What SHOULD Attorney Advertising Regulation Look Like?

Josh King1 Comment

I posted the other day about the proposed changes to the ABA Model Rules around attorney advertising. If I sounded frustrated about the glacial pace of change, it’s because it should be manifestly obvious that the attorney advertising rules are a disaster. Our generation of lawyers has inherited a partially-digested bolus of logorrheic, outdated rules from days of yore. And these rules are  supported by pearl-clutching about shadowy horrors, rather than evidence that the rules actually address real harm to the public.

Compounding matters is how lawyers are wired:

1) In an effort to avoid any possible risk to their licenses, most conscientious attorneys over-comply with the rules; and

2) In an effort to provide the widest possible guidance, most regulators and bar ethics committees over-interpret the rules to cover all sorts of activity that can’t legally be limited.

The end result? Consumers get less information about legal services, attorneys feel hamstrung in how they can engage with potential clients, and innovation in the delivery of legal services is hampered across the board.

What’s more, the Rules actually cost the bar in money and attention. As the APRL 2015 Report notes:

In addition to the over-regulation of lawyer advertising that does not serve the legitimate public policy of assuring accurate information about legal services, state regulators (most often Bar associations) spend hundreds of thousands of dollars attempting to defend the regulations in various lawsuits brought by members.

The trifecta! Bad for the public, bad for lawyers, bad for the Bars.

So what should be done? Hey, I’m not just a naysayer – I’ve got solutions! The good news is that the Rules aren’t hard to fix:

Scale the Ad Rules WAY Back

There’s no reason whatsoever for 8,000+ words of attorney advertising rules.[ref]It’s telling that the advertising guidance for doctors runs to less than 600 words.[/ref] Ask any Bar disciplinary counsel; they’ll tell you that they’re focused on the bad actors, and not attorneys who forgot to put a disclaimer in the right place. And they’ll also tell you that the only advertising rule that they need to go after these bad actors is Rule 7.1:

“A lawyer shall not make a false or misleading communication about the lawyer or the lawyer’s services.”

So let’s gut the Rules. We can start by just flat-out eliminating – entirely – Rules 7.2, 7.4, & 7.5. I’ve never heard a remotely compelling argument for the continued existence of these Rules; they are all just sub-variations on the theme of Rule 7.1.

This isn’t that radical of a position; in fact, it’s what the APRL 2015 Report advocated for. But while the ABA Committee bought this argument with respect to Rule 7.5 (firm names), it has inexplicably retained Rule 7.2 – which, as I wrote about earlier – is the Rule that causes nearly all of the harm.  Time to finish the job and get rid of this outdated, overreaching rule once and for all.

Lower the Stakes

Bars could take a giant step toward removing the chilling effect of the Rules via a simple measure: taking discipline off the table for the vast majority of potential Rules violations. As the APRL 2015 Report notes:

Lawyers should not be subject to discipline for “potentially misleading” advertisements or advertisements that a regulator thinks are distasteful or unprofessional. Nor should they be subject to discipline for violations of technical requirements in the rules regarding font size, placement of disclaimer, or advertising record retention. Regulators should use non-disciplinary measures to address lawyer advertising and marketing that does not violate Model Rule 8.4(c).

Translation: technical compliance with the Rules – to the extent there are technical rules – should be accomplished via outreach and education, not threat of disciplinary sanctions (though sanctions would STILL apply in cases of false advertising or repeated, intentional flouting of the rules).

Bars that did so would be doing an enormous favor to their members, who could then feel comfortable engaging with new technology without concern that they might inadvertently put their licenses at risk.

Institutionalize Tests

Here’s a radical thought: how about testing whether a practice causes any consumer harm, rather than hypothesizing the worst potential outcome?

I know that we as lawyers are trained to “spot issues,” but this training drives way too much tentativeness. Instead of applying the precautionary principle – REGULATE NOW, IN CASE THE BAD THINGS HAPPEN – Bars could try controlled tests.

Say a Bar has gotten a question about an innovative product like Avvo Legal Services. Instead of agonizing for 6-12 months over the potential RPC implications, the Bar could – gasp – have a quick talk with the provider and make a deal: the Bar would explicitly let attorneys know it’s OK to participate, if the provider agrees to feed the Bar data on engagement, complaints, etc.[ref]Note to Bars: Avvo would do this deal in a heartbeat.[/ref] There would also be the understanding that it would be a time-limited test (enough time to get data sufficient to understand consumer impact) and that the Bar could pull the plug early if results looked super-ugly.

A process like this would actually IMPROVE the Bar’s ability to address real consumer harm, while smoothing the road to innovation. Because listen: there’s ALWAYS the potential for harm. Life is not without risk. But without taking some chances, we’ll never see where the big opportunities lie – for lawyers and clients alike.

