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More on Technological Change and Rules of Conduct

The last column discussed two possible reasons why the legal profession has been slow to adapt its ethics rules to recent changes in technology. One is that the speed of change has been so rapid that it is simply hard to react in a timely fashion. The other is the concept of “creative destruction”, i.e. the concept that every significant change in technology and business practices results in winners and losers, and the losers resist changes.

A group of five recent ethics opinions exemplify the quandary in which we find ourselves. The opinions all address the issue of whether it is ethical for a lawyer to contract with a website to offer vouchers that can be purchased from the website and then redeemed for discounted legal services. The opinions all address the issue in the abstract, i.e. the question was in general and not limited to the specific terms of any particular deal, and the opinions all analyze the question in the context of the rules of conduct of the particular jurisdiction.

The analysis of using vouchers is rather extensive. The issues run the gamut of most state’s rules. There are issues of fee sharing and advertising, conflict of interest with past or current clients, confidentiality of information, formation and termination of the attorney-client relationship, confidentiality of information, appropriateness of the fee, and anything else you can think of.

The most comprehensive opinion is State Bar of Arizona Ethics Opinions 13-01: Internet Marketing Vouchers of Coupons (4/20/13). The Committee concluded
that “it is likely that such a voucher or coupon program would violate one or more the Ethical Rules” and “[p]ractitioners are discouraged from using an Internet marketing voucher or coupon system and, if they opt to do so, they must proceed with caution and only after careful consideration and analysis of the ethical rules and implications.” Arizona cited with approval Indiana State Bar Association Legal Ethics Committee Opinion No. 1, 2012 – JDH-1, which came to essentially the same conclusion. While neither opinion flatly outlawed the use of discount coupons, both emphasized the significant barriers to their use.

Three other state bar association, while using much the same analysis, came to a different emphasis. New York State Bar Opinion 897 (2011), South Carolina Ethics Advisor Opinion 11-05 (2011) and North Carolina State Bar 2011 Formal Ethics Opinion10 all approve the use of vouchers, but with caution on the possibility of violating one or more rules. As stated in the North Carolina Opinion:
a lawyer may advertise on a website that offers daily discounts to consumers where the website company’s compensation is a percentage of the amount paid to the lawyer if certain disclosures are made and certain conditions are satisfied.

To oversimplify, Arizona and Indiana take the view that “it’s too complicated, so don’t do it,” while New York, North Carolina and South Carolina take the view that “it’s complicated, but you can do it if you’re careful.” A review of the print literature and the comments in the blogosphere (there is a lot of material since this is apparently a current hot topic) shows a similar breakdown.

Which brings us back to the original issue – different people are looking at the same question and applying the same analysis, but some accept change and some resist it. I suspect in this case, the sheer novelty of using discount coupons plus the aggravation of having to utilize a new advertising technique are enough to discourage their use. Even though there are many legitimate problems with using coupons, in time I think the legal community will come to accept them.