Marketing Legal Services Ethically
LACBA Update, August 2014
By John W. Amberg, member and former chair, LACBA Professional Responsibility and Ethics Committee, and a partner in Bryan Cave LLP. The opinions expressed here are his own.
In his book What Money Can’t Buy, Professor Michael J. Sandel lamented the intrusion of market values into traditional public and private relationships at the expense of public policy, citing the government’s sale of green cards to major foreign investors (while immigration reform stalls), concierge doctors (while the Affordable Care Act expands coverage), and even scalping tickets to a papal mass (updated indulgences), among other examples.1 Notably, Sandel’s critique omitted the legal profession, perhaps because lawyers have well-recognized rules of professional conduct. No less than avoiding conflicts of interest or preserving confidentiality, the business of the law is subject to ethical constraints.
As the demand for most legal services remains flat six years after the Great Recession, lawyers are finding that they must compete for work by marketing themselves more vigorously.2 With more than 100,000 licensed members of the State Bar of California, it is no longer sufficient simply to do good work and hope that the word gets around. The idea that marketing is unprofessional is quaintly old-fashioned today. Any marketing plan, however, is governed by the Rules of Professional Conduct and the provisions of the State Bar Act in the Business and Professions Code that regulate advertising and the solicitation of new business. A lawyer’s violation of California’s marketing rules and statutes can result in discipline, disgorgement of fees, and embarrassment. Under the State Bar Act, these restrictions apply not only to individual lawyers but also to law firms, corporations, and partnerships.3
Until the California Supreme Court approves the proposed new ethics rules from the Commission on the Revision of the Rules of Professional Conduct, lawyers must consult Rule of Professional Conduct 1-400 (“Advertising and Solicitation”) and the State Bar Act. Rule 1-400 imposes limitations, depending on the motive, means, and target of the lawyer’s marketing. It distinguishes “communications” by lawyers and a subset of communications labeled “solicitations.”4
A “communication” is defined as “any message or offer made by or on behalf of a member [of the State Bar] concerning the availability for professional employment” to “any former, present, or prospective client.”5 This may take the form of (1) any use of the firm name, trade name, fictitious name or professional designation; (2) any written material describing the lawyer or firm, including stationery, letterhead, business card, or brochure; (3) any advertisement regardless of medium; and (4) any unsolicited correspondence, but is not limited to these examples.6
Rule 1-400 defines a “solicitation” as a communication concerning the lawyer’s availability for professional employment, the same as the definition of a “communication,” but then adds “in which a significant motive is pecuniary gain”—as if that were not the motive for professional employment in almost every case.7 It further states that a solicitation is a communication “delivered in person or by telephone” or “directed by any means to a person known to be represented by counsel in a matter which is a subject of the communication.”8
However classified, the rule is clear that communications and solicitations may not (1) contain any untrue statement, (2) contain any matter that is “false, deceptive, or which tends to confuse, deceive, or mislead the public,” or (3) omit to state any fact necessary to make the statements not misleading.9 This is the basic standard to which all lawyer marketing must adhere.
What is a “solicitation”? A communication is not a solicitation unless it serves no discernible purpose other than attracting clients.10 Thus, advertising or cold calls to promote lawyer seminars are not solicitations.11 Class action lawyers may contact potential class members, and the U.S. Supreme Court ruled that bans on such communications presumptively violate the First Amendment.12
What is “misleading”? The California Supreme Court addressed that question in a seminal case, Leoni v. State Bar, 39 Cal. 3d 609 (1985). After the U.S. Supreme Court held in Bates v. State Bar of Arizona13 that the First Amendment protects attorney advertising, California lawyers Leoni and Slate sent mass mailings to 250,000 debtors whose names were gleaned from small claims court records and foreclosure notices in newspapers. Although the court found that none of the letters contained false statements, it held the lawyers had violated the predecessor to Rule 1-400 because the letters were misleading and almost certain to cause panic and fear in the lay recipients. The letters implied that the recipients’ personal assets would be attached or their wages garnished, omitted to state that the lawyers would charge 10 times the amount of the filing fee, and failed to label the letters as communications for employment. Moreover, the court held that the format of the messages violated a prohibition on threats, intimidation, harassment, or duress. 14
Further answer is provided by 15 Standards adopted by the State Bar’s Board of Governors and appended to the end of Rule 1-400 that give examples of communications presumed to violate the rule. Thus, for example, communications are presumed false or deceptive if they contain guarantees or predictions about the result of representation;15 if they imply a relationship between a lawyer in private practice and a government agency;16 if they imply a relationship with any other lawyer or law firm;17 or if they state “no fee without recovery” unless they also disclose whether the client will be liable for costs.18 The remaining Standards illustrate other presumed violations of the rule.
Rule 1-400 requires all communications or solicitations to indicate “clearly, expressly, or by context,” that it is a communication or solicitation.19 The Standards carry this further by stating that a communication “transmitted by mail or equivalent means” is presumed to violate the rule unless it bears the word “Advertisement,” “Newsletter,” or words of similar import in 12-point type on the first page and on the envelope in which it is transmitted.20
To whom can solicitations be sent? Rule 1-400(C) expressly prohibits the lawyer from soliciting a prospective client “with whom the member or law firm has no family or prior professional relationship….”21 Thus, a lawyer may advertise generally and also may ask anyone for business in writing. However, if the marketing pitch is made in person or by phone, it can be directed only to someone with whom the lawyer has a prior relationship.
