Is Real Change Finally Arriving to Lawyer Regulation?

Go read Jayne Reardon’s latest, “Re-Regulating Lawyers for the 21st Century,” which provides an excellent overview of a series of attorney regulatory changes being floated in a number of states. While the process in California seems to be attracting the most attention, developments in other states may well outpace it. I wouldn’t have thought it possible a year ago, but Arizona seems to be on the road to doing two things I’ve long called for:

These changes may seem like small potatoes next to proposals like allowing outside investment in law firms. But eliminating these rules should be a much easier proposition, and doing so could unblock a lot of potential innovation in consumer legal offerings.

Louisiana Tired of Lawyer Ads

Well, or maybe business/insurance interests, a coalition of which is calling on the Louisiana Bar to crack down on “misleading” lawyer ads.

Misleading lawyer ads? That sounds bad!

Except those complaining don’t offer any specifics, pivoting seamlessly from “misleading” to the volume of lawyer ads that reach Louisianans. I mean, sure – it’s obviously a bummer when you’re just trying to run a business and your customers are constantly being reminded that they have rights and remedies. But it’s safe to say that this particular issue has been decisively settled in favor of consumers getting more information about legal services.

In an effort to ramp up the pressure, the coalition is pressing a bill through the state legislature that would require the Louisiana Bar to re-evaluate its rules governing attorney advertising.

Hey, study and re-evaluation is always good. Here’s hoping that in so doing the Bar decides that its current rules – which include an advertising review process that is both unconstitutional and anti-competitive – need to actually be simplified in the name of greater flow of information about legal services.

#newtox, and Doctors’ Social Media Disclosures

So, plastic surgeons: they LOVE Instagram. And with good reason. While Twitter is great for conversing with other surgeons and catching up on professional news, Instagram actually has an audience of potential patients. Savvy plastic surgeons have caught on to this, and many of them are streaming before-and-after shots and candid videos on the daily.

Many of these posts promote certain treatments. That’s one thing for say, rhinoplasty, but what about branded treatments, like Botox or Coolsculpting? And what if one of those branded treatments can be viewed as sponsoring the doctor’s post?

Case in the point: the splashy launch of a new Botox competitor, Jeaveau. At a party for the brand’s advisory board in Mexico, the doctor members of the board didn’t miss the opportunity to share photos and praise with abandon. And this being Instagram, hashtags were ubiquitous, including Jeaveau’s own “#newtox.”

Now, the Federal Trade Commission has long taken issue with social media “influencers” promoting brands without disclosing they were being paid to do so (or receiving complimentary products).

But is this REALLY that sort of situation?

The purpose of the FTC’s endorsement guidelines can be roughly summed up as “consumers should know if endorsers are being paid to endorse.” But while these doctors are getting a form of compensation – their expenses to attend advisory board meetings are covered, and there are often stipends and honoraria for talks they give – they aren’t being paid to endorse. Rather, they’re being paid to advise Jeaveau’s makers and take back what they’re learned to their busy practices.

Hashtag love for #newtox? That’s just a by-product of their affection for Instagram.

Ultimately, though, while a party like this offers a crystallizing example, it’s tricky to try to unpack the relationship between doctors, brands, and the mention of branded treatments on social media. Many doctors attend multiple events, for multiple brands, every year. Nearly every doctor gets some form of free or discounted product. Should disclaimers be required in all such instances? Perhaps it’s my general distaste for disclaimers, or the fact that this isn’t some social media influencer being paid to promote a new brand of shoes. Let’s save the disclaimers for the Kardashians of the world, and let the plastic surgeons enjoy their Instagram moments.

Don’t Take Your Dealmaking Tips From DT

It seems Donald Trump got the wrong takeaway from this weekend’s brief government shutdown:

This crowing boast of his own negotiating prowess gets things entirely backward. If I had to point to a single cause of the  shutdown, it would be Trump’s own ineptitude at negotiating. For despite his self-professed bargaining acumen, Trump is really just a one-trick pony: he’s got a single approach to dealmaking, one that likely worked well for him in real estate and licensing deals but which is wholly inadequate to the circumstances in which he now finds himself.

