Defining “Commercial Speech”

At last week’s annual meeting of the ABA Forum on Communications Law (in Scottsdale, which is an oh-so-lovely trade for Seattle in early February), there was a fascinating plenary session on something near and dear to my heart: how to define “commercial speech.”

Of course, straightforward advertising is commercial speech. And nearly every case that has addressed commercial speech – including all of the Supreme Court advertising cases – has involved material that was unmistakably advertising. But the Supreme Court has never clearly resolved the core question: what, exactly, is commercial speech?

The answer matters, of course, because regulation of commercial speech is subject to a less exacting standard of review than other forms of content-based regulation. And with that label of “commercial” speech comes a host of other ills – complete loss of first amendment protection for anything that is wrong or misleading, openness to publicity rights claims, loss of anti-SLAPP protection, etc.

Steven Brody, who – along with my lawyer, Bruce Johnson – literally wrote the book on commercial speech law, pointed out that the Supreme Court has really adopted two different definitions of commercial speech. The first, from back when the commercial speech doctrine was still coalescing, is this:

That which does no more than propose a commercial transaction.

That’s from the Virginia Pharmacy case. But much as many of us would like that straightforward, bright-line test to be the rule, the Supreme Court also said, several years later, that commercial speech is present if some 2 or 3 of the following factors are met:

1) the message is in an advertising format;

2) the communication refers to a specific product; and

3) an economic motive drives the speaker’s expression. 1

That’s from the Bolger case, in 1983.  The Supreme Court later pointed out that bolting political speech onto an advertisement won’t make the latter non-commercial speech, but also that expression in which political and commercial speech are “inextricably intertwined” must be subjected to strict scrutiny.

But the court has never come out and given us a bright-line test for distinguishing commercial from non-commercial speech.

Further complicating matters? The Kasky test for commercial speech, which is currently the law in California. And as I learned at the ABA Conference, the FTC has its own test for commercial speech: the “RJ Reynolds” test, which involves a 4 part analysis, ultimately similar to that called for in Bolger.

So that makes four different tests for whether a communication is commercial or non-commercial speech.

And adding to the confusion? It’s not as if forms of communication are getting any clearer. Rather, “native advertising” or “sponsored content” is rapidly blurring the lines between editorial and advertising messages. While there is a good case to be made that much of this type of content should not be regulated as commercial speech, it’s unclear whether much of it would pass even the test from Bolger.

A decade ago, the Supreme Court missed an opportunity to review Kasky and clarify the rule for commercial speech. It passed on the chance again, 3 years ago, in Sorrell v. IMS HealthI suspect, however, that the growth in native advertising is going to force the Court’s hand before too much more time has passed.

WSBA Ethics Opinion re Online Lead Generation

The Washington State Bar (of which I am a member) has issued an ethics opinion finding that attorneys can, generally speaking, participate in online lead generation services.

While it’s good to see the WSBA take this step, it isn’t breaking new ground. The centerpiece of the opinion reflects the comments (paragraph 5) the ABA added to Model Rule 7.2 last year.

Unsurprisingly, I also have a few beefs with the opinion.

Too Many Rules

First of all, I wish we could simply dispense with all of this nonsense. Attorneys can advertise – in any of a million ways, as long as such advertising isn’t false or deceptive. We’re burning far too many brain cells, and depriving consumers of far too much information, worrying about all of these irrelevant details. We should simply eliminate most attorney advertising regulation as the counter-productive surplussage it is.

What First  Amendment?

It would have been nice if the Bar had given a nod to the First Amendment, and the substantial constraints it places on regulation of commercial speech.  Too few bars do this in their ethics opinions, and fewer still actually interpret their rules (at least when giving ethics guidance) as if they are subject to the First Amendment. In this case, the Bar stuck exclusively to citing chapter and verse from its own Rules of Professional Conduct.

Forms of Payment for Advertising

While acknowledging that attorneys can participate in online lead generation, the opinion does not come flat out and say that attorneys can pay for such advertising on a per-lead or per-client basis. They imply as much, via a footnote, but the opinion would be clearer and more useful if they just came out and said it.

