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Groupon is a daily deal website that offers group coupons and discounts on products and services to its online customers. Buyers on the site will only receive the “groupon” if a required minimum number of purchasers sign up for the advertised deal. If a seller has reached the minimum number of buyers, Groupon will then split the proceeds from the deal with the seller as their payment.
Lawyerist recently introduced its readers to #LegalChat, the weekly legal Tweetup. During one session, amid tweets about the most popular legal technology, an interesting sidebar arose: can lawyers advertise and sell legal services on Groupon?
Because lawyers are allowed to spend money on advertising, Groupon sounds like an innovative and legitimate way to reach more clients online. Technology, however, evolves more quickly than the law, and Groupon has left lawyers wondering if they will face ethics violations for advertising and selling services on the site. Further, lawyers are questioning whether Groupon’s platform is professional enough for advertising legal services.
Ethics issues for lawyers are a mixed bag with Groupon
According to the Rule 5.4(a) of the ABA’s Model Rules of Professional Conduct, “a lawyer or law firm shall not share legal fees with a nonlawyer.” We know that Groupon splits the proceeds of the deal offered with the seller, so it seems as if the issue of profit-sharing should be a no-brainer for lawyers when deals on legal services are being advertised. It’s just not that simple, however. Not every lawyer sees the issue in such a negative light, in part due to the ABA’s own commentary on the Model Rules.
Comment One to Rule 5.4(a) notes that the Rule places a limitation on the sharing of fees between lawyers and nonlawyers “to protect the lawyer’s professional independence of judgment.” Looking at the issue this way, if Groupon is only splitting the funds collected as a fee for its advertisement services, then no harm has come to the lawyer’s independence in practice. Several law firms have already tested the waters of this argument.
North Carolina quickly put the kibosh on plans for advertising legal services on Groupon, stating in a proposed ethics opinion that the site’s fee “is a percentage of the amount actually paid to the lawyer and appears to constitute revenue sharing with a nonlawyer.” Missouri, however, welcomed Groupon with open arms, clearing the way for lawyers in the state to use the site as a way to obtain new clients.
Since the topic of whether Groupon for lawyers was feasible came from a Tweetup, I immediately took to Twitter to ask more questions about the ethics issued involved. Thomas Druan of Druan IP Law, PLLC, was quick to respond, stating:
I can see the profit sharing argument, but I don’t buy it. The restriction on sharing profits between lawyers and nonlawyers exists to prevent the undue influence of the lawyer’s professional judgment in representing a client. Even though someone pays a fee for legal services which then gets split between Groupon and an attorney, the relationship between Groupon and the attorney does not extend beyond that of any other advertiser. I don’t see how the attorney could be influenced by the relationship one way or another.
Professionalism for lawyers is questionable with Groupon
Given the ethical issues present, if lawyers are daring enough to use Groupon to advertise and sell their legal services, will they see any benefits? Although they may, some argue that the potential blow to professionalism may sway lawyers away from using the site in connection with their legal practices.
Nicole Black and Carolyn Elefant, the co-authors of Social Media for Lawyers: The Next Frontier, seem to be wary about Groupon’s use in legal practice. While Ms. Black believes that lawyers who use Groupon may cheapen their law firms in the public eye, Ms. Elefant doesn’t see how lawyers can compete against restaurants and hotels on Groupon for repeat business.
I again spoke to Mr. Druan about whether Groupon would have an impact upon the professionalism of lawyers, and he had some interesting thoughts on the topic:
There might be a sense of being a “McLawyer” if you advertise your legal services on Groupon. Putting your legal services on the shelf alongside discounted pizza and laser hair removal might not be the image you’re going for.
Final thoughts on lawyers and Groupon
There seem to be many potential pitfalls, both ethical and professional, involved for lawyers who are thinking about using Groupon to advertise and sell their legal services. In fact, other ethics issues may present themselves in the future, such as taking on more clients through advertised Groupon services than lawyers can competently handle.
Years ago, lawyers were prohibited from using display advertisements in the Yellow Pages. Now, lawyers represent the largest percentage of advertisements within the Yellow Pages. Although Groupon may be the wave of the future for lawyer advertising, is using the site worth the risk right now? Only time will tell.