Avvo ditches fixed-rate legal services ahead of N.C. ethics opinion

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RALEIGH, N.C. — The new owner of Avvo.com, one of the top players in the online legal marketplace, has put the kibosh on the company’s fixed-rate legal services – just as a North Carolina State Bar committee was working on an ethics opinion concerning whether lawyers could get into trouble for working with the website.

Now, as a result of Avvo’s decision, the bar’s Authorized Practice Committee will not be issuing an ethics opinion, according to Katherine Jean, counsel for the state bar.

“It’s effectively been rendered moot,” she said.

The Tar Heel State’s inquiry followed an ethics advisory opinion from the South Carolina Bar warning the state’s lawyers that if they offered fixed-rate services through Avvo or other similar sites they could be violating rules against sharing fees with non-lawyers or paying for referrals. (The Maryland State Bar Association’s Ethics Committee had not looked into whether lawyers could work with the website, according to committee chairman Randolph Stuart Sergent.)

Avvo had also butted heads with bar groups in other states, including Ohio and Pennsylvania, over its legal services. The company charged a fixed fee, which started at $39, for a 15-minute talk with a local attorney. The lawyer received the full fee from Avvo but had to turn around and pay a separate “marketing fee” to the company. The marketing fee was a percentage of the legal fee.

Avvo’s now-former chief legal officer, Josh King, had argued that the South Carolina advisory opinion was just that – advisory and without real teeth. He said in an interview after the release of the ethics opinion, which initially had a chilling effect on the bar, that Avvo had signed up enough local lawyers to offer fixed-rate services in the family law and business arenas.

“We’re offering more services now than we were in the wake of the opinion,” King said at the time. “I think more people are realizing that all this was is an ethics advisory opinion and they’re digging into it a little more and figuring out how wrong the bar was about it.”

But then California-based Internet Brands bought Avvo, King moved on and the new executive vice president and general counsel, B. Lynn Walsh, apparently decided to reverse course and pull the plug on Avvo’s fixed-rate legal services. The process is underway and should be complete by the end of the month.

‘Destined to fail’

While Avvo Legal Services will soon be defunct, the company is expected to continue offering its free lawyer directory while selling premium profile subscriptions, ads and websites that start at $100 to $200 a month.

Barbara Seymour, chair of the South Carolina Bar’s Unauthorized Practice of Law Committee, was not surprised to hear about Avvo’s lopping off the legal services part of its business, saying in an interview that the model was “destined to fail because they (Avvo) were fighting against the tide.”

Walsh wrote in a June 6 letter to the North Carolina State Bar that Internet Brands had “adjusted the Avvo product roadmap to align more comprehensively with our business and focus. Accordingly, we have decided to discontinue Avvo Legal Services.”

Her letter was a response to a list of questions that a bar committee sent Avvo in March as part of an inquiry into whether lawyers who participated in Avvo’s fixed-rate service were assisting the company in the unauthorized practice of law, among other things.

While King had been involved in talks with the committee, Walsh declined to participate further in the discussions. She wrote that Avvo’s input was unnecessary because the company never engaged in the unauthorized practice of law – and had decided to cease its fixed-rate legal services.

Walsh added that Internet Brands shares “Avvo’s view that providing consumers a marketplace for the provision of legal services in the manner that Avvo has done does not implicate rules regarding the unauthorized practice of law.”

Internet Brands spokesman Joe Ewaskiw declined an interview request.

Back in South Carolina, Seymour said King’s earlier statements suggesting the state bar’s ethics opinion was unenforceable were wrong, though she added no local lawyers had been publicly disciplined for offering legal services through Avvo.

She said Avvo’s contention that it could not be held liable for ethics violations without proof of consumer harm – an argument its representatives had made in the past – was a “mistake for any tech company or group of lawyers that wants to start a new and innovative way of offering legal services.”

“This is not the end of lawyers partnering with online services,” she added. “You just have to do it within the rules.”