Words Attorneys Can’t Say

The foolishness around “specialists” and “experts” continues. Again, this IS what the Bar’s rules seem to call for. But the Bar would be wise to clarify that restrictions on the use of such language by attorneys are only constitutional to the extent such terms are accompanied by a statement or implication that a third party has certified such specialization or expertise.  For example: as long as I’m not saying or implying that someone has conferred the honorific upon me, I’m confident the Bar can’t prohibit me from stating that I have expertise in attorney advertising regulation and communications law.

And Yet More Over-Regulation

The Bar properly notes the issue with “lawyer referral services,” insofar as they suggest they are “matching” a client to the best possible lawyer but instead sending them to the attorney who has paid for promotion.  That’s no good; it deceives consumers and would violate even a sensible and limited set of ad rules.

However, the Bar goes too far in stating that it is likely “that prospective clients will infer that the lead generation service is making subjective matching decisions.”

Says who? Does the Bar have any empirical evidence showing that consumers make these kinds of assumptions?

There is a long list of federal court decisions over the last ten years dismantling attorney advertising regulation precisely for making these sort of evidence-free conclusions. Attorney regulators carry the burden of showing that their attempts to limit speech are both necessary and no more extensive than required.

Instead of making such a case, the Bar plows ahead to solve this “problem” by requiring that lead generation services “clearly disclose, in plain and conspicuous language, that the match was made solely based on specified objective information (e.g., geographic information, years of practice, or practice areas as described by the lawyer).” Such a “solution” is not only unsupported by any evidence that it is necessary, but is also overbroad in not acknowledging that there are many ways a company could market to consumers without implying that it was “matching” them to the right attorney based on subjective factors.

It comes full circle to my first point: by continuing to rely on such picayune, detailed advertising rules, the Bar makes it harder than it should be consumers to get information about, and access to, legal services.

 

End Occupational Licensing . . . For Lawyers Too?

This New York Times article starts out with some well-deserved gushing over how Uber has disrupted the incumbent taxicab industry, but goes on to note the increasing skepticism over occupational licensing in general. The Obama administration has proposed sending some $15M in federal funding to the states to study the costs and benefits of occupational licensing.

As the article notes, there are a lot of weird anomalies in occupational licensing requirements, and a paucity of data showing that such requirements actually produce better consumer outcomes.

One thing we do know, however: occupational licensing is great for establishing a cartel that keeps prices high, and which fights viciously to keep competitors out.

Which naturally made me think of the Bars.

Uber is upsetting the cab cartels, and it’s pretty certain that some of the excesses of licensing expansion (license requirements for hair braiding, anyone?) are going to be pulled back. But what if we did something really outlandish and eliminated the occupational licensing requirement for lawyers? What would happen?

One belief held by many lawyers is that occupational licensing protects clients by ensuring a competency. If that argument sounds familiar, it should – it’s used by approximately 100% of all occupational licensing proponents.

Perhaps the Obama administration funding will get through and we’ll start seeing more hard data on this. But let’s pause for a moment and ask ourselves whether the claim of heightened competence is really true for the Bar.

To be sure, the necessities of going to law school (typically) and passing the bar act as gates to the completely vacant offering up legal services. But I’ve got news for you: it’s not that high of a gate. And it only tests one, narrow type of competence. There are a lot of really bad lawyers out there. Maybe not really bad in the knowin’ the law kind of way (although I’ve run across plenty of those), but really bad in the have-their-shit-together-and-can-communicate-with-real-people kind of way. Or can-run-their-business-effectively kind of way.

The state-based limitations on practice offer no particular help; I’m licensed in California, but I couldn’t tell you the first thing about most California law. The law has gotten so broad, so complex, that it’s illusory to think that someone licensed in a given state necessarily has any greater competence there.  But despite not having lived in the state for the last 14 years, and not having appeared in a California courtroom in nearly two decades, I could move there tomorrow and start representing clients.

Would it be so bad (for consumers) if law could be practiced without a license? Consumers could still choose to use someone who went to law school, or who met the membership requirements of a bar association. It just wouldn’t be their ONLY choice if they have anything remotely related to a legal question.

