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Jerome (Jerry) E. Larkin

Jerome (Jerry) E. Larkin is administrator of the Attorney Registration and Disciplinary Commission (ARDC). Jerry is responsible for administering...

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Last week, the Illinois Attorney Registration and Disciplinary Commission, better known as ARDC, published its report on client-lawyer matching services and attorneys’ participation in for-profit referral services. On Lawyer 2 Lawyer, host Bob Ambrogi joins Jerome (Jerry) Larkin, administrator of the Attorney Registration and Disciplinary Commission (ARDC) and author of the recently-published report, as they take a look at the ARDC’s recent report on client-lawyer matching services, lawyer participation in these services, and regulation of for-profit referral services.

Jerome (Jerry) E. Larkin is administrator of the Attorney Registration and Disciplinary Commission (ARDC). Jerry is responsible for administering the agency, which registers Illinois lawyers and investigates and prosecutes allegations of ethical violations.

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Transcript

Lawyer 2 Lawyer – Law News and Legal Topics

Illinois Disciplinary Agency’s Report on Client-Lawyer Matching

06/08/2018

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Jerome E. Larkin: I guess the question is, can these services bring lawyers and clients together by more legal work for lawyers that’s meaningful to people who today wouldn’t even consider hiring a lawyer, perhaps they don’t see their issue as legal, don’t see a lawyer as a problem-solver or don’t think they can afford it.

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Intro: Welcome to the award-winning podcast Lawyer 2 Lawyer with J. Craig Williams and Robert Ambrogi, bringing you the latest legal news and observations with the leading experts in the legal profession. You are listening to Legal Talk Network.

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Bob Ambrogi: Welcome to Lawyer 2 Lawyer on the Legal Talk Network. This is Bob Ambrogi coming to you from outside of Boston, Massachusetts, where I write a blog called LawSites. I also host another Legal Talk Network program called Law Technology Now along with Monica Bay.

My co-host of this show, Craig Williams, is in court today and unable to be with us, so we’re going to plot along without him.

Before we introduce today’s topic, I’d like to just take a moment to thank our sponsor Clio.

Clio’s cloud-based practice management software makes it easy to manage your law firm from intake to invoice. Try it free at  HYPERLINK “http://www.Clio.com” clio.com.

Well, in 2016 the legal directory site Avvo launched something called Avvo Legal Services. A service that provides fixed fee, limited scope, legal services through a network of attorneys. Ever since the organized Bar has been pretty sharply divided over the propriety where the ethics, I guess, of lawyers participation in the service and others like it.

Several states in recent years have issued ethics opinions against the service. Last week the Illinois Attorney Registration & Disciplinary Commission published a report that kind of goes against the grain insofar as it recommends that Illinois loosen its Professional Conduct rules, and I’ll say, “loosen” is my word not theirs, and we can talk about that, but loosen its Professional Conduct rules to allow attorneys to participate in this and similar services. The report has now been published for comment and is not by any means a final action, but it’s already been generating quite a bit of buzz.

So, today on Lawyer 2 Lawyer, we are going to talk about this report and talk with the author of the report. So, let me bring him in now. I’d like to welcome to the program Jerome (Jerry) Larkin who is Administrator of the Attorney Registration and Disciplinary Commission. Jerry is responsible for administering the agency, which registers Illinois lawyers and investigates and prosecutes allegations of ethical violations.

He was licensed to practice law in 1978. He joined ARDC as staff counsel then. He investigated, litigated, and appealed countless attorney disciplinary cases over the years. He later served as Senior Chief Counsel, Assistant Administrator, and Deputy Administrator before becoming Administrator.

Welcome to Lawyer 2 Lawyer, Jerry Larkin.

Jerome E. Larkin: Thanks Bob. I’m very happy to be with you today.

Bob Ambrogi: Well, Jerry, I wanted to kind of just start with the basics. I just kind of talked a little bit about what ARDC does, but tell us a little bit more about what the Attorney Registration and Disciplinary Commission is and what it does?

