Legal Technology

Law firm files racketeering suit over legal consultant's claimed 'bogus Internet marketing program'

Updated: A Michigan law firm has filed a federal civil racketeering lawsuit against a legal consultant that allegedly sold a “bogus Internet marketing program” to multiple small practitioners, sparking Web comment and criticism of all parties involved in the case.

The plaintiff firm, Seikaly & Stewart, says that The Rainmaker Institute and individuals associated with the company misrepresented its search engine optimization services. The company’s services were both ineffective at increasing the law firm’s visibility on Google and relied on methods that were in violation of Google’s terms of use, contends a complaint (PDF) filed July 24 in federal court in Arizona, where TRI is based. A Courthouse News story provides further details about the suit.

However, observers question both the Seikaly firm’s decision to pay $49,000 for TRI’s services and whether violations by the defendant of Google’s terms of use, even if proven, would properly come within the purview of the Racketeer Influenced and Corrupt Organizations Act.

And chief executive officer Stephen Fairley of the The Rainmaker Institute, who is also a named defendant in the case, told the ABA Journal that “there is absolutely no basis for a RICO claim. It’s a standard, everyday contract dispute between two companies,” he said of the Seikaly firm’s claim. He promised a vigorous defense, and said TRI will seek to dismiss the suit as soon as possible.

It’s an unfortunate fact of life that everybody has dissatisfied clients, Fairley said, but his company has never, in a dozen years of doing business with some 10,000 attorneys, faced anything like this lawsuit. “I think we’ve got a really strong track record,” he stated.

The Seikaly firm’s suit says the RICO claim is justified because “the conduct of the defendants meets the pattern and continuity requirements of the statute, as interpreted, because of the number of victims, [and] the fact that the bogus program was sold to numerous Victim Firms at varying points in time and constitutes not an isolated or incidental feature of the defendants’ businesses but is at the core thereof. Moreover, the plaintiff has standing to bring this action by virtue of being a legal person injured in its business or property by, at a minimum, payment of $49,000 in fees for the bogus services.”

Observers offered views that fell on both sides of the dispute:

Seikaly & Stewart paid Fairley $49,000 for including its firm in so-called link farms? “Sheesh, that’s humiliating,” writes Scott H. Greenfield in a Simple Justice post.

“Not to be unsympathetic,” he adds, “but did you seriously think that Fairley, or any of the other marketeers promising magic bullet solutions to turn you from Internet zero to hero overnight had a chance?”

But a post by Oklahoma City lawyer Clayton Hasbrook at his Hasbrook & Hasbrook blog calls the RICO claim intriguing, pointing out that typical elements of such a case, including conspiracy, misrepresentations, wire fraud and multiple offenses in the course of interstate commerce are alleged.

“I have no idea if The Rainmaker Institute is guilty of any wrongdoing,” he writes. “However, it makes sense to me that promoting Internet marketing schemes such as link farming, which are known to be ineffective and counterproductive, may constitute a RICO violation. If Seikaly & Stewart’s petition prevails, it may have a profound and sobering effect on the Internet marketing industry.”

The Seikaly firm’s suit seeks compensatory and punitive damages and attorney fees.

But could the firm possibly be seeking even more? “The SEO cynic in me hopes there is another angle: This could be nothing more than an extremely clever, sophisticated, premeditated (and genuine) link-building exercise orchestrated by a genius law firm marketing intern,” Conrad Saam writes in a post at Search Engine Land.

A tip of the hat to The Lawyerist and Search Engine Watch.

Updated on Aug. 8 to include response by Fairley.

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