FTC Staff Comment In the Matter of Amendments to the Mississippi Rules of Professional Conduct

v940a07
IN TBB SUPUMB COURT OJ' MISSISSIPPI COMMISSION AUTHORfZ£l
IN TBB MATTER OJ' AMBHD)lDTS 	TO TBB
MISSISSIPPI ROLBS 	OJ' 	PROPBSSIOHAL CONDUCT
MISC. 	NO. 	89-R-99018
COMMBNTS 	OJ' 	TBB 	S":APJ' OJ' TBB PBDBRAL TRADB COMKISSION
The 	staff 	of 	the 	Federal 	Trade 	Commission 	offers 	these
comments 	in 	response 	to 	the 	Court's 	Order 	of 	October 	22, 	1993
concerning 	amendments 	to 	the 	Mississippi 	Code 	of 	Professional
Conduct 	that 	have 	been proposed by 	the 	state 	bar. 	These 	comments
are 	the views of 	the 	staff 	of 	the 	Federal 	Trade Commission, 	and do
not 	necessarily 	represent 	the 	views 	of 	the 	Commission 	or 	any
individual 	Commissioner.
These 	amendments 	would 	generally 	establish 	more 	restrictive
standards 	governing 	attorney advertising 	and 	client 	solicitation.
Several 	of 	these 	proposals 	may 	restrict 	the 	flow 	of 	truthful 	and
useful 	information 	to 	consumers, 	and 	thus 	impede 	competition 	or
increase 	costs, 	more 	than 	is 	necessary 	to 	achieve 	the 	consumer
benefits 	envisioned 	by 	the 	drafters 	of 	the 	amendments. 	Specific
provisions 	of 	the 	proposed 	amendments 	that 	raise 	serious 	concerns
about adverse effects on consumers include those that 	(1) 	bar self-
laudatory 	statements, 	representations 	of 	quality, 	and 	comparative
claims; 	(2) 	restrict 	the 	content 	and 	style 	of 	media 	advertising;
and 	(3) 	require a 	strong disclaimer about 	reliance on advertising.
Except 	as 	noted, 	these 	comments 	take 	no position on other proposed
amendments.

I. 	Intereat 	and Experience 	of 	the 	Pederal 	Trade Commission.
The 	Federal 	Trade 	Commission 	is 	empowered 	to 	prevent 	unfair
methods of competition and unfair or deceptive acts or practices in
or 	affecting 	commerce. 1 	Pursuant 	to 	this 	statutory 	mandate, 	the
FTC 	encourages 	competition 	in 	the 	licensed professions, 	including
the 	legal 	profession, 	to 	the 	maximum 	extent 	compatible 	with other
state 	and 	federal 	goals. 	For 	several 	years 	the 	FTC 	and 	its 	staff
have 	investigated 	the 	competitive 	effects 	of 	restrictions 	on 	the
business practices 	of 	state-licensed professionals. 2 	In addition,
the 	staff 	has 	submitted 	comments 	about 	these 	issues 	to 	state
1 15 	U.S.C. 	Sec. 	41 	~ ~
2~, ~, 	American Medical Ass'n, 	94 F.T.C. 	701 	(1979); 	~
Chapter 	of 	American 	Physical 	Therapy Ass'n, 	111 	F.T.C. 	199 	(1988)
(consent 	order); 	Wyoming 	State 	Bd. 	of 	Chiropractic 	Examiners, 	110
F.T.C. 	145 	(1988) 	(consent order); 	COnnecticut Chiropractic Ass'n,
C-3351 	(consent 	order 	issued November 19, 	1991, 	56 	Fed. 	Reg. 	65093
(December 13,1991)); American Psychological Ass'n, 	C-3406 	(consent
order 	issued 	December 	16, 	1992, 	58 	Fed. 	Reg. 	557 	(January 	6,
1993)); 	Texas Bd. 	of Chiropractic Examiners, 	C-3379 	(consent order
issued April 	21, 	1992, 	57 Fed. 	Reg. 	20279 	(May 12, 	1992)); 	National
Ass'n 	of 	Social 	Workers, 	C-3416 	(consent 	order 	issued 	March 	3,
1992, 	58 	Fed. 	Reg. 	17411 	(April 	2, 	1993)); 	and 	California 	Dental
Ass'n, 	0-9259 	(administrative 	complaint 	issued July 	9, 	1993).
2

