Saturday, March 17, 2012

Should attorneys use daily deal sites to offer discounted services?

According to a recent Indiana State Bar Association's Legal Ethics Committee finding, it is "likely not appropriate for a lawyer licensed in Indiana to advertise through a group coupon program."

In part, the problem arises when a non-attorney, in this case the deals provider, is allowed to create an attorney-client relationship.

The guidelines and Rules of Professional Conduct provide that the creation and establishment of an attorney-client relationship is the non-delegable duty of the lawyer.

Simply stated an attorney is not allowed to use a middle man to help drum up clients. There was also an issue of the handling of fees.

"A lawyer shall deposit into a client trust account legal fees and expenses that have been paid in advance, to be withdrawn by the lawyer only as fees are earned or expenses incurred."

The opinion found that allowing a coupon company to handle the money and dole it out at its discretion was a violation.

Indiana is not the only state that either has such guidelines for attorneys in place or is looking into implementing such guidelines. A year ago the Lawyerist, a law practice blog providing advice on law firm marketing and related topics, said findings varied from state to state.

North Carolina quickly put the kibosh on plans for advertising legal services on Groupon, stating in a that the site's fee "is a percentage of the amount actually paid to the lawyer and appears to constitute revenue sharing with a nonlawyer." Missouri, however, welcomed Groupon with open arms, clearing the way for lawyers in the state to use the site as a way to obtain new clients.

Now a year later the Lawyerist says the idea… and acceptance of attorneys using daily deal sites like Groupon is gaining traction.

Lawyers can use daily deal sites, like Groupon, in North Carolina, South Carolina, and New York, according to ethics opinions in those states. New York was the third state to issue an opinion addressing the potential conflict between Groupon which takes a percentage of every transaction, and rules prohibiting fee sharing or paid referrals.

In 2010, a St. Louis estate planning attorney, Craig S. Redler offered a deal on Groupon after clearing it with the Missouri Bar Association. The deal consisted of 87 percent off on a will and power of attorney. Ridler's Groupon promotion saw a profit and some of the clients returned and even referred new clients.

Early this year, Debra Bruce of Solo Practice University asked Redler if he'd do another deal promotion.

"Probably not," he admitted, but not because of the clients. And not because of Groupon. He just wouldn't want to experience all the brouhaha from the legal community again. Besides the flurry of activity from new clients, Redler's office was inundated with about 150 phone calls and emails from lawyers wanting to know how it worked. On top of that, some of the online commentary was not very charitable towards him. (Lawyers, please don't contact him as a result of this post. He doesn't have time for responding.)

It wasn't that long ago that attorneys were prohibited from advertising in any form. They were only allowed a tiny text listing in the yellow pages.

"…all forms of self-promotion "offend the traditions and lower the tone of our profession and are reprehensible."

Obviously times are changing, but just how much and how fast they change is most likely going to be up to the individual states. Will daily deals ever be a good fit for the legal profession? Only time will tell.

By Kris Ashton, The Daily Deal Media

Source: The Daily Deal Media


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