Or what if we adopted a system like the UK, where a license is only necessary to engage in certain “reserved activities,” such as representing clients in court, handling probate, and transferring real property?

I do think there are a lot of things that people need a “real” lawyer for. But I’m not convinced that our current system of state-based occupational licensing is really protecting consumers so much as it is protecting our cartels.

 

California to Issue Ethics Opinion on Lawyer Blogging

**Updated 2/24/16: The Bar has issued its proposed opinion, which addresses most – but not all – of the concerns I’ve identified below.**

The California State Bar is seeking comment on a proposed ethics opinion on lawyer blogging – or more specifically, the conditions under which the California Bar would consider a lawyer’s blog subject to the attorney advertising rules.

As with its 2012 ethics opinion on social media postings, the California Bar uses specific examples of the practice in question.  The draft opinion also doesn’t completely ignore the important first amendment constraints on the Bar’s ability to regulate. Good on the Bar for doing that; too many state ethics regulators don’t bother with this.

The Bar offers four hypothetical examples of types of “blogs.” These include:

A.  A stand-alone “blog” that has no interactivity and serves as nothing more than a puff piece for the attorney’s case results.

B.  A law blog that lives on a page on a law firm’s website, and contains the analysis and discussion one would expect to see on a blog . . . but closes every post with the statement “for more information, contact so-and-so.”

C.  A law blog that lives on a standalone site, and contains the analysis and discussion one would expect to see on a blog . . . but closes some posts with the statement “if you have questions about your divorce, contact so-and-so.”

D.  A blog about jazz that links to the lawyer’s site.

The Bar’s Committee concludes that the first three types of blogging are subject to the advertising rules, but the last one is not.

The Committee is half-right. Example A is commercial speech, and example D is not.

But what about B & C? Unfortunately, after acknowledging the first amendment constraints on regulation, the Committee fails to adequately apply the test for mixed-content advertising and editorial speech.

In the case of a blog that occupies a page on the lawyer’s website, the Committee concludes that this factor alone (not even accounting for the consistent message to contact the author of the post) is sufficient to render the blog “advertising” subject to the advertising rules.  While this *might* be true in some cases, it’s too much to say that it applies across the board to all blogs that happen to reside on the same domain as a law firm website. Regulators would need to analyze, in each case, whether the combination of content, format, and motive is sufficient to render the communication commercial speech.

That said, it’s possible the Commission means that having a lawyer blog on a law firm website plus the inclusion of the consistent “contact me if you have further questions” message renders the blog advertising. But it would be nice if they said so – and I also don’t believe that message is necessarily a commercial one.

And as for blogs on stand-alone sites, in which the occasional post refers readers to contact the author about their individual cases, the Committee is really going too far to find that such a message bootstraps the entire blog into being advertising.  It may be the case that such a message – because it refers to a reader’s own case, and not questions about the editorial content – would render the post in which it appears commercial speech. However, the idea that a few isolated message such as this would “infect” the entire blog and all of its content is well beyond the Supreme Court’s test for determining whether mixed-content speech is treated as “commercial.” It’s even beyond the only-in-California Kasky test for mixed-content speech.

Why Should We Care?

Some would say, who gives a rip? Attorneys can just slap an “attorney advertising” disclaimer on their blogs and be done with it. But putting aside the efficacy of that, the perverse fetish lawyers seem to have for disclaimers, and the fact that attorneys should not have to worry about including some asinine disclaimer on everything they write, there is a bigger issue at play here:  the chilling effect that this type of over-regulation has on free expression. And that chilling effect not only impacts the attorneys who would otherwise freely express themselves, but also the extent to which consumers can obtain information about the quality and nature of legal services and providers.

Subjecting attorney blogs to advertising regulation opens up an entirely new avenue for collateral attack on attorney speech.  After all, under traditional speech analysis, bloggers can express themselves freely, without worrying overmuch about hyperbole and misstatement. And that’s a good thing; it’s part of the “more speech” solution we as Americans have chosen for our system of expression.