 

Incremental Changes Proposed to ABA Model Advertising Rules

Josh King

There’s a lot of congratulatory talk going on about the “bold” changes proposed for the ABA model rules relating to attorney advertising.

And sure, there are things to like in the proposed changes. The new solicitation rule, in particular, focuses more on substance than form, and contains an exception for solicitations made to experienced buyers of business-related legal services. Those are both positive developments.

But bold change? Naw; more like incremental adjustments to a set of rules that should have been gutted 40 years ago when Bates v. Arizona was decided.

My single biggest disappointment is that the ABA ethics committee didn’t take this opportunity to get rid of Rule 7.2.  This is the Rule that contains the cruftiest, most problematic provisions: those relating to “the reasonable cost of advertising,” restrictions on paying for “recommendations,” and limits on use of “lawyer referral services.” These are the sort of vague terms that attorneys and regulators can’t help but over-interpret in ways that harm consumers and lawyers alike.

It’s not like the committee didn’t have reason to look into the utility of Rule 7.2.  The 2015 APRL Report – heavily leaned on by the committee  in making its proposed changes – makes the case persuasively that Rule 7.2 is unnecessary to protect the public, often unconstitutional in its application, and chilling in its effect on consumer access to information about legal services. Yours truly also submitted comments to this effect.

Yet Rule 7.2 remains. And in some ways, the proposed changes make the Rule even worse. For starters, the definition has been changed to try and make the rule applicable to non-advertising “communications” – despite the fact that these rules can only constitutionally limit commercial speech. And then there’s this little gem that’s been added to the Comments:

“A communication contains a recommendation if it expresses, implies or suggests value as to the lawyer’s services.”

Yeah, like THAT’S never gonna be interpreted too broadly.

Again: attorneys have a hard enough time telling when and where these rules apply. Bar regulators and ethics committees persistently over-apply the rules. And for what? There’s no evidence that the specific ad rules benefit the public. Yet instead of streamlining the Rules, instead of cutting back to the core concept – no false or misleading advertising – we’re getting more of the same old thing.

The ABA ethics committee is holding an open hearing at its Vancouver meeting on February 2, and accepting written comments until March 1. If you’d prefer to see some real change here, please make your voice heard.

Reject the “Professional Speech” Doctrine?

Josh King2 Comments

I’ve written quite a bit about the regulation of professional speech (most recently here), and how this area is curiously under-developed from a First Amendment perspective. The closest thing we’ve seen to the Supreme Court addressing professional speech regulation is the 1985 case of Lowe v. SEC, and that case – like most lower court cases dealing with professional speech – has far more to do with the government’s right to require licenses than it does with how the government can restrict the speech of licensees.[ref]Although the First Amendment implications of whether to require a license have also not been adequately addressed by the courts. While laws of general applicability – like a business license requirement – are fine, laws requiring a license before engaging in expressive activity may also run afoul of the First Amendment. The Bars may have some issues here, as the giving of legal advice – an expressive activity – is limited, on pain of criminal sanction, to those possessing licenses issued by the state.[/ref]

Meantime, we’ve had Supreme Court cases addressing the First Amendment implications of everything from “crush films” to violent video games to drug-promoting messages in the schoolyard. Hell, we’ve had NINE Supreme Court cases plunging the depths of the First Amendment constraints on attorney advertising regulation.

So why so little attention to the Constitutional dimension of regulating non-advertising professional speech? Especially when some 30% of the population now works in a profession requiring a license from the government?

There ARE cases, winding their way up the appellate ladder, that may cause SCOTUS to address the question within the next few terms. But I’ve just come across this recent law review article penned by Widener Law School Dean Rodney Smolla (First Amendment scholar and author of, among other things, the two-volume resource “Law of Lawyer Advertising“) that makes the case that there should be no “professional speech doctrine.”

Rather than subject professional speech regulation to “intermediate scrutiny” analysis (the approach taken by the 11th Circuit in the infamous “Docs v. Glocks” case), such speech should be protected to the same extent as core political speech, Smolla argues. Referring to the Paul Sherman article I wrote about here, Smolla makes the case persuasively that regulation of professional speech should be subject to strict scrutiny – the same standard applied to almost all other forms of content-based speech regulation. While this is the hardest test for regulation to pass, Smolla makes an interesting observation: that in all of the traditional consumer-protection contexts upon which occupational speech regulation is defended, the strict scrutiny test is actually easily met:

No special “professional speech” doctrine is needed, however, to protect the consumers of professional services from expression by professionals that is false, misleading, criminal, tortious, or palpably unethical in some traditional sense (such as speech
covering up a conflict of interest). Application of the strict scrutiny test will already allow for such regulation.