legislatures 	and 	administrative 	agencies 	and 	others. 3 As 	one 	of
the 	two 	federal 	agencies 	with 	principal- 	responsibility 	for
enforcing 	antitrust 	laws, 	the 	FTC 	is 	particularly 	interested 	in
restrictions that 	may adversely affect 	the 	competitive process and
raise 	prices 	(or 	decrease 	quality) 	to 	consumers. 	As 	an 	agency
charged 	with 	a 	broad 	responsibility 	for 	consumer 	protection, 	the
FTC 	is 	also 	concerned 	about 	acts 	or 	practices 	in 	the 	marketplace
that 	injure consumers 	through unfairness 	or deception. 	As part 	of
this effort, 	the FTC has examined the effects of public and private
restrictions 	limiting 	the 	ability 	of 	professionals 	to 	contact
prospective 	clients 	and 	to 	advertise 	truthfully.4
3 The 	Commission's 	staff 	has previously submitted comments 	to
state 	governments 	and professional 	associations 	on 	the 	regulation
of 	professional 	advertising, 	including 	advertising 	by 	attorneys.
See, 	e.g., 	comments 	to Supreme Court 	of New Mexico, 	July 29, 	1991;
State 	Bar 	of 	Arizona, 	April 	17, 	1990; 	Florida 	Bar 	Board 	of
Governors, 	July 	17, 	1989; 	American 	Bar 	Association, 	November 	22,
1988; 	New Jersey Supreme Court, 	November 9, 	1987; 	Supreme Court of
Alabama, 	March 	31, 	1987; 	New 	Jersey 	Board 	of 	Medical 	Examiners,
September 	7, 	1993; 	South 	Carolina 	Legislative 	Audit 	Council,
January 	8, 	1993 	(medical 	boards); 	Missouri 	Board 	of 	Chiropractic
Examiners, 	December 	11, 	1992; 	Texas 	Sunset 	Advisory 	Commission,
August 	14, 	1992 	(medical 	boards).
4 ~, 	~, 	American 	Medical 	ABs'n, 	94 	F.T.C. 	701 	(1979),
aff'd, 	638 	F.2d 	443 	(2d 	Cir, 	1980), 	aff'd 	memo 	by 	an 	equally
divided 	Court, 	455 	U. S. 	676 	(1982). 	The 	thrust 	of 	the 	AMA
decision--"that 	broad 	bans 	on 	advertising 	and 	soliciting 	are
inconsistent with the nation's public policy" 	(94 F.T.C. 	at 1011)--
accords with the 	reasoning of Supreme Court decisions 	applying the
First 	Amendment 	to 	professional 	regulation. 	~,~, 	Peel 	v,
AttOrney Registration and Disciplinary CommissiQn Qf 	Illinois, 	110
S,Ct, 	2281 	(1990) 	(attorney's 	letterhead may use statement Qf QQna
~ 	specialty certificatiQn); 	ShaperQ v, 	Kentucky 	Bar ABs'n, 	108
S, 	Ct, 	1916 	(1988) 	(nQndeceptive 	targeted 	mail 	solicitation 	is
protected); 	Zauderer 	V. 	Office 	of 	Disciplinary 	CQunsel 	Qf 	the
Supreme 	Court 	Qf 	Ohio, 	471 	U,S, 	626 	(1985) 	(upholds 	seeking
business 	through 	printed 	advertising 	cQntaining 	truthful 	and
nondeceptive 	infQrmation 	and 	advice 	about 	legal 	rights 	and
nondeceptive 	illustratiQns 	or 	pictures); 	Bates 	v. 	State 	Bar 	of
3

