Category Archives: Advertising

On “Lawyer Referral Services”

One limitation on lawyer advertising, found in ABA Model Rule 7.2(b)(2) and the rules of nearly every state bar, is the prohibition on anything but bar-sanctioned “lawyer referral services.”

What’s a “lawyer referral service?”  It’s a service that refers consumers to lawyers.  Duh.

But why would that be a problem?  Attorneys have a right to advertise, after all.  How does a “lawyer referral service” differ from say, buying Google AdWords or banner advertising on a local news website?

To understand the basis of this disconnect – and that of many other problems with attorney advertising regulation – we have to go back to the Bars’ grudging acceptance of Bates v. Arizona, the 1977 decision in which the Supreme Court first found that attorneys have a right to advertise. Instead of scrapping the prohibition on unsanctioned “lawyer referral services” along with the rest of the advertising prohibitions that the Supreme Court found unconstitutional in Bates, the Bars just kept all of the prohibitions in place – but appended a little sotto voce exception allowing advertising.  So now, nearly 40 years on, attorneys have to parse the distinction between permitted advertising and prohibited “lawyer referral services.”

Unsurprisingly, this creates confusion.

Some attorneys and bar regulators consider a “lawyer referral service” to be any form of advertising in which the attorney pays for advertising on a per-lead or per-client basis.  If the attorney is paying the referring party for each client or potential client that is sent their way, it’s a referral program.  Which is prohibited, unless it’s non-profit and approved by the Bar.

This kind of rationale is one attorneys are well-known for: the exaltation of form over substance.  Sure, you can say the attorney is paying for each referral.  And sure, the bar rules still prohibit unsanctioned “lawyer referral services.”  So there’s that.

But go back to Bates, and there’s also this: attorneys have a first amendment right to advertise.  Paying for advertising on a per-lead or per-client basis is just a more efficient way of buying marketing.  How do we square that with prohibitions on lawyers participating in “lawyer referral services?”

A “lawyer referral service” can’t simply be whatever the bar says it is. The commercial speech doctrine tells us that restrictions on advertising must be narrowly-tailored to mitigate against real, non-speculative harms. What harm is being addressed by the prohibition on lawyer referral services?  Surely not the efficient deployment of legal marketing budgets.

Rather, as Kentucky Bar Ethics Opinion E-429 does a particularly good job of pointing out, the prohibition against lawyer referral services is intended to guard against consumer deception. Shady lawyer referral services operate by making the consumer believe that their legal issue is being vetted, and that they are being sent to the appropriate attorney for their needs – when in fact they are simply being sent to whichever attorney is next in the rotation, or has purchased the exclusive rights to all leads in their area. 1

Modern performance-based advertising programs may superficially look like referral programs (in that lawyers are paying per-referral or per-client), but they are missing, crucially, that which made the shady old lawyer referral programs a problem: consumer deception. Consumers who click on a Google AdWords ad or get connected to the first available attorney through Avvo Advisor aren’t being conned into thinking their cases are being screened and they are getting an attorney hand-picked for their specific needs. Rather, these consumers are simply responding to a form of attorney advertising that has tied the marketing fee much closer to actual performance.

Ultimately, the restriction on lawyer referral services could be safely stricken from the Rules of Professional Conduct, as the general prohibition on false and misleading advertising would cover any such practices that deceive consumers.  As it stands, this is a rule that simply acts as a drag on attorneys participating fully in performance-based marketing – which ultimately comes at a cost to the consumers that the advertising rules are intended to protect.

Notes:

  1. Which begs the question of why the bar’s own referral programs should pass muster, but that’s a question for another day.

Regulate or Permit?

As someone who has worked in tech for nearly my entire career, it’s natural for me to think a lot about innovation. Innovation – or at least the aspiration to innovate – runs in the veins of any successful technology company. It’s what leads to breakthrough growth, opens up new markets, provides new answers to old problems, and makes the leading companies wildly successful.

