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The ABA is proposing changes to the Model Rules on lawyer advertising, modestly streamlining them and trying to re-establish their relevance to the way lawyers and clients interact in the digital age.  The proposed amendments and their supporting memo fail to make any express adjustment for the elephant in the room — on-line referral services like Avvo, and especially whether engaging with them involves lawyers in paying impermissible referral fees, as some recent state ethics opinions have found.

Rundown on proposed rule changes

First, an overview.  The ABA’s effort is in response to a three-year study and package of recommendations from the Association of Professional Responsibility Lawyers (which we’ve previously mentioned here).  The ABA adopted many of APRL’s recommendations.

The ABA’s memo supporting the rule changes acknowledges that “the patchwork of inconsistent state attorney advertising rules is a prime example of a system that ‘fails to make sense’ in the current climate of social media, technology, and global lawyering.”  In other words, as APRL urged, the current Model Rules are at risk of becoming irrelevant.  The ABA noted that the people who complain about lawyer advertising are predominantly other lawyers, not consumers; and few states actively monitor lawyer advertising.

The ABA’s approach, emphasizing consolidation and re-arrangement, differs from APRL’s, which had recommended slimming down the ad rules to just two, effectively excising three others.  As we’ve reported, Virginia’s revamped rules, effective this past July, take that approach.  The ABA’s proposal, in contrast, eliminates only current Rule 7.5 on firm names and letterhead (now there’s an anachronism); and it simply redistributes most of that rule’s content to the comments of other rules.

While there’s no radical surgery, the ABA proposal has some potentially helpful changes and clarifications.  Highlights:

  • “Solicitation” would be defined in a new subsection of Rule 1.0, “Terminology,” and would mean offering to provide legal services to a specific person in a particular matter.  Soliciting by “live person-to-person contact” (Skype and Facetime are specifically mentioned) would be generally prohibited — but exceptions would include if the lawyer knows the person is “an experienced user of the type of legal services involved for business matters.”  That’s potentially a big deal for business lawyers, whose potential clients would often meet that definition.  And texts, e-mail and “other written communications that recipients may easily disregard” are also excluded from the definition of live solicitation.
  • Putting a “Lawyer Advertising” disclaimer on targeted solicitations would be a thing of the past, causing gladness at firm marketing departments.  The ABA concluded “after much discussion” that such a disclaimer is no longer necessary because consumers have become used to receiving advertising material (!) and most “will not feel any compulsion to view the materials solely because they were sent by a lawyer of law firm.”
  • A new provision would permit nominal client gifts (at holidays, for instance), and clarifies that they are not barred as things of value in exchange for recommending the lawyer’s services to others.
  • It would no longer be necessary to include an “office address” on marketing communications, but only “contact information” of a responsible firm or lawyer.  The proposed change resolves an ambiguity that has created confusion, and is in line with modern day legal practice (including virtual offices), and the way that real-life ads now look.
  • The ability to claim to be a “specialist” in a practice area would be eased.  Implying that you are certified as a specialist in a particular area continues to be restricted to those certified by approved organizations.  But saying that you “specialize in” a particular field would be permitted “based on the lawyer’s experience, specialized training or education,” as long as the statement were not false or misleading.

Small change to referral fee comment

Now back to that elephant.  Recent ethics opinions — for instance, from New York and New Jersey — have specified that Avvo’s business model (and similar ones) violate state versions of Model Rule 7.2(b), which prohibits giving anything of value to a person for recommending the lawyer’s services (except for paying charges of non-profit and bar-association-approved agencies).

Under that provision, operations that are similar to Avvo Advisor and Avvo Legal Services have been found particularly problematic by state ethics boards.  As described in a recent Indiana Lawyer article, Avvo Advisor connects online consumers with a lawyer for a 15-minute consultation for $39.  Avvo forwards the fee to the lawyer and then collects a $10 marketing fee from the lawyer.  Avvo Legal Services provides fixed-fee document review, and services such as business formation or family law matters.  Avvo bills $149 to $595 for services, which is paid to the lawyer doing the work, and collects a marketing fee from the lawyer ranging from $40-$150.