So what’s the basis for regulation beyond these areas? Smolla continues:

What is then left over is the very thin, conclusory, and paternalistic argument that consumers who receive advice from professionals, including advice that often implicates important matters of public discourse, need the heavy hand of the state to protect them from over-reaching and abuse.

The First Amendment, however, is grounded in exactly the reverse set of assumptions. The First Amendment presumes that people are their own best judge of what to say or not say, or listen to or not listen to. Clients do not have to listen to the advice they are receiving, or even continue the relationship.

Exactly right. For as Smolla points out, classic professional speech regulations – like prohibitions on breaching attorney-client privilege or requirements that doctors obtain informed consent – don’t point to a need for a relaxed regulatory standard: they are simply evidence that meaningful regulation can survive strict scrutiny. And perhaps this way of thinking can offer a path to clearing out the excesses of less-meaningful occupational speech regulation.

Lawyers Failing the People

Josh King2 Comments

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

Josh King

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?

What if We Just “Certified” Lawyers Instead of Licensing Them?

Josh King

Last week, I attended the FTC’s second Occupational Licensing Roundtable in Washington, D.C. The Roundtable – titled “The Effects of Occupational Licensure on Competition, Consumers, and the Workforce: Empirical Research and Results” – consisted of economists delving into the costs of occupational licensing. The prognosis is grim. Licensing requirements cost society a great deal (primarily in the form of higher prices and lack of economic freedom for workers to pursue a trade), while returning negligible benefits. Although most comments submitted to the Roundtable addressed other, more recently-licensed professions, Avvo and Responsive Law both submitted comments briefly summarizing some of the empirical data on the cost of legal licensing.

This is not to say that we believe attorneys should be wholly unregulated. Many of the costs of licensing stem from the breadth of the legal monopoly and the numerous restrictions on lawyer marketing and service delivery. These costs could be ameliorated simply by adopting a simpler, narrower licensing regime. But I was struck by a point of consensus by the Roundtable participants: that certification could replace licensure and deliver a massive benefit to consumers (in the form of lower cost, more innovation, and better access) while not meaningfully impacting public protection.

h/t The Locker Room

How would this work in the law? In a world of “certified” lawyers, only those possessing the qualification could use the title “lawyer.” But others could do most or all of what lawyers do, so long as they didn’t try to pass themselves off to the public as certified lawyers. There might be areas (like representing parties in litigation) where providing services would be limited to those possessing certification, but such areas would be few and far between.

Shocking? Not really; that’s largely how legal practice works today in many parts of the world, including England. In a world of certification, clients would have nearly all of the same public protective benefits of licensing while enjoying massively more choice in legal service offerings. It would even be better for lawyers, as certification should be more portable between states than licensure is (and lawyers could choose to still practice in another state regardless, assuming they are willing to forego certification). What’s more, local court-based certifications could flourish, getting back to one of the original purposes of geographic licensing – ensuring that local lawyers are experienced with local law and court procedures.

Lots of food for thought, and the FTC’s continued work in this area will bear close watching.

LegalTech Startup TikD Sues Florida Bar

Josh King1 Comment

So the same day I ponder the question of ethics opinions and antitrust, a lawsuit gets filed against the Florida Bar – alleging antitrust violations related to, in part, an advisory ethics opinion!

This will bear watching. The plaintiff in the case is “Tikd,” an innovative service that helps consumers get legal help – with highly predictable outcomes – when dealing with routine traffic tickets. And the lawyers for Tikd are Ray Abadin (who was President of the Florida Bar just a couple of years back) and Pete Kennedy, the Austin, TX antitrust lawyer who successfully represented LegalZoom and Zlien in various UPL fights with states bars.

The ethics opinion at issue apparently deals with both UPL and fee-splitting concerns with Tikd, and it’s not even clear the opinion even exists. But Tikd says its competitors are spreading the word that the opinion is out there, and the Bar isn’t disavowing it – or even meeting with Tikd to discuss the matter.

For the Florida Bar, this is yet another illustration of the problem with ethics opinions in areas involving competition and advertising. Bars are wired to give conservative advice, but what they really should be doing in these areas is not opining at all. Rather, they should flip the script and adopt a policy that affirmatively encourages innovation in the delivery of legal services, and only looks to enforce the Rules in reaction to evidence of public harm.

Ethics Opinions and Antitrust

Josh King

So a couple of weeks ago I was at the ABA’s Third Annual UPL School in Chicago – a gathering of those bar authorities dedicated to rooting out the unauthorized practice of law. And I have to say – it was a strangely chastened bunch. The specter of North Carolina Dental Board v. FTC hung heavy in the air, and many in attendance claimed that they no longer issue advisory opinions or cease-and-desist letters. Rather, they do one of two things when they get complaints: dismiss, or file a lawsuit.

