On The Case

Florida Bar wants to regulate Avvo and other legal marketers. Will state Supreme Court allow it?

(Reuters) - In 2015, the Florida Supreme Court directed the Florida Bar to solve a particular problem with for-profit lawyer referral services that purport to help consumers find law firms. A special Bar committee that spent more than a year investigating dozens of Florida referral services had reported in 2012 on all kinds of ethical pitfalls: improper solicitation of clients, undisclosed conflicts of interest, even unlicensed practice of law.

But many of the referral services were beyond the reach of the bar association because they were run by non-lawyers. After some give-and-take with the Bar, the state Supreme Court decided the most effective solution was to prohibit Florida lawyers from accepting referrals from any service not owned by a member of the Florida Bar. Its 2015 order instructed the Florida Bar to amend its rules to include that restriction.

Instead, as the Florida Supreme Court heard in oral arguments last week, the Florida Bar decided the real problem was not just lawyer referral services but the more recent proliferation of online legal directories and client matching services. Rather than adopt the rule change the Supreme Court directed, the Florida Bar proposed amending its regulations to impose registration and screening requirements on a broad array of legal marketing outfits, including, according to the Bar’s description, “a for-profit lawyer referral service, a group or pooled advertising program with a common telephone number or URL, a lawyer directory, an internet ‘matching’ site, or a tips or leads service, among others.”

The Bar's proposal was controversial even before it was approved by the Board of Governors in July 2016 and, based on arguments at the state Supreme Court, continues to raise a lot of questions about exactly which legal marketers are covered by the rules and what they have to do to comply.

Chief among the proposed rules’ opponents is the online service Avvo, which described itself in a brief to the Florida Supreme Court as “the web's largest and most heavily-trafficked legal resource,” with more than 8 million visits a month. According to Avvo, both in its brief and in arguments to the Florida justices by chief legal officer Josh King, the Florida Bar rule changes will end up hurting consumers.

Nationwide outfits, Avvo said, aren’t going to want to put in the effort to come up with the extensive due diligence the Florida Bar is asking for. Florida lawyers aren’t going to want to use the services of non-compliant directories or advertising shops. The result, according to Avvo, will be a chill on information about legitimate legal services for Florida consumers. Even a broad-based marketing provider like Google AdWords could be swept up in the Bar’s new rules, Avvo said.

The proposed rules – which are the first state bar attempt to regulate Avvo – may violate the First Amendment, Avvo said, and will certainly put “an exponentially larger burden of monitoring and compliance” on the Bar. “We know that the Bar is motivated by a desire to look out for the best interests of Florida consumers,” Avvo said in its brief. “However, in its attempt to ‘level the playing field’ by applying a uniform set of rules to lawyer referral services and all other mediums in which attorneys might market and sell their services, the Bar has created regulations that are over-extensive, under-targeted and out of step with the needs of consumers and clients.”

The Florida justices at last week’s hearing seemed hazy on exactly what Avvo does and whether some of its services could be considered the sort of fee-sharing it wants to restrict. But the justices were also puzzled about why the Florida Bar has reached so broadly in response to the court’s narrow instruction. (Carl Schwait of Upchurch Watson White & Max, who led arguments for the Bar, explained that the group didn’t think the Supreme Court’s order simply to restrict referral services owned by non-lawyers would actually do enough to protect consumers and might run into First Amendment problems.)

In an interview, Avvo legal chief King said he expects the Florida justices to refuse to adopt the Bar’s proposed rules, which he said are fatally vague. It’s not clear, for example, whether Avvo would be expected to provide a list of its advertisers to the Florida Bar or a list of every Florida lawyer in its directory, which includes all members of the Florida Bar. The proposed rule also seems to call for the Bar’s advertising committee to clear ads. “Does that mean every iteration of our website?” King said. “There’s a hornet’s nest of problems.”

It’s entirely possible, however, that the state Supreme Court will agree with the Florida Bar that online marketing’s impact on consumers of legal services needs more attention, King said. He told me he wouldn’t be surprised if the justices called for a commission to dig into the issue. “That’s a dialogue we are happy to have,” he said.

I don’t think there can possibly be too much transparency in legal marketing. I’ve heard way too many stories about consumers who had no idea what they were getting into when they responded to an ad on television or the Internet. On the other hand, there’s plenty of evidence that prospective clients would never receive the legal help they need were it not for lawyers exercising their free speech right to market their services. I’m glad the Florida Supreme Court is trying so hard to find the right regulatory balance.

I left a message for Schwait, who represented the Florida Bar at last week’s Supreme Court arguments, but didn’t hear back.