Jerome E. Larkin: Our organization is known by its acronym in this State, ARDC. I’d say in the last 10 to 15 years we focused a lot more on education and helping lawyers to serve clients better, so we investigate and prosecute; but, we are not an integrated buyer State, we are agency of the Supreme Court of Illinois and we have a Board of Governors and all that may be helpful to understand our progress and studying this issue of matching services.

We see it as a study, we put out frameworks in the study, we have not recommended anyone yet, loosening, to use your terminology, but indeed those concepts are all over the study itself.

Bob Ambrogi: Well, I want to talk a little bit more about all of that but what was the genesis of this study? What started you looking at this issue and thinking about what led to your producing this report?

Jerome E. Larkin: Well, it began at least two years ago and it is responsive to our State’s studies and concerns of the access to justice and access to legal systems’ issues together with the employment situation for Illinois lawyers, particularly younger lawyers, and we work very carefully with the organized Bar, the Illinois State Bar, the Chicago Bar, and actually we had one meeting with those representatives and a representative of Avvo and LegalZoom. We thought it was important to bring everyone to the table and talk through these situations.

(00:05:08)

Bob Ambrogi: So, you raised two different issues there, one is access to justice, one is employment of lawyers. How is this in access to justice issue in your view?

Jerome E. Larkin: Well, have you accessed to justice to be a term that applies more to those clients without means were represented by legal assistance lawyers. I think the Avvo and LegalZoom issue is more access to legal marketplace and to me and to those of us who gathered around and talked about this and looked at the facts, we believe that if we can facilitate or allow matching services to connect lawyers and those who had means even at a moderate level to hire lawyers and those legal issues that go unmet today might have a better chance of being that we were particularly taken by some of the advertisements by some of the matching services.

It seemed to be really good at stimulating a marketplace reaction, showed lawyers as being helpful, confident problem-solvers and sent a message of solutions being possible, so that was part of our thinking as well.

Bob Ambrogi: I don’t know if you were at the ABA Center for Professional Responsibility conferences past week. I was there and this report was being talked about, and lawyers seem to be sharply divided on this question of whether even if this can enhance access to lawyers whether it’s the right way to enhance access to lawyers. I heard one lawyer in the audience referred to Avvo Legal Services. It’s just a kind of a glorified form of ambulance-chasing. You’ve looked very closely at this, in this report. What’s your response to that?

Jerome E. Larkin: Well, I was at the Louisville Conference as well and I heard that lawyer say that and I don’t believe that’s accurate. We’ve had differences with LegalZoom and Avvo over the years before this last study period, but I don’t think that’s the case law.

The real question I think was one discussed yet some depth at the conference is does allowing a matching service where a fee is earned by the mashing service when a lawyer-client relationship is formed and the service completed in an amount that looks like it’s a percentage or proportion of the legal fee, is that really a kind of fee split that needs to be prohibited? There are some very good discussions by people in the audience and I really enjoyed listening to those comments and of course we all talk about the examples of the prepaid plans and the insurance defense model where there is indeed some influence on a lawyer, but the rules recognize that those influences don’t compromise independence.

So the question is, for legal professional responsibility is, can and should the Supreme Court of Illinois permit the fee split that as an example the Avvo Legal Services model provides?

Bob Ambrogi: Did I understand you to say that you don’t see this report as taking a position or necessarily advocating for a position on this?

Jerome E. Larkin: I think it’s a lean into how this could work and it certainly gets close, but we’ve not made a recommendation at some point after public comment, our Board of Governors called our Commission will take all the information, decide what they would like to do with it, and they might make a recommendation to the Illinois Supreme Court.

Bob Ambrogi: Well, you have a section of the report in the appendix called Draft Framework Proposal which kind of outlines what this rule could look like, that looks like a proposal, and it’s called a proposal. What’s the purpose of that? What is your thinking around that?

Jerome E. Larkin: A framework so people would actually see what it would look like and it would be fair to say there’s a lien in the study but it’s not yet a proposal. We want to hear from all sides. We have had at our table the Illinois State Bar and Chicago Bar and we’re going to speak with them more, we expect to reach out to Avvo and LegalZoom and others in our access to justice folks here and spend the summer really hearing from people as to what they think and whether we can accomplish something here that serves the objectives I talked about at the front end of this conversation.

