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New Jersey Regulators Say Lawyers Can’t Participate in Avvo Client-Linking Service

In June, three New Jersey Supreme Court committees jointly barred the state's lawyers from using Avvo's client-linking service. State regulators found that the "marketing fee" taken by Avvo from the payment consumers make to lawyers for flat-fee services via its referral system is improper fee-splitting with nonlawyers and an unethical lawyer-referral payment (Avvo argues that it does not violate ethical rules (http://bit.ly/2i2xgsK)). New Jersey regulators also found that LegalZoom and Rocket Lawyer operate legal service plans that were not registered with the State of New Jersey. (Both entities have since registered.)

What does this opinion mean for Illinois attorneys? As a preliminary matter, not very much. New Jersey regulates its attorneys, just like Illinois regulates its own, says Tim Moran, the chair of the ISBA's Standing Committee on the Future of Legal Services and immediate past chair of the ISBA Unauthorized Practice of Law Task Force. The New Jersey rulings don't have any effect on Illinois attorneys. However, the Illinois Rules of Professional Conduct also prohibit fee-sharing with nonlawyers. And ISBA General Counsel Charles Northrup notes that ethics opinions in South Carolina, Ohio, and Pennsylvania have also found the Avvo marketing fee to constitute improper fee-sharing and referral fees.

Find out more in the September Illinois Bar Journal.

Posted on Sep 13, 2017 by Mark Mathewson | Comments (0)
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