NetEthics Note: This article was recently published in the National Law Journal and was written by William E. Hornsby, Jr., staff counsel to the American Bar Association Commission on Advertising, in the Association's Legal Services Division. The views expressed here are his own and should not be construed to reflect the policies of the ABA.
Even though the internet existed prior to the time the U.S. Supreme Court lifted the ban on lawyer advertising in 1977, it has only become a viable vehicle for marketing legal services within the past year. As law firms go from the Yellow Pages to home pages, they are embracing the internet at a phenomenal pace. Reportedly, five law firms had home pages on the World Wide Web in November 1994. Seven months later, that figure was estimated at 500 law firms.[1]
A combination of economic and technological developments set the stage for this growth, which is likely to continue until it reaches a point of saturation. The hardware necessary to reach the internet has now become affordable. So too has the connectivity or the gateways to the internet. Literally thousands of new users, both personal and business, are logging on every day. In addition, and perhaps more importantly, graphics capabilities have advanced to create messages of far more interest to those new users.[2] The Windows application combined with color monitors as standard equipment now enable wide dissemination of virtual law firm brochures that were unimaginable only a few years ago.
Just as it is with any type of fast moving change, the use of the internet to market legal services carries with it many unanswered questions. In particular, what are the ethical implications of this new endeavor? Since the rules differ from state to state, which ones apply when the internet goes everywhere? How can a law firm market its services in cyberspace and still comply with the rules of legal ethics? It is impossible to answer these questions with certainty. Different points of view will emerge and some issues will not be firmly decided until the courts have done so. Nevertheless, an examination of prior applications of ethics rules serves to give an initial insight into the possible applications to the new vehicles available in cyberspace.
Unfortunately for firms interested in creating and maintaining a presence on the internet, the threshold question is not whether it is advertising, but instead, whether the home page is commercial speech, a concept far broader than that of advertising. The ethical provisions of the states, found in the rules of professional conduct or codes of professional rules, are not limited to advertising or solicitation activities. The rules govern all commercial speech of the lawyers, the firm, its employees and agents.
It is not necessarily easy to determine whether a firm's presence on the 'net comprises commercial speech. The Supreme Court has defined commercial speech as speech where the purpose is "to propose a commercial transaction."[3] At another point, the Court applied the standard of speech "related solely to the economic interests of the speaker and its audience."[4]
While the intent of the firm on the World Wide Web may be to further its business, it is the content that controls whether it is commercial speech, and therefore subject to the regulations. For example, in a case that challenged lawyer advertising regulations in Texas, the U.S. District Court for the Eastern District of Texas observed that a lawyer's newspaper advertisement soliciting public response to his position on judicial selection did not propose a commercial transaction and therefore was not commercial speech, even though the lawyer who sponsored the ad stated he did so for the expressed purpose of generating new business.[5]
Viewing the matter practically, most lawyers who use the internet in its reasonable capacity will be proposing commercial transactions as they do in law firm brochures, defining the capabilities of the firm, the history of its achievements and the expertise of its partners. With few exceptions, it is likely home pages of law firms and participation on the 'net by individual lawyers are subject to the rules of professional conduct governing the communication of legal services, in particular those that prohibit misleading statements and otherwise control advertisements and solicitations.
Nothing about marketing legal services on the internet precludes the application of state rules of professional conduct. It is unethical for a lawyer to communicate information that is deceptive on a home page, just as it is unethical to do so using any other medium.
While lawyers may take it for granted that they must market their practices exclusively in ways that are truthful and nondeceptive, the legal profession distinguishes itself from all others by the extreme to which this notion is carried out. Rule 7.1 of the ABA Model Rules of Professional Conduct illustrates the ways in which lawyers are prohibited from making false or misleading statements. Under Rule 7.1(a), it is improper to make any statements that are material misrepresentations of fact or law. This would bar any kind of puffing. A common example would be a situation where a law firm overstates its capabilities, perhaps by using absolutes such as "a national law firm," "providing complete legal services" or "serving all legal needs." Rule 7.1(a) also makes it a violation if the lawyer omits something that would be necessary to make the statement nondeceptive. For example, if a firm advertises its contingency fee arrangement by stating "no collection, no fee," the client is probably misled into believing he or she will not be responsible for litigation costs involved in the case and the omission of that information is therefore misleading.