II. 	Description 	of 	the 	Proposed Rule.
The basic principle 	of 	the proposed rule 	is 	that 	a 	lawyer may
not 	make, 	or permit 	to be made, 	communications 	about 	the 	lawyer or
the 	lawyer's 	services 	that 	are 	false, 	misleading, 	deceptive, 	or
unfair.' 	The subparts of 	this 	rule and the comments 	on it 	indicate
several 	more 	specific 	rules 	and 	intended 	applications. 	A
communication that 	"is likely to create an unjustified expectation
about 	results 	the 	lawyer 	can 	achieve" 	would 'violate 	the 	rule; 	the
comment 	says 	this 	would 	preclude 	communicating 	a 	lawyer's 	actual
results 	or endorsements 	from 	satisfied clients. 6 	Comparisons with
other 	lawyers' 	services, 	regardless 	of 	whether 	they 	are 	falRe,
misleading, 	deceptive, 	or 	unfair, 	would be 	banned 	unless 	they can
be 	factually 	substantiated; 	the 	comment 	makes 	clear 	that 	the
intention 	is 	to ban claims 	of 	superiority.' 	Testimonials would be
banned 	explicitly, 	on 	the 	grounds 	that 	they 	are 	inherently
misleading 	to 	laYmen 	and 	constitute 	an 	implied 	claim 	about 	the
results 	the 	lawyer 	could obtain.
Arizona, 	433 	U.S. 	"350 	(1977) 	(state 	prohibition 	on 	advertising
struck 	down; 	opinion 	recognizes 	role 	of 	advertising 	in 	the
efficient 	functioning 	of 	the 	market 	for 	professional 	services).
, 	Proposed Rule 	7.1. 	These comments deal only with aspects of
Proposed Rule 	7.
6 	Proposed 	Rule 	7.1(b) 	and 	Comment.
7 Proposed 	Rule 	7.1(c) 	and 	Comment.
4

One 	subpart, 	aimed 	specifically 	at 	advertising, 	sets 	out
restraints 	on 	content 	and 	style 	for 	advertisements 	in 	different
media. 	Advertisements may not 	use 	dramatizations 	and may only use
illustrations 	that 	present 	information 	that 	"can 	be 	factually
substantiated and 	is not 	merely self-laudatory. "a 	More generally,
a 	lawyer may not 	make 	statements 	that 	are 	"merely 	self-laudatory"
or 	that 	describe 	or 	characterize 	the 	quality 	of 	the 	lawyer's
services. 9 	In 	electronic 	media 	advertising, 	no 	background 	sound
would 	be 	permitted, 	except 	instrumental 	music .10 	Only 	a 	single
voice 	could 	be 	used, 	and 	the 	VO.i\,,;l; 	IIIU... C 	be 	that 	of 	a 	full-time
employee 	of, 	or a 	lawyer 	affiliated with, 	the 	firm 	whose 	services
are 	advertised. 	In 	a 	television 	advertisement, 	that 	individual
must 	appear 	on-screen. 11 	use 	of 	professional 	announcers, 	as 	well
as 	celebrity 	endorsers, 	would 	thus 	be 	prohibited. 	These
constraints are 	intended to ensure 	that 	advertising provides 	"only
useful, 	factual information" 	in a 	"nonsensational" manner; 	the rule
would 	ban 	sound 	effects, 	"sound 	tracks," 	slogans 	and 	jingles,
because those 	techniques 	"fail to meet these standards and diminish
public 	confidence 	in 	the 	legal 	system. ,,12 	The 	comment 	states 	that
the 	rule 	is 	intended to permit 	advertisements 	in which 	"the lawyer
a Proposed Rule 	7.2 (e), 	(f).
9 Proposed Rule 	7.2(j); 	such statements would be permitted to
existing 	clients 	or 	to 	prospective 	clients 	who 	request 	them.
10 	Proposed Rule 	7.2 (b) 	and 	comment.
11 	Proposed Rule 	7.2 (b) .
12 Comment 	to 	Proposed Rule 	7.2.
5

