-Submitted by David Drumm (Nal), Guest Blogger
We have previously discussed the law firm with the drive-thru window, here. That notion seems upscale compared to law firms using Goupon. Groupon (group coupon) is a deal-of-the-day website that can determine your computer’s location through it’s IP address and offer you discounts on goods and services in your area. If enough people sign up for the deal, it becomes available. If the predetermined minimum is not reached, no one gets the deal. Groupon makes money by keeping approximately half of the cost of the deal.
Groupon recently turned down a rumored $6 billion buy-out offer from Google.
Groupon doesn’t sound like an ideal way for an solo attorney to obtain clients but it may be better suited to a law firm with a broad range of expertise. However, Goupon may not be the kind of image a law firm is looking to project. Do enough people need attorneys often enough to make this a viable business model? However, there’s a bigger problem: Rule 5.4a of the ABA’s Model Rules of Professional Conduct: “A lawyer or law firm shall not share legal fees with a nonlawyer.”
The purpose of Rule 5.4a is to “protect the lawyer’s professional independence of judgment.” [What?] It could be argued that Groupon’s share is strictly for its advertising services similar to the [now obsolete] Yellow Pages. North Carolina has already rejected the use of Groupon by lawyers, while Missouri has approved the use of the site as a way to obtain new clients.
There are concerns regarding the appearance of professionalism using Groupon. Lawyers were prohibited from using display advertisements in the Yellow Pages, but that isn’t the case anymore. Perhaps the same will happen with Groupon.
In the movie The Firm, the client (who referred to “tipping”) knew how many hours Mitch had spent on his business. With that information, and the amount of the bill, he could have determined the hourly fee. Doesn’t that violate Rule 5.4a? Did Grisham use his literary license?
H/T: Legal Blog Watch, Lawyerist.
Groupon is expanding very very fast. Especially in Asia. Their strategy is everything must go fast. When they reach one country here are the steps: 1 Start to contact the media companies and HR companies 2 Give Double salary to recruit the people that already in the Groupon business, for instance IT, sales, etc. 3 The new recruitment is encouraged to bring their team into Groupon, so the team expand very fast. That really hurt some local Groupon companies. 4 Start to see their ads when you take subway, bus, etc. They use this way and get success in Japan, Singapore, and now in China. But I think it’s too early to judge it will success or not, quick expansion will surely bring management problems later. Hope they don’t mess up, they really bring some good opportunities for small business people.
There are lot of people they have purchased Groupon Clone from http://www.joomabc.com to start their local groupon business with the lowest start-up cost, and already doing well. To get as big as Groupon, that’s dream, but those people they have good connections with local SPAs, restaurants, that brings them the first group of good deal and traffic really fast. It’s not hard to start a groupon business as before. Before, you need to spend thousands to develop a site, now just few hundreds and your sales people can start to get the good deals.
Looking forward to see groupon and local groupons get really strong!
here in fl we have comercials for 411-pain, ask-gary and other lawyer and medical referal services. isn’t this fee sharing?
I have no problem in reasonable advertisements for attorney, but the Groupon idea would not be ethical or sensible. I work on word of mouth and contacts to obtain additional clients. I have advertised years ago in the Church weekly bulletin and in a few Realtors booklets for new home buyers. Believe it or not, the church bulletin was far more successful!
Personally, while I can see both sides of the ethics issue, after all down in Florida half the local TV ads are for lawyers, I would never use a lawyer who advertised. It doesn’t give me confidence in their ability.
http://lawschooltuitionbubble.wordpress.com/2010/09/08/numbers-crunched-the-aba%E2%80%99s-number-of-attorneys-per-state-and-per-gross-state-product/
but the temptation must be great….
Sharing fees with non-lawyers is verboten, and rightfully so as it could lead to all sorts of unsavory conduct, ergo this is unethical.
End of line.
I guess this would be the water to this story:
“Back in the eighties, I used to hate television commercials, but I eventually got used to them. Had to, in order to enjoy my favorite shows. Then, the increasing number of billboard ads annoyed me in the nineties. They followed me everywhere I went–no escape–persuading me to buy the newest whatever. It seemed like Big Brotherism–like They Live. But, I got used to it. When I finally entered the digital age and became a web addict, I was peeved at the constant sight of online ads everywhere I visited. My rage eventually passed and… I got used to it. Had to.”
How To Stop Advertising Companies From Tracking Your Online Activity For Targeted Web Ads
http://www.huffingtonpost.com/2011/02/25/stop-online-tracking_n_828289.html
Good ole Abe… I believe did advertising that almost got him in a whole heap of trouble at the time…. I cannot recall the circumstances but it was after he had filed bankruptcy and did his apprenticeship at a law firm from the story that took him nearly 17 years to pay off the debt…. Sharing fees with a non attorney in this case seems to be the issue with Groupon…