avvo had with participating lawyers. Clearly, part of the policy behind the rule is to protect the attorney’s independent professional judgment but that does not mean that the interference needs to be shown in order for the rule to apply.23 The rule does not say that sharing a fee with a nonlawyer is unethical only if it interferes with the attorney’s independent professional judgment; it says it is unethical to share a fee because it is too much of a threat to an attorney’s independent professional judgment.24
The joint opinion of three bar committees in New Jersey illustrates this position. Addressing Avvo’s contention that fee sharing with nonlawyers is not inherently unethical, the opinion explains that the rule “does not restrict the prohibition to situations where there is a clear connection between the fee sharing and the lawyer’s professional judgment. . . . Sharing fees with a nonlawyer is prohibited, without qualification.”25
Moreover, according to the Ethics 20/20 Commission, Comment  to Model Rule 7.2 cites to Model Rule 5.4 and its prohibition on sharing a fee with a nonlawyer because if the fee paid to a nonlawyer for a client lead is contingent on a person’s use of the lawyer’s service, then paying the fee would constitute an impermissible sharing of fees with nonlawyers.26 Since a lawyer did not have to pay a fee to Avvo unless a client chose a lawyer suggested by Avvo, it can be argued that the fee was “contingent on a person’s use of the lawyer’s service.”
For either of these reasons, or both, in opinions issued separately since 2016, South Carolina Bar’s Ethics Advisory Committee, the Ohio Board of Professional Conduct, the Pennsylvania Bar Association Committee on Legal Ethics and Professional Responsibility, the New York State Bar Association’s Committee on Professional Ethics, the Utah State Bar Ethics Advisory Opinion Committee, three committees of the Supreme Court of New Jersey,27 the Indiana Supreme Court’s Disciplinary Commission, and the Virginia State Bar Association found that participating in arrangements as those used by Avvo Legal Services either violates the prohibition of sharing fees with a nonlawyer or creates the risk of such a violation, whether under a rule similar to Model Rule 5.4 or Model Rule 7.2.28
Avvo’s arguments that there was no violation of the rules because Avvo was paid a marketing fee rather than a legal fee, and the argument that the payment was done in a separate transaction have also been rejected by ethics opinions. For example, one opinion concluded that a model similar to what Avvo used to claim was a marketing or advertising fee does “not correspond to any traditional model of compensation for advertising,”29 while another found that the fee does not appear to be a fee for the reasonable costs of advertising.30
Likewise, the joint opinion of the committees in New Jersey concludes that the fact that Avvo referred to its fee as a “marketing fee” did not determine the purpose of the fee or negate the fact that paying it constituted sharing a fee with a nonlawyer.31 The New Jersey opinion also concludes that because the fee the lawyer paid Avvo varied depending on the value of the legal fee created the impression that the lawyer was paying Avvo a percentage of the legal fee, which is precisely what the ban on sharing fees with a nonlawyer prohibits.32 More recently, an opinion by the Indiana Supreme Court Disciplinary Commission, issued on April 9, 2018, agrees with this analysis. It concludes that Avvo’s marketing fee was not really a fee for marketing services because it “is typically tied to the cost of the legal services provided and is not tied to the actual cost of advertising the individual lawyer’s legal services,” making the fee “more akin to fee splitting or a referral fee, [than to] payment for advertising.”33
In addition, Comment  to Model Rule 7.2 states that a lawyer may not pay a lead generator “if the lead generator states, implies, or creates a reasonable impression that it is recommending the lawyer.”34 Avvo generated “ratings” for lawyers and created the impression that Avvo was recommending some lawyers more than others. After all, part of Avvo’s original goal was to have consumers trust Avvo to provide guidance on how to choose the best attorney for their needs.35
This was one of the concerns expressed in the opinion of the New York State Bar Association’s Committee on Professional Ethics, which concluded that Avvo seemed to recommend lawyers and, thus, that lawyers who paid Avvo’s fee would be in violation of the rule.36 This is so, according to the opinion, because Avvo did more than merely list lawyers, their profiles, and their contact information. According to the committee, Avvo also gave each lawyer a rating in a way that suggested mathematical precision and claimed that the rating enabled a potential client to find the right lawyer for their needs. Based on this, the committee found that Avvo was giving potential clients the impression that a lawyer with a higher rating was a better lawyer than a lawyer with a lower rating and was, therefore, more highly recommended.37
Before it was announced that it would be discontinued, Avvo Legal Services suggested that these concerns were unwarranted because if challenged, courts would decide that the application of rules of professional conduct to attorneys’ transactions with Avvo would be declared unconstitutional.38 However, it is also possible that a state could articulate a substantial state interest that would be directly advanced by the application of a ban on sharing fees with nonlawyer lead generators. After all, as Comment  to Model Rule 5.4 states, the rule expresses what is a “traditional” limitation on the practice of law, which means the policy upon which it is based is deeply entrenched and respected.39 As stated above, Avvo felt confident in its view, but, given the recent ethics opinions on the subject, what lawyers ought to be asking themselves is how confident they would feel risking discipline.
