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Avvo Legal Services: The good, the bad and the ugly

(I know I said you wouldn’t hear from me in February, but I got this email from Avvo and I couldn’t help but write about it.)

If you’re a young lawyer, you’ve probably heard of Avvo, which has been gaining popularity for the past few years. The website hosts a directory of local lawyers and a forum for the public to post questions that can be answered by attorneys around the country.

I recently received an email asking me to participate in a new program they’re rolling out. Called “Avvo Legal Services,” it allows clients to pay a fixed fee for legal services. The participating attorney receives the fee before Avvo takes its “marketing fee.” Here are some examples:

  • 15-minute advice session – Client payment $39 – Marketing fee $10
  • Document review: Separation agreement – Client payment $199 – Marketing fee $50
  • File for uncontested divorce – Client payment $995 – Marketing fee $200
  • Apply for U.S. citizenship – Client payment $595 – Marketing fee $125

The good

When I first heard about Avvo’s new concept (before I saw the price lists), I was excited about the idea. I handle about 90 percent of my caseload on a flat-fee basis. From my immigration cases to estate planning and uncontested family matters, clients appreciate the transparency of the flat-fee model over hourly billing.  And, I have never had an issue with uncollected fees since clients know what they’re responsible for and are never blindsided by a huge legal bill.

The bad

Obviously, after Avvo takes its “marketing fee,” there’s not much left to sneeze at.

For example, after Avvo’s fee is deducted, attorneys receive a fixed fee of $795 to for an uncontested divorce.  That’s $795 for consulting with the client, negotiating and drafting a separation agreement, holding a separation agreement execution ceremony, drafting and filing the complaint for divorce, serving the opposing party, and requesting and attending the uncontested divorce hearing.  I don’t know many attorneys that could sustain their practice working for so little.

The other big problem I see is a 15-minute immigration advice session. Fifteen minutes may be sufficient to respond to an inquiry on how to answer a question on an immigration form but it would never be enough time to evaluate whether the client is actually eligible for whatever they’re applying for. When clients pay my immigration consultation fee, it entitles them to an hour of my time. We go over their full immigration history. I identify any potential red flags in their case, give them some options to consider, and discuss case strategy. I need well over 15 minutes to fully evaluate a case and provide any useful feedback.  If the client hires me for their case, the consultation fee they’ve already paid is deducted from my flat fee. 

The ugly

Avvo explains the potential payment arrangement as follows: “[a] lawyer who successfully completes 3 $149 document review services in the month of February will see 2 separate transactions on their bank statement in March: a deposit of $447 ($149/service x 3 services) and a withdrawal of $120 ($40 marketing fee/service x 3 services.”

My first concern would be whether the marketing fee violates Rule 7.2(c) of the Maryland Lawyer’s Rules of Professional Conduct prohibiting a lawyer from “giving anything of value to a person for recommending the lawyer’s services” that is not a reasonable cost of advertising.  The “marketing fee” feels more like a fee split and less like an advertising costs when you take into account the full model. Even Avvo’s general counsel, Josh King, characterizes the transaction as a “technical fee split.”

My other concern is Avvo takes the client’s payment up-front and holds it until you have completed the work. Once you’ve completed the service, Avvo deposits the full amount in your bank account and then withdraws its marketing fee. An uncontested divorce takes months from the consultation to receiving a judgment, however. I wouldn’t want a middle-man holding my client’s funds for the duration of the case. If a client is paying for my legal services, the fee should be held in my client trust account until it’s earned.

The moral of the story

My lawyer profile appears on Avvo and I often answer questions posed by the public on the Q&A forum. Many clients have found me through Avvo, and I appreciate the way it connects potential clients with local lawyers.

But when it comes to their new Avvo Legal Services program, I fear for those who may be lured in by the promises of cheap fixed fees. I’m afraid that the future clients of Avvo Legal Services will find out that you get what you pay for.