Avvo Officially Launches its Fixed-Fee Legal Services in 18 States

AvvoLegalServices

Last month, this blog was the first to report the news that Avvo was beginning to roll out a service, called Avvo Legal Services, offering fixed-fee, limited-scope legal services through a network of attorneys. At that point, the service was being tested in five cities. Today, Avvo is officially launching the service across 18 states that encompass some 70 percent of the U.S. population.

“With this service, we could be the Match.com of legal,” Avvo CEO Mark Britton told me in a recent interview. “We put the needy consumer together with the needy lawyer.”

Through the service, Avvo is offering consumers access to a network of attorneys who will provide a variety of limited-scope legal services at a fixed fee. The services range from review of legal documents such as business contracts and non-disclosure agreements to more involved matters such as uncontested divorces and citizenship applications. The service builds on a related service Avvo launched last year, Avvo Advisor, that provides on-demand legal advice by phone for a fixed fee of $39 for 15 minutes.

As I noted in my previous post, Avvo sets the services to be provided and the prices. Attorneys who sign up for the service can choose which legal services they want to offer. When a client buys the service, Avvo sends the client’s information to the attorney. The attorney then contacts the client directly and completes the service.

Clients pay the full price for the service up front. Once a month, Avvo deposits earned fees into the attorney’s operating account. As a separate transaction, it withdraws from the account a per-service marketing fee that the attorney pays to Avvo.

With today’s roll-out, Avvo Legal Services is now available in 18 states: Arizona, California, Colorado, Florida, Georgia, Illinois, Massachusetts, Maryland, Michigan, North Carolina, New Jersey, New York, Ohio, Pennsylvania, Texas, Virginia, Washington and Wisconsin. Additional locations will be added in the coming months, Avvo said. By the end of the year, the program will cover roughly 85 percent of the population.

Britton: Benefit to Both Clients and Lawyers

Avvo CEO Britton sees this new service as a benefit to both clients and lawyers. For lawyers, it will help them build their practices and recapture a part of the market that is being lost to do-it-yourself legal sites and services. For clients, it enables them to access services at a price that is both affordable and fixed and to understand exactly what services they are purchasing.

“From our beginning, Avvo has created these dynamics where we’re helping lawyers start the conversation with the needy consumer,” Britton said. “Fixed price, fixed scope legal services are just a continuation of that. We say to the consumer, ‘OK, we’ll tell you what it will cost, and we’ll tell you what the lawyer will do. We take down all the friction points and get the two of you together.'”

For lawyers, the service solves three of their biggest pain points, he said: Getting clients, billing and getting paid.

“The beauty here is we get them the customer, we get the cash up front, and they don’t have to worry about billing or tracking time. This is a shortcut to everything practice management software does. You’ve been paid and you know the services you’re delivering. What could be easier?”

He also believes the service will help lawyers build their practices by establishing relationships with clients that could lead to more work down the road.

“This is how you build practices: You build the early relationship with the entry-level market and then, as you become the go-to person for that market, a subset of the people come back with bigger and higher margin legal transactions.”

Fee Sharing?

After my first post about this new service, some commentators and readers expressed concern that this arrangement could constitute inappropriate fee sharing. Both Britton and Avvo’s general counsel, Josh King, maintain that the arrangement is not unethical because the marketing fee is paid as a separate transaction.

The critical question is whether the arrangement harms the client, said King. “It’s all about consumer and client protection. You can’t apply the ethics rules unless there’s consumer harm. We’ve been careful to make this product good for compliance-minded lawyers and especially good for consumers and clients. I would ask anyone, Where’s the consumer harm? If there isn’t any, the concerns don’t apply.”

Britton says that those who are raising the fee sharing issue instead should be focusing on the benefits this service offers to lawyers who are trying to run their businesses.

“Let’s first talk about: Is this an opportunity for lawyers to potentially expand your practices and also combat the do-it-yourself growth? On both, it’s a check check opportunity.”