But if a blog is subject to bar regulation as “advertising,” lawyers suddenly need to worry about their expression being regulated under the lesser standard of intermediate scrutiny. Their competitors can file grievances with the bar over what would ordinarily be editorial content, and as “advertising” that writing will also be open to attack on publicity rights grounds. 1 Lawyers likely lose the protection of California’s anti-SLAPP law to defend their free speech rights, as well as most fair use defenses to copyright actions. In short, they’ll need to consider the fact that anything they write is putting their license at risk. Under such a regime, it’s a fair bet that many legal bloggers will censor themselves.

What the Opinion is Missing

The Commission’s opinion is also notable for not choosing as an example a far more common case: the law blog – whether a page on a law firm website or a standalone site – that doesn’t close any posts with an explicit invitation to contact the author, but prominently displays contact information for the lawyer or law firm.  Nearly every reputable legal blog I can think of is set up this way, offering some way – telephone, email, twitter, etc. – to contact the lawyer-blogger.

The opinion does suggest, in its discussion of example “C” (law blogger on a stand-alone site) that the inclusion of a link from the blog to the attorney’s website is not enough, on its own, to render the blog attorney advertising. However, the opinion would be better if it expanded on this point, and had a more in-depth discussion of the types of “contact me” messages that could render otherwise non-advertising content commercial speech.

As discussed above, there is a fundamental difference between these two messages at the end of a blog post:

“For more information, contact Joe Smith.”

“For questions about your legal matter, contact Joe Smith.”

The latter is advertising; the former is not. But what of email addresses, chat boxes, hyperlinks and telephone numbers? Do such passive invitations to contact turn a blog post into advertising?

I’m fairly certain the answer is “NO,” at least as an across-the-board rule. While there certainly could be an accumulation of factors that would turn a blog into advertising, the availability of contact information alone would not meet the test.

And, frankly, even the explicit invitation to contact the attorney about one’s legal matter should not make the entire blog commercial speech. It’s easy enough to parse out the advertising message (“contact me”), apply the advertising rules to that and leave the rest of the blog alone.

This is an important point, and the Commission misses it entirely in its analysis. The test for mixed-content speech contains a secondary test for expression where the commercial message is “inextricably intertwined” with the editorial content. In such cases, the whole thing is treated as editorial speech. 2 The flip side of this test is this: if the messages can be separated, they are to be, with commercial speech analysis (and the potential for Bar regulation) applying to the commercial message, and the editorial expression subject only to any regulation that might survive strict scrutiny.

The “contact me with questions about your divorce case” message is certainly not inextricably intertwined with a blog post about divorce; it’s merely appended on to the end. As such, while the invitation to contact should be treated as an advertising message, the lesson of Riley is that it should not infect the entire post – or the entire blog – with its commercial character.

In any event, here’s the proposed opinion; comments are due by March 23, 2015. I’ve submitted comments along the lines of this post, and I’d encourage any readers to do the same.

And feel free to contact me if you have any questions. 3

Notes:

  1. And publicity rights actions are particularly toxic in California.
  2. See Riley v. National Federation for the Blind of NC, Inc., 487 U.S. 781 (1988).
  3. And no, this post is NOT lawyer advertising.

Time to Gut the Ad Rules

Avvo recently submitted its comments to the ABA’s “Future of Legal Services” Commission, and I wanted to highlight one of the specific suggestions we made:

Get rid of most attorney advertising regulation.

Or more specifically, eliminate everything other than restrictions on false advertising and real-time solicitation. Our suggested advertising rules would look like this:

Rule 7.1: A lawyer shall not make a false or misleading communication about the lawyer or the lawyer’s services.

Rule 7.2:  A lawyer shall not by in‑person, live telephone or real-time electronic contact solicit professional employment when a significant motive for the lawyer’s doing so is the lawyer’s pecuniary gain, unless the person contacted:

(1)  is a lawyer; or

(2)  has a family, close personal, or prior professional relationship with the lawyer.

Everything else in the attorney advertising rules – prohibitions on specific forms of advertising, hard-and-fast disclaimer requirements, vague provisions about “lawyer referral services” and the like – is the crusty accretion of over-regulation. Many of these provisions pre-date Bates v. Arizona, and would be contrary to lawyers’ First Amendment right to advertise were it not for some begrudging exceptions language that’s been bolted on.

