Can a New York lawyer sell discounted legal services through a 'deal of the day' or group-coupon website like Groupon?
NY State Bar Ethics Opinion 897: Selling Legal Services by Group Coupon
Short answer: A lawyer may market legal services on a "deal of the day" or group-coupon website if the advertising is not misleading and discloses that no lawyer-client relationship forms until the lawyer checks for conflicts and competence; a buyer the lawyer cannot serve, or who discharges the lawyer, gets a full refund subject to the lawyer's quantum meruit claim.
Disclaimer: This is an advisory ethics opinion. Advisory opinions are not binding; they interpret the New York State Bar Association's rules of professional conduct and are persuasive authority. This summary is for research purposes only and is not legal advice. Verify current rules before acting on any specific guidance.
About this page: The plain-English summary and Q&A below were written by Ezel based on the official opinion. We do not reproduce the opinion text on this page; follow the linked source for the official text, which controls.
Plain-English summary
The committee considered whether a lawyer may sell legal services through a "deal of the day" or group-coupon site, the model where a website sells a discounted voucher, keeps a percentage of the proceeds, and remits the balance to the participating vendor. The committee agreed with South Carolina Opinion 11-05 that the arrangement is permissible for at least some services (its example: a $500 simple will offered for $250), subject to four sets of concerns it then worked through (paragraphs 1 through 7).
On referral payments, Rule 7.2(a) bars paying anyone to recommend or obtain employment, but Comment [1] allows paying for permitted advertising. The committee reasoned that the website has no individual contact with buyers beyond collecting payment and does not refer anyone to a particular lawyer; it carries the lawyer's advertising message and charges for it. Assuming the percentage retained is a reasonable cost of advertising, there is no Rule 7.2 violation, though a different arrangement could cross into paying for referrals (paragraphs 8 through 13).
On fees, Rule 1.5 bars excessive fees, and the committee addressed several scenarios. If the lawyer cannot perform because of a conflict or a competence or appropriateness problem, the lawyer must give a full refund. If the buyer changes course and discharges the lawyer, the lawyer must refund the advance payment under Rule 1.16(e), subject to a quantum meruit claim for work already done. If a buyer simply never redeems or lets the coupon expire, the lawyer may treat the payment as an earned retainer for being available (paragraphs 14 through 17).
On advertising compliance, the deal must not be false, deceptive, or misleading (Rule 7.1(a)(1)); the discount must be real, not illusory, measured against an established fee; the page and any related email subject line must carry "Attorney Advertising" (Rule 7.1(f)); and if the ad is targeted it becomes a solicitation governed by Rule 7.3. Finally, to avoid prematurely forming a lawyer-client relationship before conflict and competence checks, the offer must disclose that the relationship will not form until the lawyer clears those checks, with a full refund if it cannot, and once a relationship forms the lawyer must promptly state the scope and fee under Rule 1.5(b) (paragraphs 18 through 22).
In practice
The opinion holds that, under the New York advertising and fee rules as they stood at the time, group-coupon marketing of legal services is permitted within stated limits. The committee made the Rule 7.2 question turn on whether the website's cut is a reasonable advertising cost rather than a referral payment, on the stated assumption that the site only carries the message and does not steer buyers to a particular lawyer. It tied the refund obligations to specific rules: a full refund where the lawyer cannot serve the buyer for conflict or competence reasons, and a refund under Rule 1.16(e) (less any quantum meruit) where the buyer discharges the lawyer, while unredeemed or expired coupons may be kept as an earned availability retainer. It required the standard advertising safeguards, a genuine (not illusory) discount, the "Attorney Advertising" label, Rule 7.3 compliance if the ad is targeted, and a disclosure that no representation begins until conflict and competence checks clear.
Common questions
Q: Can I offer my services on Groupon or a similar daily-deal site?
A: Yes for at least some services, provided the advertising is not misleading and you disclose that no lawyer-client relationship forms until you check for conflicts and competence. The committee followed South Carolina Op. 11-05 in approving the model (paragraphs 5 through 6, 21).
Q: Is the cut the website keeps an illegal referral fee under Rule 7.2?
A: Not on the assumed facts. The committee treated it as payment for advertising because the site only carries the lawyer's message and does not refer buyers to a particular lawyer, so long as the percentage is a reasonable advertising cost (paragraphs 10 through 13).
Q: What happens to the money if I cannot take the buyer's case?
A: You must give a full refund where a conflict or competence problem prevents you from serving the buyer, and a refund under Rule 1.16(e) (subject to a quantum meruit claim) if the buyer discharges you (paragraphs 15 through 16).
Q: What if the buyer never redeems the coupon or lets it expire?
A: The committee said the lawyer may treat the advance payment as an earned retainer for having been available to perform the service in the offered time frame (paragraph 17).
Q: Does the offer need the "Attorney Advertising" label?
A: Yes. The web page and the subject line of any related email must include "Attorney Advertising" under Rule 7.1(f), and if the ad is targeted it must also comply with the Rule 7.3 solicitation requirements (paragraph 18).
Background and rules framework
The opinion interprets several New York Rules: Rule 7.2(a) (payment for recommendations), Rule 1.5 (fees, including the refund and earned-retainer analysis), Rule 1.16(e) (refund of unearned advance fees on termination), Rule 7.1 (advertising, including the (a)(1) bar on false or misleading ads and the (f) label requirement), Rule 7.3 (solicitation), and Rules 1.1 and 1.10(e) (competence and conflict checks before forming the relationship). These correspond to ABA Model Rules 7.2, 1.5, 1.16, 7.1, 7.3, and 1.1. The committee drew heavily on South Carolina Op. 11-05 and on its own N.Y. State 563 (1984) on discount advertising.
Citations and references
Rules of Professional Conduct:
- MR 7.2 / NY Rule 7.2(a): payment to recommend or obtain employment; advertising exception (Comment [1])
- MR 1.5 / NY Rule 1.5, 1.5(b): excessive fees; communicating scope and fee
- NY Rule 1.16(e): refund of unearned advance fee on termination
- MR 7.1 / NY Rule 7.1(a)(1), (f), (j): false or misleading ads; "Attorney Advertising" label; fixed-fee written statement
- MR 7.3 / NY Rule 7.3: solicitation, if the ad is targeted
- MR 1.1 / NY Rule 1.1, 1.10(e): competence; conflict checking
Cases:
- Bates v. State Bar of Arizona, 433 U.S. 350 (1977), a lawyer may advertise a service at a specified price if the service is actually performed for that price
Other opinions cited:
- South Carolina Op. 11-05: approving group-coupon marketing subject to limitations
- N.Y. State 563 (1984): discount advertising; a discount is misleading if the customary fee is not readily ascertainable
- N.Y. State 599 (1989): a discharged lawyer's quantum meruit recovery
See also
- NY State Bar Ethics Op. 902: Paying a Marketer Based on Contacts Developed
- NY State Bar Ethics Op. 908: Advertising in an Internet Directory
- NY State Bar Ethics Op. 921: Attorney Advertising and Required Disclaimers
Source
- Landing page: https://nysba.org/ethics-opinion-897/