Ethics Counsel by James M. McCauley Legal Ethics Committee Concludes that Lawyers May Not Participate In Avvo Legal Services On September 13, 2017 , the Standing Committee on Legal Ethics voted to present Legal Ethics Opinion 1885 (LEO 1885) to the Council of the Virginia State Bar (VSB) for approval at its next meeting on October 27, 2017. If Council approves the opinion, the VSB will petition the Supreme Court of Virginia to adopt LEO 1885. LEO 1885 holds that a lawyer may not pay the current marketing fee to par-ticipate in Avvo Legal Services (ALS) because the marketing fee payment is an improper sharing of legal fees with a nonlawyer entity and an improp-er payment for recommendation of employment. See Virginia Rules of Professional Conduct, Rules 5.4(a) and Rule 7.3(d). Although the opinion does not mention ALS anywhere, the business model described in the opin-ion obviously applies to ALS. On March 23, 2017, the VSB published a proposed draft of LEO 1885 for comment. At its next meeting on May 17, 2017, after discussion of some of the comments received, the committee voted not to submit the proposed LEO to Council at its June meeting, in order to study further the issues raised by the comments. The current proposed draft differs very little from the draft previously pub-lished for comment. So far, fi ve states have issued ethics opinions 1 holding that lawyer participation in Avvo Legal Services is unethical and violates their Rules of Professional Conduct: Ohio, South Carolina, Pennsylvania, New Jersey, and New York. One state, North Carolina, has issued a proposed opinion for comment going the other direction, holding that lawyers may participate in an online platform for fi nding and employing lawyers if cer-tain requirements are met. 2 Avvo Legal Services is operated by a privately owned corporation that describes itself as an online legal services marketplace. ALS disputes the characterization in some ethics opin-ions that it is a “lawyer referral service.” Proposed LEO 1885 does not reach that conclusion nor is it necessary, al-though Virginia lawyers currently may not participate in a for-profi t lawyer referral service. Rule 7.3(d)(2). ALS allows a consumer to choose a fi xed-fee, limited-scope service that could include, for example, legal advice for matters such as immigra-tion, divorce, custody, employment, real estate, landlord-tenant; document review services; document preparation (wills, trusts, powers of attorney lease agreements, eviction notices, employ-ment contracts, contracts and docu-ments for starting up a business); or start to fi nish support for legal services such as, for example, an uncontest-ed divorce, which ALS advertises for $995. Once the customer has chosen a legal service, she selects a lawyer in the selected area of practice and locale, purchases the legal service or elects to “have a lawyer call me now.” Once the consumer has selected a lawyer (or opted for “have a lawyer call me now”), the consumer clicks on a button that says “buy now,” makes a credit card payment for the desired legal service and the lawyer then contacts the client. Avvo insists that it does not “rec-ommend” the participating lawyer but rather allows the consumer to choose from a list of lawyers that offer the desired legal service in the particular location. At the beginning of each month, Avvo pays each participating lawyer all of the legal fees generated by that lawyer in the preceding month and separately charges a “marketing fee,” the amount of which is tethered to the specifi c fi xed fee charged for each type of legal service. As the price of the legal service increases, so does the “marketing fee.” The range starts as low as a $10 marketing fee for a $39 service (i.e., a 15 minute telephone consult) up to a $400 marketing fee for a $2,995 service. The marketing fee for the uncontested divorce priced at $995, is $200. Proposed LEO 1885 concludes that the business model used by ALS is one in which lawyers are ceding con-trol of the delivery of legal services to a nonlawyer because the company sets the legal fees, not the lawyer, and the company collects and holds the legal fees and disburses earned fees to the participating lawyer after the service is completed. In so doing, the participat-ing lawyer is circumventing Rule 1.15’s requirements to hold advance fees in the lawyer’s trust account. The Rules of Conduct also require that the lawyer and the client agree on the scope of the representation. Rule 1.2(a). A third party intermediary, such as ALS, inter-feres with that process by prescribing a legal service that may not be suited to the consumer’s needs and the fee for 16 VIRGINIA LAWYER | October 2017 | Vol. 66 www.vsb.org