Tag: Chapter 3

ABA House of Delegates Amends Lawyer Advertising and Solicitation Rules (updated with information about MPRE testing)

Renee KnakeLeave a comment

From the ABA Journal:

The ABA House of Delegates on Monday voted in favor of amending Rule 7 of ABA Model Rules of Professional Conduct, which addresses lawyer advertising.

Lucian Pera, of Adams and Reese in Memphis, Tennessee, and chair of the Center for Professional Responsibility, told delegates that in the decades since the 1977 U.S. Supreme Court decision in Bates v. State Bar of Arizona allowed for lawyers to advertise their services, there’s been a “breathtaking variation in advertising rules” among states. He said the amendments were necessary to clarify and simplify these rules.

Resolution 101 amends Rules 7.1-7.5, and was informed 2015 and 2016 reports by the Association of Professional Responsibility Lawyers. The Standing Committee on Ethics and Professional Responsibility worked on the edits over the course of two years, holding at least two open hearings. A detailed article on their work is available here.

No one rose to oppose the amendment, and the majority of delegates voted in favor of the amendments.

For those of you teaching PR during 2018-2019, you may wish to advise your students regarding the appearance of revised rules on the MPRE. Here is the position of the NCBE as posted on its website:

Amendments to the ABA Model Rules of Professional Conduct or the ABA Model Code of Judicial Conduct will be reflected in the examination no earlier than one year after the approval of the amendments by the American Bar Association. Until that time, the examination may include questions that test on the rules before amendment.

We can’t be satisfied with a C average (at best) on affordable legal help

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No state receives higher than a ‘C’ overall on the new Report Card on Barriers to Affordable Legal Help released today by Responsive Law.

Tom Gordon, Executive Director of Responsive Law, explains more in today’s USA Today:

Imagine that at tax time you’re required to either fill out your 1040 without help or pay a CPA hundreds of dollars to do it for you. There’s no H&R Block, and while TurboTax exists, it’s under constant siege by state regulators for being an unlicensed accountant.

That’s analogous to the situation that most Americans face whenever they have a legal issue. For even simple matters, they have to either do it themselves, hire a lawyer for over $200 an hour or use software that can do the job well but which the lawyer cartel is trying to put out of business.

Responsive Law’s Report Card on Barriers to Affordable Legal Help, which will be released Thursday, grades each state on how restrictions created by lawyers make legal help expensive and inaccessible for its residents. No state received a grade above a C. The two factors most responsible for the low grades are restrictions on who can provide legal services and restrictions on the corporate structure of law firms.

For a basic will or uncontested divorce, a consumer could be well served by a competent professional other than a lawyer. However, in most states, only lawyers are allowed to provide these services. State bars have used vaguely worded restrictions on the “unauthorized practice of law” to bring legal actions against everyone from major companies like LegalZoom to small mom-and-pop operations.

The worst offender in restricting competition is Florida, which received an F in the category of Barriers to Non-Lawyer Help. The Florida Bar has a $1.97 million annual budget dedicated to enforcement of unauthorized practice restrictions that it has used to pursue charges against people like Katie Vickers, a senior citizen who helped a fellow parishioner at her church with completing workers compensation forms.

$890 million in advertising for clients?

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From Forbes today comes this, “Lawyers Bump Advertising Spending to $890 Million in Quest for Clients.”

A few highlights:

The phrase “San Antonio car wreck attorney” is the most expensive search string on the Web, at $670 per click, followed by “Accident attorney Riverside CA,” at $626. In fact, 23 of the 25 most expensive search terms involve lawyers and litigation, according to a new survey by the U.S. Chamber’s Institute for Legal Reform, which doesn’t think much of lawyer advertising.

Defying the trend toward declining television advertising spending, lawyers have increased their spending by 68% over the past eight years to an expected $892 million this year, the ILR reports, as law firms seek clients for lawsuits over prescription drugs, medical devices and asbestos.

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The ILR study paints a portrait of an industry that knows where its customers are – often in front of a television set, watching afternoon programs, or searching the web for information about a medical condition – and knows how to get their attention.

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Law firm spending on TV ads has been rising six times faster than overall spending since 2008, the study found.

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Lawyers have also flooded the Internet and social media with their messages, buying search terms and linking up with “influencers” and “Super Tweeters” who write about litigious subjects on Facebook and Twitter.

