Lawyers are people. We have needs too. Sometimes we need new furniture. Other times, we might need tax advice or a stiff drink. And clients, often, lack the liquidity required to pay for legal services, especially when a lawyer requires a retainer.
So, do you barter? Or, in the immortal words of Randy Moss, is it "straight cash, homey?"
Agreeing on Value
One of the biggest problems is agreeing on value. The easiest way is to have each party give a fair and reasonable value of the service if they were to provide it on the open market, before either party commences work. For example, if a mechanic's hourly rate is $50, and yours is $150, both parties should understand in advance that the mechanic is probably going to have to work three times as long to make things even.
And in cases where, say, replacing your timing belt is worth less then a DUI defense case, both parties should agree, in advance, that any difference will be paid in cash or other services.
Of course, the real problem is where one party does a subpar job. Lets say you swap remodeling of your bathroom for a divorce case. What do you do when the grout is uneven, the shower leaks, and the floor begins to dry rot? You can't sabotage the divorce case, obviously. You might just end up eating the cost.
That's why its doubly important to only barter with someone who carries indicia of reliability, such a friend of a friend, or a contractor who has worked on a friend's home previously.
Of course, there's always your local craigslist section. For example, in San Francisco, there is a debt defense and small business attorney seeking to trade for pretty much anything, and another person trying to trade his legal expertise as a probate and criminal defense lawyer for a vasectomy. The possibilities are endless[ly shady].
Another possibility is recently-launched startup Barterball. According to Robert Ambrogi's lawsites, the website was founded by an attorney, and launched back in June. The idea is simple: straight services bartering, and participants can be given a happy or sad face to rate their performance.
The site doesn't seem to have a ton of participants yet, but it's worth keeping an eye on if you're looking for a marketplace. Our favorite participant? Jon E., who has one year of experience in both "Web Design & Development" and "Frightening children."
Ethics and Income Taxes
Of course, before entering into any bartering arrangement, you'll want to consult your state's rules of professional conduct, and if you think you might be tip-toeing on the line, call the ethics hotline if one is available. Take for instance the very sleazy case of a law for lap dance trade. Not kidding. That intrepid and lonely attorney was suspended for 15 months.
And, of course, the IRS requires you to pay taxes on your bartering income, either on a 1099-B (Proceeds from Broker and Barter Exchange) or for trading services-only, possibly a 1099-MISC.
Bartering sounds like a great idea to us in theory, but also like a quick trap for fee disputes. Do you have any bartering success or horror stories? Tweet us @FindLawLP.
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