Finally, one last issue of concern regarding Avvo Legal Services discussed in some of the ethics opinions relates to the ethical duty to hold a client’s money in a trust account. While it was in service, Avvo’s position was that “[b]ecause Avvo does not transfer the fee paid by the consumer until after legal services have been provided and the fee earned, participating attorneys need not worry about trust account issues.”40 Thus, Avvo seemed to take the position that because the fee was paid to Avvo in advance of the provision of legal services, the lawyer was exempt from having to place the money in a trust account. In fact, the generally accepted rule is exactly the opposite. Model Rule 1.15(c) states that a lawyer has a duty to deposit into a client trust account legal fees and expenses that have been paid in advance, to be withdrawn by the lawyer only as fees are earned or expenses incurred.41
This concern has already been expressed by the ABA Standing Committee on Ethics and Professional Responsibility in a different context. In an ethics opinion on prepaid marketing deals, the committee held that it is doubtful that prepaid marketing deals can be structured to comply with the duty to deposit unearned fees in a trust account when prepaid deals involve nonlawyers collecting in advance the money to which the lawyer will be entitled for legal services yet to be performed.42
Given that Avvo Legal Services’ fee structure also allowed for a nonlawyer to collect, and retain, money to which the lawyer would be entitled as legal fees, the same concern expressed by the ABA Standing Committee is likely to support arguments against allowing participation in programs such as Avvo Legal Services. As expressed in the Utah State Bar’s opinion on Avvo, it is difficult to see how a lawyer can protect client funds “with the care required of a professional fiduciary” if the lawyer has no control over the funds.43 Likewise, in a proposed ethics opinion, the Virginia State Bar concluded that a lawyer who participates in a service like Avvo Legal Services violates Virginia Rules of Professional Conduct because in doing so, the attorney cedes control of her current or prospective client’s advanced legal fees to a lay entity, thus relinquishing control of the lawyer’s obligation to refund any unearned fees to a client at the termination of representation.44
The only way the duty to safeguard the client’s money in a trust account does not apply is if the fee is deemed earned by the lawyer upon payment to the matchmaking service.45 Yet, at least in Avvo’s case, its own language defeated this argument because it admitted that it kept the money until after legal services had been provided and the fee was earned. If the fee is not earned until the services have been provided, by definition, the money paid to Avvo still belonged to the client until the lawyer provided the services and, therefore, the lawyer had an obligation to place the money in a trust account.
For all these reasons, as discussed in almost all the ethics opinions issued to date, it is not far-fetched to conclude that a disciplinary agency might charge a lawyer who participated in Avvo Legal Services with violating the jurisdiction’s rules of professional conduct. And that is something lawyers should be concerned about when considering whether to participate in other matchmaking services.
The North Carolina Bar Ethics Committee’s proposed opinion
In contrast with the conclusion expressed in the ethics opinions already published, a proposed opinion by the North Carolina State Bar Ethics Committee, drafted before it was announced that Avvo Legal Services would close, had taken a different view.46 In it, the North Carolina Bar Ethics Committee concluded that lawyers could participate in Avvo Legal Services specifically as long as certain conditions were met. Most of these conditions were reasonable and understandable. For example, Avvo could not exercise discretion in choosing lawyers for prospective clients (because this would mean Avvo operated as a referral service in violation of Rule 7.2), Avvo could not make recommendations to the lawyer relative to the representation of the client (because this would interfere with the lawyer’s independent professional judgment), Avvo could not have a policy of threatening to remove or of removing lawyers from the list of participating lawyers due to their exercise of independent professional judgment (for the same reason) and participating lawyers would have to evaluate the fees charged by Avvo and would have to decline to offer legal services if the fee was excessive (because otherwise the lawyer would violate the duty not to charge unreasonable fees).
On the other hand, on the issues most commonly addressed by the other available opinions, and which can still be applied to companies that provide services similar to those of Avvo Legal Services, the suggestions of the North Carolina Bar Ethics Committee may be problematic. For example, to address the possible violation of the rules requiring clients’ funds to be kept in a trust account, the opinion states that the fee paid by the customer to the matchmaking service must be deposited in a lawyer trust account, rather that kept by the matchmaking company as it used to be required by Avvo’s terms. Will companies agree to tell the customer to send the payment directly to the lawyers instead of collecting the payment and keeping it until the work is done? Unless they do, the opinion suggests North Carolina lawyers would not be allowed to participate in their programs.