But here’s the thing: we lawyers aren’t the most comfortable around innovation.  We’re trained to respect precedent.  It’s a principle that’s great for stability, but it doesn’t lend to our being drivers of rapid change.  And that’s OK to a point – the role of the lawyers is, in many cases, to be the voice of caution in the room, the one highlighting the potential risks and problems that shiny innovations can leave in their wake.

Unfortunately, our profession is also possessed of another tendency that’s actively harmful to innovation – our regulatory bias.  Because we are trained in drafting and interpreting rules, we lawyers have a tendency toward addressing problems and uncertainties by creating rules. 1

This regulatory bias, in combination with our backward-looking emphasis on risks, acts as a very real brake on innovation.  This manifests itself in the widespread favoring by lawyers of what’s known as the “precautionary principle:” the idea that the best way to handle changes and new developments is carefully and cautiously, with rules and regulations governing the acceptable parameters of such changes.

The trouble with the regulatory bias is that it offers only the illusion of control.  Prophylactic regulation of new technology almost always prevents the benefits of such technology from being fully realized.  It slows things down.  Sometimes that’s OK.  It can be a useful brake on concepts that are getting ahead of themselves.  But such regulation frequently leads to unforeseen, negative consequences – consequences which are sometimes far more significant than the theoretical harm the regulation was intended to prevent. 2

But as Adam Thierer argues persuasively in his book Permissionless Innovation, there’s an alternate model to the lawyerly reflex to regulate new technology. Under Thierer’s model, the default is instead to be hands-off, letting things develop with a minimum of regulation – at least until (and unless) such regulation proves to be necessary. This model requires that lawyers do something that may feel a bit unnatural, which is step back from their role as rule-makers and wait for firm evidence that rules are needed before restricting new technology.

Permissionless innovation requires acknowledging the hard truth behind regulation: no matter how noble its ends, it is often wholly ineffective – and it often produces unanticipated consequences to boot. 3 Yes, sometimes it succeeds. And sometimes we are willing to accept a fair dose of imperfection and high cost because the choice of not regulating is even worse.

However, this is rarely the case with new innovations. Are there risks to holding off and letting innovation flourish, free of regulation?  Of course.  But it defies the history of regulation to assume that regulators can deftly avoid those risks, optimize the benefits of innovation, and also keep any unanticipated consequences from popping up.

And to bring this full circle to the subject of this blog – permissionless innovation is a mindset that can be applied to many areas even outside of technology. As I’ve argued many times before, the sprawling pages of lawyer advertising regulation do far more harm than good. In attempting to address any number of potential marketing techniques and theoretical harms, the rules only succeed in keeping consumers uninformed about legal services. The vast majority of actual consumer harm from lawyer advertising could be addressed through a simple rule prohibiting false and deceptive advertising.

My railing against precautionary regulation isn’t a political point, or an objection on principle to ALL government regulation, which is often necessary and sometimes effective. It’s simply a reminder that we as lawyers, instead of rushing in to propose new rules, should regularly pause and reflect whether the better course isn’t to simply let things play out.

Because a great deal of the time, it’s going to be.

Notes:

  1. If you’ve even been in a fantasy football league run by lawyers, you’ll know what I mean.
  2. There are many, many examples, but this article from the Freakonomics guys is a good place to start.
  3. These realities are documented exhaustively and persuasively by Yale law professor Peter Schuck in his recent book, Why Government Fails So Often: And How It Can Do Better.

Ethical Marketing Techniques

I’m speaking this Wednesday night at the Beverly Hills Bar Association; the topic is “Ethical Marketing Techniques for Solos and Small Firms.”

If you can’t make it (and I’d love to see any Socially Awkward readers there!), here are the basic points I’m going to cover:

  • Staying on the right side of the Rules of Professional Conduct when communicating online is actually pretty easy – as long as you treat social media as more analogous to a cocktail party than, say, a billboard ad.
  • Any attorney remotely concerned about generating business – whether online or offline, consumer or business – is failing massively if they haven’t created at least three separate places online where potential clients can find information about them and their approach to the practice of law.
  • Reputation management is becoming more and more important as “word of mouth” moves online.  Whether you like it or not, legal services can and will be reviewed, just as toasters and hotel stays are.  Understanding how to respond to negative online feedback in a productive way is critical.