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  • Prof. Alberto Bernabe

    I think King is wrong. He says “you can’t apply the rules unless there is consumer harm.” That is not how the rules work. The reason fee sharing with non lawyers is banned is because the rules presume there is harm. In other words, Rule 5.4 says that fee sharing with non lawyers is not allowed BECAUSE it causes harm to the client. Avvo may want to argue the rule should be changed. That’s OK to say and today’s ABA resolution on regulatory objectives provides some support for that position. But until the rule is, in fact, changed, it applies. You can’t say it does not apply because you don’t think it is a good idea for it to apply. So, the question really is whether transaction is fee sharing. Avvo claims it isn’t because it is a separate transaction. The problem with that argument is that the fee is based on the value of the service, which means it is essentially a percentage of the amount charged to the client. The fact that it is a separate transaction does not change that. The attorney is getting paid by the client and then sending a percentage out of that fee to Avvo. Does that sound like sharing a fee with Avvo? It does to me. Am I missing something?

    • Josh King

      The rules don’t get to “presume there is harm.” To the extent the rules operate to limit lawyer speech (as they would here), the first amendment dictates that their application survive intermediate – or higher – scrutiny. Which means there must be actual harm (or, charitably, an empirically-based potential for actual harm). As this form of advertising poses no risk, whatsoever, to a lawyer’s professional independence, there is no such potential for harm, and thus no violation of Rule 5.4.

      • Prof. Alberto Bernabe

        How is this an issue of advertising and the first amendment? Rule 5.4 deals with sharing fees not with advertising. The key question is whether the fact that Avvo charges a percentage of the fee constitutes sharing the fee. If it is, the lawyer violates 5.4 unless the jurisdiction has decided that it would be OK to share a fee with a non lawyer (which at least a couple of jurisdictions have done).

        • Josh King

          As-applied in this case, it would be a form of speech regulation.

          • Prof. Alberto Bernabe

            How? Please explain. Exactly what IS the speech involved?

            • Josh King

              No. Re-read what I wrote above, and then ask one of your Con Law colleagues to explain the difference between as-applied and facial challenges.

              • Prof. Alberto Bernabe

                I understand the difference. So, you are arguing that Rule 5.4 is unconstitutional as applied in a case like this. OK.

  • Jett Hanna

    My concern is that Avvo may be acting as a for profit referral service, which is subject to a whole other set of regulations.http://www.statutes.legis.state.tx.us/docs/OC/htm/OC.952.htm This is not a first amendment advertising issue, but rather a problem with unqualified entities suggesting who is an appropriate lawyer. What’s the argument around those rules?

    • Jett Hanna

      Opinion 573 sets forth the requirements for a service such as this in Texas. https://www.legalethicstexas.com/Ethics-Resources/Opinions/Opinion-573.aspx I’d suggest Texas lawyers review this opinion and make sure the services complies with it.

    • Josh King

      Jeff, LRS requirements are also advertising restrictions, and thus their application must be viewed in light of first amendment rights. And Avvo Legal Services is not a referral service. An LRS connects potential clients to lawyers based on an exercise of discretion within stated guidelines (with all of the attendant consumer harm and deception that can come from that). Avvo Legal Services is a marketplace where potential clients can choose among any of the participating attorneys.

  • Paul Spitz

    Not having to chase the client down for the money is worth the marketing fee, period. The client is pre-qualified, because they have deposited the payment with Avvo at the time of signing up. This removes a big pain point for any lawyer. Now the big issue is, can Avvo deliver any clients? I’m still waiting on this.

    • Bob Ambrogi

      My guess is that delivering the clients won’t be a problem. Avvo has huge reach among consumers.

      • Paul Spitz

        I’ve been signed up for two weeks now, and not a peep. But my services are business/transactional, so that may not be a strength for them.

        • Bob Ambrogi

          Maybe others who’ve signed up can weigh in and let us know how they’ve fared.