The opinion mentions a possible exception, but it is not clear when this exception would be available. Specifically referring to Avvo’s model, the opinion states that “a trust account must be designated repository for a legal fee collected and forwarded to a participating lawyer by Avvo unless the lawyer is confident that the legal services will be complete and the fee earned by the time that the fee is transferred by Avvo to the lawyer’s account.”47 The problem with this is that it is not clear under what circumstances a lawyer would be in a position to start to work for the client, let alone, finish the work, before Avvo would collect and transfer the money, because, according to Avvo’s own terms, the lawyer was supposed to wait until the customer paid Avvo before beginning to provide the services. Even though Avvo Legal Services was discontinued, this is important because other companies charge fees in similar ways.48
As an alternative, the proposed opinion in North Carolina suggested that Avvo itself must establish a trust account in which it would deposit the attorneys’ clients’ funds. Assuming a company would agree to do that, the opinion suggests that lawyers would have a duty to investigate whether the company (or any other designated entity that would hold the funds in trust) has reliability, stability and viability.49 Lawyers would also have to determine if the company (or another designated entity) has taken reasonable efforts to segregate and safeguard the clients’ funds.50 In addition, the Committee states that once collected, the funds must be transferred to the lawyer’s designated trust account to, among other things, enable the collection of interest for the IOLTA program or for the client.51 Again, it is unclear whether this means that the matchmaking company would have to create a trust account, and connect it to the state’s IOLTA program, or whether it means that the company would have to eliminate its requirement that the fee be kept in the company’s possession until it is earned.
As yet another alternative, the Committee suggests that Avvo’s website could fully disclose that the fee “is a flat fee for legal services that is earned by the lawyer immediately and in advance of the provision of legal services.”52 As stated above, in theory, this would solve the problem since, once the fee is earned, the money belongs to the lawyer; but in reality, it may raise more problems.
The notion that a fee can be deemed earned when the services for which it is paid have not been provided is troubling because, as mentioned in the opinion on Avvo by the Virginia State Bar, lawyers have an obligation to refund any unearned fees to a client at the termination of representation.53 In response to this concern, it could be required that, in addition to the suggested language, the website also state clearly that a client might have a right to seek a refund if the services paid for in advance are not performed (or completed). However, doing so would expose the fact that the money still belongs to the client and, therefore, that the lawyer has violated the obligation to keep the amount paid in a trust account until the fee is actually earned.54 If a fee is truly earned, the money belongs to the lawyer and the lawyer can do with it as the lawyer pleases except leave it in the trust account because leaving it in the trust account would result in commingling of funds. If, on the other hand, the money is “deemed” earned when in fact it must be refundable, by placing the money in the lawyer’s general account the lawyer would be depositing an amount of money the lawyer can’t touch since it is possible it would have to be refunded to the client. At that point, the account would contain client money (the unearned amount that may have to be refunded) and attorney money at the same time. In other words, by allowing a lawyer to consider a fee paid in advance to be earned, even though it really hasn’t been earned, in order to avoid commingling funds within the trust account, the lawyer is forced to commingle funds within the lawyer’s operating account.
Finally, as to the notion of sharing fees with a nonlawyer, the North Carolina Bar proposed opinion admits that ‘the fact that the marketing fee is a percentage of the legal fee implicates the fee sharing prohibition.’55 Yet, the opinion concludes that a similar concern can be raised in circumstances that have been found acceptable in the past, such as accepting credit card payments and participating in group coupon services, and that therefore, as long as there is no interference with a lawyer’s independent professional judgement, there would be no violation of the rule.56 The North Carolina Committee is careful to point out, however, that this conclusion also depends on whether the fee charged is for the reasonable cost of advertising, a claim that was rejected by some of the other published opinions.
Is there a better approach?
There is some speculation that Avvo’s recent sale to Internet Brands, and the subsequent decision to discontinue Avvo Legal Services, may have stemmed at least in part from the frustration of having to confront the organized bar’s reluctance to accept Avvo’s business model.57 For that reason, rather than argue that participating in Avvo Legal Services did not constitute a violation of rules of professional conduct, what Avvo should have done was argue that the rules should be changed to allow lawyers to participate in Avvo Legal Services.58 Presumably, prior to the sale of the company, representatives of Avvo tried to do this, and some bar organizations began to pay attention.
In North Carolina, for example, a committee of the North Carolina State Bar Association has drafted a proposal to amend several rules of professional conduct to address concerns about splitting fees with nonlawyers, improper payment of referral fees and safeguarding of client property. However, on October 26, 2017, the proposed amendments to Rule 5.4 were returned to the Ethics Committee for further study.59
Similarly, some jurisdictions are moving toward accepting fee sharing with for-profit referral services.60 For example, in 2017, a Task Force of the Oregon State Bar Board of Governors recommended an amendment to Oregon’s fee-sharing rules to allow fee-sharing between all referral services and lawyers.61 Although Avvo Legal Services was not, technically, a referral service, a change in policy toward for-profit referral services would have supported its argument that restrictions on fee sharing should be relaxed to allow lawyers to participate in its service. Such an argument will benefit other companies seeking to provide matchmaking services in the future.