Bob Ambrogi: Yeah, it’s a fascinating document and I hope listeners to this program will take the time to read it. I will be sure to include a link to it with the notes for this show I’ve written about it on my blog LawSites with a link to it, it’s on the ARDC website, a 124-page report. Almost reads a little bit like a legal brief. You’ve really done your research here and you talk about the issues — broadly the ones you’ve already outlined, you also talk about how other states and how the ABA has addressed this issue and you talk as well about some of the other possible legal issues, constitutional issues and trust issues. I have to say congratulations.

This had to have been a lot of work just to put this together and it’s a fascinating read for anybody.

(00:10:04)

Jerome E. Larkin: There’s a lawyer in our office, young lawyer out of Kent the Law School here, who has made it most of his last year of time working on that. But the important thing is we could — I believe no matter what our Court does and what we recommend to them, we can say, well, our Supreme Court that if it were to maintain the present rules or to go in the direction of the framework they would be on firm and I trust in constitutional law footing and could adapt the rule that would be pretty difficult to challenge.

Bob Ambrogi: Yeah, and I guess the other thing that we talked about unmet legal needs and the other aspect of this that you talked about addressing through this report is that of the underemployment of attorneys in Illinois, and of course, that’s not just in Illinois.

So, again, how do you see what Avvo is offering as potentially a solution for that issue of underemployment of attorneys?

Jerome E. Larkin: I want to be broader than Avvo and they’ve spent a lot of time with Josh King from Avvo and Chas Rampenthal from LegalZoom, but the ABA tells me there might be 400 services like this out there. And so, we want to see whether — I guess the question is, can these services bring lawyers and clients together to provide more legal work for lawyers that’s meaningful to people who today wouldn’t even consider hiring a lawyer, perhaps they don’t see their issue as legal, don’t see a lawyer as a problem-solver or don’t think they can afford it.

So, our State Bar did a great study on the unmet legal needs themselves. And I want to push back a little bit on your very fine writings. I don’t think they are at all demonstrating hypocrisy, they just see a core value in their view of Rule 54 but they have been at this issue of access to justice and access to marketplace and doing it in great good faith and we will work with them.

The Chicago Bar Foundation, not the Bar Association, but I suspect they are blamed has taken a little different approach and they would open up 54 to allow for the matching services, at least their proposal today would do that, without any regulation of the matching services or at least not any required regulation of matching services.

Bob Ambrogi: Yeah, and I have to say, to underscore that “hypocrisy” was my word and not yours and not contained anywhere in that report and when I wrote about the report, but it kind of sounds that way as you read the report, because you seem to be saying, the report seems to be saying that Bar Associations have not-for-profit matching services that function essentially the same way as the for-profit referral services do.

Bar Associations not only allow those nonprofit referral services to operate but in fact often they are operating them themselves and in some cases these might be the same Bar Associations that are issuing ethics opinions against the for-profit services. And when you focus on that fee issue and that question of, is this fee sharing of some kind, it sounds a little hypocritical to me.

Jerome E. Larkin: Yeah, I hear you, but one part of the analysis that permits those carve-outs to 54 that developed over time, as one of our colleagues mentioned at a couple sessions in Louisville, is that Bar Associations are not-for-profit more net they are part of the fabric of the profession, and in one sense are organizational officers of the Court and they lean heavily into access to justice.

So, you could certainly make that argument. I happen to believe in that argument but I might also — you picked up the lien of our study pretty well, Bob.

Bob Ambrogi: I thought it was also interesting certainly to me because I’ve talked and written about this in the past that there’s a section of the study titled ‘Legal Profession’s Resistance to Change’ and the opening sentence of this section says, “The legal profession’s resistance to change impacts potential clients’ access to the legal market and lawyers’ access to new and innovative ways to reach clients.”

Why did you feel it’s important to kind of address that?