Trump’s is a chaotic approach, combining affability and relationship-stroking with mercurial changes in temperament and deal terms. He frequently re-trades or tries to change deal terms at the 11th hour – or even after the fact. That’s a crappy way to do business, and it doesn’t yield good long-term returns. It increases the risk of any given deal imploding, and it craters the dealmaker’s reputation, making future deals harder.

Unfortunately, it’s a technique that can be very effective in wringing favorable terms out of deals where you’ve got lots of leverage. And that’s certainly familiar terrain for Trump, who cut his dealmaking chops squeezing small vendors, aspiring licensees of the Trump name, and creditors fearful of yet another debt-sucking Trump bankruptcy. Those people didn’t have any good alternatives to making a deal with Trump, so they had to grit their teeth and suck it up, even as he went back on his words, changed terms mid-stream, and generally acted like a mercurial jackass.

We’ve certainly seen Trump roll this play out repeatedly in his first year in office, with predictable results: chaos, disorder, and a lack of any meaningful negotiated outcomes, despite plenty of them being within reach. And that’s because negotiation in governing is a lot different and more complex than squeezing a plumber who can’t afford to sue to accept sixty cents on the dollar for his invoice. Getting stuff done requires a mix of credibility, toughness, and the smarts to know when to stop negotiating and take a deal.

To be successful at getting deals done in this kind of environment, there are times when you need to ask counterparties to take you on faith. And for them to be willing to do so requires a reservoir of trust. If Trump had any such reservoir, his year of bald-face lying and retrading has drained it bone-dry.

“See you at the negotiating table?” Not likely. Watch as experienced pols increasingly pack up and walk from negotiations with Trump – that is, if they’re unsuccessful in sidelining him from the table in the first place.

 

Lawyers Failing the People

It’s not like our society is getting less bureaucratic, less litigious, less in need of legal guidance. And indeed, as Professor Bill Henderson’s number-crunching shows, the spend on business and government legal services went up nearly 20% in the 5 year period between 2007 and 2012.

But consumer spending over that time? It went DOWN by over 10%.

That’s awful. It’s awful for the lawyers who could be more gainfully employed, but it’s really awful for the public. Their legal needs haven’t shrunk by 10%; they’re just choosing to do without legal assistance.

These numbers represent a collective action failure on the part of lawyers, regulators, and legal trade associations. Our industry has carved out a rigid monopoly in providing legal services, but it has clung for far too long to a single way of doing business.

Consumers in 2017 expect transparency, predictability, information, and control when making purchases. Instead, we give them opaque, uncertain, “full scope” representation as the only option. And forget about innovations like ease of purchase, satisfaction guarantees, or non-lawyers providing some routine legal services.

The practice of law isn’t going to shrink its way to relevance in people’s lives. These numbers should be a wake-up call that we need to get serious – about regulatory reform, about embracing innovation, about the extent of the legal monopoly – if we’re going to stave off this escalating crisis in consumer access to justice.

November Notes: Attorney Gets SLAPPed with Fees; California Bar Goes Splitsville

Be Very Sure it’s Defamation Before Suing. A Texas attorney – or former attorney, because he’s now been disbarred – is liable for over $100K in attorney’s fees after unsuccessfully suing a local newspaper for coverage he found less than flattering. As I often point out, “defamation” isn’t “something mean somebody wrote about me.” Defamation requires that what’s written or said be materially false, and usually in ways that actually harm one’s reputation. And even then it often doesn’t make sense to sue (because of cost, hassle, and the Streisand Effect). But it REALLY doesn’t make sense to sue when a) the statements weren’t in fact false, and b) you’re doing so in a state like Texas which has a strong “anti-SLAPP” law that allows the defendant to immediately strike your complaint and get a mandatory attorneys’ fee award.

California Bar To Split in Two.  Big news from the country’s biggest bar: California is splitting in two. No, not the earthquake rupture that would cast LA, SF, etc. into the sea, but rather the decision to break the California State Bar into two pieces. To one side goes all of the mandatory licensing and disciplinary activity; to the other goes all of the hob-knobby trade association activity. It’s a natural split, already long in place in New York, Illinois, and, more recently, the United Kingdom. And it makes a ton of sense. The regulatory piece of the Bar – which is mandated with protecting the public – has always been in tension with the trade association interests of members. It’s far too easy – and tempting – for lawyers to use the levers of industry regulation to protect their monopoly. This divided structure doesn’t completely solve for the problems of self-regulation, but at least it removes one major impediment.