A similar proposal advanced recently by the Chicago Bar Foundation would have been even more helpful to Avvo and will be helpful to other matchmaking companies in the future. In it, the Foundation has proposed to amend Illinois Rule 5.4 to allow lawyers to share legal fees with any “entity that connects potential clients with lawyers” if certain conditions are met.62 Evidently, the concept of an “entity that connects potential clients with lawyers” is broader than the concept of a “referral service” and can easily be understood to include other matchmaking and lead generator services. The conditions are similar to those proposed in North Carolina and impose a duty on the lawyers to use due diligence to ensure that the matchmaking entity complies with the proposed Rule 5.4, that the entity is committed to protecting the public, and that it is financially responsible.63 The proposal also includes the creation of a registry in which the disciplinary agency in Illinois, officially known as the Attorney Registration and Disciplinary Commission of the Supreme Court of Illinois (“ARDC”), would keep a list of entities that seek to connect potential clients with lawyers and who have agreed to comply with the rules.64 Also, the entities themselves would have to meet a list of requirements.65 It is not clear whether Avvo would would have found those conditions agreeable, but at least the proposal would have made it easier for Avvo to enter the market.
Finally, with these proposals as background, on May 30, 2018, the ARDC published its own study on the issues related to the regulation of attorney-client matchmaking services.66 At 124 pages in length, it is the most comprehensive report on the issues to date. Although it seems to be based on the debatable, if not incorrect, assumption that Avvo Legal Services qualified as a referral service, it does provide support for those who desire to change the regulatory approach related to sharing of fees with nonlawyers. The report concludes, for example, that “[f]or-profit referral and matching services could provide . . . benefits to individuals seeking legal help and they could help increase access to the legal marketplace”67 and that “prohibiting lawyers from participating in or sharing fees with for-profit services that refer clients to or match clients with participating lawyers is not a viable approach, because the prohibition would perpetuate the lack of access to the legal marketplace.”68
Yet, when it comes to an actual proposal for regulation, the Chicago Bar Foundation and the ARDC take a different approach than the one discussed in North Carolina and Oregon. Instead of simply proposing changes to the current rules that apply to lawyers, the Chicago Bar Foundation and the ARDC propose a new regulatory system that would allow the attorney regulatory agency to regulate nonlawyer entities. Thus, the ARDC study proposes a dual approach by regulating lawyer participation as well as the lawyer-client matching services themselves, including maintaining and publishing an index of registered referral services, prohibiting lawyers from participating in referral services not registered with the agency, and removing from the index any referral service that does not follow the registration, reporting, and minimum standards requirements.69 More specifically, the ARDC report suggests that regulation of the nonlawyer entities could include placing limits on the fees charged, requiring disclosure of information to clients, limiting registration to certain types of business entities, requiring the entity to maintain insurance, requiring entities to prove their presence in Illinois, requiring the entities to submit to the jurisdiction of the Illinois Supreme Court and the regulation and supervision of the ARDC, and requiring the entities to appoint an agent, who would be required to be an attorney licensed to practice in Illinois.70
As stated above, if Internet Brands were to decide to allow Avvo Legal Services stay in business, it is not clear whether it would find it acceptable to be regulated by an attorney regulatory agency, but at least the proposal would make it easier for Avvo to participate in the market.
Yet, the proposal is not without critics. As argued by one commentator, “a state-by-state approach is hardly a viable solution. State regulation of legal platforms will result in a crazy quilt of conflicting rules which increases compliance costs for matching platforms that are ultimately passed on to consumers. In addition, differing state regulations only confuse consumers who wonder why their relative in Illinois can hire a lawyer off of Avvo when they’re precluded from doing so in Indiana. One good swift federal antitrust lawsuit is all it would take to clear out state regulation in one fell-swoop and in my view, is a far better approach.”71 This author also argues that bar regulators don’t have the resources needed to oversee matching platforms, asking “ [if] [r]egulators can barely process consumer bar complaints against attorneys... [w]here will they find the resources to handle the additional workload of overseeing platforms?” and concludes that state regulators can be prone to bias or favoritism.72
There is ample evidence of lack of access to affordable legal services in the United States.73 This reality has created a demand for programs that provide access to solutions to legal issues, which in turn has resulted in calls for more “innovation” in the way legal services are provided.74 Some have argued that Avvo Legal Services was the kind of innovation that is needed to provide new solutions to the limitations of the ways in which legal services are currently provided in the United States. However, given the current regulatory scheme in almost all jurisdictions, all but one of the ethics opinions available to date have advised that participating in programs like Avvo Legal Services would raise serious ethical concerns for lawyers.