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The Institute for Legal Reform thinks all this advertising stimulates too much litigation, and the example of pelvic mesh implants may demonstrate their point. But plaintiff lawyers and some academics make exactly the opposite argument: Advertising helps drive more socially useful litigation by people who otherwise might not realize they have a valid claim.

The U.S. Supreme Court has held the First Amendment applies to lawyers, too, noted Anthony Sebok, a professor at Cardozo Law School in New York who writes frequently on the merits of greater involvement in civil litigation. “Big Pharma is doing the same thing as Big Tort,” he noted in an e-mail to me, by advertising directly to consumers in order to prompt them to ask their physicians for prescription drugs. The important distinction is between advertising for potential clients and invading their privacy by directly contacting them after an accident or medical mishap.

“Obviously the line between advertising and solicitation is a hard one to draw, but at no time have the courts worried about the interests of defendants when talking about where to draw the line,” Sebok told me.  “The concern is for the victims of accidents, who shouldn’t be harassed and pressured, and the state’s interest in maintaining the reputation of the legal profession.”

APRL’s Advertising Committee Issues Report

Laurel TerryLeave a comment

Relevant to Chapter 3: see ASSOCIATION OF PROFESSIONAL RESPONSIBILITY LAWYERS 2015 REPORT OF THE REGULATION OF LAWYER ADVERTISING COMMITTEE . The opening paragraph of the Executive Summary states: “The rules of professional conduct governing lawyer advertising in effect in most jurisdictions are outdated and unworkable in the current legal environment and fail to achieve their stated objectives. The trend toward greater regulation in response to diverse forms of electronic media advertising too often results in overly restrictive and inconsistent rules that are under-enforced and, in some cases, are constitutionally unsustainable under the Supreme Court’s Central Hudson test. Moreover, anticompetitive concerns, as well as First Amendment issues, globalization of the practice of law, and rapid technology changes compel a realignment of the balance between the professional responsibility rules and the constitutional right of lawyers to communicate with the public.  ……

Based on the survey results, anecdotal information from regulators, ethics opinions, and case law, the Committee concludes that the practical and constitutional problems with current state regulation of lawyer advertising far exceed any perceived benefits associated with protecting the public or maintaining the integrity of the legal profession, and that a practical solution to these problems is best achieved by having a single rule that prohibits false and misleading communications about a lawyer or the lawyer’s services. The Committee believes that state regulators should establish procedures for responding to complaints regarding lawyer advertising through non-disciplinary means. Professional discipline should be reserved for violations that constitute misconduct under ABA Model Rule 8.4(c).3 The Committee recommends that violations of an advertising rule that do not involve dishonesty, fraud, deceit, or misrepresentation under Rule 8.4(c) should be handled in the first instance through non-disciplinary means, including the use of advisories or warnings and the use of civil remedies where there is demonstrable and present harm to consumers.

Primus and Ohralik in the Facebook-era

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When I teach lawyer advertising and solicitation, I often pose the following hypothetical to my students: Is the use of social media like Facebook to reach potential clients permissible solicitation under the precedent of In re Primus (where the Supreme Court held that North Carolina could not bar an ACLU attorney from holding gatherings to inform women about their civil rights after they had been sterilized on condition of receiving public medical benefits) and Ohralk v. Ohio State Bar Association (decided the same day as Primus, with the Supreme Court holding that an ambulance chaser could be barred from soliciting clients at the hospital bedside). My hypothetical is now a reality–from Bloomberg News comes this article on how law firms are using Facebook to solicit medical victims (h/t Professor Elizabeth Tippett of Oregon Law, whose scholarship focuses on lawyer advertising and marketing, among other topics).

An excerpt:

For ambulance chasers, persistence and a phone book just don’t cut it anymore. Law firms, which once relied on television commercials, billboards, and cold calling numbers in the white pages to find plaintiffs for medical lawsuits, have begun to embrace technology. To locate their ideal pharma victims more quickly and at lower costs, they’re using data compiled from Facebook, marketing firms, and public sources, with help from digital bounty hunters like Tim Burd.

A victory for the FTC and teeth whiteners…will legal service providers be next?