Other provisions found in the RPCs of many states, such as pre-review of advertising (by a committee that may include a law firm’s competitors) and limitations on many forms of legitimate advertising, are fundamentally anti-competitive and often highly arbitrary in application.

As anyone who pays close attention to this area knows, there is absolutely nothing in this dog’s breakfast of regulations that actually buys us any greater consumer protection. 1 Anything egregious and harmful in attorney communication can be enforced via the general prohibition on false and misleading advertising.

What’s more, this thicket of regulation is actively harmful. I’ve spoken with hundreds, if not thousands, of attorneys over the last seven years about this topic. There is a general level of concern and uncertainty over what attorneys are “permitted” to say to potential clients. And lawyers, being the risk adverse creatures they are, tend to clam up.

The Supreme Court has repeatedly noted in some two dozen advertising cases over the last 40 years that consumers have a very strong interest in minimally restrained commercial speech. As the court observed in Bates:

[T]he consumer’s concern for the free flow of commercial speech often may be far keener than his concern for urgent political dialogue.

And yet, the Bar restrictions, with their often-byzantine level of detail and apparent reach into all manner of attorney speech, are preventing attorneys from providing consumers with the robustness of information necessary to make good purchasing decisions – or to get legal help at all. This is bad for consumers, and ultimately, bad for the Bar.

While there are other things that the profession can do to improve access to justice, one immediate and easy opportunity for improvement is to massively prune back attorney advertising regulation.

 

Notes:

  1. And consumers rarely complain about lawyer advertising violations; virtually all such complaints are filed by other lawyers.

“He Who Shall Not Be Named”

If you follow local and statewide policy-making, you’ll find no shortage of nuttiness. The bar for holding many positions of public trust is quite low, and there’s no particular guarantee that those holding elected positions at this level are familiar with the fundamentals. 1

Case in point: Frederick County (MD) Councilman Kirby Delauter, who has threatened a local reporter with legal action for using his name without permission.

Kirby Delauter Facebook ThreatThe result is predictable. Thanks to the Streisand Effect, Kirby Delauter’s name is being used orders of magnitude more times, in ways he presumably does not like, and would not give his permission to – if he only had that right.

The mocking is particularly brutal in some quarters:

Popehat Kirby Delauter

Delauter’s position is obviously ridiculous. The First Amendment gives anyone, reporters or otherwise, the right to comment and write about other people. And this right is particularly critical when it comes to government officials.

However, the sobering thing is that if Kirby Delauter decides to double down on stupid, he may well find a lawyer dumb enough to take his case.  I talk to attorneys all the time who think – or at least argue – that some bastardization of the publicity rights doctrine permits people to control when and how their name is mentioned.

Notes:

  1. This charge can also be leveled at many members of the U.S. Congress, but the traps that must be run to be elected at the federal level eliminate most of the real loons – or at least discipline them enough to stay “on message.”

Birth of a Solo Practice

I really hope Leo Mulvihill goes on to have a phenomenally successful career, because the kickoff of his solo practice would make an awesome origin tale for a future lion-of-the-Philadelphia-bar Leo to relate to wide-eyed baby lawyers. As Leo puts it:

So there I was, a secretary performing law clerk work while running my part-time practice at night out of an office I got for free.

Probably not how any of us would have drawn it up when choosing to go to law school.

Leo’s whole story is well worth the read, particularly for the instructive example he’s set using hustle and networking to build his practice. He also offers his thoughts on social media and blogging, which are pretty much right on point with what I’m always telling lawyers who are thinking of starting a blog:

Don’t start some stupid sham blog where you pay some marketing company to do it for you. Either write for yourself because you want to, or because you have something interesting to say. No one cares if you simply repost news articles.

Indeed.

“Past Results” Ban in Florida Tossed

Really interesting decision in the case of Rubenstein v. The Florida Bar, in which federal district judge Beth Bloom granted attorney Robert Rubenstein’s motion for summary judgment against the bar AND enjoined the Bar from further enforcing its rules banning the use of references to past results in many forms of attorney advertising.