Not Sure About Twitter? Try “Lurking.” Georgia Supreme Court Justice Keith Blackwell, when asked about his twitter habits, noted that while he has an account, he uses it strictly to read information posted by others – he does not tweet. While his reasons for so doing may be grounded in a heightened sense of judicial propriety, this approach can have wider application. For while Twitter is a phenomenal source for breaking news, incisive commentary, cultural ephemera, and humor, interactivity on twitter  . . . isn’t always so hot. You can find yourself arguing with a disguised Russian troll bot, or besieged by basement-dwelling racist troglodytes. Or simply anonymous weirdos possessing no familiarity with logic and reasoned debate. And you get to spend your tame arguing with them – 140 characters at a time. Sure, there are bright sides, too. I’ve engaged with, and even met in real life, smart, thoughtful people on twitter. But if you’re just wading in, starting out as a lurker might be the best bet.

Social Media News and Notes:

Better than nothing: court accepts unsent text as dead man’s last will and testament.

The “can judges ‘friend’ lawyers” question is going all the way to the Florida Supreme Court.

Arf! Can AI rules be created to make intelligent robots act more like service dogs?

October Notes: The Facebook Post that Cost an In-House Lawyer Her Job

In-House Lawyer Fired for Intemperate Facebook Post: Expressing a lack of sympathy for shooting victims based on their perceived political leanings isn’t a good look on anyone. So it’s no surprise that CBS lawyer Hayley Geftman-Gold was unceremoniously fired for posting on Facebook, shortly after the mass shooting at a Las Vegas country music festival, that she was indifferent because “country music fans often are Republican gun toters.” It’s (yet another) example of how the quick-and-informal nature of social media posting can lead to permanent career damage. But should Geftman-Gold’s post also lead to disciplinary sanctions?  The answer is certainly no. Outside of limited circumstances involving their own clients and legal matters, lawyers still have a First Amendment right to express their opinions. But as this instance shows, there’s a lot more than merely legal ethics to keep in mind when thinking about sending out that oh-so-incisive tweet or Facebook post.

No “Excusable Neglect” For Cutting Corners on Anti-Spam Software:  I’ve never been one to get exercised about spam. Modern email clients sort it well, and it’s easy to quickly scan the “junk” file every few days and purge the offending items. But combine an inordinate distaste for spam with law firm frugality and you get an email system that automatically deletes valid and spam email alike – with no safeguards. Which can unhappily lead to important court documents finding their way straight to the memory hole, sight unseen. That’s, uh, bad – and malpractice-worthy. Or as a Florida appellate court put it, in denying a law firm’s request for leave to appeal an award of attorneys’ fees against its client: “Odom & Barlow made a conscious decision to use a defective email system without any safeguards or oversight in order to save money.” Ouch! One part of a lawyer’s duty of technological competence is listening to the experts – and not shining their recommendations to save a few bucks.

Court Doesn’t Buy the “Contract By Tweet” Concept: While some people are content to argue about whether twitter is really just a cesspool of logic-free argument and pet videos, others are trying to use it to cobble together contract claims. Here’s how it works: post your creative ideas, tweet them at actors and movies execs, and then when a movie that plausibly looks like your idea appears, pounce with the contract claim! Alas, as with all too many 1-2-3 PROFIT ideas online, this one has met a brick wall. It turns out that to make a contract claim – even on social media – you’ve got to have, you know, the elements of a contract. Things like “terms,” and “agreement,” and “consideration.” A shocking reminder that the rules applicable in real life still apply online.

Social Media News and Notes:

UN Ambassador Nikki Haley learns that retweets CAN equal endorsements.

Yeah, so it turns out that creating fake court orders to get negative online reviews taken down isn’t such a hot strategy.

And tempting though it might be, it’s best not to create bogus online postings about opposing counsel, either.

August Notes: All About the Judges

Judges: Social Media on Their Minds. As social media gets both more commonplace and mature, it’s natural that even judges will be using the stuff. I mean, it’s not like we’re going to require that newly-minted jurists relinquish all access to cat videos, dank memes, and food photos, right? However, as this discussion with several prolific judicial users of social media shows, the rules of the road for how judges should think about social media issues are still far from being sorted out. Some litigants will parse all corners of a judge’s social media trail, looking for indications of bias – even in areas as innocuous as the accounts a judge follows on twitter. For social media-savvy judges like the Texas Supreme Court’s Don Willett and Georgia Court of Appeals Chief Judge Stephen Dillard, engaging on social media requires a high level of attention: no commenting whatsoever on pending matters, and steering clear of political controversies.