personally 	appears 	to 	explain 	a 	legal 	right, 	the 	services 	the
lawyer 	is 	available 	to 	perform, 	and 	the 	lawyer's 	background 	and
experience. ,,13
A prescribed disclaimer would be 	required on all advertising,
except 	print 	advertising 	that 	contains 	only 	specified 	items 	of
information and 	carries 	no 	illustrations. 14 	The 	disclosure 	reads,
liThe determination of the need for 	legal services and the choice of
a 	lawyer are extremely important 	decisions 	and should not 	be based
solely 	upon 	advertisements 	or 	self-proclaimed 	expertise. 	This
disclosure 	is 	required 	by 	rule 	of 	the 	Supreme 	Court 	of
Mississippi." 	The disclaimer must be recited orally at the loudest
volume 	level 	and 	slowest 	speed 	as 	the 	rest 	of 	the 	advertisement;15
it 	takes 	about 	15 	seconds. 	In 	a 	print 	advertisement 	or 	other
written 	communication, 	it 	must 	appear 	in 	the 	largest 	and 	boldest
type .16 	Television 	and 	radio 	advertisements 	must 	also 	include 	a
further 	disclosure 	that 	additional 	information 	about 	the 	lawyer's
13 ls.i.
14 Proposed Rule 	7.2 (d). 	The 	items 	that 	may be 	included 	in 	a
print 	advertisement 	without 	triggering 	the 	disclosure 	requirement
are: 	the 	names 	of 	the 	firm 	and 	its 	lawyers, 	addresses, 	phone
numbers 	and office hours, 	dates 	of bar admission and 	jurisdictions
where 	licensed, 	foreign 	language ability, 	participation in prepaid
legal 	service 	plans, 	acceptance 	of 	credit 	cards, 	fee 	for 	initial
consultation, 	and 	information 	about 	sponsorship 	of 	public 	service
announcements 	or 	charitable, 	civic, 	or 	community 	programs.
Proposed Rule 	7.2(n).
15 Proposed Rule 	7.2 (d) (i) .
~ Proposed 	Rule 	7.2(d) (ii).
6

services 	is 	available 	free 	on 	request; 	this 	may 	be 	displayed,
rather 	than 	narrated.~
Advertising 	would 	be 	permitted 	in most 	public 	media, 	but 	not
through 	motion 	pictures 	or 	video 	cassettes 	because, 	according 	to
the comment, 	information on those media may rapidly become outdated
and 	hence 	misleading. 111 	Advertisements 	(and 	all 	written
communications) 	must 	contain 	the 	name 	of 	a 	lawyer 	or 	referral
service 	responsible 	for 	their 	content, 	and 	must 	disclose 	the
geographic 	location 	of 	the 	office 	whose 	lawyers 	will 	actually
perform 	the 	services. 19 	Advertisements 	that 	mention 	fees 	must
include 	disclosures 	about 	how 	fees 	are 	computed 	and 	possible
liability 	for 	expenses, 20 	and 	specific 	advertised 	fees 	must 	be
honored 	for 	at 	least 	90 	days. 21
17 	Proposed Rule 	7.4 (e) (1). 	This 	rule 	would 	require 	any 	firm
that advertises to make available, 	free, 	in written form 	"a factual
statement detailing the background, 	training and experience of each
lawyer or law firm"; 	if the lawyer or firm claims special expertise
or 	limits 	its 	practice 	to 	special 	types 	of 	cases, 	the 	statement
must 	set 	out 	"the 	factual 	details 	of 	the 	lawyer's 	experience,
expertise, 	background, 	and 	training 	in 	such 	matters." 	Proposed
Rule 	7.4(a). 	This 	statement 	must 	be 	included 	with 	all
advertisements by written communication, 	and an announcement of its
availability must 	be 	included in all print 	or dioplay advertising.
Proposed Rules 	7.4(b), 	7.4(e) (2), 	7.4(e) (3).
111 	Proposed Rule 	7.2 (a) 	and Comment.
19 Proposed Rules 	7.2 (c), 	7.2 (1) .
20 Proposed 	Rule 	7.2(h).
21 	Proposed 	Rule 	7.2(j); 	fees 	advertised 	in publications 	that
appear 	infrequently, 	such 	as 	yellow 	pages, 	must 	be 	honored 	for 	a
year.
7

