sales’ for legal services?
are tough times. Citizens are occupying Oakland, Los Angeles and other cities. Difficult
economic conditions often result in new methods of making a living or in
revisiting old ones.
centuries-old concept of barter will never pay the rent or student loans. Legal
fees are usually a lawyer’s only source of income. Abraham Lincoln once
bartered his legal services for a U.S. Army pistol that had been used in the
Mexican War (ABA Journal, April 1982). Remember that barter transactions are
deemed to be reportable as part of a taxpayer's gross income. Lincoln was
extremely aggressive about his fees. He often sued clients to collect,
demanding and receiving cash (and these were not criminal cases).
advent of the Internet presents new opportunities, including the “daily
deal websites” like Groupon and Living Social, which offer coupons and
discounts for products and services. Consumers only receive the deeply
discounted bargain if a minimum number both sign up and prepay. The coupon
company then splits the proceeds with the seller as compensation for making the
offer available. You can imagine the dust-up this presents in the legal ethics
community, remembering that ethics usually lags about 30 years behind the
reality of our practices.
have been allowed to advertise since 1977, and group coupons have tremendous
market potential. But do you want to be “offered,” alongside of the
newest day spa with laser hair removal? Obviously, there are major issues
involving professionalism always present in attorney advertising. Are coupons a
fancy advertisement (remember all the restrictions and requirements), or is it
more sinister in terms of our ethical obligations?
about fee splitting in the group coupon scenario? Lawyers have been prohibited
from splitting fees with nonprofessionals for decades, because it is believed
to impair a lawyer’s exercise of the fiduciary obligation of independent
judgment. North Carolina and South Carolina say that legal services can be
offered as the “daily deal,” but with lots of warnings. Missouri
issued a preliminary ethics opinion for a specific lawyer who wanted to do
basic wills and durable powers of attorney, indicating that it can be done
presents a Pandora’s Box of ethics issues. Lawyers cannot charge
excessive fees. What about the consumer who never uses the coupon because of an
expiration date? Some maintain that accepting a fee for doing nothing is
inherently excessive or unconscionable (Rule 4-200). Could this be construed as
misleading or confusing advertising? Where is the list of disclaimers usually
required? Is a coupon an advance fee? How do you do a conflict check? How do
you competently represent clients when you never consulted with them to analyze
their personal issues?
in terms of new business models, nobody can “sell” you cases.
It’s flat-out capping and running, which is a crime (Business and Professions
Code § 6151). In Dickens’ Bleak House, the representation of one of
the heirs, Jarndyce, was sold to an attorney for five pounds. This too is illegal.
you really want to be the “daily deal?” Last year, at an MCLE
program for the Beverly Hills Bar, recordings of some of my prior programs were “ON
SALE!” The practice of law is not for the faint hearted, but being on
sale while doing a program was honestly creepy.
Legal ethics expert Diane Karpman can be reached at 310-887-3900 or at email@example.com.