Opinion 732 - AVVO, Legal Zoom, Rocket Lawyer
NJ Supreme Court Committees: Advisory Committee on Professional Ethics, Attorney Advertising, Unauthorized Practice of Law
Responding to an inquiry by the New Jersey State Bar Association, the New Jersey Law Journal reports today that a binding joint Opinion of three New Jersey Supreme Court Committees has found that AVVO Legal Services fee plan violates the Court's Rules of Professional Conduct. The business model runs afoul of RPC 5.4 (a) bar on division of fees with non-lawyers and constitutes an impermissible referral fee in violation of RPC 7.2 (c).
New Jersey lawyers are barred from participating in AVVO Legal Services.
The Opinion is binding subject to discretionary review by the Supreme Court itself.
Legal Zoom and Rocket Lawyer were found to be permissible legal services plans, but lawyers may not participate until the plan is properly registered with the Supreme Court.
AVVO asserted a First Amendment defense but the Committees responded:
AVVO asserted that its marketing scheme is commercial speech that must be tested against the intermediate scrutiny standard applied to First Amendment commercial speech. The Committees are not restricting Avvo’s marketing; the focus of this Joint Opinion is on the for-profit lawyer referral program and sharing of a legal fee with a nonlawyer. The First Amendment does not protect lawyers who seek to participate in prohibited attorney referral programs or engage in impermissible fee sharing.
NOTICE TO THE BARLAWYER PARTICIPATION IN THE AVVO LEGAL SERVICE PROGRAM AND INLEGAL ZOOM AND ROCKET LAWYER LEGAL SERVICE PLANS
On June 21, 2017, the Advisory Committee on Professional Ethics, Committee on Attorney Advertising, and Committee on the Unauthorized Practice of Law issued a Joint Opinion (ACPE Opinion 732, CAA Opinion 44, UPL Opinion 54) stating that the legal service program operated by Avvo through its website is an impermissible lawyer referral service, in violation of Rules of Professional Conduct 7.2(c) and 7.3(d), and comprises improper fee sharing with a nonlawyer in violation of Rule of Professional Conduct 5.4(a). New Jersey lawyers may not participate in the Avvo legal service program. The Joint Opinion further states that LegalZoom and Rocket Lawyer appear to be offering legal service plans that have not been registered pursuant to Rule of Professional Conduct 7.3(e)(4)(vii). New Jersey lawyers may not participate in the LegalZoom or Rocket Lawyer legal service plans because they are not registered with the New Jersey Supreme Court (Administrative Office of the Courts).
Glenn A. Grant, J.A.D.,
Acting Administrative Director of the Courts