Jerome E. Larkin: Does this surprise you that lawyers generally and Bar Associations as operated by lawyer members have resistance to change?

Bob Ambrogi: Does this surprise me? Not at all, no.

Jerome E. Larkin: No, this is kind of — it is we are a precedent-based profession and the rule of law is what drives us. So, I think we have some difficultly in effectuating change, but I want to return to this thought that we got together LegalZoom, Avvo, Chicago Bar, ISP and others, they have a really wonderful conversations that helped form this report.

(00:14:54)

Bob Ambrogi: Yeah, but I mean, in doing that you’re somewhat going against the grain. You cite in the report the example of the ABA partnering with Rocket Lawyer in 2015 in a pilot program in several states, including Illinois, and then almost just as quickly backing out of it again when it proved to be something that was not popular with the ABA members.

So, I mean, it’s a real problem that is institutionally ingrained in the legal profession and it’s something that really does stand in the way of progress.

Jerome E. Larkin: There is a natural ingrained resistance among lawyers generally and it’s I think nationally true. It’s not untrue here but here, unlike any other State, people’s eyes are open to consider what works in the best interest of the public. And whilst the other states aren’t thinking that way but we happen to be the first to come out what I think a comprehensive study of this issue, of course, based about access to justice studies done by the organized Bar. I want to make sure we’re balanced here.

Bob Ambrogi: Right. I want to get more into the report and the framework that you’ve outlined here, but we do need to take a quick commercial break, so why don’t we do that now, and when we come back, we can talk a little bit more about the framework that you talked about in this report. So, please stay with us, we will be right back.

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Welcome back to Lawyer 2 Lawyer, this is Bob Ambrogi. And today we are talking with Jerry Larkin, Administrator of the Attorney Registration and Disciplinary Commission in Illinois about a report that they have just issued on matching services and framework for perhaps making that more workable for consumers, and for lawyers, and for the Professional Responsibility Community as well, I guess.

So, Jerry, tell us what the framework is that you’ve kind of laid out here as a starting point for this conversation? How do you see this potentially working?

Jerome E. Larkin: Well, I believe that at the highest level, the rules would be amended 54, and the 7 series rule amended to allow Illinois lawyers if this were adapted — recommended the Court and adapted by the Court to accept cases from a matching service that was registered with the ARDC.

So, there are two prongs to this, and there are — would be in place certain restrictions to avoid compromise of independence and on the other side it would avoid us finding boiler room operations in the mix. The comment at the ABA Conference in Louisville was lawyers in this are going to allow people to chase cases on the street and this is one reason it wouldn’t. There would be some bona fides to a matching service. It’s not just Larkin boiler room operation in the basement of my house, employing runners to bring cases in.

Bob Ambrogi: So that registration is key to it, as you see it?

Jerome E. Larkin: It is, and part of it might also be to, much like the Bar Associations do today, ask those matching services to step up with some resources to go towards the access to justice issue, as opposed to the access to legal marketplace opportunity. And I spoke with one of the matching services we’ve discussed earlier and that representative said that will of course be something that would be in the discussion and I sense the willingness to make that kind of commitment to the legal marketplace.

Bob Ambrogi: As you’ve outlined this in the report, the lawyer’s payment to the service would be recognized as a percentage of the fee or it could be recognized as a percentage of the fee, and I thought that was interesting because there seems to be a great deal of acrobatics by some of these services, and by the lawyers to define the payment as a marketing fee and to break it out as separate from the services; that sometimes feels artificial and sometimes feels like contortionism, and it seems to make so much more sense to just call it what it is and give it the blessing of the rule.

Jerome E. Larkin: That’s exactly what we thought and you could see that happening with the contingent fee permitted to a Bar Association referral organization. It wasn’t in the rule to begin with, it happened, it was challenged in Court in Illinois and elsewhere and eventually it became permitted. It’s better to be realistic with what the rules are, be clearer rather than resort to confliction.

Bob Ambrogi: A lot of lawyers who are going to hear about this are again going to throw up the argument that this is going to be bad for consumers and that these kinds of services can be bad for consumers.