Rule 7.1(b) prohibits lawyers from communicating in ways that create unjustified expectations. This rule assumes that every case is unique and a lawyer's history of success should not be used as a gauge of future outcome. Therefore, law firms are limited in the publications of "track records" as well as client testimonials and endorsements. Similarly, the rule is applied to the use of titles, such as those of former judges or political office-holders, when the use of that title implies a relationship that would seemingly give that lawyer an advantage over others.
Rule 7.1(c) prohibits the comparison of a lawyer's services with that of another, unless that comparison can be quantified. Thus, a law firm could indicate that it performs more real estate closings than any other law firm in the metropolitan area, but it could not indicated it provides better service for those closings. This rule has been applied to limit the use of a variety of subjective terms in lawyer advertising, including "experienced," "expert," "highly qualified," and even "competent."[6]
Beyond the need to comply with the state interpretations of the rules governing what is false and misleading, lawyers must also comply with the rules specifically governing advertising, solicitation and specialization, as set out in the state-adopted counterparts of ABA Model Rules 7.2, 7.3 and 7.4. However, the specific state rules governing these provisions may or may not apply to the law firm's presence on the internet, even if that presence is commercial speech. Virtually none of the state rules of professional conduct have been promulgated in anticipation of cyberspace usage and the specific language may be broad enough to include the activity or narrow enough to exclude it.[7]
For example, compare the requirements governing the labeling of written solicitations of legal services. ABA Model Rule 7.3(c) states, "Every written or recorded communication from a lawyer soliciting professional employment from a prospective client known to be in need of legal services in a particular matter...shall include the words 'Advertising Material'... at the beginning and ending of any recorded communication."(emphasis added) Most states have comparable provisions, but word them in a variety of ways. Indiana Rule 7.3(c) states, "Every written or recorded communication from a lawyer soliciting professional employment from a prospective client potentially in need of legal services in a particular matter...shall include the words 'Advertising Material' ... both at the beginning and ending of any recorded communication."(emphasis added)
The application of these rules suggests that a home page is not directed to a prospective client known to be in need of legal services in a particular matter and therefore, under the Model Rules would not need to be labeled "Advertising Material." On the other hand, the same home page could be construed to be one that solicits a prospective client potentially in need of legal service in a particular matter, and therefore would violate the rule if it does not include the label.
The state rules governing law firm marketing emerged after the U.S. Supreme Court lifted the ban on lawyer advertising in 1977, and have been modified as a result of several court decisions since then. Additionally, lawyers have marketed their services in different ways and to different degrees among the states, causing some jurisdictions to react against overreaching and crass commercialism through greater rule restrictions. States such as Iowa, Florida, Texas, New Mexico and Nevada have imposed a varying range of restrictions far beyond those of the ABA Model Rules.
In determining which state rules apply to a law firm marketing services on the internet, the important factors involve: 1) the states in which members of the firms are admitted to practice, 2) the states in which the firm is seeking clients and 3) the states in which the firm in fact practices.
ABA Model Rule 8.5 governs circumstances of multiple admission. According to this rule, the state rules that apply to a choice of laws are those of the state in which the lawyer principally practices, unless the conduct has its predominant effect in another jurisdiction in which the lawyer is licensed, in which case the rules of that jurisdiction apply. This suggests that a lawyer who has multiple admissions or a law firm with lawyers admitted in various states would need to comply with the rules of each of those states where there is admission by a member of the firm and in which the firm is seeking clients, since it would otherwise be impossible to determine in advance in which state a marketing effort would have its predominant effect.
