Dorothy Hae Eun Min//May 16, 2012
//May 16, 2012
Most people by now have had experience purchasing or using a coupon from Groupon, Living Social, Plum District and similar websites. Aside from a couple of incredibly annoying experiences with two purchases from Living Social, I have been a content consumer of these coupons.
Recently, the ABA Journal provided an overview of ethics opinions on lawyers and law firms using these services. The state bar associations in North Carolina, South Carolina and New York have issued opinions suggesting it’s OK for lawyers to jump on the deal-of-the-day coupon bandwagon. As this phenomenon spreads, I am willing to bet that more bar associations will also opine on the issue. Here are three main concerns discussed in these opinions:
1) Does this kind of payment arrangement amount to fee splitting with non-lawyers, which is prohibited by Rule 5.4 of the ABA Model Rules of Professional Conduct, as well as the ethics rules of all the states?
2) Are advertisements for discounted legal services using this “couponing” method inappropriate for attorneys to use from a professionalism or appearance standpoint?
3) Is a “couponing” for business a good business model for attorneys?
One analysis of the fee-splitting issue says it does not amount to more than a payment of reasonable advertising costs. The South Carolina Bar’s advisory opinion states the fee charged by the website operator amounts to payment of the reasonable cost of permitted advertising by a lawyer rather than sharing the lawyer’s fee.
“The fact that the charge for this form of advertising service is deducted up front by the company rather than invoiced and then paid from the lawyer’s operating account does not transform the transaction from the payment of advertising costs into an improper fee split,” the opinion states.
A second analysis in the opinion concludes that the transaction does constitute fee splitting but the transaction still is OK “as long as the website does not have the ability to exercise any control over the services which are to be subsequently rendered by the attorney.”
“Sharing fees with a non-lawyer may be permitted where the circumstances do not suggest any encroachment on the lawyer’s independent judgment,” the opinion states.
On the propriety front, the “couponing” method may carve out a new perspective about how law firms communicate their fee information to potential clients and how they advertise. But the perception of a “legal Groupon” is difficult for some to overcome.
“There have been people who say that [it] is not appropriate. It makes us look like we’re in the bazaar, not practicing law,” Ronald C. Minkoff, a partner at Frankfurt Kurnit Klein & Selz in New York City, told the ABA Journal.
Finally, the most important question is whether online coupon advertising will catch on with lawyers and whether it is a good business model. Robin Iori, a marketing director based in Chicago, told the ABA Journal using such services might be limited to one-time hits, rather than the repeat business most lawyers want.
“I don’t necessarily think it would build a really great practice because you’re going in with the idea of discounting it from day one,” she said.
On the flip side, she said that younger legal consumers, who are accustomed to meeting their needs on the Internet or through these types of deals, might find coupon sites a desirable way to seek out legal services.
What are your thoughts? Is a coupon for legal services too “out there” at this point in time? Would you purchase a “groupon” for legal services?e