My Shingle

An Indiana Ethics Opinion That May Kill Legal Start Ups

by Carolyn Elefant on April 14, 2014 · 5 comments

in Ethics Do's & Don'ts, Marketing & Making Money

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Via the Legal Profession Blog, comes a recent Indiana ethics decision reprimanding a lawyer who’d practiced 41 years without incident for participating Law Tigers , a site that helps members of the public find a motorcycle attorney.  Trouble is, in pursuit of a single Tiger that may purportedly cause harm to the public, the Indiana Supreme Court now has the entire fledgling industry of legal matchmaking platforms by the tail.

Here’s the background. The American Association of Motorcycle Injury Lawyers (AAMIL) operates the Law Tigers website – one of dozens of  lead gen platforms like the Nolo Law Directory  Total Attorneys that direct website visitors and prospective clients to participating lawyers who pay to receive leads within a designated geographic area. Naturally, to encourage site visitors to seek legal services, the Law Tigers website boasts “Exceptional Results: Settlements and Verdicts” and links to glowing client testimonials.  However, the respondent lawyers website, which could be accessed through a link on the Law Tigers site, included a disclaimer that a firm could not advertise past settlements or results.

Even so, this wasn’t enough for the Indiana Supreme Court which found that:

An average viewer would not differentiate between Respondent and the statements about Law Tigers on the AAMIL website and that Respondent is therefore responsible for objectionable content on the website.

For example, the court worried that website visitors might be mislead into believing that the testimonials on the Law Tiger sites referred to the Respondent or that the Respondent would achieve exceptional results even though the Respondent’s firm website contained a disclaimer. It is difficult to imagine a client so stupid as to associate a generic testimonial with Respondent’s service or so passive as to not inquire about the “Exceptional Verdicts and Settlements” advertised. In today’s internet world, clients have never been more savvy or educated, but to the court, they’re treated like a bunch of morons.  

Given that no one but the Indiana Supreme Court could find that the Law Tigers site would confuse prospective clients, it’s no wonder that the Respondent couldn’t have predicted the outcome. The ruling notes that Respondent had engaged in due diligence prior to signing up for Law Tigers and apparently determined that it passed muster. Although the court treated Respondent’s due diligence as a mitigating factor, it wasn’t enough to avoid a reprimand. (Yet another reason why we need the safe harbor that I advocated earlier).

But what’s worst about the Indiana Supreme Court’s ruling is that no site is safe – including the recent crop of VC-backed client matchmaking sites. Take UpCounsel , a site that small businesses can use to find lawyers. Like LawTigers, UpCounsel includes generic testimonials .  Screen Shot 2014-04-13 at 9.11.44 PM

And while UpCounsel doesn’t tout “Exceptional Results,” it boasts that it offers the “best lawyers.”

Screen Shot 2014-04-13 at 8.21.35 PM

The way that I read the Indiana Supreme Court opinion, I don’t see any principled way to distinguish LawTiger from the new crop of matchmaking platforms.  Which means that the Indiana court decision will have a chilling effect on lawyers in Indiana – and potentially other jurisdictions. And while the Indiana Court may view that as a triumph, in the long run a far worse fate awaits.

Because while the Indiana Court’s ruling may scare off solos and smalls, it won’t deter Venture Capital. (If you don’t believe me, ask the taxi cab regulators who were forced to come along  for the de-regulation ride by Uber). If venture capital firms sees regulatory barriers blocking emergence of  potentially lucrative legal services market, they won’t turn tail and run  Instead, VCs and other legal futurists will push even harder for non-lawyer ownership – which means that instead of platforms that match lawyers to clients, we’ll see the rise of non-lawyer owned sites that aren’t subject to Indiana disciplinary rules and can advertise anyway they feel like.  Those sites will cut lawyers out of the equation as much as possible by simply selling legal services outright, collecting the fee and then hiring the cheapest lawyer on some internal roster to handle the work at a fixed prices.

Maybe sites like LawTiger aren’t the most dignified way for lawyers to advertise. But they’re not unethical and are far preferable to the alternative.

  • http://legalresearchandwritingpro.com/ Lisa Solomon

    How much can UpCounsel and Law Tigers really understand about the legal industry if they don’t get it that the statements they’re making on their websites could land their participating attorneys in hot water? After all, the language is glaringly unethical (if used directly by an attorney) – this isn’t some technical, nitpicky violation. And simply changing the language on the sites doesn’t interfere with their functionality or business model. The sites need to take some responsibility for their own role in this situation.

  • Mudpie

    That is the whole purpose of the legal profession’s elite: to stifle competition so that bigger firms and those who donate the most money can avoid having to compete with lawyers who are equally as good and charge less.

    I recently spoke with a friend who paid $5,000 to a Big Law attorney to review a 10 page contract. She made a couple of changes to justify her fee and he showed it to another small practice lawyer who changed it back to the way it was and then obtained a second opinion that the Big Law attorney had erred in her changes. These second two lawyers charged $175 an hour as opposed to the $400/hour the Big Firm shyster alleged charged.

    From whom does the public need protection?

    What a vile racket.

  • $ is not > than public good

    Ms. Elefant shows why lawyers and the public need Disciplinary Commissions like the one here: failure to understand how uninformed consumers are hurt by their lack of accurate information. Also, the closing doomsday scenario she mentions is just as regulable as the behavior from the Supreme Court’s opinion from today. It is called “Unauthorized Practice of Law.” Non-attorneys can’t receive any portion of fees paid for legal work. If you’d read those opinions you’d see that this type of “business” has already been smacked down. http://www.in.gov/judiciary/opinions/pdf/04141001per.pdf

    Also, a company that pays lawyers internally to do various types of legal work for them is called a law firm. They’re regulable also.

    Since you can’t remove the practice of law from the marketplace (i.e. people have legal needs and lawyers want to earn a living), either you agree that lawyers have to be regulated to protect the misinformed/uninformed or you set artificial pricing regulations on that specific market. As much as some might see price caps as a good thing, good luck getting that passed. Capitalism keeps sharks in the waters (whether lawyers or simply opportunists); Disciplinary Commissions and self-regulation keep the blatant sharks (lawyers and non-lawyers) at bay.

  • myshingle

    I agree with lawyer regulation where a practice is truly deceptive. I think the court was stretching here. As for non lawyers splitting fees, they can’t do it now but they’ll be able to with non lawyer ownership. That was my point – and that is where we are heading if bars keep regulating practices that may not be desirable but arent unethical or deceptive.

  • pogden297

    Unfortunately the Indiana Disciplinary Commission has a history of spending enormous resources to go after attorneys on cases like this while allowing truly dishonest attorneys who are stealing from clients and doing other things harmful to the public to practice for years without facing any sort of discipline even though numerous grievances had been filed to alert the Commission to what is going on. We also have attorneys who have been convicted of felonies that involve dishonest who aren’t charged with the Commission with misconduct for months if not years if ever. I don’t know if the complained of practice in this case can ever be regulated given modern technology. Probably the rules are antiquated and need to be updated. But I do know about Commission resources and when the Commission devote enormous resources to go after an attorney on something like this ( so much so that the prosecution goes all the way through the hearing process to the Indiana Supreme Court)m that means there are less resources for the truly unethical attorneys out there.

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