Specialization or limitation of practice may be announced, 	but
only for 	areas of practice 	that 	have occupied more 	than 30 percent
of 	the 	lawyer's 	time 	(or 300 	hours 	annually).n 	The 	rule 	lists 	the
31 areas of practice and the intellectual property specialties that
may 	be 	identified 	and 	prohibits 	using 	other 	descriptions 	of 	the
kinds 	of 	cases 	a 	lawyer 	handles. 23 	Lawyers 	who 	accept 	cases
outside 	of 	their 	specialties 	may 	not 	be 	listed 	under 	specialty
classifications 	in 	telephone 	directories 	and 	their 	advertisements
must 	appear together w~th a 	prescribed disclaimer. u
Use 	of 	trade 	or 	fictitious 	names 	(except 	those 	of 	deceased
partners) 	would be 	prohibited. 	The 	term 	"legal 	clinic" 	or 	"legal
services" 	could 	be 	used 	in 	conjunction 	with 	a 	lawyer's 	own 	name,
but only for practices that provide routine services for fees 	lower
than 	the 	prevailing 	rates. u
n 	Proposed Rule 	7.6(a) (4).
23 	Proposed Rule 	7.6 (a) (1), 	7.6 (a) (2), 	7.6 (c) .
U 	Proposed Rule 	7.6(a) (3) (b). 	The 	disclaimer 	reads,
A description or identification of limitation of practice
does not 	mean that any agency or board has certified such
lawyer as a 	specialist or expert 	in an indicated field of
law 	practice, 	nor 	does 	it 	mean 	that 	such 	lawyer 	is
necessarily 	any 	more 	experienced 	or 	competent 	than 	any
other 	lawyer. 	All 	potential 	clients 	are 	urged 	to 	make
their own independent investigation and evaluation of any
lawyer being considered. 	This notice 	is required by Rule
of 	the 	Supreme 	Court 	of 	Mississippi.
U 	Proposed 	Rule 	7.7(b).
8

III. 	Effeet. 	of 	the 	Propo.ed Rule ••
Advertising, 	by 	professionals 	as 	well 	as 	by 	other 	kinds 	of
businesses, 	informs 	consumers 	of 	options 	available 	in 	the
marketplace and encourages competition among firms 	seeking to meet
consumer needs. 	These procompetitive functions 	of 	advertising can
be 	significant 	regardless 	of 	a 	firm's 	size 	or 	age. 	They 	may 	be
especially 	important 	in 	facilitating 	the 	entry 	of 	new 	firms, 	by
making them known to potential 	clients and helping them reach more
quickly 	an 	efficient 	competitive 	size. 	Studies 	indicate 	that
prices for professional services tend to be lower where advertising
exists 	than 	where 	it 	is 	restricted 	or 	prohibited. 26 	Empirical
evidence 	also 	indicates 	that 	while 	certain 	restrictions 	on
professional 	advertising 	tend 	to 	raise 	prices, 	the 	restrictions
studied 	do 	not 	generally 	increase 	the 	quality 	of 	available 	goods
and 	services. 27 	These 	relationships 	among 	price, 	quality, 	and
advertising 	have 	been 	found 	to 	exist 	in 	the 	provision 	of 	certain
legal 	services 	as 	well 	as 	in 	the 	provision 	of 	other 	professional
26 	Bond, 	Kwoka, 	Phelan 	& Whitten, 	Effects 	of 	Restrictions 	on
Advertising and Commercial Practice in the Professions: 	The Case of
Optometry 	(1980); 	Benham 	& 	Benham, 	Regulating 	Through 	the
Professions: 	A Perspective on 	InfOrmation Control, 	18 	J.L. 	& Econ.
421 	(1975); 	Benham, 	The 	Effects 	of 	Advertising 	on 	the 	Price 	of
Eyeglasses, 	15 	J.L. 	& Econ. 	337 	(1972).
27 	Bond 	et 	al., 	Effects 	of 	Restrictions 	on 	Advertising 	and
Commercial 	Practice 	in 	the 	Professions: 	The 	Case 	of 	Optometry
(1980) . 	See 	also 	Benham, 	LiCf'~nsure and 	Competition 	in 	Medical
Markets, 	in 	Frech, 	ed., 	Regulating 	Doctors' 	Fees 	(1990); 	Cady,
Restricted 	Advertising 	and 	Competition: 	The 	Case 	of 	Retail 	Drugs
(1976) .
9

