Regulating Lawyer Advertising When It Is Not Misleading

Posted in: Law Practice

The Association of Professional Responsibility Lawyers (APRL, pronounced “April”) is an association of lawyers who represent other lawyers in disciplinary proceedings, and who advise law firms on ethics and professional responsibility, risk management, legal malpractice, and the law governing the practice of law. APRL, created in 1990, now numbers more than 500 lawyers, including corporate counsel, risk management lawyers, government lawyers, law professors, and judges, worldwide. Last June, it issued a comprehensive report on laws regulating advertising by lawyers. (Full disclosure: I am a member of APRL and was a member of the committee drafting this report.)

The American Bar Association (ABA), for over a century, has drafted model rules governing the practice of law. It has been very successful in encouraging courts to adopt these rules as positive law; virtually every state court has adopted these rules (either verbatim or with non-uniform amendments) or the substance of these rules. California, for example, uses a different format, but the influence of the ABA is clear.

The title of the latest version, called the ABA Model Rules of Professional Conduct, has several provisions, often detailed and complex, dealing with lawyer advertising. These Rules include a general provision, ABA Model Rule 7.1 (“Communications Concerning a Lawyer’s Services”), yet another provision, Rule 7.2 (“Advertising”), one dealing with specialties, Rule 7.4 (“Communications of Fields of Practice and Specialization”), and finally one dealing with law firm stationery and business card, Rule 7.5 (“Firm Names and Letterheads”). It takes nearly six pages to reprint them all. In addition, the ABA has a general rule, Rule 8.4(c) prohibiting lawyers from “dishonesty, fraud, deceit, or misrepresentation.”

The purpose of these advertising rules is to protect clients. In the past, the advertising restrictions were even more complex and lengthy, and their purpose was to protect lawyers from competition from other lawyers. In 1908, the ABA adopted a “Canons of Professional Ethics,” which prohibited almost all advertising. Later, when the advertising rules were less strict, they still prohibited undignified ads along with other restrictions. For example, one old rule said, “It is unprofessional to solicit professional employment by circulars, advertisements, through touters or by personal communications or interviews not warranted by personal relations.” In other words, you could tell your relative that you could represent him in writing a will, but you could not place a newspaper ad that said, “I write wills.”

In 1977, the U.S. Supreme Court finally ruled that many restrictions on lawyer advertising violated free speech, in Bates v. State Bar of Arizona. Two Arizona lawyers, John R. Bates and Van O’Steen, opened a law office to offer “legal services at modest fees to persons of moderate income who did not qualify for governmental legal aid.” They placed a local newspaper advertisement offering “legal services at very reasonable fees” and listing fees for certain routine legal services (e.g., a name change). The state bar found that the advertisement violated Arizona’s Code of Professional Responsibility, and the Arizona Supreme Court censured the lawyers.

The U.S. Supreme Court reversed, holding that there is a free speech right to advertise truthfully. The Court rejected the various rationales that state bar offered. For example, the bar argued that advertising would stir up litigation and increase the overhead of lawyers who would have to advertise because other lawyers were advertising. The Court said the state’s ban on all lawyer advertising “serves to inhibit the free flow of commercial information and to keep the public in ignorance.” That is impermissible under First Amendment. However, the state does have the power to prevent misleading advertising. The purpose of advertising restrictions should be to assure consumers of legal services that they receive factually accurate, non-misleading information about available services.

The state bars were slow to react to Bates, and more litigation followed. The present version of the Model Rules is the ABA’s attempt to comply with Bates and its progeny, while still imposing extensive restrictions not necessary to prevent misleading speech. These restrictions and the experience of the discipline authorities of the last few decades raise various questions that we should answer.

One question is whether the state bars need so many rules dealing with advertising a lawyer’s services when they already have a rule prohibiting the one thing that should most concern those who rely on lawyers’ advertisements: misrepresentation. Is it enough to prohibit just misleading advertising, which is what Rule 8.4(c) already does? Who tends to bring complaints to the bar discipline authority (the organization in each state that disciplines lawyer for violating these rules)? Because the purpose of these rules is to protect clients, one would think that clients are the ones complaining. It turns out that is not true.

