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January 1, 2018
Bar tells Avvo Advisor it is a lawyer referral service

By Gary Blankenship
Senior Editor

A private company program that offers consumers a 15-minute consultation with a lawyer for $39 is a lawyer referral service under Bar rules, according to the Board of Governors.

At its December 8 meeting in Amelia Island, the Board of Governors unanimously approved the recommendation of the Board Review Committee on Professional Ethics that the Avvo Advisor online system for connecting potential clients with questions to lawyers meets the Bar’s definition of a referral service.

The action has implications for nonlawyer companies that are moving from rating lawyers or providing legal forms to linking lawyers and potential clients. In addition to this recommendation, the BRCPE is discussing the ethical propriety of different ways of charging for referrals that can range from a fee per referral to a split of the proceeds in a referred case.

“Our rules define a lawyer referral service as any person or group of persons, association, or professional entity that seeks a fee or charge for causing the direct or indirect referral of potential clients to a lawyer drawn from a specific group of lawyers,” committee Chair Mike Hooker said.

He said a Bar member asked the Bar Ethics Department whether the Avvo Advisor program qualified under that rule as a referral service. The inquirer said the program works from the Avvo website and consumers can pick a lawyer from a list provided by Avvo or let Avvo contact the lawyer.

The Bar’s Standing Committee on Advertising considered the matter and forwarded it to the board for guidance.

At the BRCPE meeting the day before the board meeting, Avvo General Counsel Josh King said when the potential client does not select an attorney from the list of “top-rated” Avvo attorneys, Avvo texts lawyers who participate in the Advisor program and the first one to respond — not one selected by Avvo — gets the referral. He also explained the $39 payment goes directly to the responding lawyer, who then remits the $10 “marketing fee” to Avvo.

“BRCPE voted 9-0 to present a recommendation to this board that Avvo Advisor as described above meets the definition of a lawyer referral service,” Hooker said.

“This is a difficult question for this board, it’s going to set a lot of precedent for issues we are going to have to deal with that are related,” President-elect Designate John Stewart said. “The decision could affect a large number of our constituents. There are at least, anecdotally, a fair number of our constituents who participate in this program.”

He said the board must look at the broader policy implication and consider how the decision will affect Bar members who participate in the Avvo program and similar programs offered by other nonlawyer companies.

“They’re clearly a lawyer referral service,” board member Dennis Kainen, a member of the BRCPE said. “There are a lot of lawyer referral services that are complying with our rules, are sending in their information, and I don’t think it would be right to exclude one entity when everyone else is playing by the rules.”

Board member Larry Sellers, another member of the BRCPE, said one concern for Avvo was being designated by the Bar as a lawyer referral service. Unlike some other states, Florida allows private companies to be lawyer referral services. Sellers said Avvo is worried that the Bar’s action could have repercussions in those states, even though they may have different definitions of lawyer referral services.

Board member Tom Bopp, who also serves on the BRCPE, said King acknowledged that if Avvo got a complaint about a participating lawyer, that lawyer could be removed from the Advisor program. That shows, he said, that the company has control over the lawyer panel and hence meets the definition of a referral service.

Added BRCPE and board member Rick Nail: “If we don’t do it, we’re going to have much more fallout from all of the services out there that are complying.”

At the BRCPE meeting, Avvo’s King conceded the company did not want to be called a referral service because of other states that do not allow private referral services. He also said the Bar’s regulations raise constitutional concerns under First Amendment and commercial speech precedents.

King said private referral companies will claim their participating attorneys are highly qualified regardless of their skills, while with Avvo, consumers can check their Avvo rating and other online information. He also said if the consumer does not want to select a lawyer, Avvo texts lawyers who participate in the Advisor program and the first one to respond — not one selected by Avvo — gets the referral.

“We’re not exercising discretion, we’re not hiding the ball [about lawyer qualifications] from the consumers, we’re not vetting their legal problem,” King said. “We’re just connecting them with a lawyer who can help with their legal problem.”

He added the key question for the Bar should be whether consumers are harmed, not a strict adherence to possibly suspect rules.

Hooker noted that several other states have concluded that Avvo is operating a referral service, but King replied that North Carolina reached a different conclusion and is drawing up new rules on the issue.

King did concede that under Bar rules, Avvo qualifies as a lawyer directory, which has fewer requirements than a lawyer referral service. “Overall, Avvo is a directory and legal service is a sub-service of that directory,” he said.

Under Bar rules, lawyer referral services must register with the Bar, provide to the Bar lists of participating Bar members, require that participants carry $100,000 of malpractice insurance, and all ads must meet Bar advertising rules. Avvo Advisor meets none of those strictures.

Tim Chinaris, who represents the inquiring attorney, told the committee, “Simply looking at the definition [in Bar rules], which really hasn’t changed . . . Florida has probably the broadest definition of lawyer referral services in the country. That’s one of the issues that concerns online services that connect consumers and lawyers. . . .

“In Florida, if any entity receives a fee or charge for sending a consumer to a lawyer, it’s a lawyer referral service.”

As Hooker and other committee members noted, the Avvo question has broad implications for a rapidly changing legal marketplace and the way private entities are connecting consumers and lawyers.

The Bar has twice in recent years proposed sweeping revisions to its lawyer referral service rules. The first attempted to address, among other things, services that refer callers to legal as well as other services, such as medical care. The Supreme Court rejected that revision, saying it didn’t go far enough and that private lawyer referral services should be owned or managed by Bar members to enhance compliance with Bar rules. The court also said the Bar should consider a special committee recommendation that lawyers should not belong to services that refer callers to more than just legal services from the same incident.

The Bar undertook further revision of the rules, but faced with online companies initiating services that connect consumers and lawyers, the Bar went back to the court recommending major changes that did away with the term “lawyer referral service” and instead dubbed any entity or service that matched lawyers and clients as a “qualified provider” and set conditions for those companies. It also proposed doing away with the requirement for carrying malpractice insurance for lawyer participants.

The court rejected those sweeping changes, saying it didn’t have enough information and wanted to informally discuss the issue with the Bar. Justices, the Bar, and interested parties had a workshop session last June and work is continuing.

Hooker noted that the inquiry about Avvo Advisor had been delayed for several months — primarily because of the pendency of the rules revisions before the court — but now that there is no actual rules case at the court, the Bar has an obligation to answer the question as well as enforce its existing rules.

The Florida Bar will provide a 90-day grace period on discipline under Rule 4-7.22 for lawyers who may be currently associated with Avvo Advisor. This would allow Avvo Advisor to file its first quarterly report and comply with Rule 4-7.22 or for the Florida lawyers to exercise other options if Avvo Advisor chooses not to follow Rule 4-7.22, Rules Regulating The Florida Bar.

Bar ethics-related opinions are advisory and not binding.

[Revised: 12-11-2018]