Celebrating 10 years! 2007-2017

Capping and Below Market Fees

Ok, since I am appealing to the wisdom of JDU today, let's j redemptionsong04/15/17
Nothing wrong with (1) so long as you write up the retainer vohod04/15/17
report the f*cker and reduce the competition As for compe dingbat04/15/17
You have little choice except to report him. tttsolo04/18/17
So variation on a theme: x lawyer has an "agent" who contact redemptionsong04/26/17
I'm confused- why would the prospective client ever pay a mi bucwild04/26/17
Lack of English language ability. redemptionsong04/26/17
How does a middle man help that? If the prospective lawyer c bucwild04/26/17
They seldom or never meet the lawyer. redemptionsong04/26/17
And people bewildered by the US legal system would pay for t redemptionsong04/26/17
Undercutting too much is the fastest way to go broke. You ar adamb04/26/17
Redemptionsong, your characterization of the middleman as th guyingorillasuit04/26/17
In best humor, that sounds like a great argument for a guilt redemptionsong04/26/17
Well yeah, if the lawyer never meets the client, I would pre guyingorillasuit04/26/17
So you're saying he's cutting his fees with the intention of onehell04/26/17
You can make contact by letter or email as long as the commu redemptionsong04/26/17
I don't know what you mean by offensive to the community. It onehell04/26/17
That's my real hangup I guess. Has anyone here ever had to f redemptionsong04/27/17
redemptionsong (Apr 15, 2017 - 2:45 am)

Ok, since I am appealing to the wisdom of JDU today, let's just say, hypothetically, there is a lawyer. He wants to dominate a niche market so he charges much less than everyone else with the intent to prevent market entry and widen the former customer base? Legit or no? Where would the line be between competitive pricing to a level that keeps the lawyer with a living at some level of gentrified poverty and maybe and, is there any ethics rule on this or is this just subject to the checks of the marketplace?

And then, also hypothetically, you see a competitor full on capping. In fact, he told he was capping and seems not to understand that anything is wrong with it. This includes reducing fees for referrals and paying a non-lawyer as a "middle man" to solicit clients. Option and Perspective 1) Don't be a rat. The state is evil and you never want to talk to the teacher. Option and Perspective 2) Kick him under the bus and let him see you do it. What a jerk. We have rules in this profession which ensure civility and professional independence. It is unfair for me or anyone to be handicapped by a person who just chooses to ignore the rules of the playing field for their own profit to the detriment of the decent majority.

Analysis.

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vohod (Apr 15, 2017 - 8:42 am)

Nothing wrong with (1) so long as you write up the retainer and initial understanding so the client understands what is happening. There are several highly profitable nation-wide Fam Law chains that have filing petitions and withdrawing by preliminary motions as their business models. Sooner or later this catches up with you on Yelp or other gripe pages.

Second rule on having "middle men" solicit clients is dubious at best but if set up right a referral service can be done. I personally find it sketchy. If its a situation where a nonlawyer is handing out your business card at jail or in the ER, its unethical in both of my states.

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dingbat (Apr 15, 2017 - 9:14 am)

report the f*cker and reduce the competition

As for competitive pricing, some lawyers are a lot more efficient than others, and some lawyers are happy earning less than others. If someone is both, good for them.

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tttsolo (Apr 18, 2017 - 6:03 pm)

You have little choice except to report him.

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redemptionsong (Apr 26, 2017 - 8:58 am)

So variation on a theme: x lawyer has an "agent" who contacts prospects and describes himself as the "middle man" for the lawyer. The "middle man" supposedly does not receive any cash from the lawyer but charges the clients he is able to bring in a fee for making the connection. Analysis?

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bucwild (Apr 26, 2017 - 9:07 am)

I'm confused- why would the prospective client ever pay a middle man?

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redemptionsong (Apr 26, 2017 - 9:39 am)

Lack of English language ability.

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bucwild (Apr 26, 2017 - 10:08 am)

How does a middle man help that? If the prospective lawyer can't communicate w/ the client, the relationship won't commence. If the lawyer can communicate w/ the client, the middle man is not needed.

Ethical issues notwithstanding, this "service" you're describing sounds like one very few people would even consider paying

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redemptionsong (Apr 26, 2017 - 10:33 am)

They seldom or never meet the lawyer.