It bears mentioning that it remains harder than it should be for lawyers to “stay ethical” when it comes to advertising. I’ve written about some of the reasons why, but I will likely pen a longer post in the near future on the problems created by our lawyerly bias toward regulation.

Publicity Rights & Commercial Speech

Yes, I’m about to write about a case involving NFL Films, which has approximately nothing to do with lawyer advertising.  But it’s a nice example of the relatively narrow parameters of the commercial speech doctrine.

And repeat along with me, lawyers: only your commercial speech can be regulated by the state bar advertising rules.  If you’re staying non-commercial, you don’t have to worry about whether the ad rules apply to your tweeting or Facebook updates.

In our NFL Films example, three former players sued, claiming that NFL Film compilations of old game highlights violated their rights of publicity.  What’s important about the Federal District Court’s dismissal of the case on summary judgment is its detailed discussion of these two principles:

1) Publicity rights claims (which, you might have gathered, I loathe) can only survive if the underlying communication is commercial speech; and

2) Commercial speech, while continuing to evade a bright-line definition, must contain some meaningful combination of economic motive, advertising format and reference to a specific product.

The decision reiterates that economic motive alone is NEVER sufficient to render speech “commercial.”  It also notes that the fact that the films are all about the NFL and its players does not make them a form of “image advertising,” but rather expressive products in their own right.

All in all, a good case to remind us of the limited scope of commercial speech, and the fact that free expression needn’t face the publicity rights tollbooth just because it features people whose images have commercial value.

Why Care About Attorney Advertising Rights?

I am occasionally asked why I spend so much time focused on the tension between lawyer advertising regulation and the free speech rights of attorneys.  The perhaps-too-obvious answer is that my employer, Avvo, is built upon attorney advertising, and I’ve got a vested interest in seeing that attorneys continue to be able to advertise.

And it’s certainly true that working at Avvo has colored how I think about attorney advertising – but perhaps not in the way one might think.  For while I certainly do have a vested interest in seeing that attorneys continue to be able to advertise, that particular fight has long been over.  Attorneys can advertise, attorneys will continue to be able to advertise, and attorneys will pay good money to advertise for the foreseeable future.

For that, Avvo (and I) thank them.

But what I’ve discovered in 7+ years at Avvo is that the state Rules of Professional Conduct governing lawyer advertising are a sloppy mess, doing a disservice to lawyers and consumers alike.

Since Bates v. Arizona was decided nearly 40 years ago, it’s been settled law that the RPCs can’t stop lawyer advertising, or even limit those ads deemed to be beneath the dignity of the profession. Some might argue that this is a bad thing.  But that’s like trying to stop the tide. In the years since Bates, the Supreme Court has greatly solidified the commercial speech doctrine, with the First Amendment clearly protecting the right of businesses to engage in non-deceptive advertising.  Absent an abrupt, 180-degree reevaluation of how the First Amendment relates to commercial speech, this is not going to change.

Unfortunately, rather than regroup in the aftermath of Bates and devise more streamlined, meaningful rules, the bars simply kept their existing frameworks and bolted on begrudging exceptions for attorney advertising.

The result? Now attorneys have to parse the rules to understand whether they are participating in a “referral program,” or doing something that might be considered “solicitation,” or having the temerity to suggest they might “specialize” in an area of law. There are any number of ordinary means of communicating with other human beings that might technically run afoul of the bar’s advertising rules – particularly as means of communication proliferate.