Renee Knake1 Comment

Last week the Supreme Court issued a 6-3 opinion affirming the Fourth Circuit’s decision in North Carolina State Board of Dental Examiners v. Federal Trade Commission. In the decision below, the Fourth Circuit upheld the FTC’s determination that the Board of Dental Examiners violated antitrust law in issuing cease-and-desist letters to non-dentists performing teeth whitening services, finding that the Board acted as a group of private dentists rather than as a state actor. Agreeing with the Fourth Circuit, Justice Kennedy, writing for the majority, observed: “Limits on state-action immunity are most essential when the State seeks to delegate its regulatory power to active market participants, for established ethical standards may blend with private anticompetitive motives in a way difficult for even market participants to discern. Dual allegiances are not always apparent to an actor.” The decision may have implications for state bar regulators, particularly regarding unauthorized practice of law enforcement.

For more about the potential impact of the case on the legal profession, see Ken Friedman’s Forbes article (he’s the VP of Legal and Government Affiars for LegalZoom) and commentary from PrawfsBlawg. (Disclaimer, I assisted in authoring an amicus brief on behalf of LegalZoom and others. I’m also working on a paper about antitrust enforcement and the legal profession—I hope to be posting it soon…)

$44 Million Contingency Fee Upheld for Graubard Miller

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The final decision on appeal in Lawrence v. Miller was just released, where the New York Court of Appeals upheld the $44 million contingency fee and reversed an intermediate appellate court decision that had overturned the fee. The casebook covers this opinion in Chapter 3, beginning at page 280.

From the New York Law Journal:

A contingency fee agreement that netted Graubard Miller $44 million for five months’ work was valid and must be adhered to, the state Court of Appeals ruled Tuesday.

The law firm took substantial risks by making the agreement with Alice Lawrence in January 2005, and the fact that the real estate matter on which it had long represented Lawrence unexpectedly settled in May 2005 did not make it unconscionable, the court decided.

Teaching the duty of competence under revised Model Rule 1.1: “a lawyer should keep abreast of changes in law and its practice, including the benefits and risks associated with relevant technology”

Renee KnakeLeave a comment

Ever since I began teaching Professional Responsibility several years ago I’ve suggested to my students that they have an implicit ethical duty to consider how technology plays a role in their law practice.  (Indeed, a student of mine published her recommendation that the Model Rules incorporate a duty to keep abreast of technology advances in the Professional Lawyer in 2010—take a look here.)

The ABA recently incorporated this obligation explicitly into the comments accompanying Model Rule 1.1 Competence.  Comment 8 now provides:

To maintain the requisite knowledge and skill, a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology, engage in continuing study and education and comply with all continuing legal education requirements to which the lawyer is subject.

In the spirit of the ABA’s recognition of the importance of technology to law practice, we will be revising Chapter 3 of the casebook to cover not only finding and billing clients, but more broadly the business, technology, and marketing of legal services.  Everything that current adopters appreciate about the existing Chapter 3 will remain, but we are shortening some of the excerpted cases and articles to make room for new content addressing ways lawyers can leverage technology in delivering legal services and in reaching clients.  Possible topics may include virtual law practice, use of social media tools, cloud computing, and links to innovative examples of technology and law.  We welcome your feedback about this change.  Do you agree that technology should be addressed in this way within the casebook?  What other information about technology would you like to see in the casebook or in the teacher’s manual?

Teaching Chapter 3 on Finding & Billing Clients?

Renee KnakeLeave a comment

If you’re teaching Chapter 3 on Finding & Billing Clients, you (and your students) might enjoy these resources:

1.  Here is an ad from Alexander & Catalano, complete with the “wisps of smoke, blue electrical currents, and special effects” described by Judge Calabresi in Alexander v. Cahill on page 223 of the casebook. (Click the image to play the ad).  2.  This video clip, just out from the recently-formed, British-based law firm (and ABS–alternative business structure–ala the UK’s Legal Services Act) Riverview Law, spoofs the hourly rate.  Riverview operates on a model of exclusively fixed-fee pricing. (Click the image to play the clip).3. Vivia Chen asks whether hourly billings are making lawyers anxious and depressed in this July 2012 article in The Careerist.4. If you don’t know about LawZam yet, check this out…the new lawyer-finding service has been compared to online speed dating. (Click the image to play a promo video).