The ABA proposal does not include any change to Rule 7.2(b).  It does add a section to the relevant comment, saying that “directory listings and advertisements that list lawyers by practice area, without more, do not constitute impermissible ‘recommendations.'”  That may be a small nod to Avvo, which in the past has suggested that at least in part, it merely functions as an on-line lawyer directory.

But the ABA’s small proposed change to the comment would not appear to touch on Avvo’s business of charging lawyers for obtaining referrals from Avvo, or similar business models.

Of course, the referral-fee issue is not the only ethics rule that state ethics opinions have cited when it comes to Avvo and similar on-line organizations.  As we’ve previously noted, in addition to the advertising rule on referral fees, other rules flagged include state versions of Model Rules 5.4 (independent judgment, fee-splitting); 5.5 (unauthorized practice of law); 1.15 (comingling lawyer and client funds); 1.16 (duty to refund unearned fees at end of representation); 1.5 (contingent fees); and 1.6 (confidentiality).

What comes next?

The ABA will host a public forum on the proposed amendments at its mid-year meeting in Vancouver on February 2.  Written comments on the proposed amendments are invited; the submission deadline is March 1.  The ABA Ethics Committee aims to submit a resolution and report on amending the advertising rules at the association’s August 2018 meeting.

Stay tuned for further developments.

Just last month, we wrote about a North Carolina draft proposal that would ease the way via its ethics rules for Avvo and other on-line legal services to operate there.  Now, after a joint opinion from three New Jersey Supreme Court committees, the Garden State has turned thumbs down on such law platforms, citing issues including improper fee-sharing and referral fees.

Nix on Avvo, LegalZoom, Rocket Lawyer

The joint opinion bans participation in Avvo’s programs because of the “marketing fees” it collect from lawyers in exchange for participating in two of its offerings:  “Avvo Advisor,” in which clients talk to lawyers for 15 minutes for $40, with Avvo keeping $10; and “Avvo Legal Services,” where clients pay a flat fee to Avvo for access to affiliated lawyers, and then Avvo pays the lawyer net of its own fee.

The committees found that this arrangement violates New Jersey’s version of Model Rule 5.4(a), barring fee-splitting with non-lawyers, and it mattered not that Avvo called its cut a “marketing fee”:  irrespective of its label, said the committees, “lawyers pay a portion of the legal fee earned to a nonlawyer; this is impermissible fee sharing.”  In addition, said the committees, these payments signal a “lawyer referral service,” and payment of an “impermissible referral fee” under New Jersey’s Rules 7.2(c) and 7.3(d).

Icing the cake, the committees also raised a trust account issue, saying that Avvo’s practice of holding the lawyer’s fee until the conclusion of the matter violates the attorney’s duty to maintain a registered trust account and to hold client funds in it until the work is completed.

Avvo wasn’t the only on-line platform tagged — Rocket Lawyer and LegalZoom also were placed off-limits to New Jersey lawyers, but for a different reason.  While they do not require payment from lawyers to participate, and do not share the clients’ monthly subscription fees with lawyers, Rocket Lawyer and LegalZoom are “legal service plans” that have not been registered with or approved by the New Jersey Supreme Court, said the committees.  That places them outside the pale, even while not violating the fee-sharing prohibition.

A notice to the bar from the supreme court’s administrative office accompanied the joint opinion, listing the 46 state-approved legal service plans, including those offered through unions and government agencies.

What next?

As we’ve noted, the ABA’s Futures Commission sees the continuing onslaught of on-line platforms as something that is here to stay.  Nonetheless, this New Jersey ethics opinion joins other cautionary or negative ones issued by regulators in Ohio, Pennsylvania and South Carolina.  Against that backdrop, North Carolina’s recent consideration of rule changes may appear to be the outlier (although an Oregon state bar association task force also recently recommended ethics rule amendments that would be friendly to on-line service legal platforms).

Avvo responded to the New Jersey opinion, telling the New Jersey Law Journal that it is “attempting to address the pressing need for greater consumer access to justice, and we will continue to do so despite this advisory opinion.”

Will market pressure become a tsunami that will eventually sweep legal ethics considerations away?  It may take awhile to tell, but until then, look for more ethics opinions to come out with differing views, potentially creating a patchwork of inconsistent state approaches.  We’ll be watching with great interest.

