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Revenue Sharing

Revenue Sharing

 

Everything About Revenue Sharing

In different contexts, the question “what is revenue sharing?” can mean different things.  By one revenue sharing definition, just giving referrals to a lawyer friend could constitute revenue sharing.  In today's online marketing context, though, “what is revenue sharing?” usually refers to online affiliate programs and coupon programs—and for lawyers, these can be a minefield.  Can you, for instance, use a website like Groupon to discount your legal services by 87%, as one Missouri attorney did?  In some states, the ethical revenue sharing definition requires all sharing to be done with attorneys.  This guide will help you sort out which revenue sharing definition matters to you, and how to make sure that your revenue sharing is considered ethical.

What is Revenue Sharing?

In its most basic form, revenue sharing simply refers to giving back a percentage of your fees when you have received a lead from someone else.  The oldest answer to “what is revenue sharing” for attorneys was the classic “fee splitting” agreement with another attorney who had worked on a case and referred it to your law office.  Today's revenue sharing definition has expanded significantly beyond splitting fees in this way.

The explosion of online affiliate marketing programs has changed the idea of what is revenue sharing substantially in just the last few years.  When attorneys talk about nailing down a revenue sharing definition today, they're usually discussing whether a particular form of advertising is “just an ad” or if it constitutes fee splitting in some way.

Before You Use Revenue Sharing: Check With Your State!

It is absolutely critical for your firm to find out what is revenue sharing that is considered ethical by your state bar association, before you use any affiliate marketing programs.  Unethical revenue sharing definition depends on which state you live in, and different bar associations have made different rulings on whether these marketing programs can constitute an unethical action.

The reason that the revenue sharing definition is so important is that state bar associations prohibit fee sharing with non-lawyers.  The opinion of bar associations regarding “what is revenue sharing” has been split.  Some bar associations, like New York, have determined that online revenue sharing does not violate ethics rules as long as you are paying for an advertising service.  However, other states, like Missouri, have decided that it is not ethical to use revenue sharing since revenue sharing, by definition, constitutes a fee being split with a non-attorney.

If you are uncertain about the ethical revenue sharing definition in your state, and whether your marketing strategy fits into it, you can contact your bar association.  Usually, the bar association can provide you with a ruling on revenue sharing so that you can continue your marketing campaign without fearing ethics charges.

What is Revenue Sharing With Attorneys?

The one type of revenue sharing that is always permissible for attorneys is fee splitting with other lawyers.  In fact, if you asked attorneys just ten years ago, “what is revenue sharing?” they probably wouldn't know of any other kind.  Fee splitting arrangements are, in essence, a very primitive example of the revenue sharing definition: they require people to pay based on the revenue they made, but are usually handled on a case by case basis, rather than constituting a true marketing strategy.

What is Revenue Sharing With Google AdSense?

It's no secret that when people find your website with a search engine, they may not always find what they're looking for.  You can let those clients bounce back out of your website, never to be seen again, or you can try to make a profit.  Google expanded the answer to the question “what is revenue sharing?” when it introduced Google AdSense, a tool that allows you to get money every time someone clicks on another attorney's advertisement on your website.

So far, advertising using Google Adsense has not met the unethical revenue sharing definition according to state bar associations—while revenue sharing with non-lawyers does occur when using Google AdSense, the general consensus of bar associations has been that it is merely another form of advertising, and therefore is allowed.

Just because it's considered ethical according to the current revenue sharing definition doesn't mean using Google AdSense will turn a profit for your firm.  The firms that may have the best luck using Google AdSense are those who have high-ranked SEO results for a number of keywords, but want to be able to profit when someone wants an attorney in a different geographical location.  Since you probably wouldn't have gotten those clients anyhow, making money when they click to go to another website can help you make at least some money from their visit.

What is Revenue Sharing With Groupon?

One of the most controversial revenue sharing tools being used by attorneys today is Groupon.  This website allows you to sell group coupons to clients in your area, so that they can obtain discounted legal services—for instance, a discount to writing your will.  Feelings about Groupon have been quite mixed among attorneys, with some feeling that its revenue sharing model is unethical, while others think it's simply tacky to market professional legal help next to gym membership and house cleaning discounts.

For many attorneys, the biggest revenue sharing question about Groupon is this: does it actually generate profits?  Obviously the goal of offering discounted legal services is to get clients who need additional legal work done for them, but you need to carefully weigh whether you really expect your offer to be profitable in the long run.  Ironically, the coupon that led to Missouri's ruling that the Groupon service constituted unethical revenue sharing with non-lawyers didn't end up making its firm any profit at all.

Groupon may still be a good idea to get your law firm's name out if your firm is new and struggling to make a name for itself.  Even so, it's unlikely that Groupon and the many nearly-identical revenue sharing programs it has spawned will be used by large and established firms any time soon.

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