An Indiana Ethics Opinion That May Kill Legal Start Ups

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.”

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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.