The current advertising rules “are outdated, may be overly restrictive of commercial speech, and could hamper the ability of lawyers to adapt to the changes in technology that affect the practice of law, and influence how consumers learn about available legal services.”1 So concluded the ABA Standing Committee on Ethics and Professional Responsibility in support of its proposed amendments to the current advertising rules. The proposed amendments, released on Dec. 21, 2017, seek to bring the “model rules into the 21st century.”2
The standing committee also concluded that the current advertising rules no longer serve as models because the versions used by the states vary.3 The proposed amendments seek to reestablish the rules as models by “encouraging more national uniformity; simplifying the rules that are actually enforced by state regulators; maintaining the prohibition against engaging in false or misleading communications; and accommodating developments in the legal profession, technology, and competition (from inside and outside the profession).”4
The proposed amendments also seek to protect consumers by freeing regulators from “the onerous and complicated provisions” now in place and by focusing attention on “harmful conduct.”5
Moreover, the standing committee recognized that the current regulations present First Amendment and antitrust issues, by restricting the communication of accurate and useful information to consumers of legal services, and the proposed amendments ameliorate those issues.6
Constitutional Limitations Restricting Commercial Speech
In 1977, in Bates v. Arizona, the U.S. Supreme Court established a lawyer’s First Amendment right to advertise. The Court held that lawyer advertising, as a form of commercial speech, could not be subject to blanket suppression but could be regulated by the states.7 The Bates decision, however, failed to establish a clear standard for assessing the constitutionality of such regulation.
In 1980, the Court in Central Hudson Gas & Electric Corp. v. Public Service Commission of New York established a four-part test for assessing the constitutionality of the regulation of commercial speech. This test inquires whether 1) the commercial speech is protected by the First Amendment because it concerns lawful activity and is not misleading; 2) the asserted governmental interest is substantial; 3) the regulation directly advances the governmental interest; and 4) the regulation is not more extensive than is necessary to serve the governmental interest.8
After Central Hudson, the U.S. Supreme Court decided several First Amendment cases dealing with the regulation of individual lawyer advertising. In each of these cases, the regulations failed to satisfy the Central Hudson test and therefore violated the First Amendment.9 While these cases preceded the surge in the use of the internet and social media for lawyer advertising, in more recent cases, the federal courts have continued to apply the Central Hudson test.10
Anticompetition and Antitrust Concerns
During the past 20 years the Federal Trade Commission (FTC) has also weighed in on the regulation of lawyer advertising. The FTC has submitted advisory letters to supreme courts and lawyer regulation offices about proposed advertising regulations that could reduce competition, violate federal antitrust laws, and restrict consumer access to factually accurate information regarding legal services.11
Moreover, the Supreme Court’s decision in North Carolina State Board of Dental Examiners v. Federal Trade Commission12 suggests that restraints imposed by lawyer regulation offices may run afoul of antitrust laws. The Supreme Court concluded that the decision of the board of dental examiners to exclude individuals who are not dentists from providing teeth-whitening services was anticompetitive and an unfair method of competition in violation of the Federal Trade Commission Act.
The Court further concluded that a controlling number of the board members were dentists, “active market participants,” and that there was no state entity supervision of the decisions of the nonsovereign board.13 Lawyer regulatory entities and bar associations are concerned that the same analysis could be applied to lawyer disciplinary authorities, “especially if it appears that the lawyers who are making decisions on ‘permissible’ lawyer advertising are competitors, and there are no clearly articulated objective criteria to determine if their competitors’ advertising violates the Rules of Professional Conduct.”14
Brief Summary of Proposed Amendments
The proposed amendments are designed to “simplify the rules while adhering to constitutional limitations on restricting commercial speech, protecting the public, and permitting lawyers to use new technologies that can inform consumers accurately and efficiently about the availability of legal services.”15
In an effort to streamline the rules, all provisions regarding false and misleading communications are combined into Model Rule 7.1 and its comment. Model Rule 7.1: Communications Concerning a Lawyer’s Services, which remains unchanged, states: “A lawyer shall not make a false or misleading communication about the lawyer or the lawyer’s services. A communication is false or misleading if it contains a material misrepresentation of fact or law, or omits a fact necessary to make the statement considered as a whole not materially misleading.” The comment provides additional guidance.
The provisions of the current Model Rule 7.5: Firm Names & Letterhead, which largely relate to misleading communications, are moved to the proposed comment following Rule 7.1.
In addition, all specific provisions for advertising are consolidated into proposed Model Rule 7.2: Communications Concerning a Lawyer’s Services: Specific Rules. Extraneous information in the comment justifying advertising is deleted because advertising is constitutionally protected speech.
The proposed amendments also seek to protect consumers by freeing regulators from ‘the onerous and complicated provisions’ now in place and by focusing attention on ‘harmful conduct.’
