In the face of opposition from Responsive Law, the Virginia State Bar (VSB) has backed off from a proposed ethics opinion that would have restricted Virginians’ ability to use affordable fixed-fee legal services.

The proposed opinion would have declared that lawyers were acting unethically by participating in programs where a company advertises their services for discrete tasks—such as creating a will, reviewing a lease, or filing for an uncontested divorce—and charges a fixed flat fee for those services. The opinion was clearly directed at Avvo Legal Services, which has begun to roll out such services in markets nationwide.

In the proposed opinion, the VSB’s Standing Committee on Legal Ethics opined that lawyers could be violating legal ethics rules by paying a marketing fee to a company like Avvo, which it considered a violation of the prohibition on lawyers sharing fees with non-lawyers. It also said that it would be unethical for Avvo to maintain possession of client fees while a client waits for the lawyer to complete the work for which they were hired. Instead, the committee claimed, such money should be held in the lawyer’s client trust account.

Responsive Law submitted comments to the committee opposing the proposed opinion. We noted that clients were likely to be better protected against misappropriation of their fees under Avvo’s model than by a client trust fund. A client trust account, we noted, “is not a subterranean vault guarded by a goblin at Gringotts Wizarding Bank; it’s a paper (or electronic) construct to which the lawyer has complete access.” By contrast, under Avvo’s model, it holds the fees until the client indicates that the lawyer has satisfactorily completed the work.

Our comments also noted that a lawyer’s payment of a marketing fee to Avvo is a reasonable business expense, much like a credit card processing fee, and is also a totally reasonable way for lawyers to advertise that causes no harm to consumers. Rather than looking for technical violations of the ethics rules, the VSB should consider whether the increased access to legal services such services provide outweighs a theoretical harm that has not been demonstrated.

Finally, we pointed out that attempts by the VSB to restrict innovative new business models is a potential violation of the U.S. Supreme Court’s recent ruling in North Carolina State Board of Dental Examiners v. Federal Trade Commission. In that case, the Court held that self-regulating professions cannot hide behind “state action” immunity from antitrust law when the regulators are market participants. Several elements of the proposed opinion relied upon bar rules that are anticompetitive, making antitrust liability a strong possibility for the VSB, the Ethics Committee, and their individual members.

Aside from Avvo and one individual lawyer, Responsive Law was the only entity to submit comments opposing the proposed ethics opinion. In response to those comments, the Ethics Committee voted not to submit the proposed opinion to the Bar Council. VSB Ethics Counsel James McCauley told Virginia Lawyers Weekly (sub. req’d) that the committee now plans to “go back and study the affected rules.”

To read Responsive Law’s comments to the VSB, click here.

Responsive Law recently submitted comments to the American Bar Association regarding proposed rule changes to the Model Rules of Professional Conduct governing lawyer advertising and solicitation. Lawyer advertising is one of the most common ways that people find out about where they can get legal help. Restrictions on truthful advertising not only hinder the lawyer's ability to advertise her services, but also the consumer's ability to find the right lawyer for her legal matter. Lawyers have the right to convey truthful information and consumers have the right to make an informed decision among different options for legal services.

The current rules of professional conduct maintain an antiquated mindset under which advertising is heavily restricted due to being seen as undignified. While a Victorian era gentleman could find a good lawyer through recommendations from family members or friends from the country club, the modern consumer relies on advertising—especially online—to find professional services. Despite repeated court rulings that lawyers are free to advertise like any other profession, the ABA's Model Rules (followed by nearly all states) keep them shackled with unnecessary restrictions that serve to protect this antiquated business model rather than to protect consumers. This view of advertising as some type of "tasteless" activity leads to a society of uninformed consumers. If this type of pressure on lawyers continues, then the legal profession will never see change and consumers will always be left out of the equation.

A recent research study by Rebecca Sandefur (a member of our policy advisory board) concluded that most Americans are unaware when their problems have a legal component and wouldn't know how to find a lawyer even if they thought one would help them. Under the current rules, lawyers end up providing less information to consumers due to fear of punishment for running afoul of overly restrictive and unnecessarily technical restrictions.

