Utah joins other bars in rejecting online lawyer-client matching service


Nicole Black, BridgeTower Media Newswires

In recent columns I've written about a number of ethics opinions handed down by various state bar ethics committees regarding online lawyer matching services. In each case, the committees have determined that the setup of certain online lawyer matching services is unethical. Some have specifically considered Avvo's lawyer matching service, while others have described a hypothetical setup that operates in much the same manner as Avvo's does. Along with the states I've written about, New York and Virginia, a number of other states' ethics committees have also considered this issue and reached the same conclusion, including Ohio, South Carolina, Virginia and New Jersey.

Recently, Utah joined their ranks with the issuance of Opinion No. 17-05 (online: http:// www.utahbar.org/wp-content/ uploads/2017/11/2017-05.pdf) at the end of September. Although Avvo was not mentioned in the opinion, the fee structure of the hypothetical lawyer matching service discussed is very similar to that of Avvo's.

At issue in this case was whether it is ethical for Utah lawyers to participate in an online lawyer referral service where potential clients seek to receive designated legal services at fixed rates from a provided list of participating lawyers. Once the selected lawyer accepts the case, the online service deposits the agreed upon fixed fee into the lawyer's trust account and then withdraws the referral fee from that same account.

The Utah State Bar Ethics Advisory Committee noted that the proposed service implicates a number of different ethical issues. First, the committee considered the prohibition on fee-splitting with non-lawyers as set forth in Rule 5.4. The committee determined that the lawyer matching service's fee setup violated that rule: "In the scenario presented to the committee, the client pays a flat fee for legal services, which is split between the lawyer and the non-lawyer referral service. None of the exceptions to the prohibition on sharing fees with a non-lawyer apply."

Next the committee turned to Run 7.2 and considered whether the fee paid to the service constituted an advertising fee, and thus was an exception to the prohibition of referral fees. The committee concluded that it did not, since the fee varied depending on the type of legal services provided, and thus was an impermissible referral fee.

Another interesting conclusion reached by the committee related to the scope of representation. The committee explained that lawyers may permissibly limit the scope of legal representation if doing so is reasonable under the circumstances and the client provides consent. However, under the hypothetical proposed, that "may be difficult or impossible to accomplish when the initial task of describing the representation and setting the fee is delegated to a third-party referral service." As such, the committee determined that the proposed service also violated Rule 1.2(c).

Because many different aspects of the proposed scenario violated an assortment of ethics rules, it's not surprising that the committee accordingly concluded that it was unethical for Utah attorneys to participate in the hypothetical lawyer matching service: "The service described above violates Rule 5.4's prohibition on splitting fees with a non-lawyer. It also violates Rule 7.2's restrictions on payment for recommending a lawyer's services and it may violate a number of other Rules related to client confidentiality, lawyer independence, and safekeeping of client property, depending on facts not presented."

So, for Utah lawyers, along with lawyers in a number of other states, the described lawyer matching service is no longer an option. As for lawyers in states that have yet to issue an opinion, the tide seems to be turning against this particular setup. If you have plans to use an online lawyer matching service in the near future, carefully research your jurisdiction's ethical rules and opinions on the issues addressed in the Utah opinion prior to doing so. After all, when your law license is at stake, it's better safe than sorry.


Nicole Black is a director at MyCase.com, a cloud-based law practice management platform. She is also of counsel to Fiandach & Fiandach in Rochester and is a GigaOM Pro analyst. She is the author of the ABA book "Cloud Computing for Lawyers," coauthors the ABA book "Social Media for Lawyers: the Next Frontier," and co-authors "Criminal Law in New York," a West-Thomson treatise. She speaks regularly at conferences regarding the intersection of law and technology. She publishes three legal blogs and can be reached at niki@mycase.com.

Published: Tue, Dec 05, 2017