Should Law Firms Avoid Groupon?

Yes!  (According to this month’s guest blogger*.)

While Groupon may be a marketing marvel for the broader business community, whether or not lawyers can get in on some of new business action is yet to be decided. The question buzzing around the legal community: Is using Groupon to garner new business ethical?

For those who have never heard of the website, Groupon features daily deals on activities, restaurants, products, and services in more than 300 markets and 35 countries. Visitors who sign up receive a daily email listing local deals to take advantage of.  To date, the total amount of Groupon offers purchased totals almost 30 million, which is significant for a site that only launched in November 2008.

According to a recent article in the ABA Journal, a St. Louis law firm marketed its services for a will and durable power of attorney for $99 via a Groupon offer. The ethical issue stems from the fact that Groupon takes a percentage of the profits for each offering to its subscribers (negotiated on a case-by-case basis). An ethics subcommittee of the North Carolina state bar is currently investigating whether a Groupon deal amounts to “impermissible fee-sharing with a nonlawyer.” The St. Louis law firm that marketed its services on the site argues that offering a Groupon deal is similar to a coupon offering a discount. Interestingly, the firm reportedly lost money when individuals purchased the Groupon offer, but the firm did benefit from the new business calls that resulted from the original ad.

This case raises a timely issue for law firms looking to market their services through new channels, particularly online and in social media. Services like Groupon could be useful for law firms looking to market their business locally – but are they ethical and can they lead to new business for the firm? What are your thoughts?

My next post will focus on best practices for law firms looking to market their services in an era of new media.

*This post by Matt Probolus, assistant vice-president and senior underwriting specialist, Chubb Group of Insurance Companies, is one of a series of guest posts on CounseltoCounsel. Special thanks to Matt for his contributions.

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