Stand out from the crowd concept femaleAvvo Legal Services has been meeting with North Carolina bar regulators, resulting in a draft proposal that would amend several legal ethics rules and make it easier for Avvo to operate in the Tar Heel State, according to Prof. Alberto Bernabe, a Chicago law professor who has seen some of the relevant documents, and blogged about them last week.

Ethical problems?

Several state legal ethics opinions have recently found client-referral services using an Avvo-like model to be ethically problematic, including opinions from regulators in Pennsylvania, South Carolina, and my home state, Ohio.  Rule revisions in Florida now pending for approval by the state supreme court there likewise call aspects of the model into some question.

Some of the identified ethical issues raised by Avvo-like referral services, as identified by various ethics opinions are:

  • the company — and non-lawyers — control significant aspects of the attorney-client relationship, including functions that can constitute the practice of law (see Model Rule 5.5(a));
  • the structure can interfere with the lawyer’s exercise of independent legal judgment on behalf of the client (see Model Rule 5.4(c));
  • the way the fees are managed could constitute or invite commingling of clients’ funds and lawyers’ funds (see Model Rule 1.15(a));
  • the fee structure makes it difficult to comply with the duty to refund unearned fees at the end of the representation (see Model Rule 1.16(d));
  • a model where the lawyer is paid only after the representation is concluded makes the fees contingent on the outcome, which can violate the prohibition on contingent fees for certain kinds of cases (see Model Rule 1.5(d));
  • receiving and holding client funds paid in advance may violate the lawyer’s duty to hold those funds in a trust account (see Model Rule 1.15(c));
  • although part of the fee paid by the client and kept by the company may be designated as a “marketing fee,” the fact that such fees are calculated as a percentage of the full fee makes the arrangement likely to be impermissible fee-splitting with a non-lawyer (see Model Rule 5.4(a));
  • the business model can threaten the confidentiality of the lawyer-client relationship (see Model Rule 1.6).

North Carolina considers amendments

In light of these issues, Avvo has tried to allay concerns, including by saying that its model actually comports with ethics rules, and that it is providing advertising that is protected by the First Amendment.  (A recent Georgetown Law Journal article by Prof. Bernabe details Avvo’s arguments.)

According to Prof. Bernabe, North Carolina may now be considering a different regulatory approach:  amending its lawyer conduct rules to “make it acceptable for lawyers to participate in services like Avvo.”

Documents he has seen include a proposal to amend the fee-splitting rule to permit payment of a portion of the lawyer’s fee to an on-line platform if the amount is a reasonable charge for administrative or marketing services and there is no interference with the lawyer’s independent professional judgment.

Another proposed comment amendment would allow lawyers to participate in Avvo-like rating services without fear of being held in violation of the prohibition against giving something of value in exchange for a recommendation of employment.  (See Model Rule 7.2(b).)

Yet another amendment would allow the company to keep the client’s payment until the end of the representation, imposing on the lawyer the obligation of ensuring that such “intermediaries” “adequately protect client funds” — instead of placing such advance payments in the lawyer’s trust account.

Brave New World

Although nothing is certain yet, and the documents that Prof. Bernabe describes are certainly preliminary and might be incomplete, the path that North Carolina appears to be contemplating significantly departs from the road that bar regulators in other jurisdictions have so far taken.  Whether acquiescing to market trends — even ones that seem to be irresistible — is in the true best interest of legal consumers and the legal profession remains to be seen.

Avvo has a First Amendment right to use a lawyer’s publically-available information to generate advertising revenue for itself, the district court for the Northern District of Illinois held on September 12.

As we’ve explained before, Avvo’s business model works like this:

  • Avvo creates “profile pages” of individual lawyers using publically-available data;
  • then, Avvo collects a fee from lawyers to allow them to put ads for their practices on the profile pages of lawyers who don’t pay the fee — and the lawyer profiles where the paid ads appear are those of head-to-head competitors;
  • then, if you are the target of this shake-down tactic, you can pay a fee to keep Avvo from putting ads for your competitors on your profile page.

Nice, right?

