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Groupon For Lawyers? Nope. Unethical and Prohibited by the AL State Bar

There have been a number of posts in the past year regarding lawyers’ use of social coupon sites such as Groupon.

FYI – the Alabama State Bar has come down with their opinion of Alabama lawyers using these sites:

The use of sites like Groupon would also violate a number of other ethics rules. For example, it is well-settled that pursuant to Rule 1.15(a), all unearned fees must be placed into a lawyer’s trust account until earned. See Formal Opinion 2008-03. However, under the fee model employed by Groupon, half of the legal fee paid by the purchaser is claimed by Groupon at the time of the purchase making it impossible for the lawyer to place the entire unearned legal fee into trust as required by Rule 1.15(a). Further, if the purchaser were to demand a refund prior to any services being performed by the lawyer, the purchaser would be entitled to a complete refund regardless of the fact that half of the fees were claimed by Groupon. Failure to make a full refund would be considered charging a clearly excessive fee in violation of Rule 1.5(a) [Fees] and/or failing to return the client’s property as mandated by Rule 1.16(d) [Declining or Terminating Representation].

Another ethical dilemma created by the use of daily deal websites is the inability of the lawyer to perform any conflict check prior to the payment of legal fees by the potential client. Under the Groupon model, the lawyer is selling future legal services and receiving the fees for such future services without ever having spoken with or having met with the client. Because the lawyer cannot perform a conflict check prior to being retained, the potential for conflicts of interest among the lawyer’s former and current clients is great.

Additionally, the Disciplinary Commission is concerned that the use of such daily deal sites could result in violations of Rule 1.1 [Competence] and/or Rule 1.3 [Diligence]. Because there is no meaningful consultation prior to the payment of legal fees, the purchaser may be retaining a lawyer that does not possess the requisite skills or knowledge necessary to competently represent the purchaser. There is no opportunity for the lawyer to determine his own competence or ability to represent the client prior to his being hired.

Other states have reached contrary opinions (North Carolina, South Carolina, and New York. Indiana sides with Alabama).

So if you are practicing in a state that hasn’t come down one way or the other on the use of Groupon-like sites, I’d be wary of dipping my toe in the water. Even without a formal ethics opinion, the use of sites like Groupon just smells wrong to me for lawyers. Don’t do it.

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About Keith Lee

I'm the founder and editor of Associate's Mind. I like to write, talk, and think about law, professional development, technology, and whatever else floats my boat. I practice law in Birmingham, AL.
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