Yet, recent proposals in several jurisdictions are taking a different approach to the subject. Rather than discuss whether participating in matchmaking services such as Avvo Legal Services violates the rules of professional conduct, some jurisdictions are considering amending the rules to either make it clear that lawyer participation in such services does not violate the rule or to create a whole new regulatory system to oversee the implementation of the services.
1. Robert Ambrogi, Unauthorized Practice, 101 A.B.A. J. 72, 74 (2015) (“[M]ultiple state and federal studies show  that 80 to 90 percent of low – and moderate-income Americans with legal problems are unable to obtain or afford legal representation.”); Thea Jennings, An Access to Justice First: Washington State’s Limited Licensing Program for Nonlawyers, @Law, Fall 2014, at 28, 29 (discussing a study by the Supreme Court of Washington); Milan Markovic, Juking Access to Justice to Deregulate the Legal Market, 29 Geo. J. Legal Ethics 63, 65 (2016); Selina Thomas, Rethinking Unauthorized Practice of Law in Light of the Access to Justice Crisis, 23 Prof. Law. No. 3, 2016, at 17.
2. See Alberto Bernabe, Justice Gap vs. Core Values: The Common Themes in the Innovation Debate, 41 J. Legal Profession 1 (2016).
3. See Legal Zoom, https://www.legalzoom.com (last visited Aug. 14, 2018).
4. See Rocket Lawyer, https://www.rocketlawyer.com (last visited Aug. 14, 2018).
5. See Biz Box, https://www.mybizbox.com/legal-services (last visited Aug. 14, 2018).
6. It was recently announced that a new service called Text A Lawyer will provide access to legal advice by text. See Robert Ambrogi, Launching Soon: ‘Text A Lawyer’ Aims To Be The Uber Of Legal Help, Law Sites, June 20, 2018, available at https://www.lawsitesblog.com/2018/06/launching-soon-text-lawyer-aims-uber-legal-help.html. Whether Text A Lawyer’s payment scheme violates rules of professional conduct is already in question. See Carolyn Elefant, How Legal Ethics Rules on Non-Fee Splitting Platforms Lead to Unintended Consequences and Ludicrous Results, My Shingle, June 20, 2018, available at https://myshingle.com/2018/06/articles/ethics-malpractice-issues/how-legal-ethics-rules-on-non-fee-splitting-platforms-lead-to-unintended-consequences-and-ludicrous-results/.
7. Before it was discontinued, the website for Avvo Legal Services was available at: https://www.avvo.com/legalservices?avvo_campaign’legal_services&avvo_medium’giganav_subnav&avvo_source’avvo.
8. The program started as a pilot program in only five cities, but then expanded to 18 states on February 9, 2016. Robert Ambrogi, Avvo Officially Launches its FixedFee Legal Services in 18 States, Law Sites, Feb. 9, 2016, http://www.lawsitesblog.com/2016/02/avvoofficiallylaunchesitsfixedfeelegalservicesin18states.html; Robert Ambrogi, Avvo readies rollout of fixedfee legal services, ABA J., Jan. 12, 2016, http://www.abajournal.com/mobile/article/avvo_readies_roll_out_of_fixed_fee_legal_services/.
9. The only action by a state supreme court on these issues has been the New Jersey Supreme Court’s June 1, 2018, order denying a petition filed by the group Consumers for a Responsive Legal System to review the New Jersey Supreme Court’s Advisory Committee on Professional Ethics, Committee on Attorney Advertising, and Committee on Unauthorized Practice of Law Joint Opinion 732 addressing the ethics issues presented when a lawyer joins a service similar to that offered by Avvo.
10. Before Avvo Legal Services was discontinued, this information was available on its website’s “frequently asked questions section,” http://www.avvo.com/support/avvo_legal_services_attorney_faq#ethics.
11. While it was in operation, Avvo’s own description of its service was available here: https://advisor.avvo.com/providers/welcome.
12. According to Comment  to ABA Model Rules of Professional Conduct Rule 7.2, a legal service plan is “a prepaid or group legal service plan or a similar delivery system that assists people who seek to secure legal representation.” Model Rules of Prof’l Conduct R. 7.2, cmt.  (2017). See also ABA Comm. on Ethics & Prof’l Responsibility, Formal Op. 87-355 (1987) (typically, for-profit prepaid legal service plans provide for plan members to pay a monthly fee, part of which is kept by the plan sponsor).