APRL engaged in an extensive empirical study to answer these questions. Its committee on this issue received valuable input from committee liaisons from the ABA Center for Professional Responsibility and the National Organization of Bar Counsel (“NOBC”), which is the organization of legal professionals who enforce ethics rules regulating the professional conduct of lawyers in the United States, Canada, and Australia. These lawyers typically prosecute lawyers before the bar discipline authorities, who have the power to reprimand, suspend, or disbar lawyers who violate the rules.

This APRL Committee on the Regulation of Lawyer Advertising questioned bar regulators regarding the enforcement of current advertising rules by state disciplinary authorities. The committee’s survey had an extensive sampling—34 of the 51 jurisdictions (the 50 states plus Washington, D.C.). The APRL Committee also examined consumer surveys, state bar reports, and other materials containing consumers’ attitudes toward lawyer advertising, and the effects of advertising regulations on the public’s understanding about legal services.

The committee gave particular attention to the impact of evolving technology and innovations in marketing legal services. The technology is moving so fast and is creating issues that the complex Model Rules have not considered. Consider, for example, the issue of “key word advertising.” Many lawyers have no idea what it means; others use it all the time; and North Carolina (by an ethics opinion, not by a rule) bans it entirely! Professor Eric Goldman and Angel Reyes III have published an important study of this issue.

Many lawyers advertise on the World Wide Web, and many prospective clients use it to find lawyers. A prospective client who types “mesothelioma” in the search engine will have two types of responses. Google, Bing, etc., determine their “organic search results“ by how they program their search engine to finds the web pages that are most closely relevant the user’s search query (“mesothelioma”). In paid search results, an advertiser can choose a term (e.g., “mesothelioma”) and bid to have a link to their page displayed in the ad sections of a search results page. In this example, “mesothelioma” is a “key word.”

Professor Eric Goldman and Angel Reyes show that “for many years, one of the highest priced keywords for advertising has been ‘mesothelioma,’ bid up in search engine ad auctions by lawyers who can bring lucrative lawsuits for mesothelioma victims. For ads triggered by keyword searches including the phrase ‘mesothelioma,’ advertisers have sometimes paid over $100 for each consumer’s click on their ads.” Competitive keyword advertising by lawyers benefits consumers who are searching for law firms that focus on that type of work.

Goldman and Reyes explain, if you are thinking of buying a Mercedes, you may search using that word. If so, you may see an advertisement—clearly marked as such—that touts Volvo and includes the car dealer’s address and contact information. You may decide to buy the Volvo. Similarly, if you want to find out about Billy Bob, the auto accident lawyer, you search for him on the Internet. You may discover a paid advertisement (clearly marked as such) telling you that Mary Ann’s law firm also represents auto accident victims. You check out both and decide to hire Mary Ann instead of Billy Bob.

Key word advertising is akin to a divorce lawyer paying for TV ads that air when “Divorce Court” is on television. Or, it is the cyber equivalent of opening up a McDonald’s next to a thriving Subway, because you want to benefit from the foot traffic that Subway creates. The ABA Models Rules, extensive as they are, do not ban key word advertising, but neither do the Rules specifically authorize the practice. This advertising is not deceptive.

However, some lawyers in North Carolina do not like key word advertising, so they wrote an ethics opinion, in 2012, that bans it. Relying on platitudes, the opinion said, “The intentional purchase of the recognition associated with one lawyer’s name to direct consumers to a competing lawyer’s website is neither fair nor straightforward.” A year later, the Grievance Committee of the North Carolina State Bar publicly censured a lawyer who employed the practice.

Who complains about lawyer advertising? First, the extensive study of the APRL Advertising Committee found that “Complaints about lawyer advertising are rare.” Second, the people complaining are not clients complaining about misleading ads, or bait and switch tactics. No: “Most complaints about lawyer advertising are made by other lawyers.” Only three percent of the people complaining about lawyer advertising were consumers, and the bar discipline authorities could take care of these cases simply by using the rule regarding fraudulent and misleading advertising. If the purpose of advertising restrictions is to protect prospective clients—rather than to protect lawyers from competition from other lawyers—the APRL proposal makes eminent sense.

The APRL Advertising Committee concluded, “the practical and constitutional problems with current state regulation of lawyer advertising far exceed any perceived benefits associated with protecting the public or maintaining the integrity of the legal profession, and that a practical solution to these problems is best achieved by having a single rule that prohibits false and misleading communications about a lawyer or the lawyer’s services.”