“Non-commercial” speech

And it’s all protected by strict constitutional scrutiny as non-commercial free speech, said the district court, in dismissing the putative class action of an Illinois lawyer who said that Avvo’s gambit violated state law by using his identity for commercial purposes without his permission.

In granting Avvo’s motion to dismiss, the district court said that

[T]o hold otherwise would lead to the unintended result that any entity that publishes truthful newsworthy information about individuals such as teachers, directors and other professionals, such as a newspaper or yellow page directory, would risk civil liability simply because it generated revenue from advertisements placed by others in the same field.

The court viewed the Avvo site as a mere directory, and analogized it to Sports Illustrated magazine:  just like the magazine has editorial content plus ads, the Avvo site has non-commercial speech consisting of the lawyer profiles — plus ads.  The court reasoned that just as ads do not convert the entire magazine into commercial speech, Avvo’s ads do not “turn the entire attorney directory into commercial speech.”

Money train

So the Avvo juggernaut rolls on.  In August, reports Bob Ambrogi’s Law Sites, “a California lawyer dropped his putative class action against Avvo after Avvo brought a motion to strike the complaint under California’s anti-SLAPP law.”  Avvo has also successfully torpedoed a 2007 federal class action complaint in Washington and a suit filed in Florida that was later transferred to Washington.

Ambrogi quotes Avvo’s chief legal officer on the company’s win:  “This is further validation that publishers like Avvo needn’t obtain the consent of their subjects prior to exercising their First Amendment rights,” said Josh King.

As I reported in February, Avvo has taken my Ohio bar information, found a picture of me (though it is a gorgeous one, I must say), and put up my profile, all without my permission.  And there are still four ads  for other lawyers on my profile page– so Avvo continues to use my data to make money for itself.   No phone book or lawyer directory that I know of has Avvo’s rapacious business model.  But as long as courts continue to see Avvo as a mere phone book — or worse, a magazine — it will continue to expand its empire at the expense of lawyers who won’t play along.

Dislike, croppedLawyer-rating site Avvo is violating a state statute barring unauthorized use of “an individual’s identity for commercial purposes,” an Illinois lawyer has charged in a putative class-action complaint filed last week in the chancery division of Cook County Circuit Court.

Fee- based marketing plan

The gist of the complaint is that without any authorization or participation from plaintiff or any other lawyer, Avvo has created profile pages for 97% of the of the attorneys in the country, using publically-available data; then, Avvo’s fee-based marketing plan allows lawyers who pay a fee to put ads for their practices on the profile pages of lawyers who don’t pay the fee — and the lawyer profiles where the paid ads appear are those of head-to-head competitors.

If you are the target of this shake-down tactic, you can then pay a fee to keep Avvo from putting ads for your competitors on your profile page.

The class-action plaintiff practices family law in the Chicago area; in the complaint, she cites four family-law lawyers who practice in the same geographic area as she does, and whose ads are parked on the profile Avvo has created for her.

Free speech or misappropriation?

The theory behind the complaint is that Illinois’ Right of Publicity Act is violated when Avvo takes publically-available personal data of a lawyer — years in practice, practice areas, bar discipline history, education — and puts it to commercial use without the lawyer’s consent, by using the profile to sell advertising or marketing space to those who pay for it.

According to the on-line ABA Journal, Avvo’s chief legal officer has called the allegations in the complaint “bizarre” and “ludicrous.”

My own Avvo profile (created without my authorization) has my smiling face, my office address, lists my practice areas as “business, ethics and professional responsibility” — and has three ads from lawyers who would appear to sort of work in the same practice area as I do.  One is based in Columbus (150 miles down the road from me in Cleveland), one has a tag-line that says “Need a lawyer who sues other lawyers?  Call …”) and one says he is dedicated to “Fighting For What Is Right And Ensuring Our Client’s Best Interest Are Served.”

Interesting stuff, but Avvo is plainly profiting from data about me (including my glam picture) that its bots have harvested from my firm’s website and the Ohio Supreme Court’s lawyer registration rolls.

I think that’s unfair, and I hope the Illinois lawsuit survives the inevitable motion to dismiss and proceeds to discovery.  I’d like to know how much money Avvo makes on this shake-down.  So far, though, the odds are with Avvo in achieving dismissal of the complaint.