13. Comment  to Rule 7.2 of the ABA Model Rules of Professional Conduct defines lawyer referral services as “any organization that holds itself out to the public as a lawyer referral service.” From the beginning, Avvo did not call itself a lawyer referral service. See also N.C. State Bar Ethics Comm. Proposed Formal Op. 6 (July 27, 2017) (“If [Avvo Legal Services] is a lawyer referral service, North Carolina lawyers may not participate. . . . [Avvo Legal Services] is not a lawyer referral service if, after indicating the type of service desired, the consumer has the ability to select a lawyer from the list of all participating lawyers in a particular geographic area who are willing to provide the selected service. As long as [Avvo Legal Services] does not exercise discretion to match prospective clients with participating lawyers, the requirements of Rule 7.2(d) are not implicated.”) For more information on referral services, see the ABA Model Supreme Court Rules Governing Lawyer Referral & Information Service, available at https://www.americanbar.org/groups/lawyer_referral/policy.html (last visited Aug. 14, 2018). Also, if Avvo Legal Services had been considered a referral service, the fact that it was run as a for-profit enterprise would have affected the analysis. While some jurisdictions allow lawyers to share fees with not-for profit referral services, only California seems to allow lawyers to share fees with for-profit referral services. Attorney Registration & Disciplinary Commission of the Supreme Court of Illinois, Client Matching Services Study (“ARDC Study”), May 30, 2018, at 13-14, available at http://www.iardc.org/Matching_Services_Study_Release_for_Comments.pdf.
14. Model Rules of Prof’l Conduct R. 7.2, cmt.  (2017).
15. Andrew M. Perlman, Towards the Law of Legal Services, 37 Cardozo L. Rev. 49, 65 (2015).
16. Model Rules of Prof’l Conduct R. 7.2(a) (2017).
17. Model Rules of Prof’l Conduct R. 7.2(b) (2017); Ronald Rotunda & John Dzienkowski, Legal Ethics: The Lawyer’s Deskbook on Professional Responsibility 1285 (2017) (a lawyer cannot pay a nonlawyer a fee for each referral that results in a client representation or a percentage of the legal fees generated by the referrals).
18. “Recommendation” is defined as a communication that “endorses or vouches for a lawyer’s credentials, abilities, competence, character, or other professional qualities.” Model Rules of Prof’l Conduct R. 7.2, cmt.  (2017).
20. See S.C. Bar Advisory Comm. Advisory Op. 16-06 (2016); Sup. Ct. of Ohio Bd. of Prof’l Conduct, Op. 2016-3 (2016); Pa. Bar Ass’n Legal Ethics & Prof’l Responsibility Comm., Formal Op. 2016-200 (2016); N.Y. State Bar Ass’n Comm. on Prof’l Ethics, Op. 1132 (2017); N.J. Sup. Ct. Advisory Comm. on Prof’l Ethics, Comm. on Attorney Advertising, Comm. on Unauthorized Practice of Law Joint Op. 732 (2017) [hereinafter ACPE joint opinion]; Utah State Bar Advisory Op. 1705 (2017); Va. State Bar Ass’n Proposed Op. 1885 (2017); Ind. Sup. Ct. Disciplinary Comm’n Op. 1-18 (2018).
21. See supra note 10.
22. For a more detailed discussion of some of Avvo’s arguments, see Alberto Bernabe, Avvo Joins the Legal Market: Should Attorneys Be Concerned?, 104 Geo L.J. 184 (2016).
23. Some ethics opinions related to referral services also support this view. See Helen Gunnarsson, Staying on the Right Side of the Blurry Ban Against Paying for Referrals, 30 Law. Man. Prof. Conduct 541 (2014), discussing among others, N.C. State Bar Formal Op. 2004-1 (lawyer may participate in forprofit online service that is hybrid of lawyer referral service and legal directory, provided there is no feesharing with service); Ohio Sup. Ct. Op. 2001-2 (2001) (company operates as impermissible referral service when company requires lawyers to pay a percentage of the fee obtained for rendering legal services); Or. Formal Op. 2007-180 (2007) (lawyer may not pay internet referral if fee is based on number of referrals, retained clients or revenue generated by listing).
24. See Rotunda & Dzienkowski, supra note 17.
25. ACPE joint op. 732, supra note 20, at 6-7.
26. ABA Commission on Ethics 20/20, Report to the House of Delegates on Resolution 105B, at 5, https://www.americanbar.org/content/dam/aba/administrative/ethics_2020/2012_hod_annual_meeting_105b.authcheckdam.pdf; Model Rules of Prof’l Conduct R. 7.2, cmt. .
27. The three committees of the Supreme Court of New Jersey were the Advisory Committee on Professional Ethics, the Committee on Attorney Advertising, and the Committee on the Unauthorized Practice of Law.
28. See supra note 20.
29. Pa. Bar Ass’n, Legal Ethics & Prof’l Responsibility Comm., Formal Op. 2016-200 (2016).
30. Utah State Bar Advisory Op. 1705 (2017).
31. ACPE joint opinion 732, supra note 20, at 5-8. For Avvo’s response to the opinion, see Josh King, Why New Jersey Gets It Wrong on Avvo Legal Services, Socially Awkward, July 20, 2017, at http://sociallyawkwardlaw.com/whynewjerseygetsitwrongonavvolegalservices/.
