N.Y. State Bar Prohibits Marketing Fees to Avvo

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A lawyer who wished to participate in Avvo Legal Services sought an Ethics Opinion from the New York State Bar Association.  Legal services would be offered through Avvo’s website, based on marketing fees that Avvo charges.  “Because” the Committee said, “Avvo’s method of operation is crucial to our response, we will devote several paragraphs to describing the Avvo Legal Services product:

“Avvo allows potential clients to choose participating lawyers in various practice areas for a fixed (i.e. flat) fee.  The Avvo website says: ‘Experienced lawyers on demand. Hire yours’ and ‘Work with highly rated, local lawyers near you,’ and it contains a guide called ‘How to find and hire a great lawyer.’  Avvo assigns every lawyer in a jurisdiction an ‘Avvo rating.’ The rating is calculated based on information Avvo collects from lawyer websites and other public sources (such as the type of work the lawyer does and the number of years the lawyer has been engaged in that work), as well as on information the lawyer has chosen to add to the lawyer’s Avvo profile (such as publications, CLE presentations, speaking engagements and positions with bar associations and their committees). Avvo’s website says that each attorney’s rating ‘is calculated using a mathematical model, and all lawyers are evaluated on the same set of standards. … At Avvo, all lawyers are treated equally.’ Avvo does not seek or accept any payment for an Avvo rating. However, lawyers who supply more information may receive higher ratings than lawyers who supply less information. Avvo says it scores all information objectively, and does not use subjective data such as client reviews.  Although Avvo assigns a rating to all lawyers in a jurisdiction, lawyers cannot offer their services through Avvo unless they meet Avvo’s minimum criteria and sign up with Avvo to be listed on the site and agree to Avvo’s pricing schedule and marketing fees. According to Avvo, the criteria for participation include a minimum Avvo Rating, a minimum client review score, and a clean disciplinary history….  Avvo’s website does not say ‘We recommend that you choose this lawyer’ or ‘This lawyer is the best fit for your situation.’ Rather, Avvo furnishes information about lawyers (including client reviews, peer reviews, and Avvo ratings) and allows clients to choose the lawyer. Avvo describes its service as simply ‘facilitating a marketplace’ where consumers can choose from among all of Avvo’s participating lawyers. Once the prospective client has chosen a lawyer (or opted for ‘have a lawyer contact me now’) and selected a specified legal service, the client clicks on a button that says ‘Buy now’. The lawyer then contacts the client. (Phone calls from a participating lawyer to a client initially go through an automated Avvo ‘switchboard’ so that Avvo can time the calls, but Avvo asserts that it cannot listen to the calls.) Once the lawyer and client have completed a phone call of at least eight minutes, Avvo charges the client’s credit card for the full amount of the fee for the selected legal service.”

The Committee was therefore called upon to decide whether Avvo is “recommending” a lawyer or “implying or creating a reasonable impression” that it is making a recommendation, under (New York) Rule of Professional Conduct 7.1.

“As noted earlier, Avvo allows clients to choose from among all of the lawyers in a geographic area who have listed themselves as practicing the field of law in which the client wants legal services.  Avvo says that it does not analyze (or even inquire about) a client’s individual situation. No human being at Avvo talks directly to any prospective client to find out the facts or studies the prospective client’s documents and then picks out a particular lawyer who is ‘right’ for that client. Nor does Avvo’s website suggest that a client hire any particular lawyer. Avvo is not ‘recommending’ lawyers in that sense.

“But Avvo does more than merely list lawyers, their profiles, and their contact information. Avvo also gives each lawyer an Avvo rating, on a scale from 1 to 10. As Avvo explains on its website, ‘It’s as simple as counting to 10. Ratings fall on a scale of 1 (Extreme Caution) to 10 (Superb), helping you quickly assess a lawyer’s background based on our rating.’ The Avvo ratings suggest mathematical precision – the rating for each lawyer is calculated to a decimal place (e.g., a rating of 6.7 or 8.4).  Moreover, some Avvo ads expressly state that the Avvo Rating enables a potential client to find “the right” lawyer, and Avvo’s website claims that its ratings enable potential clients to choose the right lawyer for their needs….”

While they did not believe that a bona fide professional rating alone were a recommendation, assuming, arguendo, that Avvo ratings were “bona fide professional ratings,” the Committee concluded that “the way Avvo describes in its advertising material the ratings of participating lawyers either expressly states or at least implies or creates the reasonable impression that Avvo is ‘recommending’ those lawyers.

In N.Y. State Ethics Opinion No. 799 (2011), discussing “the difference between an internet-based directory and a recommendation, we said that the line between the two was crossed when a website purports to recommend a particular lawyer or lawyers based on an analysis of the potential client’s problem.  Other jurisdictions also focus on the ‘particular lawyer’ distinction.  See, e.g., South Carolina 01-03 (lawyer may pay internet advertising service fee determined by the number of ‘hits’ that the service produces for the lawyer provided that the service does not steer business to any particular lawyer and the payments are not based on whether user ultimately becomes a client); Virginia Advertising Op. A-0117 (2006) (lawyer may participate in online lawyer directory in which publisher does not recommend or steer business to particular lawyers).  We believe Avvo’s advertising of its ratings, in combination with its statements about the high qualifications of lawyers who participate in Avvo Legal Services, constitutes a recommendation of all of the participating lawyers.

“Our conclusion is bolstered by Avvo’s satisfaction guarantee, by which the full amount of the client’s payment (including Avvo’s portion of the fee) is refunded if the client is not satisfied.  This guarantee contributes to the impression that Avvo is “recommending” the lawyers on its service because it stands behind them to the extent of refunding payment if the client is not satisfied.”

The Opinion made it clear that it “does not preclude a lawyer from advertising bona fide professional ratings generated by third parties in advertisements, and we recognize that a lawyer may pay another party (such as a magazine or website) to include those bona fide ratings in the lawyer’s advertisements.

“But Avvo Legal Services is different.  It is not a third party, but rather the very party that will benefit financially if potential clients hire the lawyers rated by Avvo.  Avvo markets the lawyers participating in the service offered under the Avvo brand, generates Avvo ratings that it uses in the advertising for the lawyers who participate in Avvo Legal Services, and effectively ‘vouches for’ each participating lawyer’s credentials, abilities, and competence by offering a full refund if the client is not satisfied. As noted earlier, Avvo says: ‘We stand behind our services and expect our clients to be 100% satisfied with their experience.’ Accordingly, we conclude that lawyers who pay Avvo’s marketing fee are paying for a recommendation, and are thus violating Rule 7.2(a).”

In conclusion, the Committee noted that: “The questions we have addressed here have generated vigorous debate both within and outside the legal profession. The numbers of lawyers and clients who are using Avvo Legal Services suggest that the company fills a need that more traditional methods of marketing and providing legal services are not meeting. But it is not this Committee’s job to decide policy issues regarding access to justice, affordability of legal fees, or lawyer quality. Our job is to interpret the New York Rules of Professional Conduct. Future changes to Avvo’s mode of operation – or future changes to the Rules of Professional Conduct – could lead us to alter our conclusions, but at this point we conclude that, under Avvo’s current structure, lawyers may not pay Avvo’s marketing fee for participating in Avvo Legal Services.”

 

N.Y. Ethics Opinion No. 1132 (Aug. 8, 2017).

 

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