Thanks to Bates, we’ve now got ever-more-ridiculous attorney television and billboard ads.  Yet at the same time, attorneys ponder whether they can respond to inquiries posted on Twitter, or highlight on their websites feedback from clients.  Where straightforward advertising is clearly allowed, other, more direct forms of communication – which are often far more valuable – exist in a legal gray area.  In this way, the uncertainty of the rules acts as a tax on lawyer communications, making it much harder than it should be for consumers to get information about legal services.

Some lawyers might think that’s a feature, not a bug.  After all, less direct communication means less opportunity for lawyers to deceive clients.  But that condescending viewpoint hardly gives clients – or lawyers, for that matter – the credit they deserve.  In most things speech-related, America has chosen the “more speech solution” as the preferred approach.  Rather than censoring speech, we’ve determined that it’s preferable to let competing voices hash things out in the marketplace of ideas.

Unfortunately, in the marketplace of ideas around legal services, we’ve got the screeching of the Law Hawk and the “life’s short” lady – and a whole lot of attorneys who are going around not communicating with potential clients out of fear of ending up on the wrong side of the Bar.

That’s messed up.  And that’s why I care about restoring attorney free speech rights, and scaling back the reach of the advertising regulations so that they are properly focused only on false and misleading advertising – and not on a clutch of outdated, picayune concerns.

Naughty Words Attorneys Can’t Use

Attorney ethics rules offer some great examples of the problems inherent in the mechanistic application of the law.  Sometimes, it’s a matter of a well-founded rules being applied to circumstances where technology has gutted the purpose of the rule . 1  But other times, it’s a case of the expansive regulator: the deacons at the bar stretching the breadth of the rule far beyond its logical (or constitutional) limits.

Back in 1990, the Supreme Court held, in Peel v. ARDC, that a bar can’t prohibit an attorney from truthfully advertising that they had been certified as a specialist by a bona fide organization.  The Court also expressed skepticism about the state’s position that the word “specialist” has a unique, narrow meaning apart from its generally understood meaning of “a person who has special knowledge and skill relating to a particular job.” 2  Nonetheless, many states (including Florida and New York) continue to prohibit attorneys from using terms like “specialist,” “specialize,” “expert,” and “expertise” except in conjunction with a bona fide certification.

What these states are missing is that it’s the certification that’s doing the work.  It’s false and misleading if attorneys hold themselves out as being “certified” specialists or experts when no legitimate certifying agency has conferred the honor. But the use of general terms like “specialist” or “expertise” on a standalone basis, with no claim of third party certification?  There is virtually no question that prohibiting such use is unconstitutional.

The wonderfully-named New Orleans attorney Kearney Soniat du Fossat Loughlin thought so too.  He had been disciplined by the Louisiana disciplinary board for stating on his website: “Loughlin & Loughlin is a plaintiff-oriented pure litigation firm specializing in maritime personal injury and death cases.”  Loughlin wasn’t content to take this slap on the wrist, so he appealed the discipline to the Louisiana Supreme Court, challenging the constitutionality of Louisiana’s prohibition on the use of the word “specializing.”

Loughlin won.  Unfortunately, he won because the court found that a) he hadn’t intended to break the rule and 2) the public wasn’t harmed.  It didn’t address his constitutional argument.

It’s great the Loughlin was willing to take on the bar.  I wish more attorneys would do so in cases like this.  There are real problems with false advertising that the bars can go after, but policing the use of  harmless, ordinary words isn’t one of them.

Notes:

  1. For example, prohibitions on fee-splitting being applied to purchases via Groupon, where there is no danger whatsoever of the fee split interfering with the lawyer’s independent professional judgment.
  2. Thanks, Mirriam-Webster!

Attorneys: It’s Not Always OK to Lie

SangaryLook, it’s OK to lie.  Or, at least, outside of some fairly specific circumstances, the government can’t punish you for lying.  Go check out U.S. v. Alvarez – and the now-unconstitutional “Stolen Valor Act” to see what I mean.

That doesn’t mean it’s not despicable to pass oneself off as a Medal of Honor winner, and the same First Amendment that protects our lies 1 also allows us to call out those practicing such behavior as the pathetic lowlifes that they are.