Score:  Avvo, 2 – Profession, 0

To date, according to the ABA Journal article, Avvo has successfully fended off attacks on its business model, obtaining dismissal of a 2007 federal class action complaint in Washington, over the site’s lawyer-ranking system (I have a 6.7/10 rank — why?  No client has ever ranked me on Avvo), and a suit filed in Florida and transferred to Washington before it too, was dismissed.  A suit similar to the current one in Illinois was filed in San Francisco last year; a motion to strike the complaint under California’s anti-SLAPP law is pending.

Data marauding — plus

Avvo is not content to profit off your professional data; last week it announced it was going to roll out a flat-fee legal services plan — and yes, this morning my Avvo profile has an ad parked on it touting contract reviews at $149.00 per.

It may be just a matter of time before this race to the bottom results in a scenario where a client keys in a credit card number and gets legal “advice” from a robot.  Technology geeks are already predicting such a future, where the lawyers “may be less J.D. than R2D2.”

I hope I’m not around to see it.

Making big news this summer was the shut-down of Avvo Legal Services just a few months after it was acquired by Internet Brands.  (A couple of the many reports are here and here.)  Some speculated that the new corporate owner had no stomach to continue to fight for that portion of Avvo’s business model in the face of numerous state ethics opinions that found a wide variety of ethics problems with it.

The flat-fee service that Avvo offered through a network of lawyers required the lawyer to rebate a “marketing” fee to Avvo out of the fee that the lawyer received.  As we’ve pointed out, that raised issues of fee-splitting with non-lawyers; but other aspects of the model also troubled ethics boards.

Does “processing fee” = fee-splitting?

On another front now drawing notice, another on-line legal services provider is contesting charges in California district court that its own business plan violates false advertising and unfair competition statutes, including recently-filed allegations that it supports its business with spurious attorney ratings.

The suit is significant for highlighting that despite the demise of Avvo Legal Services, the ethics issues remain in light of the other players that continue to occupy the same space in the marketplace, and that litigation, not just regulatory action, sometimes results.

The plaintiff in the California federal case is LegalForce RAPC Worldwide, an IP firm.  In an amended complaint filed earlier this month, LegalForce alleges that it competes with defendant UpCounsel Inc. to “provide individuals and small businesses with affordable access to attorneys,” by using technology to match clients with lawyers specialized in corporate, patent and trademark law.

The allegations, which withstood an earlier motion to dismiss, include that UpCounsel’s model features a “processing fee” markup that constitutes impermissible fee-sharing with non-lawyers.

The amended complaint says that UpCounsel tries to attract consumers by promising to provide lawyers in the “Top 5%” of specialized IP and corporate practice niches in cities across the U.S, and that the representation constitutes false advertising, as there is no ranking system that could provide a basis for the claim.

“Reviews” outnumber lawyers, says complaint

In addition, according to the allegations of the amended complaint, UpCounsel falsely advertised superior consumer ratings for the lawyers in its network.  As an example, the plaintiff pointed to the rating given to IP lawyers in Cotati, California:

“Cotati Intellectual Property Lawyers, 5.0 ***** Based on 5450 reviews.”  “It is impossible for Cotati Intellectual Property Lawyers to have 5,450 reviews on UpCounsel,” says the amended complaint, because “Cotati is a small town … with a population of 7,455. There are only 21 attorneys in the city of Cotati licensed to practice law in California, and none of these 21 attorneys are listed on UpCounsel.”

LegalForce alleges that this same pattern of “perfect or near-perfect review scores” based on thousands of purported reviews is duplicated as to lawyers advertised by UpCounsel in other cities, such as Tallahassee and Savannah.

More to come…

The ethics issues regarding on-line legal service providers have not gone away just because Avvo has withdrawn from that market.  As Prof. Alberto Bernabe, a legal ethics professor at John Marshall Law School in Chicago, has pointed out, “Where Avvo left off, someone else will pick up…,” including, most recently, “Text a Lawyer,” an on-line platform where prospective clients can ask lawyers questions via text.

Regulators and litigation parties will surely continue to confront the ethical issues inherent in these platforms, although the ABA’s recently-passed revamp of some of the legal marketing rules in the Model Rules of Professional Conduct fails to address on-line referral providers.

