Total Attorneys: Zelotes v. Chern matter
Robert J. Ambrogi wrote in legalblogwatch.typepad.com/legal_blog_watch/2010/01/conn-dismisses-ethics-case-against-total-attorneys.html and other places of the blog:
We have written frequently here about the series of ethics complaints filed in some 47 states by by Connecticut lawyer Zenas Zelotes against Chicago-based Total Attorneys and its lawyer-founder Kevin Chern. Although no state has found ethical wrongdoing by Total Attorneys or by any of the lawyers who participate in it, all eyes were on Zelotes’ home state of Connecticut, where the chief disciplinary counsel found cause to file charges against five attorneys. The charges alleged that they were obtaining referrals through and sharing fees with Total Attorneys in violation of legal ethics rules.
Now comes news that the Connecticut charges have been dismissed. On Friday, I received an e-mail from Total Attorneys saying that a three-person panel of the Connecticut Statewide Grievance Committee dismissed the complaints. According to the e-mail, the panel dismissed the charges at the close of the disciplinary counsel’s evidence, before the attorneys were even required to put on their defense. This would suggest that the panel saw no even arguable ethics violation in the case presented by the disciplinary counsel.
More details were provided yesterday by reporter Doug Malan at The Connecticut Law Tribune. The hearing committee issued a summary ruling that offered no insight into its reasoning, Malan said, and will issue a decision within two weeks explaining its ruling. Complaints filed by Zelotes against another seven Connecticut lawyers are likely also to be dismissed, Malan writes.
Meanwhile, Zelotes is not backing away from his assertions that attorneys who participate in Total Attorneys violate ethics rules. He told the Chicago Tribune that he will participate in a hearing this week on his complaints in North Dakota. “This is not the end of the debate in Connecticut and elsewhere,” he said.
Is Total Attorneys Complaint a Total Joke?
What are we to make of the complaint by Connecticut lawyer Zenas Zelotes against Chicago-based Total Attorneys and its lawyer-founder Kevin Chern? Zelotes has filed versions of his 303-page complaint against more than 500 lawyers in 47 states. He alleges that these lawyers are obtaining referrals through and sharing fees with Total Attorneys in violation of legal ethics rules. The Connecticut Law Tribune first reported about the complaint in July and now it is back in the news with a piece in the Norwich Bulletin.
In a blog post written shortly after the story appeared in the Law Tribune, Total Attorneys president Chern defended his company’s business model.
Mr. Zelotes’s argument that the pay-per-performance model employed by Total Attorneys amounts to fee splitting defies even the most basic logic. Sponsoring attorneys pay fees based on exposure, regardless of whether or not a particular consumer ever retains them or they ever receive a fee.
The truth is that the pay-per-performance model employed by Total Attorneys is the industry standard in online advertising and is most notably employed by Google as the pricing model for their AdWords program. Total Attorneys’ program is a natural extension of the Google performance-based pricing model. Both times that ethics opinions have addressed performance-based pricing models, first in South Carolina and then in Kentucky, they have been found to be compliant.
At Law Marketing Blog, Larry Bodine sides with Chern, calling the complaint “zany” and citing those same South Carolina and Kentucky ethics opinions to conclude that the law is on the side of Total Attorneys. Carolyn Elefant, my colleague in writing Legal Blog Watch, also sides with Chern. In a comment to Chern’s blog post, she wrote, “Frankly, I have never understood the objections to these ‘for fee’ referrals. The bars all run referral services and they are pay-for-play.”
But are the ethics rules all that black-and-white? Connecticut’s chief disciplinary counsel, Mark DuBois, has found probable cause to pursue disciplinary complaints against five lawyers relating to their involvement with Total Attorneys. “I feel like the traffic cop who has to defend the 35-mile-an-hour speed limit to a guy who has invented a car that goes 200 miles per hour,” DuBois told the Norwich Bulletin, saying the cases raise “fascinating issues” about the use of technology in marketing legal services.
DuBois earlier told the Law Tribune that the Web sites used to attract potential clients could run afoul of his state’s rules. “The problem with that is that the advertising rules here require there to be the name of a Connecticut-admitted lawyer on the ad and that lawyer has to file the ad with the grievance committee for review.” Dubois also said there would be ethical problems if the fees paid by attorneys are deemed well in excess of the cost of the advertising sites’ operation.
In Virginia, a draft ethics opinion issued earlier this year concluded that a lawyer’s participation in a Web site similar to Total Attorneys would violate that state’s ethics rules. The non-binding draft was put out for public comment and now awaits further review by the state bar Ethics Committee.
These actions in Connecticut and Virginia suggest that Zelotes’ complaints should not be dismissed out of hand. Regardless of whether you believe the complaints have merit, they point to the need for a broader re-examination of legal ethics rules that some see as outmoded and others as essential to protecting consumers. I agree with Martha Sperry at the blog Advocate’s Studio, who says this case highlights the need for our the legal profession “to examine change, and that includes the ethical rules that purport to guide the profession and ensure protection of client interests.”
