Suing Your SEO: Can An Agency Be Held Liable For Poor Results?

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Suing Your SEO: Can An Agency Be Held Liable For Poor Results? Empty Suing Your SEO: Can An Agency Be Held Liable For Poor Results?

Post  Nilesh Patel on Tue Aug 06, 2013 5:07 pm

It was only a matter of time before a lawsuit was filed against a search engine optimization agency for failing to deliver.

Last week, the legal marketing industry was aTwitter (and aFacebook and even aPlus) with news that law firm Seikaly & Stewart had filed a lawsuit against The Rainmaker Institute seeking a return of their $49,000 in SEO fees and punitive damages under civil RICO (read: mobsters and racketeering — more on that later).

To the best of my knowledge, this is the largest and most public legal imbroglio involving aggressive performance claims, angry clients, SEO agencies and black hat tactics.

To date, clients caught up in agency black hat shenanigans (JC Penney, anyone?) have expeditiously swept the news under the rug as soon as possible.

Internal marketing departments, and their close cousins in PR, are only too eager to avoid public discussion from a lawsuit that would paint them as at best entirely ignorant and at worst entirely complicit with short term black hat search practices.

Full disclosure: I know Stephen Fairly at the Rainmaker Institute and have spoken about SEO at many of his events in the past (gulp). Everyone outside of legal must understand that the industry has gone to great (and excessively overreaching) lengths in attempts to legislate away the ambulance-chasing lawyer stereotype.
Are SEOs Responsible For Outcomes?

When it comes to marketing, attorneys generally have their hands extremely tied due to restrictive regulations on legal advertising, though restrictions do vary from state to state. The introduction of online marketing into the mix has further complicated things — existing regulations do not always have clear applications for online marketing, and regulators are still in the process of putting together advertising guidelines for this new frontier.

The Rainmaker Institute has gone to great lengths to not only educate, but to encourage marketing of legal services. I stand behind the notion that marketing is good for the industry as it brings attorneys closer to people who really need help.

I commend Fairley for being instrumental in making this happen. But, did he go too far? And is this a precedent where SEO agencies are on the hook for tactics and performance in search? And, what about this racketeering thing?
RICO Racketeering?

While I don’t want to go too deeply into the legality of things, RICO (short for Racketeer Influenced and Corrupt Organizations Act) was created in 1970 to help close loopholes protecting the leaders of organized crime for the actions of their group — like a mob boss ordering a hit, for example.

Seems a far cry from link building, so I asked some lawyers: Dan Kalish from the employment firm HKM explained that Rainmaker’s actions would need to be seen as a “broad, interstate scheme, involving several victims and spanning several years.” Seth Price described the racketeering claim as “a creative attempt to get a simple contract dispute from state arbitration into federal court.” (For a full legal counterpoint, try this piece by Clay Hasbrook.)

Let’s dig into the complaint itself:

   The Rainmaker Institute disclaimed all liability for lack of success of its efforts . . . The action is based on the fact that, at the time that the defendants were promoting this marketing scheme to the Victim Firms, they knew that the techniques they proposed to use were in violation of the guidelines already well-established and published by Google.

This begs the question for all agencies: does knowingly violating Google guidelines open agencies up to lawsuits? Let’s be honest, if that were the case, more than a few of my search friends would have found themselves in court already. Even really bad tactics work (for some period of time). And of course, Google’s guidelines change, and tactics become outdated.
Marketing Is A Crapshoot

Remember when boldfaced text was a genuine indicator of what a page was about? Or when (genuine) blog comments were a good authority signal? Or, more recently, over-optimized anchor text links? Marketing is still a crapshoot — TV, billboards, super bowl ads, skywriting and SEO. Holding any advertising agency responsible for what does and doesn’t work is sour grapes from a bitter client.

Everyone involved in marketing channels on the client side knows that their primary function is to assess not only the marketing channel in question, but also the projected outcomes of that channel.

My two experiments in TV advertising have been utter failures, but suing Comcast would be an asinine response. Yet, that is what S&S is doing. This is the heart of the problem for the law firm in this case — essentially, they are saying, “We bought something that was widely recognized by everyone (but us) to be ineffective.” And like the JC Penney marketing department, S&S was either extraordinarily ignorant or has some serious (but informed) buyer’s remorse.

The scorn among the legal blogosphere has been evenly meted out between plaintiff and defendant. (From my experience, the only thing blogging lawyers hold in higher contempt than meritless lawsuits are SEO consultants.) From the acrid eloquence of Scott Greenfield:

   … And were Seikaly & Stewart victimized by Fairley’s unkept promises? It’s beyond ironic that a firm seeking to buy its way to prominence from a marketeer complains that it was out-deceived. It’s not that they have no cause of action, having paid a pretty sweet sum to the Rainmaker Institute and gotten bupkis in return, but that when someone seeks to game the system and got played in return, it’s just awfully hard to feel badly about the whole thing . . . Plus, it’s always fun to see the imaginative uses to which civil RICO is put.

The final obvious result, of course, is that no search agency in their right mind will ever want Seikaly and Stewart on their client roster. However, 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.

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