services. 28
Advertising is not, 	of course, 	invariably benign. 	Advertising
may 	sometimes 	be 	unfair 	or 	deceptive 	or 	may 	violate 	other
legitimate 	goals 	of 	public 	policy. 	But 	truthful 	advertising 	is
generally 	beneficial 	and 	procompetitive. 	The 	comments 	that
accompany 	the 	proposed 	rules 	recognize 	the 	importance 	of 	"not
interfering with the free flow of useful 	information to prospective
users 	of 	legal 	services," 	while 	also 	noting 	concerns 	about
potential 	interference 	with 	the 	fair 	and proper 	administration 	of
justice 	and 	concerns 	that 	practices 	that 	are 	misleading 	or
overreaching 	can 	create 	unjustified 	expectations 	and 	"adversely
affect 	the public's 	confidence 	and 	trust 	in our 	judicial 	system."~
The staff's reservations about some aspects of the proposals do not
arise 	from 	disagreement 	that 	these 	are 	important 	issues. 	We
suggest 	that 	the 	Supreme 	Court 	of 	the 	State 	of 	Mississippi 	can
balance 	the 	matters 	at 	stake 	by 	imposing 	restrictions 	on
advertising 	that 	are 	tailored 	to 	prevent 	unfair 	or 	deceptive 	acts
or practices or otherwise to serve consumers, 	rather than 	imposing
28 	~ 	Jacobs 	et 	al., 	Improving 	Consumer 	Access 	to 	Legal
Services: 	The 	Case 	for 	Removina 	Restrictions 	on 	Truthful
Advertising 	(1984); 	Calvani, 	Langenfeld 	& 	Shuford, 	Attorney
Advertising 	and 	Competition 	at 	the 	Bar, 	41 	Vand. 	L. 	Rev. 	761
(1988); 	Schroeter, 	Smith 	& 	Cox, 	Advertising 	and 	Competition 	in
Routine 	Legal 	Service 	Markets; 	An 	Empirical 	Investigation, 	35 	J.
Indus. 	Econ. 	49 	(1987); 	Muris 	& McChesney, 	Advertising 	and 	the
Price 	and 	Quality 	of 	Legal 	Services: 	The 	Case 	for 	Legal 	Clinics,
1979 	Am. 	Bar Found. 	Research 	J. 	179 	(1979).
29 Comments 	on 	Proposed Rule 	7.2.
10

restrictions 	that 	tend 	chiefly 	to 	dampen 	competition.
The 	ban 	against 	all 	assertions 	relating 	to 	the 	quality 	of
services 	offered, 	except 	for 	items 	of 	information 	that 	are
expressly 	permitted 	by 	other, 	narrower 	provisions,~ 	may 	be
unnecessarily 	broad. 	"Self-laudatory" 	statements 	and 	claims
concerning 	"the 	quality of 	legal 	services," 	which 	the 	rules 	would
prohibit, 	are 	not 	necessarily 	either 	unfair 	or 	deceptive. 	While
advertising fitting these descriptions could be employed to deceive
consumers, 	many 	instances 	of 	non-deceptive, 	useful 	advertising
could 	fit 	these 	descriptions 	as 	well. 	Most 	advertisements 	are
self-laudatory to some extent, 	explicitly or implicitly. 	And even
subjective, 	self-laudatory assertions about the quality of services
offered, 	such 	as 	the 	importance 	a 	firm 	places 	on 	courtesy 	and
attentiveness 	in the 	delivery of 	legal 	services to 	the public, 	can
also convey information 	of 	some 	value.
Similarly, 	the 	proposed 	rules 	prohibiting comparative 	claims
and illustrations that 	"cannot be factually substantiated" could be
applied 	too 	broadly. 	Requiring 	that 	some 	kinds 	of 	claims 	be
substantiated can, 	of course, 	serve consumers by helping 	to ensure
that 	claims 	are 	not 	misleading; 	however, 	if 	substantiation 	is
demanded for representations that, 	although not misleading, 	concern
~ ~ 	proposed 	Rule 	7.2(n). 	These 	specific 	enumerations 	of
permissible 	quality-related 	claims 	would 	apparently 	take
precedence, 	as 	a 	matter 	of 	rule 	interpretation, 	over 	the 	broader
prohibition of 	Rule 	7.2(j).
11