Which bring us to the tale of Los Angelese attorney Svitlana Sangary, who festooned her law firm website with numerous photos of Ms. Sangary hanging with celebrities.  Problem was, it was all phony – Sangary had photoshopped herself into all of the pictures.  She now finds herself facing the likely suspension of her law license.

Now, it’s important to note that the potential suspension recommended by the California State Bar Court wasn’t only because Sangary put some phony photos on her website.  It’s also because she utterly failed to cooperate, behaved in a manner that’s textbook “How Not to Handle a Bar Complaint,” and generally acted as a poster child for the proposition that admission to the Bar is no guarantee of fitness to practice law.

But I want to focus on the photos.   Sangary would have a good First Amendment defense if the bar had come after her for having the photos at issue here on a personal blog, facebook profile, or the walls of her office.  Just like everyone else, attorneys have the right to lie.  They might do so for any number of reasons: lack of self-esteem issues, to piss people off, or abject failure to understand social norms.

And again, remember: this isn’t to say that it’s not shameless and pathetic for a lawyer (or anyone, really) to behave in this way.  It is.  It’s just that there  can’t be any state-sanctioned penalties for so doing.

However, one reason for lying that isn’t protected by the First Amendment is commercial speech.  Not only is commercial speech in general subject to less protection than “core” speech (intermediate vs. strict scrutiny), false commercial speech is entitled to NO First Amendment protection.

So, Sangary’s photos.  There’s no question her website is a form of advertising, nor that the page with the doctored photos was designed to fulfill a particular marketing task: instilling Sangary’s potential clients with a feeling of trust, cachet, and exclusivity.   Thus the photos are a form of false advertising, and easily form the basis for Sangary to be disciplined.

That, plus the crazy way she handled it.  Seriously, the details in the judge’s order are a stark example of why consumers need to do more than be starstruck by a few celebrity photos when it comes time to choose a lawyer.

Notes:

  1. Or, more aptly, protects us from the chilling effect of laws allowing the government to determine what is true and what is false.

Publicity Rights vs. Media Law

I’m going to expand on a theme that recurs in my world with depressing frequency: the idea held by many (including many lawyers, who should know better), that the “for profit” nature of a company somehow limits that company’s right to publish information about an individual.

The usual argument is that the publisher – let’s say Avvo in this case – is publishing information about lawyers.  Because Avvo is “profiting off” those directory listings of lawyers, it must get permission from the lawyers involved (and, presumably, share the wealth if such permission is obtained).   1

This argument is a conflation of the publicity rights doctrine (which holds that companies DO have to gain permission from and compensate endorsers) with “Media Law 101” (which holds that everyone – for-profit companies included – has a fundamental First Amendment right to write about other people.

It’s really not very complicated.  If Avvo was to run an ad campaign claiming that “Attorney Brian Tannebaum thinks Avvo is the greatest,” we’d need to get Brian’s permission to do so.  We’d be engaging in commercial speech, and we can’t just appropriate the value of Brian’s publicity for ourselves. 2

But when we create a profile of Brian, and an opinion about him in the form of the Avvo Rating?  That’s not commercial speech, and it’s fully protected by the First Amendment.  We don’t need his permission to publish it.  It is neither commercial nor infringing on his right to monetize his own publicity.

And what of the fact that Avvo makes money from its publishing activities?  After all, we wouldn’t be able to sell ads if we didn’t have those attorney profiles and Avvo Ratings, right?

It doesn’t matter.  At all.

It’s the distinction between co-opting someone’s persona for marketing vs. covering that person in the media.  If it’s the latter – whether an Avvo profile, a feature article in The New York Times or a listing in Google – there is nothing the subject has to say about it.

And that’s precisely how it should be – because as should be obvious by now, we wouldn’t have any media if this wasn’t the case.

