According to the New Jersey Advisory Committee on Professional Ethics Committee Avvo’s client-linking services marketing fee violate the ban on lawyer-referral payments and ban on sharing fees with non-lawyers in their June 21 Opinion.
Avvo two legal services website products are Avvo Advisor and Avvo Legal Services. Prospective clients pay a flat fee for a 15-minute phone conversation with a lawyer though Avvo Advisor. With Avvo Legal Services prospective clients purchase specific services, such as an uncontested divorce, for a flat fee.
Avvo places the flat fee into the lawyer’s bank account and then withdraws a “marketing fee.” The ethics opinion said the marketing fee is an impermissible referral fee, rather than a fee for the cost of advertising, as well as an impermissible shared fee.
While LegalZoom and Rocket Lawyer’s products appear to fall within the guidelines New Jersey lawyers may not participate because the plans are not registered with the Administrative Office of the Courts in accordance with Rule of professional Conduct 7.3(e)(4)(vii).
The opinion cited ethics opinions in Ohio, South Carolina and Pennsylvania that found marketing fees charged by “Avvo-type companies” were improper referral fees or constituted impermissible fee sharing.
Additional information can also be found on the ABA Post concerning this decision