The Oregon Bar Association’s House of Delegates is set to vote Friday on whether to allow lawyers in this state to split fees with such legal referral services as LegalZoom and Avvo. The proposal has gotten plenty of pushback from lawyers, so much so that it and one allowing real-time solicitation for legal services may be withdrawn before a vote is actually taken.
We’ll agree that the fee-splitting proposal is a bad one. It could reduce the money to clients and create incentives that may not be good for the judicial system.
The fee-splitting proposal would work something like this: A lawyer in Oregon could sign up with a for-profit referral service like LegalZoom and, presumably, get work as a result. If so, he or she would give the company a percentage of what was collected.
State bar rules already allow referrals from nonprofit or bar-run referral services, and this would expand referrals to for-profit companies. The state bar also allows lawyers to pay for marketing services supplied by Avvo, LegalZoom and others, but those fees cannot be a percentage of what a lawyer charges a client.
There are real differences between nonprofit and for-profit referral services, however, and those differences make the change a bad idea.
While the proposed change would, indeed, expand the number of services a lawyer-seeking Oregonian could turn to for referral, it would not necessarily improve the quality of the information the searcher receives.
Moreover, a cozy arrangement between an Oregon lawyer and a company like LegalZoom could prove expensive. The referral company would have every reason to encourage a lawyer to raise rates or do work that might otherwise not be needed or done. Too, a lawyer faced with having to turn a chunk of a bill over to an outsider has a reason to raise rates.
The Oregon bar has long been concerned about the fact that for too many of this state’s residents, price really is an obstacle when it comes to hiring a lawyer. No doubt it’s a valid concern, and allowing lawyers to split fees with for-profit referral services will not only not improve the situation, it’s likely to make the problem worse.