qualities that ~:e not easy to measure, 	messages that consumers may
find 	useful 	may be 	barred. 	Claims 	or 	assertions 	about 	aspects 	of
service might be understood as at 	least implicitly comparative, 	and
thus 	subject 	to 	the 	requirement 	of 	factual 	substantiation. 	Such
claims as 	that 	the 	firm provides 	"friendly," 	"diligent," 	"prompt,"
or 	"convenient" 	service, 	while 	probably 	not 	susceptible 	to
objective 	substantiation, 	may 	nonetheless 	communicate 	uaeful
information, 	indicating qualities 	that 	the 	firm seeks to emphasize
in 	its 	practice. 	The 	illustration 	that 	the 	comment 	specifically
disapproves, 	a 	clenched 	fist, 	could 	similarly represent 	a 	fea~ure
that 	a 	firm 	could 	legitimately 	seek 	to 	emphasize 	about 	its
practice, 	such as 	tenacity, 	that would probably not 	be susceptible
to objective substantiation. 3! 	The commentary on the proposed rule
shows 	a 	concern 	that 	the 	forbidden 	claims 	could mislead consumers
about 	the resul ts lawyers can achieve. 	But the proposed rule would
ban 	all 	non-substantiable 	comparative 	claims 	and 	illustrations,
regardless 	of 	whether 	they 	had 	any 	particular 	bearing 	on 	likely
outcomes.
The 	rules 	may 	have 	been 	proposed 	as 	a 	response 	to 	a 	limited
class 	of 	claims, 	namely 	overreaching 	and 	potentially 	misleading
claims 	on 	which 	consumers 	could 	be 	expected 	to 	place 	serious
reliance, 	such as 	unfounded 	or misleading 	claims 	about 	a 	lawyer's
ability to 	secure 	relief 	for 	clients or about 	the 	relative quality
31 	The 	Comment 	interprets 	this 	illustration 	as 	a 	(prohibited)
self-laudatory claim about the lawyer's ability to achieve results.
12

of 	a 	lawyer's 	work 	product. 	If 	so, 	such 	claims 	could 	be
disciplined 	through 	narrower 	prohibitions 	that 	did 	not 	present 	as
great 	a 	risk 	of 	chilling 	potentially 	useful 	communications. 	For
example, 	rather 	than 	banning 	endorsements 	and 	testimonials
outright, 	the 	court 	might 	consider 	an 	approach, 	similar 	to 	that
taken 	by 	the 	Commission's 	guides 	on 	this 	subject, 	that 	seeks 	to
ensure 	that 	client 	testimonials 	are 	truthful 	and 	not 	misleading. 32
More 	generally, 	the 	rules 	might 	target 	those 	claims 	that 	make
insupportable 	representations 	about 	particular 	results 	or 	that
inaccurately 	imply 	the 	existence 	Q~ vOJ~~tive substantiation.»
The 	constraints 	on 	the 	style 	and 	content 	of 	broadcast
advertisements 	could 	d~scourage 	competition 	in 	the 	legal
profession. 	The 	comment 	on 	these 	restraints 	states 	that 	they 	are
intended to ensure that advertising is limited to what 	is 	"useful,"
"factual," 	and 	"informational," 	presented 	in 	a 	manner 	that 	is
"nonsensational." 	But 	the 	restraints will prohibit communications
that are not deceptive, 	misleading, 	or unfair, 	and that 	are 	likely
to 	be 	"useful" 	to 	consumers 	by 	helping 	them 	identify 	suitable
providers. 	Both 	the 	style 	and 	the 	content 	of 	a 	provider's
advertisement 	may 	help 	consumers 	decide 	whether 	the 	provider 	is
32 	Guides 	Concerning 	Use 	of 	Endorsements 	and 	Testimonials 	in
Advertising, 	16 	C.F.R. 	Part 	255. 	A 	copy 	of 	these 	guides 	is
attached. 	These guides explicate and illustrate the application of
the 	Federal 	Trade 	Commission 	Act's 	legal 	standards 	of 	unfairness
and 	deception.
33 	This 	might 	be 	done 	by 	deleting 	Rule 	7.2 (j) 	and 	recasting
Rule 	7.1(c)'s 	substantiation provision.
13