Notes:

  1. Avvo does not sell directory listings or charge readers to use the site.  It publishes the information proactively for consumers, and is supported by advertising sales.
  2. Note that publicity rights issues most often come up with respect to celebrities and sports stars who already have a market for their endorsement.  I expect I could get Brian’s endorsement for the price of a bottle of halfway-decent Chateneauf du Pape.

3rd Circuit Smacks NJ on Compelled Speech

Atlantic City, NJ Boardwalk Hall
Atlantic City, NJ Boardwalk Hall

Another day, another compelled speech case – this one involving lawyer advertising.

I’ve discussed the Dwyer case before. Dwyer sued to challenge a New Jersey advertising guideline preventing lawyers from using words of praise from judges in advertisements – unless the advertisement included the entire text of the judicial opinion.   As I mentioned at the time:

Quotes from judges are likely to carry a lot of weight with consumers, largely because of their scarcity value: consumers will assume that judges will dole out such praise sparingly, not realizing that these compliments are functions of the workaday business of ruling on fee applications, rather than some rarefied benediction.  It’s easy to see why the use of such quotes in advertising would be, as the state of New Jersey argued, inherently misleading without some form of disclosure.

However, as the Third Circuit noted, in a decision remarkable for its clarity on this nuanced and under-appreciated area of speech regulation (and contrary to the more expansive interpretation the DC Circuit adopted just weeks ago), disclosure requirements must be “reasonably related to preventing consumer deception.”  They also can’t be unduly burdensome.

The Court went on to find the New Jersey Guideline wanting on both counts.  There was no indication that presenting the entire text of a decision would in any way lessen consumer deception, and the requirement was incredibly burdensome in that it effectively prevented ANY form of advertising including such judicial plaudits.

It’s a classic screw-up on New Jersey’s part.  Using these statements in ads does lead to consumer deception.  What the state should have done is consider the first amendment issues and craft a narrower regulation. 1 Instead, the New Jersey regulators just went with the ham-handed approach to attorney speech regulation and called it a day.  It’s an approach, that despite a growing number of Circuit Court setbacks, remains distressingly common – despite the fact that consumers, attorneys and the bars alike all lose in the process.

 

Notes:

  1. The 3rd Circuit decision even offers a helpful suggestion of a disclaimer that would survive constitutional scrutiny:  “This is an excerpt of a judicial opinion from a specific legal dispute. It is not an endorsement of my abilities.”

DC Circuit is COOL with Compelled Speech

Earlier this year, I noted two DC Circuit decisions on compelled speech – disclaimer requirements around country of origin labeling (“COOL”) for meat and “conflict free” diamonds. In each case, the court struck down the labeling requirements, applying the “intermediate scrutiny” standard for commercial speech regulation.

In a notable decision this week the DC Circuit, sitting en banc, reversed the COOL case. And in so doing, it explicitly overruled language in the “conflict diamond” decision applying the intermediate scrutiny standard.

Why is this important?  Because the court is saying that disclaimer and disclosure requirements are only subject to the lightest of constitutional burdens – the requirement that the compelled speech be “reasonably related” to the government’s interests and objectives.  This is a very low bar (and to make matters worse, the court declined to even hold that the government’s interest must be substantial).

The critical case at play is one I’ve written about before: Zauderer v. Office of Disciplinary Counsel.  Zauderer isn’t as clear as it could be on this point, but most courts (including the two panels of the DC Circuit that first heard the COOL and conflict-free cases) have read it to apply the lower bar of “reasonably related” only to those cases where the compelled disclosure is necessary to prevent deception.

The DC Circuit has now thrown the gates wide open, allowing virtual carte blanche forall manner of speech the government might want a business to disseminate.  This bodes well for proponents of things like lawyer advertising disclaimers and GMO labeling requirements, but it is certainly a setback for free speech.

Here’s hoping our very free-speech-friendly Supreme Courts steps in and clarifies that compelled speech, just like prohibitions on speech, should be carefully circumscribed.

UPDATE: Jonathan Adler at the Volokh Conspiracy has a more in-depth look at the decision and the vexing issues it raises.