Groupon for Professionals? Ok, but Risky

Group coupon websites are a popular marketing ploy among a variety of service providers.  The concept behind Groupon, Living Social, and similar sites is for consumers to select from local deals for discounted services.  Typically, once a threshold number of coupons are sold, the service provider and the website share the proceeds. The professional liability community has caught on to this marketing trend and is taking notice.  However, be aware professionals; utilizing similar group coupon sites is risky due to ethical limitations.

The American Bar Association recently published an ethics opinion arising from the use of online marketing deal-of-the-day coupon sites.  In Formal Opinion 465 issued on October 21, 2013, the ABA recognized that this type of marketing did not constitute improper fee sharing nor did it forbid the use of these websites.  However, the ABA identified areas of concern and highlighted the potential for breach of the model rules of professional conduct.

One of the ABA’s concerns surrounded the fee structure between would-be client, attorney and the website.  For example, the ABA considered the problem arising from an attorney offering discounted services – i.e. $1500 in legal services for $750 – and requesting an up-front payment.  To comply with the ABA model rules in this scenario, the consumer must be identified by name and the funds deposited into a trust account; steps usually ignored by the websites.

Similar issues arise when the attorney detects a conflict after the consumer purchased the discounted service. Is the consumer entitled to a refund from the attorney? The website? Both?

The ABA identified other issues including concerns about the accuracy of marketing statements on the websites, concerns about attorneys properly outlining the scope of services when offering up-front deals, and the need to explain that no client-lawyer relationship exists until a consultation takes place.

Given that the professional liability community is forever searching for new tools to meet our audience, it is no surprise that we have taken to this form of online marketing. The takeaway for attorneys and other professionals is that Groupon-like marketing sites are not forbidden but are full of risk.   Although these deals can be structured within the confines of the ethical guidelines, to do so professionals must be familiar with the terms and conditions of each website and the specific ethics rules in that jurisdiction.