32. ACPE joint opinion 732, supra note 20, at 5-8. See also Rotunda, supra note 11, at 1013 (a lawyer cannot pay a nonlawyer on a contingent basis because this would constitute the sharing of a fee). In addition, although ethics opinions on “deal of the day” marketing programs are divided on whether paying the website that markets the deal constitutes sharing a fee with a nonlawyer, the analysis in most of them suggests that paying a fee that is dependent on the amount of the legal fees would constitute sharing fees with a nonlawyer. See Ala. State Bar, Formal Op. 2012-01 (2012); Ind. State Bar Ass’n Legal Ethics Comm., Advisory Op. 1 (2012); Pa. Bar Ass’n, Advisory Op. 2011-27 (2011); ABA Comm. on Ethics & Prof’l Responsibility, Formal Op. 465 (2013); N.C. State Bar, Formal Op. 10 (2011). But see Md. State Bar Ass’n Comm. on Ethics, Op. 2012-07 (2012); S.C. Bar Ethics Advisory Comm., Advisory Op. 11-05 (2011).
33. Ind. Sup. Ct. Disciplinary Comm’n, Op. 1-18 (2018), at 2-3.
34. Model Rules of Prof’l Conduct R. 7.2, cmt.  (2017).
35. See Robert Ambrogi, Following Avvo’s Acquisition, Founder Britton is Leaving the Company, Law Sites, Apr. 2, 2018, https://www.lawsitesblog.com/2018/04/followingavvosacquisitionfounderbrittonleavingcompany.html (citing Mark Britton, Avvo’s founder, stating that “our focus in this product was in serving the consumer and on getting them the help that they need.”).
36. N.Y. State Bar Ass’n Comm. on Prof’l Ethics Op. 1132 (2017).
38. Josh King, Avvo Legal Services and the Rules of Professional Conduct (2016), http://sociallyawkwardlaw.com/wp-content/uploads/Avvo-Legal-Services-and-the-RPC-with-supporting-details-2016-2-11.pdf.
39. Model Rules of Prof’l Conduct R. 5.4, cmt.  (2017).
40. King, supra note 38.
41. Model Rules of Prof’l Conduct R. 1.15(c) (2017).
42. ABA Comm. on Ethics & Prof’l Responsibility, Formal Op. 465 (2013).
43. Utah State Bar Advisory Op. 1705 (2017).
44. Va. State Bar Ass’n Proposed Op. 1885 (2017). The opinion also concludes that participating in the services violates the rules related to sharing legal fees with a nonlawyer and paying another for recommending the lawyer’s services.
45. A proposed opinion by the North Carolina State Bar Ethics Committee suggests this alternative, which is addressed below. See N.C. State Bar Ethics Comm. Proposed Formal Op. 6 (2017). For a comment on the problems created by “deeming” that fees are earned before they are, in fact, earned, see Alberto Bernabe, Flat Fees: Earned, Unearned or Both, Ohio Lawyer, Vol. 30, No. 4 (July/Aug. 2016); Alberto Bernabe, Ethical Issues Related to Flat Fees, @Law, 36 (Spring 2017).
46. See N.C. State Bar Ethics Comm. Proposed Formal Op. 6 (2017). However, at its meeting on April 19, 2018, the Ethics Committee agreed to take no action on this proposed Opinion until the Authorized Practice Committee issues an advisory opinion on the unauthorized practice of law question raised in the proposed opinion. See North Carolina Council Actions, https://www.ncbar.gov/for-lawyers/ethics/proposed-opinions/ (last visited Aug. 14, 2018).
47. N.C. State Bar Ethics Comm. Proposed Formal Op. 6 (2017).
48. See Carolyn Elefant, supra note 6, discussing the fee charging model of Text-a-Lawyer.
53. Va. State Bar Ass’n Proposed Op. 1885 (2017). The opinion also concludes that participating in the services violates the rules related to sharing legal fees with a nonlawyer and paying another for recommending the lawyer’s services.