But Even a Judge’s “Friends” Can be Problematic. Most of us know by now that a “friend” on Facebook is not the same as a “friend” in real life. Depending on the standards we choose to use, our Facebook “friends” may include casual acquaintances, business associates, and people we haven’t seen or spoken to in decades. But the unfortunate familiarity of Facebook’s chosen term has caused no end of consternation for judges, who seem to face regular recusal motions because they happen to be Facebook “friends” with counsel appearing before them (here’s the latest example). It’s all part of the continuing inability of the bar to get that social media is simply an extension of things we do in real life. If judges can banter and share canapes with counsel at Bench-and-Bar events, why can’t they be Facebook “friends?”

Blogging Not a Showstopper for Judicial Nominee. As with twitter and Facebook, it was only going to be a matter of time before some blogging lawyers would be up for judgeships. Case in point: Kentucky attorney John Bush, nominated for a seat on the 6th Circuit, who had posted hundreds of political and contentious posts pseudonymously on the blog “Elephants in the Bluegrass.” Among these were posts sympathetic to “birther” claims about Barack Obama and others deeply critical of abortion rights. However, by differentiating between the political nature of his speech as a private citizen and the obligations he would undertake as a federal judge, Bush was able to win over enough votes – he was narrowly confirmed by the Senate in late July.

Social Media News and Notes:

No, says the 9th Circuit, a judge tweeting a news item is NOT grounds for recusal.

Texas judge under fire for venting on Facebook about being “tortured” by counsel.

And litigants? Beware of judges watching YOUR social media activity.

April 2017 Notes: It’s all About “Unmasking” This Month!

Twitter Crushes Unmasking Attempt. If you’ve been following the political news lately, there’s been LOTS of talk about leaks of information and the “unmasking” of the identity of U.S. citizens caught up in government surveillance of foreign spies. But the political unmasking tilt took yet another turn in early April, as the Department of Homeland Security tried to use an administrative summons to force Twitter to reveal the identity of the person behind an anonymous account. The account – @ALT_uscis – was one of many “ALT government” accounts set up after last November’s presidential election. And like many of the other accounts, @ALT_uscis regularly posts content critical of the Trump administration and the agency it spoofs – in this case, the Customs and Immigration Service. Twitter, to its credit, filed a federal lawsuit to quash the summons. After all, there is a strong first amendment protection for anonymous speech, and the use of administrative summons or subpoenas to reveal the identity of anonymous speakers – particularly when such tools are wielded by thin-skinned bureaucrats – is exceptionally threatening to full and robust public expression. Within a day the DHS withdrew the subpoena, showing that at least at some level grownups have asserted authority within the agency. But it shouldn’t have to take a lawsuit and public pressure for government agencies to respect the right of the public to criticize them.

Avvo Unmasking Follow-Up. Back in 2015, Avvo took a similar stance in response to a subpoena from an attorney seeking to unmask the identity of the anonymous author of a negative Avvo review, who the attorney believed was a non-client. That case, decided in favor of the reviewer, established the balancing standard in Washington State by which courts will determine whether to permit discovery under “unmasking subpoenas.” Now, the reviewer has come forward and identified herself, proving that she was a client of the lawyer in question, and noting that she “feels strongly about the need for a consumer to speak the truth about their experience” with an attorney.

It’s Hard to Hide Online. If any of my readers are wondering whether they can reliably stay anonymous online, here’s a fascinating cautionary tale. After FBI Director James Comey mentioned offhand that he had a “secret” Twitter account, Gizmodo reporter Ashley Feinberg took on the challenge of tracking it down. Through some quick detective work and cross-referencing of other accounts, Feinberg zeroed in on a particular twitter account: @ProjectExile7. And by tracking the accounts @ProjectExile7 followed, and the FBI-centric tweets occasionally sent out by the account, she concluded that it was “almost certainly” Comey’s (this conclusion was bolstered by the posting of this meme by @ProjectExile7 right after Feinberg’s story ran). The takeaway? If even the FBI Director can’t stay hidden from a motivated investigator, don’t count on having better luck yourself.