Fortunately, the proposed amendments may indicate a shift in the bar's thinking. The amendments would streamline the rules to focus more on the truthfulness of lawyer advertising and solicitation and less on the form that such advertising takes. Responsive Law's comments to the ABA support these proposals in the hope that they will move the legal profession out of the Victorian-era and into the era of technology, where consumers can more easily access information about lawyers at the touch of a button.

You can find Responsive Law's testimony here

Angel Gutierrez is a Responsive Law intern

The ability to sign electronically is a convenient process allowing people to sign documents or confirm purchases from the comfort of their homes. However, the use of electronic signatures has not yet been applied to the process of estate planning. The 2016 Gallup Poll determined that the percentage of Americans with a will was only 45%, leaving the other 55% of the U.S. population with no record of their wishes upon their death. Responsive Law recently released a statement stating its support for laws that would allow for greater use of electronic signatures in estate planning.

In its statement, Responsive Law noted that “there is undoubtedly a segment of this population that is inhibited from preparing a will because of the need to have a physical signature on the document.” Responsive Law’s statement also recognizes that electronic signatures would increase the ability to create wills due to the process becoming more accessible and affordable to the public. In addition, cutting traveling and mailing costs out of estate planning could further simplify the process of getting a will, making it more likely that Americans would do so.

 Several state legislatures are considering bills that would permit electronic signatures in estate planning. Florida’s SB 206, New Hampshire’s SB 40, Arizona’s SB 1298, and Indiana’s HB 1107 would all provide guidance on allowing the convenience of e-signatures while ensuring their validity.

 Planning for the future after death can be harrowing for most, but it is also an important step. Responsive Law advocates for any process that can make this step easier for those who partake in it. E-signatures can greatly benefit the 55% of Americans who do not yet have a will, and Responsive Law believes that it is time to make that change a reality.

Angel Gutierrez is a Responsive Law intern.

Laura Snyder's new book, "Democratizing Legal Services: Obstacles and Opportunities," provides a comprehensive analysis of international trends and developments in the regulation of legal service providers.

Aided by dozens of detailed interviews with both traditional and nontraditional providers of legal and quasi-legal services, Snyder explores a developing market through lenses that are both specific enough to create a multi-dimensional story and broad enough to give readers a sense of the issue's global scope.

Her refreshingly frank and pragmatic tone leaves one laughing aloud at the absurdity of some obsolete regulatory schemes while simultaneously cringing at the same. Similarly, her inclusion of personal stories and the experiences of individuals—both consumers and providers of legal services—presents the implications of the changing market in an accessible manner that never loses sight of the immediate and essential impact that legal regulatory regimes have on human lives.

In an era when innovation and technology allow a constantly shifting legal environment, Snyder examines the arguments both against and in favor of the growing trend toward relaxed regulation of legal service providers. Organized primarily as a collation of the experiences and impressions of providers and consumers in Australia, Canada, the United Kingdom, and the United States, Democratizing Legal Services artfully treads the thin line between presenting a collection of interviews and offering a fact-based analysis of various regulatory regimes.

You can find the online directory of supplemental materials for Snyder's book here.

Lynn Bechtol is a Responsive Law Legal Fellow.

In a disappointing move for proponents of public oversight of the bar, on November 17 the California Supreme Court authorized its State Bar Association to collect interim dues from its members for 2017. Responsive Law testified on this issue to the California Supreme Court, urging it to tie any such authorization to a requirement that the State Bar pursue reform of its governance structures.

The California Supreme Court itself had earlier mandated that the State Bar of California act to segregate its attorney discipline and trade organization functions, reacting to a recent US Supreme Court case holding that professional organizations may not use their regulatory functions to stifle marketplace competition. Despite this mandate, the Special Regulatory Assessment requested by the Bar made no effort to address shortcomings in the Bar's current governance system.

"The California Supreme Court's decision to authorize the assessment even in the absence of reform is an unfortunate defeat for consumers of legal services, who need reform to make the judicial system more responsive and accountable to the interests of the public," stated Responsive Law Executive Director Tom Gordon. "In California and across the nation, state bars need to adapt their practices both to serve the public and to conform with the US Supreme Court's standards for professional regulatory organizations."

You can read more about the Supreme Court order here, and you can find Responsive Law's testimony on this matter here.

Lynn Bechtol is a Responsive Law Legal Fellow.

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