The rule contains an exception to this prohibition if the solicitation is “protected from abridgement by the Constitution[s] of the United States or…California.”22 However, this is not a safe harbor because courts have traditionally permitted restrictions on the manner of contact. “Direct real time communications are inherently more coercive.”23 Even if the statements are not false or misleading, such direct, personal calls are thought to lead to abuse and overreaching by attorneys, which the U.S. Supreme Court has ruled may be regulated by the states.24
Today, lawyers are more likely to market themselves through the Internet and social media. Attorney advertising by electronic means is governed by Article 9.5 (“Legal Advertising”) of the Business and Professions Code. Similar to Rule 1-400, Section 6157.1 prohibits any “false, misleading or deceptive statement” in an advertisement, and Section 6157.2 prohibits including any “guarantee or warranty regarding the outcome of a legal matter.”25 Section 6158 refers to “advertising by electronic media,” and Section 6157(d) defines “electronic medium” as including “computer networks.” In California State Bar Formal Opinion No. 2001-155, the State Bar’s Standing Committee on Professional Responsibility and Conduct (COPRAC) opined that a lawyer’s Web site constitutes a “communication” and “advertisement” under the Rules of Professional Conduct and the State Bar Act. Thus, COPRAC concluded, the Web site must indicate it is a “communication” under Rule 1-400, and the Standards adopted by the Board of Governors under Rule 1-400 also apply.26 Though the opinion did not expressly state that a Web site must be labeled “Advertisement,” Standard (5) requires communications to be labeled “Advertisements” if transmitted “by mail or equivalent means,” which could be interpreted to require such labeling.
In Formal Opinion No. 2012-186, COPRAC concluded that the restrictions in Sections 6157.1 and 6157.2 apply to computer-based communications, and that a posting to Facebook or Twitter is a “communication” under Section 6157(c) and Rule 1-400.27 Recent decisions from other states illustrate the application of ethics rules to new technologies. Thus, in Hunter v. Virginia State Bar, the Virginia Supreme Court held that an attorney’s blog posts about his recent cases were potentially misleading commercial speech and subject to regulation by the state bar association. His failure to include disclaimers in his blog posts subjected him to discipline.28 And in May 2014, as foreshadowed by COPRAC’s Opinion No. 2012-186, the New York State Bar Association’s Committee on Professional Ethics issued an opinion finding that a law firm’s “tweets” were advertisements and “solicitations” under that state’s rules of professional conduct, and were required to be labeled as “attorney advertising.”29
As lawyers become even more adept at using technology to market their services, close attention to the State Bar Act and the Rules of Professional Conduct will be repaid in continued respect for the profession and perhaps even new business.
1 Michael Sandel, What Money Can’t Buy: The Moral Limits of Markets (Farrar Strauss and Giroux, N.Y. 2012).
2 See “2014 Report on the State of the Legal Market,” Georgetown Center for the Study of the Legal Profession and Peer Monitor, Thomson Reuters (January 2014).
3 Bus. & Prof. Code §6152(a)(1).
4 Cal. R. of Prof’l Conduct R. 1-400 (A) & (B).
5 Cal. R. of Prof’l Conduct R. 1-400(A).
7 Cal. R. of Prof’l Conduct R. 1-400(B).
9 Cal. R. of Prof’l Conduct R. 1-400(D).
10 Jacoby v. State Bar, 19 Cal. 3d 359 (1977).
11 Belli v. State Bar, 10 Cal. 3d 824 (1974); L.A. County Bar Assn., Prof’l Responsibility & Ethics Comm., Formal Op. No. 494.
12 Gulf Oil Co. v. Bernard, 452 U.S. 89 (1981).
13 Bates v. State Bar of Arizona, 433 U.S. 350 (1977).
14 Leoni v. State Bar, 39 Cal. 3d 609, 627 (1985).
15 Standard (1).
16 Standard (6).
17 Standard (7).
18 Standard (14).
19 Cal. R. of Prof’l Conduct R. 1-400(D)(4).
20 Standard (5).
21 Cal. R. of Prof’l Conduct R. 1-400(C).
23 Hazard, Hodes & Jarvis, The Law of Lawyering (3d Ed. 2013 Supp.) §57.3.
24 Ohralik v. Ohio State Bar Ass’n, 436 U.S. 447 (1978).
25 Bus. & Prof. Code §§6157.1, 6157.2.
26 Cal. State Bar Formal Op. No. 2001-155.
27 COPRAC Formal Op. No. 2012-186.
28 Hunter v. Virginia State Bar, 285 Va. 485 (2013).
29 N.Y. State Bar Ass’n Comm. on Prof’l Ethics, Ethics Op. No. 1009.
LACBA's Professional Responsibility and Ethics Committee welcomes new inquiries from LACBA members regarding ethical issues or concerns about professional responsibilities. The identity of the inquirer is kept confidential within the committee. The committee, however, does not publish formal opinions that are the subject of any pending litigation involving the inquirer. If you have an ethical question that you would like the committee to consider, you can mail your written inquiry to Los Angeles County Bar Association, Professional Responsibility and Ethics Committee, P.O. Box 55020, Los Angeles, CA 90055-2020, or e-mail your inquiry marked “Confidential” to Member Services at email@example.com .