(00:20:05)

You are saying that by providing standards for the qualification and registration of these services that you’ll provide protections that otherwise wouldn’t be there, do you have a sense of what those qualifications would look like? How would you want to see a service such as this? What kind of protections for consumers would you expect would be necessary in order for a service to become qualified under this kind of a plan?

Jerome E. Larkin: Well, I think that the service would have to show a bonafide presence in Illinois, registered agents, some corporate or some business structure amenable to service here. There is a process here. We would require a fee, an annual registration, and provide you their own disciplinary mechanism to address failures in the various standards the framework talks about, which are really very few right now, might be more, but we watched the Florida model that was so far off of this and we thought that our colleagues who we love from Florida just had too many regulations in the proposal that went to the court initially or the second proposal.

So, we learned from that, and at this point the framework would say, no in-person solicitation, nothing false from misleading in terms of advertising and we added something that would accord privilege and confidentiality to the preliminary communications between the respective client and a participating lawyer through the entity.

I don’t know who else has followed that but if this entity is not a lawyer obviously, we don’t want a question of privilege to later arise.

Bob Ambrogi: One of the other issues were raised in Louisville that have been raised in a number of the ethics opinion is this concern that the arrangement between a lawyer and a service, such as this, could in some ways compromise the lawyer’s independence of judgment in representing the client, in defining the scope of the representation, in setting fees and determining appropriate costs, what’s your answer to that? How does this framework address those kinds of concerns?

Jerome E. Larkin: I don’t see anything in my framework right now, but it would have something that would generally prohibit such intrusion on independence, but what I enjoyed listening to in Louisville, which was on my mind anyways, this doesn’t seem any more risky than the prepaid, very carefully crafted insurance defense model and other models where others and the client have some presence in a lawyer-client relationship. I’m confident we could figure out and assemble if we go forward this, any additional protections necessary.

It does resolve another issue. It’s not the only way to resolve it, but today lawyers in Illinois, I suspect in other states don’t know what the rule is or there’s lack of clarity. So we attend, but whatever happens at the result end of this study and whether the proposal will go to the Court, I would imagine it would resolve ambiguity.

Bob Ambrogi: Yeah. I think that’s important. I mean, it seems inevitable to me that the rules are going to move in this direction is something else that I picked up on at the Louisville Conference was comment made that they weren’t aware of any basically reported instances of a consumer being hurt in any way by using Avvo Legal Services or any of the other services of that. I don’t know if that’s your experience as well. I know I haven’t heard of anything coming out of that.

Jerome E. Larkin: That is our experience here. I am not aware of any grievance filed by a client who hired a lawyer through any of these matchmaking services.

Bob Ambrogi: Then the kind of the flip-side of that is that, again, there’s something that came up with the Louisville Conference is that there are oftentimes, or in many cases anyway, these limited scope representations turn into longer term lawyer-client relationships that these one-time instances of assistants lead to longer term relationships, especially if it has to do with maybe starting a business or something like that. And I think that’s something a lot of lawyers don’t think about with these services, they think of them as these one-offs in limited scope situations, but that’s often not the case.

Jerome E. Larkin: We had the same thought. If it’s a loss leader, I am not sure, even it is a loss leader, but it would just be that. It would be, if a lawyer provides high-quality service to a person performing a business user example, there’s a great chance that businessperson is going to pick up the phone next time and call that lawyer again.

(00:24:58)

Bob Ambrogi: So there have been several states that have issued ethics opinions coming down against lawyers participating in these services, most often they tend to focus on the fee sharing concern. I know there have been a few efforts in the other direction as well. You have put this out for comment now, and I don’t know whether you’ve started to get comments but I’m sure you’re getting a lot of reaction. What’s the reaction that you’re getting so far? What are you hearing from people about this report?

Jerome E. Larkin: We don’t have many email comments yet. I thought the Louisville reaction to the extent of someone wanting to open this up, that conference is preaching to the choir and the reaction I got there, possibly good thought was what I expected.