The failure of a law firm to comply with the ethics provisions of a state in which a member of the firm is admitted could lead to sanctions limiting the lawyer's right to practice in that state. No such remedy is available, however, in the circumstance where a law firm is marketing its services in states where no one in the firm is admitted to practice. This can create the peculiar application of unauthorized practice of law as a remedy to stop the noncomplying conduct. If there were no remedy available governing the marketing of legal services by lawyers not admitted in a jurisdiction, the lawyers who are admitted to those states with restrictive rules would be forced to compete with the out-of-state lawyers inequitably. To do so would no doubt be inconsistent with the purpose of the limiting regulations to start with. At least one jurisdiction is currently using unauthorized practice as a basis to sanction out-of-state law firms that sent solicitation letters to accident victims in violation of the rules governing those letters in the state where the victims reside.
Although the stakes may be higher where there is admission, there appears to be a need for law firms to comply with rules governing the marketing of legal services wherever the firm is seeking clients. For most firms using a home page as a marketing vehicle, this will involve a substantial number of states, making compliance a difficult task.
Most firms probably now post their presence on the internet in reckless disregard to the rules of professional conduct controlling the activity. After all, the theory goes, the rules are designed to control crass commercialism, sensationalism and overly aggressive ambulance chasing; not dignified, stylish and information-oriented material designed to help companies make sound decisions about meeting their legal needs. While it is probably true that enforcement for rule violations are far more likely to occur against those firms offering personal legal services, substantial risks exist for any firm that violates the rules. Most states enforce their ethics provisions governing marketing on a reactive basis. That is, violations are enforced because a competing lawyer brings a complaint. The other lawyer is usually someone who has to market services and does not believe he or she should have to do so at a competitive disadvantage with those firms who choose not to follow the ethics provisions for whatever reason.
Additionally, given limited resources of disciplinary agencies to prosecute lawyers who violate the rules, some states may find it advantageous to create a high-profile example of a firm which decides to assume the risk of non-compliance. Reckless disregard of the rules governing legal services marketing among the various states is not a good option.
On the other hand, absolute compliance assures no risk of violation. The problem is the difficulty with which it is achieved, as well as the content and appearance of the result. The copy must be scrutinized according to the rules that apply to each state and specific state nuances must be incorporated. For example, different state-required disclaimers must be included as directed by those rules. Thus, to comply with the rules of Alabama, the communication must include the statement: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." To comply the Florida rules, the advertising has to state: "The hiring of a lawyer is an important decision that should not be based solely upon advertisements. Before you decide, ask us to send you free written information about our qualifications and experience."
Testimonials and endorsements of all types must be avoided, since some states find them to be inherently misleading and prohibit them under their version of rule 7.1. Rules such as those in Arizona and New Jersey mandating that the advertising be predominantly informational may preclude entertaining portions of the material. Rules such as that in Iowa which prohibit any communication that appeals to emotions, prejudices, likes or dislikes would also limit the content and orientation of the firm's material.
Copies of advertising materials must be filed in several jurisdictions. A few states, notably Texas, Florida, New Mexico and Kentucky, require advertising to be screened prior to or concurrent with distribution of the material. Filing fees must accompany the review submissions and be refiled when there are changes. Some states with screening requirements have not yet decided whether to include internet materials. Texas, however, has concluded that home pages of Texas law firms must be submitted and failure to so do is itself a rule violation.[8]
Absolute compliance may be most feasible when a small law firm has a geographically limited practice and produces a home page targeted toward prospective clients in that limited area. For example, a firm may offer representation in real estate tax appeals to property owners in Cook County and therefore, do no more than comply with the rules governing lawyers in Illinois.
There are a number of other options which could lead to suitable exceptions for law firms that market their services on the internet and are not willing to assume the risk of disregarding the rules nor are they prepared to comply with all state provisions. Prior to looking at those exceptions that may be feasible, those which are not should be noted. Some commentators have suggested compliance with the most restrictive rules will suffice to be compliance with all state rules. This "lowest common denominator" concept ignores the ways in which the state rules vary. The requirement to comply with a disclaimer in one state, for example, in no way meets the requirement to include a different disclaimer in another state. Likewise, filing copy in one jurisdiction does not meet the requirement of any other.
