Written by Tom Gordon
The New Jersey Supreme Court has declined to review a bar ethics opinion prohibiting lawyers from participating in fixed fee legal services platforms such as Avvo Advisor. The court’s inaction will most immediately impact consumers of legal services in New Jersey, but ultimately could expose members of the New Jersey bar ethics committees to antitrust liability.
The Bar’s Prime Directive: Don’t Share
June 2017, three New Jersey bar committees, the Advisory Committee on Professional Ethics, the Committee on Attorney Advertising and the Committee on the Unauthorized Practice of Law, issued a joint opinion stating that New Jersey lawyers could not participate in Avvo Advisor, because its use of marketing charges for lawyers based upon the fee they received from clients constitutes improper fee-splitting.
Responsive Law asked the Supreme Court to review the decision of the bar committees. You can read our petition here, as well as the opposing briefs from the New Jersey Attorney General and the New Jersey State Bar Association, and our reply brief. Our submissions noted that there was no showing of harm to consumers from the services at issue, and that the marketing fee paid by lawyers to Avvo was a reasonable cost of advertising.
This matter highlights the bar’s fetishistic obsession with fee splitting. One would think that the highest value of the profession would be providing access to justice, or perhaps protecting one’s clients. However, the bar’s stance against any business model where lawyers’ money comes in contact with the money of those who aren’t members of the bar seems to make lawyer insularity the prime directive of the profession. Services such as Avvo’s are making lawyers more affordable and more easily found for thousands of consumers, but in states like New Jersey, the bar is willing to sacrifice a demonstrated increase in access to justice to protect against unspecified harms that result from a sliding scale marketing fee.
If You Appeal This Decision, Beware of the Leopard
The entire process of attempting to get the New Jersey Supreme Court to review this decision demonstrates the insurmountable barriers that the bar has put in place to prevent the public from questioning its authority over regulating in its own perceived self-interest. Responsive Law tracks state bar committee decisions nationwide, so we learned about the bar’s joint opinion within a couple of days of it being issued. Under New Jersey law, we had 21 days from the issuance of the opinion to submit an appeal to the New Jersey Supreme Court.
In most states, we’d be able to appeal simply by emailing testimony to the state supreme court. However, New Jersey insists on treating this review as if it were litigation, and requires the submission of formal briefs. Thus, once we found out about the bar’s opinion, we had 19 days to find local counsel in New Jersey to sponsor my motion to represent Responsive Law as an out-of-state lawyer and to prepare briefs. Because I’m not a New Jersey lawyer, I can’t use the state’s e-filing system, which meant an additional two-day lag each time I had to sign something, overnight it to our New Jersey lawyer, have him sign it, and then overnight it to the court in Trenton.
These requirements (with some help from the July 4th holiday) led us to have a mere nine business days to draft our brief. While I can write ten pages of testimony in nine days, it’s a much greater burden to draft the 30 pages of motions, affidavits, certifications, and other legal forms that had to accompany our policy arguments.
And let’s be clear: This is a matter where the court is acting in its capacity as a policymaker, not in its adjudicatory capacity. There’s simply no reason in this instance for it to require all the procedural red tape that goes along with a litigation appeal. To do so is akin to a state legislature requiring that all citizen input regarding legislation be accompanied by a specific set of forms, prepared and signed by a lawyer, then submitted along with nine paper copies and a $250 filing fee. Such an onerous set of restrictions would be a clear violation of the First Amendment right to petition the government. It should be no more acceptable for the judicial branch to create such barriers to citizen participation in policymaking than it would be for a legislature to do so.
Responsive Law had a few benefits over the average citizen in its ability to have its voice heard by policymakers in the judicial branch. We’re fortunate enough that I’m a licensed lawyer, and that we were able to find a lawyer to serve as local counsel without charge. (Big thanks to Jeremy Meyer of Cleary, Josem, & Trigiani!) Even still, copying, mailing, and filing fees in this case cost us close to $1000. No average citizen is willing to pay that much to comment on a matter of public policy, let alone pay the thousands of additional dollars in attorney fees that would be required to submit a brief that conforms to nitpicking requirements about typeface, font size, margins, headings, and characters per line.
Throughout the process of appealing this decision, I was reminded of the beginning of The Hitchhiker’s Guide to the Galaxy, in which Arthur Dent faces bulldozers about to demolish his house. When he protests, he’s told that he had, been given proper notice of the demolition. After all, someone had come by to tell him about the demolition the day before, and the plans had been posted at the local planning office for weeks. Arthur points out that the plans were located in the basement of the planning office, where there were no lights, and the stairs were missing. Within that basement, they were “posted” in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying, “Beware of the Leopard.”
Will the Leopard Bite Its Handlers?
Fortunately, the New Jersey Supreme Court’s decision not to review the bar’s decision may be the beginning of the story rather than the end. The U.S. Supreme Court’s recent decision in North Carolina Board of Dental Examiners v. FTC made clear that state boards consisting predominantly of members of the profession they regulate are not exempt from antitrust liability unless they are actively supervised by the state government.
The New Jersey Supreme Court has abrogated its responsibility to engage in the active supervision described in Dental Examiners. In doing so, it allowed members of the bar to engage in unchecked anticompetitive behavior when they prohibited other bar members from engaging in an innovative business practice that could compete with existing business models. Since the state of New Jersey has not reviewed the bar’s actions and there was no realistic opportunity for citizens to have input in the bar’s decision-making, the bar and the individual members of the committees could face antitrust liability for their anticompetitive actions. Perhaps that “Beware of Leopard” sign should be changed to read “Beware of Lawsuit.”
Tom Gordon is Executive Director of Responsive Law