I did a talk just an hour and-a-half ago on this topic to some lawyers, I didn’t get a lot of reaction they are absorbing it and it’s not even a handful of email comments at this point, but we do about 300 talks a year at ARDC and we will include exposition of this topic at those talks in the next several months and see if we can stimulate other reaction.

And I will circle back and we’re going to be talking to Bar leaders in Illinois and also to the matching service leaders and other access justice organizations and complete this study and really understand as much as we can about all of the nuances to it.

Bob Ambrogi: And so, what’s the longer-term plan? You get the comments, you have these conversations, you talk to these different interest groups and entities, will you be making a more formal recommendation at some point or is that a matter of waiting and seeing how this all turns out?

Jerome E. Larkin: We will be waiting and see, but I would predict that after a comment period, which might be extended, we will bring this back to our board of directors, our commissioners, and likely have something definitive as to what is identified in that study right now and make some recommendation to our Court.

You saw, Bob that an announcement of it was on our Supreme Court’s website. So it’s not unknown to those who govern the regulatory efforts here, and this is not purposeful, but we have found ourselves in Illinois to be willing to take some risks. We adapted the proactive regulatory model that came out of New South Wales in our first cycle of implementing that, and it goes back to what I said. We’re here trying to help lawyers serve clients more effectively. That’s our touch.

Bob Ambrogi: There’s a lot in this 124-page report that we haven’t talked about. As I mentioned before you’ve got whole sections on constitutional issues, the antitrust issues, just let me ask you before we wrap up because we’re running low on time, is there anything else that you really wanted to highlight or talk about with reference to this report while you have the floor here?

Jerome E. Larkin: Not really, I think I touched just briefly at a high level on the constitutionality and antitrust issues, which I don’t think are real issues given how we’re addressing this. I think we’ve talked about the other issues as well and we are in a mode now where we’re looking to engage lawyers and matching services and consumers and everyone in Illinois to inform us.

Bob Ambrogi: Well, you’ve posted this to the ARDC website, you’re accepting comments through August 31, 2018. Comments can be sent to [email protected] Is there anything else our listeners should know about that comment process or anything else with regard to responding to this report?

Jerome E. Larkin: That’s it. We’ve also spoken about it with our regulatory colleagues from across the country, so I would expect to hear something from them too.

In terms of our website and our email, it’s  HYPERLINK “mailto:iardc.org” iardc.org is the website and  HYPERLINK “mailto:[email protected][email protected] is the comment email address.

Bob Ambrogi: Great. Well, any last thoughts before we wrap up, any final thoughts on this?

Jerome E. Larkin: No, no, I appreciate the opportunity, I’ve read your articles on this topic. I appreciate the opportunity to chat with you today.

Bob Ambrogi: Well, I really appreciate your taking the time to do this and I appreciate all the work that went into preparing this report. As I said at the outset, I really hope our listeners will take the time to read through it. It’s a good read if nothing else, especially for anybody who is interested in this issue. You really lay it all out thoroughly and in detail and do a good job with it, and all sides of it, it’s a fair and balanced report. It does kind of take a position in my mind as I read it and I think you suggest as much but it lays out I think all of the issues in a fair way.

(00:30:02)

Well, thanks a lot. We’ve been talking with Jerry Larkin, the Administrator of the Attorney Registration & Disciplinary Commission in Illinois. I also want to just make a note of special thanks to Jim Grogan, Deputy Administrator and Chief Counsel at the ARDC for his assistance in getting this program set up.

That brings us to the end of our program. If you liked what you heard today, please rate us in Apple Podcasts. Also, visit us at  HYPERLINK “http://www.legaltalknetwork.com” legaltalknetwork.com or you can leave a comment on today’s show and sign up for our newsletter.

This is Bob Ambrogi on behalf of Craig Williams, and all the good folks at the Legal Talk Network, thanks for listening. Join us next time for another great legal topic, when you want legal, think Lawyer 2 Lawyer.

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Episode Details
Published: June 8, 2018
Podcast: Lawyer 2 Lawyer
Category: Access to Justice , Best Legal Practices
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