Others have suggested that a presence on the internet is different from other types of legal services marketing because the prospective client must seek it out and it is therefore not invasive, like television commercials or direct targeted mail. While this may serve as a justification for policy-makers to include in future rules if they choose to exempt the internet as a regulated vehicle, the concept is no different than the Yellow Pages which must also be sought out by prospective clients and which unquestionably is subject to the ethics provisions.
There are, however, at least three feasible exceptions that law firms may use, depending on the nature of their practice and 'net presence. First, as discussed above, if the firm's material on the internet is not commercial speech, the ethics provisions governing commercial speech would not apply. The material would have to entirely avoid proposing a commercial transaction, limiting its utility as a marketing vehicle. It is not unforeseeable, however, that a law firm could do so, especially if the firm is located in a state where the rules are restrictive enough to preclude many marketing options to begin with.
Second, there is authority in some states, as well as an ABA ethics opinion, that indicates marketing legal services from lawyer to lawyer is exempt from the rules. Although the exception is not found specifically within the rules, it is a logical application. The rules are designed to protect consumers against overreaching by aggressive lawyers. A reasonable assumption would conclude that protection is not needed among each other. Therefore, if a firm's home page included information that the material is directed only toward other lawyers, it may be a satisfactory exemption from the limiting rules. Of course, this exception will also limit the firm's marketing capability and the usefulness of the internet presence. If the firm is trying to reach those other than other lawyers, this method would be self-defeating.
The most feasible compliance alternative may be to include a statement on the home page like that found in advertisements for sweepstakes, where sponsors comply with myriad state laws by saying the game is "void where prohibited by law." In other words, if a law firm complies with its own state rules, but concludes it will not comply with the rules of each and every state, the firm could indicate in its communication that it is unwilling to assume the representation of clients from those states where the marketing material does not comply and where the client is generated as a result of that communication. The statement would have to be followed up with a method of self-enforcement, just as a firm must check for conflicts of interests. Although this may place some limits on the ability of the communication to generate clients, more importantly it could serve as a reasonable method to preclude any claims of ethical violations or unauthorized practice.
Lawyers who use the internet as a marketing vehicle must understand that the legal profession is going through a period where the governing standards have not yet been defined. Technology is always the forerunner to its appropriate regulation. Over time, the legal profession will promulgate reasonable rules that specifically address the use of commercial speech by its members through cyberspace. Until then, lawyers are saddled with the responsibility to comply with make-shift applications of the current rules of professional conduct.
[2] See G. Burgess Allison, "The Lawyer's Guide to the Internet," ABA Section of Law Practice Management (1995); James Evans, Law on the Net (1995).
[3] Cincinnati v. Discovery Network Inc., 113 S. Ct. 1505 (1993).
[4] Id. at 1512-13.
[5] Texans against Censorship, Inc. v. State Bar of Texas, 3:94 CV 61, (E.D. Texas), March 31, 1995.
[6] Spencer v. Honorable Justices of the Supreme Court of Pennsylvania, 579 F. Supp. 880 (E.D. Pa. 1984). See generally Harry Haynsworth, ABA/BNA Lawyer's Manual on Professional Conduct and Marketing and Legal Ethics: The Rules and Risks, ABA Section on Law Practice Management (1990).
[7]For a compilation of all the rules from all states governing legal services marketing, see Provisions of State Codes of Professional Responsibility Governing Lawyer Advertising and Solicitation, ABA Commission on Advertising.
[8] Sterns & Murgatroyd v. Lundberg, IP 95-674C, (S.D. Ind.) May 1995.
[9] See Gary Taylor, "Eyes of Texas Are Upon Internet 'Ads,'" NLJ, Nov. 6, 1995; Alicia Philley, "The Bar as Cybercop," Texas Lawyer, Oct. 16, 1995.