This isn’t a bad thing. Advisory opinions and C&D letters can have a toxic, chilling impact, stopping all sorts of activities that are well outside the boundaries of the legal monopoly. In fact, this is the sort of practice that got the North Carolina Dental Board into hot water – dentists using C&D letters to shut down tooth-whitening services. And it’s what we see in the more egregious examples of UPL enforcement. Being more cautious when wielding the regulatory club isn’t a bad thing, so long as regulators don’t overcompensate and abandon ALL attempts to enforce UPL.[ref]Despite my skepticism about the breadth of the legal monopoly, I’ll readily acknowledge that there are consumer-impacting UPL practices out there, among them non-lawyers pretending to be licensed and the various related forms of “notario” fraud.[/ref]

But I have to wonder: is the UPL side of the regulatory house not talking to the legal ethics side? Because the same issues exist there. North Carolina Dental stands for the proposition that Bar regulators can lose their state action antitrust immunity for anti-competitive behavior. And what’s more, this potential liability also carries through to the individual members of the Bar boards and committees that make these determinations.

Advertising ethics opinions – and advertising review boards, in those states that employ them – can have the same sort of anti-competitive impacts as UPL letters and opinions. In all such cases, potential competitors are being elbowed out or burdened. The fact that in the advertising context those competitors are primarily fellow members of the Bar doesn’t make a difference. Bar Ethics Committees – which are comprised of market participants – are issuing ethics opinion that limit competition. The do so by chilling the ability of other members of the Bar – members who may not enjoy Bar leadership positions – to offer information about legal services to the public. They may even limit non-lawyer competition with Bar lawyer referral services.

As with UPL, there are ways Bars can regulate such advertising activity without taking on antitrust risk. Doing so requires an open, transparent, and evidence-based showing that the consumer protection justifications for its restrictions outweigh the anti-competitive effects. Or at least “active supervision” by actual state government actors. But that’s not the typical closed ethics opinion approach, which we continue to see even now two years after the decision in North Carolina Dental. A handful of states – like Virginia, North Carolina, Oregon, and Washington – at least seem to be aware of this concern. But it’s odd that the cautious approach on the UPL front has yet to be matched by most regulators on the legal ethics side.

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

Josh King

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.

Speech Restrictions on Judges

Josh King

More on occupational speech restrictions: I’ve come across this recent piece by Texas A&M law prof Lynne Rambo, dealing with First Amendment issues around judicial speech.  Rambo’s article notes that “surprisingly, most of the state and federal courts deciding judicial discipline cases based on extrajudicial speech have not addressed the constitutionality of the code provisions involved.”

No kidding! That’s because there’s been precious little judicial guidance in general when it comes to the tension between the First Amendment and occupational speech restrictions, and next to none where lawyers and judges are concerned (this, despite the law being the most speech-intensive of the licensed professions). Nonetheless, what little there is out there points in the general direction of occupational speech being regulated subject to the same intermediate scrutiny standard applicable to commercial speech.

We also know that occupational speech regulation only goes so far. Lawyers don’t waive their First Amendment rights as a condition of Bar membership; they are free to opine and express themselves any way they want (or at least, to the same extent as any other citizen) as long as doing so doesn’t involve their clients or matters.

But what about judges? Is there something special about their roles that would lend itself to greater reach for occupational speech regulation? Professor Rambo makes the case in the affirmative, arguing that judicial speech – even far off the bench – should be regulated via the Pickering test applicable to public employees.

What’s the Pickering test? It’s a balancing test, which looks at the the interests of the employee in commenting on matters of public concern and the interests of the State – as the employer – in promoting the efficiency of the public services it performs through its employees. It doesn’t apply to things an employee might say as part of his or her job (it’s not a First Amendment violation for a government employer to discipline an employee for those), but rather only to those things a government employee says OUTSIDE of the job that may cause problems for the government employer’s mission.

That’s not much of an issue for most government employees, but it’s different for judges given their position in society. Judges are highly esteemed and viewed as neutral arbiters. The courts are very attuned to ensuring that judges avoid even the appearance of bias. A judge could be highly competent – and a paragon of objectivity – but that judge staking out positions on one “side” or another of contentious issues in the community will cause no end of trouble for the court.

As Rambo notes, the interest of the government employer in the Pickering test is “promoting the efficiency of the public services it performs through its employees.” She suggests that in the judicial context this means something more: protecting the judiciary from extrajudicial statements by judges that compromise “either the actual or the perceived independence, integrity or impartiality of the court.”

That sounds right, particularly since the “efficiency” of the government institution that is the court is best measured not by how quickly it churns through cases but rather by how independent and impartial it can be – both in reality AND appearance. And that means that judges – unlike lawyers – may be subject to occupational speech regulation that reaches far beyond the confines of the courtroom.