To the extent that these complaints point to the lack of clarity and consistency in the rules of conduct governing lawyers, they are no joke. Complaints filed in 47 different states could conceivably result in 47 different outcomes. That kind of uncertainty doesn’t help lawyers or consumers.
Connecticut Set to Hear ‘Total Attorneys’ Case
Connecticut’s attorney grievance committee will begin hearings Nov. 12 on whether five attorneys violated state ethics rules by participating in the Web site TotalBankruptcy.com. The state’s chief disciplinary counsel, Mark Dubois, charges that the lawyers payments to the site violate the ethical prohibition against providing anything of value in exchange for a client referral.
As we discussed in a post here in September (Is Total Attorneys Complaint a Total Joke?) the Connecticut charges follow from the complaint filed by Connecticut lawyer Zenas Zelotes against Chicago-based Total Attorneys and its lawyer-founder Kevin Chern. Zelotes has filed versions of his 303-page complaint against more than 500 lawyers in 47 states. He alleges that these lawyers are acting unlawfully by obtaining referrals through and sharing fees with Total Attorneys.
In a comment he posted to our earlier report, Zelotes defended his filing of these complaints:
If Chern prevails and referral fees are permitted, the floodgates will open and all hell will break loose. This is not just about me. This is not just about bankruptcy. This is about upholding the intergity our profession and (perhaps) even our right to self-regulate. No attorney will be immune from its effects. Opening the door to referral fees would have a profound negative impact on ALL practitioners.
Others strongly disagree with that point of view. Vocal among them is our former Legal Blog Watch colleague Carolyn Elefant, who wonders at her blog MyShingle why so many in the legal community are letting the five Connecticut lawyers be “hung out to dry.” She recalls how legal bloggers leapt to the defense of lawyer Ben Cowgill several years ago when the Kentucky bar labeled his blog advertising and required him to pay $50 every time he posted.
It’s rare to see bloggers take up a cause anymore and always welcome and refreshing when they do. With TotalBankruptcy.com, I suspect that too many solo bloggers have too much invested in their own business models or practices to do anything that might help a third party that hasn’t helped them. But for me, this isn’t about TotalBankruptcy; it’s about five lawyers – five well intentioned solo and small firm lawyers – with their licenses and reputations on the line.
One attorney who is taking up the cause is Josh King, general counsel at Avvo.com. At the Avvo Blog, he argues that Connecticut is on questionable constitutional footing in this case.
Ultimately, in the absence of consumer harm – and, indeed, a crystal-clear fit within the law’s prohibitions – states should never find that lawyer marketing practices violate their rules. Any other result is constitutionally infirm. While the bar owes it to the public and its members to carefully evaluate marketing practices that may mislead consumers, it must do so carefully and avoid rushing to judgment or overreaching. Let’s hope that when Connecticut’s Statewide Grievance Committee holds its hearing on this matter next week it does just that.
What do you think about this issue? Is Connecticut stuck in the dark ages of lawyer marketing or has Total Attorneys crossed an unacceptable line? While we await the outcome of the Connecticut case, share your thoughts below.
Illinois Clears Total Attorneys of Ethics Charges
The Illinois Attorney Registration and Disciplinary Commission yesterday notified Chicago-based Total Attorneys that its investigation of the company found no ethics violations. Connecticut lawyer Zenas Zelotes filed a a complaint last spring against the company’s president, Chicago attorney Kevin Chern, alleging that the company’s legal marketing program violated state ethical rules.
Totalattorneys As we’ve noted here before, Zelotes has filed versions of his 303-page complaint against more than 500 lawyers in 47 states. He alleges that these lawyers are obtaining referrals through and sharing fees with Total Attorneys in violation of legal ethics rules. In Zelotes’ home state of Connecticut, the state’s chief disciplinary counsel found cause in the complaint to file charges against five attorneys there. The state’s attorney grievance committee opened hearings last month on the charges.
But Illinois’ decision to dismiss the complaint makes it the fourth state to find in favor of Total Attorneys, according to information provided by the company. Hawaii and Alaska already determined that there was no basis for action on the complaints, while a North Carolina panel dismissed a complaint against Chern for the alleged unauthorized practice of law. No state has ruled against Total Attorneys or any of its attorney clients.
The company and the charges against it continue to provoke debate within the legal community. A number of lawyers, including my former Legal Blog Watch colleague Carolyn Elefant, defend the company’s marketing program as good for consumers and for attorneys. Others, such as Scott Greenfield at Simple Justice, assert that businesses such as Total Attorneys “are a cancer in the legal profession.”
As for Total Attorneys, company president Chern called the decision a victory for both small firm lawyers and consumers. “The Total Attorneys model makes Internet marketing affordable and time-efficient for small law firms and solo practitioners and improves consumer access to legal information and services,” he said.
In an e-mail to me, Total Attorneys founder and CEO Edmund Scanlan said the Illinois decision has particular significance because Chern is licensed to practice there and Chicago is the company’s headquarters. “We are very encouraged by the consistency of the early decisions on this issue,” Scanlan said. “We continue to expect that when the remaining complaints are laid to rest, our business model will be fully vindicated and legal professionals will at last have clear guidelines regarding the ethical use of Internet marketing tools.”