Why more lawyers aren't on Groupon
Recently I was attempting to come up a creative marketing strategy and thought about Groupon, one of my newly discovered addictions. Groupon is a site featuring “daily deals" on food, merchandise and services in your local area. It exists in more than 44 countries and covers more than 500 markets. It shouldn’t have come as a surprise that I wasn’t the first lawyer to have this thought. In August 2010 an estate planning lawyer in St. Louis put a deal on Groupon, “$99 for a Will and Durable Power of Attorney." For items such as wills or powers of attorney that lawyers frequently “flat rate," or in my field, bankruptcy, I thought this might be worth exploring, attempting to find out if it worked for the St. Louis attorney and whether I could use a similar model. A quick Google of the Grouponing attorney resulted in news article chronicling the ethical dilemma Grouponing attorneys could face, and I haven’t found any lawyer since August 2010 that has attempted this marketing ploy.
Turns out there are several ethical issues that arise with lawyers giving deals to potential clients on Groupon. One such issue raised in several of the articles discussing these ethical dilemmas is that an attorney cannot screen for conflicts. While certain transactional work and preliminary consults may seem harmless in most regards and possibly limit the potential for conflict, the potential exists nonetheless. Another ethical issue some analysts have raised with lawyers on Groupon is the “fee sharing" arrangement businesses posting on Groupon are subject to. The Groupon model is set up such that the site gets a piece of each Groupon sold, therefore, arguably, lawyers posting on the site are “fee sharing." Whether this is considered “fee sharing" or simply an advertising fee, I’m not sure many attorneys want that battle with Bar Counsel. Of note, North Carolina’s Ethics Committee has already opined that utilizing Groupon is a violation of the state’s fee splitting rule.
A further issue is that this Groupon method doesn’t involve any screening of the potential client to ensure the services being offered are right for that potential client. In the case of a will, I’m not sure there are too many people that shouldn’t have a will, but the point is that unless lawyers restrict their services to those very basic things that fit the mold of every client, the Groupon model will be hard to sustain amongst most practice areas.
Lastly, and an issue pertaining to the one thing that gets most attorneys in trouble, is the dilemma of the escrow account. When an individual purchases a Groupon the business that offered the Groupon gets a series of Groupon numbers that are printed on each purchasers coupon voucher. The attorney does not have a list of names of the potential clients to open the necessary escrow account for the potential client, and would have to open as many new client accounts as there are Groupons. Stemming from this same issue then is how to handle those purchasers that never follow through. If an attorney doesn’t earn their fee until the work is performed, who does the attorney refund the monies to?
In essence, Groupon may not be the right model currently for attorneys and marketing their practices. The issues discussed herein are just a sampling of the potential issues that marketing on Groupon could cause. For now we stick to the methods of networking, word-of-mouth, and traditional advertisin; and for those of us brave enough, the worlds of Facebook and Twitter.