54. One would think that agreeing that the fee is “earned upon receipt” means that the fee is earned and that the money belongs to the attorney. Yet, in those jurisdictions that recognize the possibility of an agreement to consider a flat fee as earned upon receipt, a fee that is earned upon receipt is actually not really earned, and although the attorney can place it in the attorney’s own bank account as if the money belonged to the attorney, the attorney can’t touch that money since it is possible the attorney may have to refund it. In effect, in those jurisdictions, a flat fee can be earned and unearned at the same time. This makes little sense. Alec Rothrock, The Forgotten Flat Fee: Whose Money is it and Where Should it be Deposited?, 1 Fla. Coastal L.J. 293, 347 (1999) (It simply makes no sense to permit lawyers to enter into fee agreements with clients stating that an advance payment such as a flat fee is earned upon receipt, when such payments are subject to being refunded to the extent unearned.). To be fair, North Carolina is not alone in suggesting that unearned fees can be deemed earned. See, e.g., Ohio Prof’l Conduct R. 1.5(d)(3). See also Rothrock, The Forgotten Flat Fee: Whose Money is it and Where Should it be Deposited?, 1 Fla. Coastal L.J. 293, 305-313, citing ethics opinions by the State Bar of Arizona, the Florida Bar Ethics Committee, the Georgia Supreme Court, the Disciplinary Board of the Hawaii Supreme Court, the State Bar of North Carolina and an Oregon Bar Ethics Committee. On the subject of whether fees can be earned and unearned at the same time, see Alberto Bernabe, Flat Fees: Earned, Unearned or Both?, Ohio Lawyer, Vol. 30, No. 4, 14 (July/Aug. 2016).
55. N.C. State Bar Ethics Committee Proposed Formal Op. 6 (2017).
56. Id. The argument based on a comparison to the sharing of fees with credit card companies used to be mentioned in Avvo’s own website. See supra note 7. However, the conclusion of this argument is not self-evident. It is based on the proposition that the fee sharing involved in a credit card transaction poses the same types of risks that those posed by the transaction with a matchmaking services such as Avvo Legal Services. It can easily be argued that this is not the case. By allowing the credit card company to keep a portion of the fee charged, there is little risk that the attorney will be tempted to act differently in order to “please” the credit card. When dealing with a matchmaking service or a referral service, the attorney does have an incentive to maintain a healthy relationship with the entity because the attorney wants it to become a steady source of new clients. The distinction might be small, but there is a distinction and, for that reason, it should be addressed more fully than merely by stating a conclusion. The rule bans fee sharing to prevent a risk of misconduct, not as a reaction to misconduct. It can be argued that in the credit card scenario there is no risk to prevent, while in the matchmaking scenario there is a risk. Thus, it can be argued that even if it is not justified to apply the rule in the credit card scenario, it is justified in the case of transactions with an entity like Avvo Legal Services.
57. Carolyn Elefant, Why State Bar Regulation of For-Fee Referral Services Is A Very, VERY Bad Idea, My Shingle.com (June 7, 2018), https://myshingle.com/2018/06/articles/ethics-malpractice-issues/why-state-bar-regulation-of-for-fee-referral-services-is-a-very-very-bad-idea/.
58. None of the published opinions on Avvo Legal Services to date has proposed to change the rules of professional conduct to allow lawyers to participate in Avvo Legal Services. See ARDC Study, supra note 13.
59. ARDC Study, supra note 13 at 48, citing Amendments Returned to Ethics Committee for Further Study Proposed Rule Amendments, N.C. State Bar, https://www.ncbar.gov/for-lawyers/ethics/proposed-amendments-to-the-rules-of-professional-conduct (last visited Aug. 14, 2018).
60. Currently, although some jurisdictions allow lawyers to share fees with not-for-profit referral services, only California allows it with for-profit services. Id. at 13-14.
61. Id. at 45. The Task Force concluded that “the current rule is ill-suited to a changing market in which online, for-profit referral services may be the means through which many consumers are best able to find legal services.” Id. at 46.
62. Id. at 47. The proposal does not directly regulate a lawyer’s participation with the entities. Rather, it establishes minimum standards that, when met, provide lawyers with a safe harbor for complying with Rule 5.4. Id. at 48.
63. Id. at 48.
67. Id. at 49.
68. Id. at 51.
69. Id. at 51-54. Although it would be new to Illinois, the proposal to regulate the practice of nonlawyer services by a regulatory scheme for the legal profession is not unprecedented. A few jurisdictions not only regulate lawyer participation in lawyer referral service programs but have established registration and requirements, as well as minimum standards for referral services to operate and accept lawyers, including California, Florida, Georgia, Michigan, Missouri, Ohio, Tennessee, and Texas. Id. at 13. The degree to which these states control the structure, operation, and supervision of the referral programs vary widely. Id. According to the ARDC study, in California, Ohio and Tennessee, attorney regulatory agencies “directly regulate” nonlawyer matching services by requiring the service to register with the regulatory agency, to satisfy certain registration requirements, and to satisfy certain minimum standards, and by revoking the service’s registration for failing to satisfy the registration requirements or violating a minimum standard. Id. at 51.
70. Id. at 52-53.
71. Elefant, supra note 57.
73. Supra notes 1 & 2.
74. For a discussion of the most recent example of controversial innovation in the delivery of legal services, see Ambrogi, supra note 6; Elefant, supra note 6, in which the author discusses a new platform called “Text-a-Lawyer” which allows potential clients to connect with lawyers via “text messages” for $15. As discussed in the comments section of the story, the program is controversial not only because of its billing system but also because it is debatable whether discussing legal issues by text is viable idea.