Greetings 2018!  Time for some ethics trend predictions to kick off the Year of the Dog (according to the Chinese zodiac).  Let it be a year in which you doggedly pursue ethical practice (ouch).  No more bad puns — here’s what’s hot as we begin the year:

Law firm cyber-security

No surprise here that the top trend is data security.  It’s one of the “chief concerns” of GC’s, and for good reason:  It’s not if, but when, a firm is going to experience a cyber-attack.  The latest ABA report says that 22 percent of law firms of all sizes were hit with a data breach in 2017, up from 14 percent in 2016; several of the biggest firms experienced attacks and various kinds of disruption in the past couple years.  But small and medium-size firms are just as vulnerable, say the data.  Of course, lawyers have an ethical duty under Model Rule 1.6(c) to take reasonable steps to safeguard the confidentiality of client data.  Ethics rules also require lawyers to have the technological competence to recognize and address the problem.  (See comment [8] to Rule 1.1.)  Trending:  More clients are insisting that firms establish data security policies and procedures.

The “Uber” effect – on-line service providers and other tech disruptors

Just as Uber disrupted an entire market segment with its ride-hailing model, on-line businesses like Avvo and LegalZoom have taken aim at legal services and how they are marketed.  But these on-line types of business raise legal ethics issues, including fee-splitting, handling client funds and professional independence.  (Excellent summary is here.)  Some innovative models, like the traffic-ticket-fighting site TIKD, are under fire for potential antitrust violations and the unauthorized practice of law.  And will consumers soon be taking their legal problems to chatbots?  Will legal teams soon be using artificial intelligence to analyze complaints and generate document drafts?  Trending:  State ethics regulators have come down against Avvo-like platforms, but they are still thriving.  How will the legal industry adapt?  (Hint:  Watch the progress of the ABA’s consideration of a revamp of the Model Rules on lawyer marketing and advertising, aimed at “bringing them into the 21st century” and reported here, in the Professional Responsibility Blog.)

Gender bias and sexual harassment in the profession

The ABA adopted Model Rule 8.4(g) in 2016, barring lawyers from engaging in harassing or discriminatory conduct; states are now considering whether to adopt the rule into their own lawyer conduct codes.  (Box score as of 8/1/17:  1 aye, 1 nay, many studying; and some commentators raise First Amendment concerns.)  But 40 percent of women in the profession report that they have been subjected to harassment and discrimination; and there have been several high-profile discrimination and pay-equity claims against prominent national firms and individuals.  The judiciary has been hit as well, with a prominent federal judge apologizing and retiring abruptly after sexual harassment allegations; and 695 law professors and former clerks are now petitioning Chief Justice John Roberts, seeking revision of judicial employee guides and support for reporting misconduct.  Trending:  Women in the profession are adding their voices to #metoo.

Lawyer health and wellness — mental and physical

Finally, we’d be remiss, in our first post of 2018, if we didn’t mention the personal aspect of lawyering:  keeping yourself safe and sane.  As a profession, more of us fight alcoholism, substance abuse, depression and anxiety than the general population, and those trends start developing in law school.  The statistics are alarming.  Trending:  a hopeful resolve, via a new, comprehensive ABA report, to come to grips with these systemic issues.  If you made a New Year’s resolution to stop drinking or drugging, or to address mental health issues that are affecting your legal practice, every state has a lawyer assistance organization to help you.  We’ve linked to the ABA’s state-by-state listing before; but here it is again.  If it helps one person, there’s no such thing as posting it too often.

Happy New Year.

 

A Philadelphia personal injury law firm has sued an out-of-state competitor in Pennsylvania federal court, claiming that its TV, billboard and on-line ads reaching the Philadelphia area are false and misleading, violating the Lanham Act and constituting unfair competition.

The case is a reminder that the ethics rules and disciplinary action aren’t the only exposure lawyers might have to a claimed violation of the limits on advertising legal services.

A widespread practice?

The complaint against the Orlando-based firm, Morgan & Morgan, says that its ads “mislead the consumer that [Morgan & Morgan and its lawyers] actively litigate claims in Pennsylvania when in fact their representation of personal injury claims is nonexistent or minimal.”