The provisions regarding lawyer referral services remain limited to qualified entities approved by the appropriate regulatory authority. The proposed amendment changes “office address” to “contact information” to reflect technological advances that influence how lawyers advertise and are contacted. A new provision is added that permits “a lawyer to give nominal gifts that are neither intended nor reasonably expected to be a form of compensation for recommending a lawyer’s services.” The proposed comment clarifies what is considered nominal.
The current rules do not define solicitation. To provide clarity, a definition is added to Model Rule 1.0: “‘Solicitation’ or ‘solicit’ denotes a communication initiated by or on behalf of a lawyer or law firm that is directed to a specific person reasonably believed to need legal services in a particular matter and that offers to provide, or reasonably can be understood as offering to provide, legal services for that matter.”
Model Rule 7.3 continues to prohibit in-person solicitation but clarifies that the prohibition applies to “live person to person contact.” Such contact includes “in person, face to face, telephone and real-time person to person communications such as Skype or Facetime, and other visual/auditory communications where the prospective client may feel obligated to speak with the lawyer.” Such contact does not include chat rooms and text messages.
Two new exceptions are added to the “live person to person” solicitation prohibition. The current rule permits a lawyer to solicit a person with whom the lawyer has a “prior professional relationship.” The proposed amendment permits a lawyer to solicit a person with whom the lawyer has a “prior business or professional relationship.”
In addition, the proposed amendment permits a lawyer to solicit “a person who is known by the lawyer to be an experienced user of the type of legal services involved for business matters.” A lawyer must not, however, engage in “live person to person” solicitation involving personal legal matters such as criminal defense, family law, or personal injury.
The proposed amendment to Model Rule 7.3 eliminates the requirement that targeted written solicitations be marked as “advertising material.” The standing committee concluded that the requirement is no longer necessary because consumers have become accustomed to receiving advertising materials and are unlikely to be misled simply due to the nature of the communication.16
The ABA Model Rules of Professional Conduct are merely recommendations and are not themselves binding. To date, California is the only state that does not have rules of professional conduct that are based on the ABA Model Rules.
Whether or not you agree with the proposal to amend the lawyer-advertising rules, you can contribute to the discussion. There’s a brief window to help guide the ABA in its proposed revision of the rules. The ABA Standing Committee on Ethics and Professional Responsibility will accept written comments on the working draft through March 1, 2018. Written comments should be sent to firstname.lastname@example.org.
1 ABA Standing Committee on Ethics & Prof’l Responsibility, Memorandum in Support of Working Draft of Proposed Amendments to ABA Model Rules of Professional Conduct on Lawyer Advertising 4 (Dec. 21, 2017), [hereinafter Memorandum].
2 Proposed Changes to ABA Model Rules on Advertising Are a “Philosophical Shift,” (quoting Dennis Rendleman, Ethics Counsel to the ABA Standing Committee on Ethics and Professional Responsibility).
3 Memorandum, supra note 1, at 4.
6 Id. at 5.
7 Bates v. Arizona, 433 U.S. 350 (1977).
8 Central Hudson Gas & Elec. Corp. v. Public Serv. Comm’n of N.Y., 447 U.S. 557, 566 (1980). The question presented in Central Hudson was whether a regulation of the New York Public Service Commission violated the 1st and 14th Amendments because the regulation completely banned promotional advertising by an electrical utility.
9 Peel v. Attorney Registration & Disciplinary Comm’n, 496 U.S. 91 (1990); Zauderer v. Office of Disciplinary Council, 471 U.S 626 (1985); In re R.M.J., 455 U.S. 191 (1982).
10 See, e.g., Public Citizen v. Louisiana Attorney Disciplinary Bd., 632 F.3d 212 (5th Cir. 2011) (Louisiana Rules); Alexander v. Cahill, 598 F.3d 79 (2d Cir. 2010) (New York Rules); Rubenstein v. The Fla. Bar, No. 14-CIV-20786, 2014 WL 6979574 (S.D. Fla. Dec. 9, 2014) (Florida Rules); Harrell v. The Fla. Bar, 915 F. Supp. 2d 1285 (M.D. Fla. 2011) (Florida Rules).
11 For example, the FTC has sent letters to regulators in Alabama, Arizona, Florida, Indiana, Louisiana, New Jersey, New Mexico, New York, Ohio, Tennessee, and Texas. ABA Center for Professional Responsibility, FTC Letters Regarding Lawyer Advertising (2015).
12 North Carolina State Bd. of Dental Examiners v. Federal Trade Comm’n, 135 S. Ct. 1101 (2015).
13 Id. at 1116.
14 Memorandum, supra note 1, at 12.
15 Id. at 5.
16 Id. at 17.