If you’re reading this, I suspect you are already familiar with Groupon, LivingSocial, and woot! – services that promise subscribers “deals of the day” from local businesses. Admittedly, the discounts are tempting – often 50% off featured services or products. And if the offer comes from a restaurant, hotel, or retailer, why not take advantage? It’s all good stuff. Customers save money and participating businesses can build their brand, find more clients, and “book more revenue.” No wonder lawyers want to jump on board! But before you sign on with a deal-of-the-day Web site, know and understand the ethics framework:
The 10 Commandments of Online Advertising – Material Misrepresentations, Illicit Fee Sharing, Impermissible Referral Fees, Conflicts, and Confidentiality
- Stick to the facts: “Lawyers are generally permitted to pay third parties to communicate information about their services on the Internet as long as the communication does not misrepresent a material fact and is not otherwise materially misleading.”
- Give details and do the math: Accurately describe your proposed services in the online offer and how you calculated the claimed discount.
- Specify the jurisdictional limits of your practice.
- Explain that your ability to provide the promised services depends on whether or not a conflict of interest exists.
- You may not pay others for online recommendations or referrals. (It is permissible to pay for the actual cost of online advertisements.)
- Give no impermissible rewards: “Offering services on a deal-of-the-day Web site will violate Rule 7.2(a) if a lawyer is compensating the Web site as a reward for having made a recommendation resulting in employment by a client or securing the lawyer’s employment by a client.”
- Carefully scrutinize the payment procedure! If the terms of service require you to pay a fee based on the work derived from the advertising or the number of retained clients, then the payment arrangement violates RPC 5.4.
- Paying a fixed fee for “hits” or “clicks” on an ad is permissible, provided the fee: (a) is not related to any particular work derived from the online advertising or (b) is not based on an actual referral or retained client.
- A lawyer-client relationship exists as soon as the potential client purchases a voucher for your services on the deal-of-the-day Web site. Run a conflict check at the earliest possible opportunity and be prepared to issue a refund if you cannot undertake representation.
- “Even if a lawyer-client relationship is not created, a deal-of-the-day customer ‘who discusses with the lawyer the possibility of forming a client-lawyer relationship’ before or after purchasing a deal is a prospective client who is owed certain duties of confidentiality and loyalty under RPC 1.18.”
Read the full article here.
Copyright 2011 Beverly Michaelis