The complaint claims that the lawyers in the ads are not licensed in Pennsylvania, and it is alleged that Morgan actually refers all or substantially all the cases generated from its Philadelphia-area ads to other lawyers and firms.

The plaintiff, Rosenbaum & Associates, alleges that Morgan’s ads contain statements like “We’re all here for you,” and “Our family is here for your family,” falsely leading Philadelphia-area consumers to believe that Morgan will handle their claims.

Morgan has not yet answered the complaint.

Plaintiff-side personal injury firms with a national footprint often seek clients beyond their home turf via ad campaigns, referring the leads they get to lawyers and firms licensed to handle them, in return for part of the contingent fee.

However, as cited in the complaint, Pennsylvania ethics Rule 7.2, unlike the analogous Model Rule, prohibits advertising that is “a pretext to refer cases obtained from advertising to other lawyers.”  (My home state of Ohio, similarly prohibits the practice of soliciting clients solely for the purpose of referring them elsewhere.  A handful of jurisdictions require disclosure when an advertising lawyer intends to forward cases to another lawyer to handle.)

The times they may be a-changing

The rules governing lawyer advertising are potentially in a state of flux.  Online service- and referral-providers like Avvo and LegalZoom are working on several fronts to alter the landscape, including by seeking to change ethics rules that might limit their ability to market and carry out their operations.

The Association of Professional Responsibility Lawyers has two proposals on the table (2015 and 2016) that would  streamline the ABA’s Model Rules on advertising and, if adopted by states, would reduce regulations that some see as unwarranted interference in marketing legal services to consumers.

The APRL proposal is working its way through the ABA vetting process.  But at least one jurisdiction, Virginia, is not waiting; effective July 1, it slimmed down its lawyer advertising rules, patterning them after the APRL proposals.  And as we have noted, North Carolina is considering changes to its rules to make it easier for on-line service- and referral-providers to operate.

But in the meantime, just to add to the mix, be aware that regulatory or disciplinary action is not the only way that potential violations of the advertising rules might be addressed.

Indeed, although the complaint against Morgan cites Rule 7.2 of the Pennsylvania Rules of Professional Conduct, the claims for relief are solely based on alleged violations of the federal Lanham Act’s prohibition against false advertising, and the parallel state common-law ban against unfair competition.

That’s worth remembering as you navigate the legal advertising landscape.

Road Sign with THE FUTURE and SkyWhat is the future of legal services in the U.S.?  How should the enormous unmet need for services — to the middle class and to the poor — be met?  Judy Perry Martinez, the Chair of the ABA Commission on the Future of Legal Services, was in Cleveland last week, and discussed the Commission’s 100+ page report and some of its controversial recommendations.  She spoke at the Cleveland Metropolitan Bar Association to members of its ethics committee and other bar leaders. Martinez’ talk was wide ranging.

  • On-line service providers are here to stay:  Entities like Avvo, Rocket Lawyer and LegalZoom now have a presence in some legal market segments, said Martinez, and “they are not going away.”  Lawyers must acknowledge this force, and that “they are no doubt innovating in a way that consumers of justice are paying attention to.”  Like attorney advertising, which was once derided but is now ubiquitous, on-line service delivery platforms are “now part of the ecosystem.”  The challenge is to ensure that these and other technology-driven models meet the standards most critically important to the profession.  The Commission report recommends that state courts adopt the ABA Model Regulatory Objectives for the Provision of Legal Services, so that if and when a court examines on-line or other providers (including lawyers), any regulation is guided by the stated objectives.   These include such core principles as independence of legal judgment, protection of confidential and privileged information and accessible civil remedies for negligence and discipline for misconduct.
  • The public needs more from us:  The Commission’s report details a huge unmet need for legal services.  In some jurisdictions, more than 80 percent of the civil legal needs of low-income people and the majority of middle-income people go unmet — even as new law graduates struggle to find work.  “Our efforts have woefully failed” so far, Martinez said, to meet the goal of providing some form of effective assistance for the essential civil legal needs of all people otherwise unable to afford a lawyer — which is the Commission’s #1 recommendation.
  • We’re trained to be innovation-averse:  Our legal training itself makes lawyers resistant to change, and that threatens to leave us behind.  We are trained to look at the past, and to avoid unnecessary risk.  The traditional service delivery models that we accordingly embrace constrain innovation, and can limit access to justice.  Yet, it is crucial to overcome these barriers.  “If we don’t shape the future, others will,” said Martinez.
  • Despite adverse comment from the rank-and-file, conversation about “ABS” continues:  Permitting non-lawyer ownership stakes in law firms (aka “alternative business structure”) has generated much controversy; it is currently barred in every jurisdiction except the District of Columbia (although in the state of Washington, a very narrow form is encompassed under its Limited License Legal Technician program).  In 2016, the ABA solicited comments on its issue paper on ABS for law firms, including non-lawyer ownership.  Based on a lack of data showing that ABS would benefit the public, and being aware of opposition from some, the ABA recommended continued exploration.  According to Martinez, the issue is continuing as a topic of discussion at bar association and court meetings, and those interested are watching developments in the UK, where ABS is growing.  What should the burden of proof on the issue be, asked Martinez:  that there is “no evidence of harm to the public,” or that there is “evidence of benefit to the public”?