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redemptionsong (Apr 26, 2017 - 10:34 am)

And people bewildered by the US legal system would pay for this "service."

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adamb (Apr 26, 2017 - 10:08 am)

Undercutting too much is the fastest way to go broke. You are providing a professional service, not selling widgets.

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guyingorillasuit (Apr 26, 2017 - 11:50 am)

Redemptionsong, your characterization of the middleman as the lawyer's agent may be unfounded. Are all my non-attorney referral sources now my "agents"? They probably would be if I paid them (anything more than a thank you card or a lunch). However, lots of non-attorneys are actual or potential referral sources to my practice. As far as I know, none of them have ever been paid by a client for making the referral. I have no way of knowing if they collected a fee. I have no way of controlling how they describe themselves to the referred person.

If there's a guy out there who claims to be my middleman, and collects a fee for the introduction, I would want him to stop immediately. But how would I know?

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redemptionsong (Apr 26, 2017 - 11:58 am)

In best humor, that sounds like a great argument for a guilty (lawyer). As per above, the "agent" is collecting information and passing it onto the lawyer who never meets the clients. For a fee. Plenty of independent evidence of the deal. We have a duty to supervise employees and agents. There is no out for sending a third party to do something that you cannot legally do.

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guyingorillasuit (Apr 26, 2017 - 12:09 pm)

Well yeah, if the lawyer never meets the client, I would presume there is something shady there. My question is: what evidence do you have that the lawyer is controlling the agent's actions, and that the attorney-client relationship operates primarily through the agent?

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onehell (Apr 26, 2017 - 12:20 pm)

So you're saying he's cutting his fees with the intention of driving other lawyers out of business, and also with the intention of raising those fees once again once the competition is gone? First of all, it simply won't work. There are far too many lawyers for the practices of one to influence the entire market. Second of all, the only thing that I can think of that would make such conduct problematic is antitrust, and there's no way his firm is so big that that would be even remotely applicable. The ethics rules prohibit charging an unreasonably high fee; there's nothing that says you can't charge an unreasonably low one.

As to paying the middle man, OTOH, that IS a problem. Ethics rules generally prohibit paying for referrals or splitting fees with non-lawyers. Also, directly contacting prospective clients is prohibited unless there is a preexisting personal or professional relationship between the lawyer and the person being solicited. And what you can't do yourself, you can't do through an agent. As such, using these "runners" is an ethics violation.

You'll have to check your ethics rules as to whether reporting him to the bar is mandatory or discretionary. But under the model rules, it's mandatory if the issue raises a "substantial question as to that lawyer's honesty, trustworthiness or fitness as a lawyer in other respects." I would say it does. Using runners is blatantly unethical, it's not a gray area or close call, and the pressure it puts on people can harm clients.

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redemptionsong (Apr 26, 2017 - 12:32 pm)

You can make contact by letter or email as long as the communication is truthful, not misleading and denoted as attorney advertising. In our wonderfully detailed hypo, let's say none of those things are happening. Just a guy popping up saying I am the middleman for the lawyer and can fix your problem fox $x. Then collect the info and later the same guy gets back to you and tells you about the result.

I keep getting consistent reports from prospects on this and seeing overt online efforts by the "agent" who I know has an association. No hard evidence yet but the scheme is clear. Not going to completely fill in the blanks here but in most places is this not something that is just offensive to the community? Like play by the rules or get out of town?

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onehell (Apr 26, 2017 - 1:43 pm)

I don't know what you mean by offensive to the community. It's either an ethical violation or it's not. And as you describe it, it pretty clearly is. You can't sell legal services door-to-door or by cold-calling. Yes you can advertise, but there is a big difference between a targeted mail campaign and a physical person popping up on your doorstep with a retainer in hand.

As to proving it, I don't think that's your obligation. Just tell the bar that you suspect he's paying for referrals, using an agent to contact prospective clients directly, and potentially splitting legal fees with a non-lawyer. They'll investigate if so inclined.

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redemptionsong (Apr 27, 2017 - 11:05 pm)

That's my real hangup I guess. Has anyone here ever had to file a bar complaint against a brother/sister lawyer? I know I am required to report and trust me, there is more I left out, the violations are clear from the total situation. I don't like the idea.

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