Law Practice Advisor has the details, but in reading the decision I was struck by how completely unimpressed Judge Bloom was with the Florida Bar’s position. She absolutely eviscerated the Bar for its utter lack of empirical evidence to support its ban, as well as its failure to consider any more narrowly-tailored remedies.

And for First Amendment law junkies, there’s this: while Rubenstein positioned his case as an “as applied” challenge – which is much easier to win, but has the disadvantage of not extending beyond the particulars of the plaintiff’s case – Judge Bloom took it upon herself to style it as a facial challenge. She then went on to show how the Bar’s rules were fundamentally unconstitutional, no matter how they were applied.  BAM!!

This isn’t necessarily the end of these rules, as the state could theoretically rebuild them with proper evidentiary support and deference to their obligation to regulate in a narrowly-tailored way.

Or they could appeal, but that’s a long shot – the good Judge issued a a very complete and well-thought-out ruling.

This decision is a great step toward a simple yet elusive concept: that Bar regulators should only limit speech where it is necessary to do so, and only to the extent of that necessity.

And ultimately, what’s most damning to the Florida Bar’s position is this: the data shows, unsurprisingly and overwhelmingly, that consumers really want to know what kind of results attorneys get. The Bar should take this message, get out of the way, and let that happen.

Ethics & Competitive Keyword Advertising

It sounds unethical:

  1. “Buy” the name of your competitor from Google.
  2. When potential clients search Google for that competitor, your ad appears.
  3. Profit!!

Lawyers seem to think so, too.  There was the Milwaukee PI firm of Habush Habush & Rottier, which sued a competitor for doing this. The North Carolina State Bar issued an ethics opinion putting a kibosh on the practice. And now “The Hammer” – the Texas Firm of Jim Adler & Associates – has weighed in, asking that Texas also find competitive keyword advertising unethical.

Of course, they’re all wrong.

Habush found this out, after spending several hundred thousand dollars losing their lawsuit.

North Carolina should have found out, after watching even ad-restrictive Florida reverse course and withdraw a proposed opinion barring the practice.

And Adler et al will find out as well, as I expect the Texas Bar will leave them hanging.

Habush competitive keyword ad 2

Here’s why: look at this competitive ad for the search term “Habush.” There’s absolutely nothing deceptive or misleading about the ad. There’s no “likelihood of confusion” and no trademark infringement. In fact, the search engines have ad rules that affirmatively prevent advertisers from using the competitor’s name in the ad. So all that happens is that a consumer searching for a firm by name also sees an ad for a competitor. Fundamentally, that’s no different than traditional “proximity advertising” – buying a billboard across the street from your competitor, or a yellow pages ad on the opposite page.

And that’s a GOOD THING – because we should favor giving consumers more information when choosing a lawyer, rather than giving lawyers a competition-free channel for online name searches.

Another Blogger Disciplined

I’m always quick to encourage blogging to those lawyers who love to write; I strongly believe it makes you a better lawyer – and one who is more professionally fulfilled to boot. It may even help generate business, but that is a long game.

But it’s not without risk to the unwary. Your blog may be overly promotional. It may reveal client confidences – even if you try to conceal them.

Or you may, as Illinois attorney Joanne Denison did, go on a rip against the local judiciary, and have sanctions recommended for abusing the judges a bit too harshly.

It’s true that attorneys have fairly wide latitude under the First Amendment to criticize judges (see my “Criticism of Judges” page for more details). But when that criticism totters over the line into defamation, the attorney making the criticism is fair game for bar action.

The facts in the Denison case are complicated, and it’s difficult to tell whether the attorney’s complaints about judicial corruption really meet the test for “public figure” defamation (meaning they must be made maliciously or with reckless disregard for the truth). But the takeaway here, as with most cases of judicial criticism, is that care and diligence are in order when taking judges to task.

Also, because I am regularly railing on attorney regulators for disregarding the free speech rights of attorneys, I must note this: the Illinois Attorney Registration and Disciplinary Commission did an exemplary job of parsing the First Amendment issues in rendering their decision. I can’t say for sure that the facts support their conclusion, but at least the IARDC fully considered the constitutional dimensions.

h/t Kevin O’Keefe

Social Media + The Law of Legal Marketing