What can be done on the local level?  Martinez said that lawyer education aimed at helping lawyers and judges understand the benefits of applying technological innovations to the access-to-justice problem was front and center, and that every bar association should be incorporating a futures component into its long-range planning.

Bottom line:  we lawyers had better get on board because like it or not, the future is here, and it holds opportunities for the profession and for increased access to justice.

Held to ransomA cyber-alert issued earlier this month by the non-profit Center for Internet Security warns of a dangerous wave of malicious e-mails that are specifically targeting lawyers.  The fake e-mails are calculated to get your adrenaline pumping and to get you to open them and click on a link — because they’re personalized, they look urgent, and they’re disguised as coming from your own state’s disciplinary body or bar association.

Don’t fall for these e-mails

The CIS, through its Multistate Information Sharing and Analysis Center, reports that the subject and body of these phishing or spoofing e-mails look like they are from your board of bar examiners, bar association, or disciplinary counsel.  In the subject line and/or body, they claim that a disciplinary complaint has been filed against you, or that your bar membership has lapsed.  You are asked to respond by clicking on a link — which, according to the CIS, “leads to a malicious download, potentially ransomware.”

We tweeted out the warning when it came in from Minnesota, but other states where lawyers have been targeted, according to the CIS, also include AL, CA, FL, GA and NV.

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Well-written, well-disguised

The CIS says that unlike the obvious Nigerian-lottery-type e-mails we know to avoid, this latest wave consists of e-mails that are “well-written and appear to originate from the appropriate authority,” and they are personalized, too, which of course boosts their effectiveness.

As a member of my local certified grievance committee, I know the procedure my home state of Ohio uses to notify lawyers of grievances — and it does not include e-mail.  I doubt that your jurisdiction’s process does either.

Your full name, bar membership status, bar number, office address and other professional details are publicly available, usually through your supreme court’s web listing of enrolled lawyers.  So it is easy for the bad guys to find you, and relatively easy to match you up with an e-mail address.  If  Avvo can do it, why not criminals?

Ways to be savvy

CIS recommends several steps in response to this latest threat:

  • Know how to identify spear-phishing e-mails.  “This particular series of emails includes what appears to be a link to the state bar association, but when the user hovers over the link it shows that the link is really to a different website.  Copying and pasting the link, instead of clicking on it, would defeat this social engineering attempt.“
  • Back up all your systems regularly “to limit the impact of data loss from ransomware infections.  Backups should be stored offline.”
  • CIS is a § 501(c)(3) non-profit; check out its additional recommendations for protecting against and responding to phishing campaigns, available here and here.
  • Report any suspicious e-mails to the FBI’s Internet Crime Complaint Center (www.ic3.gov) as well as to the legal organization that is spoofed in the e-mail.

And a duty to be savvy

As we’ve noted before, not only is it obviously in your own interest to avoid scams that would lock up your own computer data — it can also be part of your ethical duty of competence to your clients.  Law departments have been identified as particularly susceptible to falling for scam e-mails.

Our complete dependence on our computers makes them a point of vulnerability — take the steps necessary to avoid being exploited.