Social Media News and Notes:

Lawyers continue to wring hands about reconciling ethics rules and use of social media.

“Reverse astroturfing:” $34,500 judgment in case of false negative review left for competitor.

Some surprisingly good tips for lawyers experimenting with Facebook advertising.

Credibility in Business and Government

[This post was inspired by an email discussion after my last CLE webinar, “Lawyers & Lies.”]

Prior to the 2016 Presidential election, it wasn’t exactly a secret that Donald Trump is a less-than-effective businessman. Those familiar with how businesses operate and grow know that building a business empire through real estate and one’s gilded name, on the back of inherited wealth, is no marker of an excellent business operator.

The signs were all there: the bankruptcies, the reliance on a small coterie of loyalists and family, the rumors of shady dealings, the repeated stories about screwing over counterparties (often tradespeople and small-scale vendors), and the lack of any business vision other than the simple logic of commercial real estate: leveraging other people’s money and hoping that rents rise and assets inflate fast enough to outpace debt service.

So I doubt that any serious business person voted for Trump on the commonly-held assumption that he would wield his “business acumen” to bring the problems of unruly government to heel. 1 But plenty of people less familiar with business surely bought in to this pipe dream, assuming that Trump’s gold-festooned lifestyle was a proxy for serious mastery of all things business.

It should now be obvious – to  all but the willfully blind – that the assumption of Trump’s business skills has been put soundly and firmly to bed. The failures of operational discipline were apparent from the start, from the disorganized transition to the complete goat rodeo that represented Trump’s first travel ban rollout – an egregious bit of policy that nonetheless could have easily been landed successfully had a defter hand been at the helm. But beyond this lack of operating chops, we are now seeing the impact of another, even more critical form of business currency that Trump seems devoid of: credibility.

Presidents and politicians, even more than business leaders, are notorious for spin, overstatement, and failed predictions. But this doesn’t mean they don’t retain – and rely on – some reservoir of core credibility. That much of what they say, particularly when making statements of fact and important or personal commitments, can be fundamentally trusted.

Trump is something else entirely. In the New York Times yesterday, David Leonhardt offered a good overview of the President’s many, many confabulations. Yet while the man is clearly a liar (in the sense that so many of his untruthful utterances, unlike the spin or failed predictions of other politicians, are clearly intentional), he is also something more: a bullshitter. The bullshitter will lie, certainly. But more fundamentally, the bullshitter doesn’t care about the truth. Whatever he says is whatever he says – it’s just a means to end. He says whatever he needs to say to get to where he wants to be.

And the thing is, being a bullshitter probably worked pretty well in Trump’s sad, shoddy, little business empire. You can shine on lenders, as long as they get paid or you’ve got an escape hatch via bankruptcy. You can stiff your “little guy” vendors, because what are they going to do, sue? And you can take advantage of the star-struck and gullible, because suckers abound when celebrity (even of the tarnished, C-list variety) is around.

But lacking credibility doesn’t work in real business, or – as Trump is learning – in government. First of all is the transparency: people start checking things out. They follow up to see if you did what you said you were going to do. And they call you on your bullshit when you lie or fail to follow through.

Even worse for the bullshitter who finds himself out of his depth is the fact that the loss of credibility makes it really hard to get things done. While our society has lots of contracts, laws, and verification procedures, there are myriad points where we invest – time, money, effort – based on our trust of another person. Imagine if you didn’t trust a counterparty to not retrade or willfully breach an agreement. Would you invest the time to negotiate a deal with them anyway? Of course not. The same goes for government – the bullshitter’s got no ability to cajole, persuade, or incentive. His bullshit has cost him any room to negotiate, because his counterparties don’t believe what he’s saying, and don’t trust that he will meet any commitments he makes. He’s stuck with nothing but punitive measures.

The punitive-and-petulant approach may have worked passably well in the gaudy corridors of Trump Tower. But as our 45th President is discovering, it’s not remotely enough to meet the challenge of running the country. Credibility must come first.

Notes:

  1. Although surely plenty voted for him on the assumption that he would adopt business-friendly policies, either hoping that collateral damage (to democratic institutions, national security, minority rights, etc.) would be minimized or out of a willingness to ignore such concerns. The first part of that seems to be working out so far.