suitable 	for their needs. 	The constraints would prevent 	the use of
common methods 	that 	advertising firms 	have 	used 	for generations 	to
make 	their 	messages 	memorable. 	These 	methods 	are 	unlikely 	to
hoodwink 	unsuspecting 	consumers, 	because 	consumers 	are 	thoroughly
familiar with them. 	Whether a 	slogan, 	musical 	tag, 	or illustration
is 	misleading, 	deceptive, 	or 	unfair 	to 	consumers 	would 	depend 	on
what 	it 	says 	and how 	it 	is 	understood, 	not 	on whether 	it 	is 	catchy
and 	effective.
The 	ban 	against 	dramatizations 	is 	apparently 	intended 	to
eliminate risks 	of distortion or of 	creating legal problems 	rather
than solving them. 	The 	comment 	shows 	that 	the 	rule 	is 	intended to
limit 	advertisements 	to 	identification 	of 	providers 	and
explanations 	of 	the 	law. 	But 	dialogue 	and 	demonstration 	may 	be
effective ways to explain the law, 	particularly to consumers who do
not 	already 	know 	how 	legal 	terminology 	corresponds 	to 	their
experiences and problems. 	And requiring on-screen or on-microphone
appearances by the lawyers presenting the explanations is likely to
discourage 	many 	professionals 	from 	using 	broadcast 	advertising.
Perhaps the permitted format, 	of the lawyer talking into the camera
about 	the 	law, 	would be 	effective 	for 	some 	lawyers, 	but 	for 	others
it 	would not, 	and 	the 	difference 	in 	effectiveness 	may have 	little
to do with differences 	in the quality of 	their legal 	services. 	The
proposed rule 	could reward the telegenic, 	for others could not hire
on-the-air professionals 	to 	help 	them put 	their 	message 	out.
14

The 	disclaimer 	and 	other 	disclosure 	obligations 	will 	tend 	to
increase advertising costs, 	by requiring that.messages be longer or
by 	forcing 	advertisers 	to 	displace 	other 	information. 	Disclosure
obligations may also discourage 	advertising 	if advertisers believe
consumers 	will 	take 	the 	disclosure 	to 	reflect 	negatively 	on 	the
advertiser, 	regardless 	of 	whether 	that 	imputation 	is 	justified.
And 	the 	disclaimer 	would 	occupy 	a 	large 	fraction 	of 	a 	spot
broadcast announcement and a prominent place in a printed display--
unless the display were limited to the 	"tombstone" 	information that
the 	rule 	permits. 	Because 	of 	these' effects, 	disclosure
requirements 	that 	are 	unnecessary can 	reduce 	the 	amount 	of 	useful
information available 	to consumers.~ 	Accordingly, 	it 	is 	important
in 	evaluating disclosure 	requirements 	to 	weigh 	such costs 	against
the 	expected 	benefits.
The 	proposed 	ban 	on 	advertising 	through 	video 	cassettes 	and
movies 	is 	said 	to 	be 	required 	because 	information 	in 	these 	media
would 	become 	outdated 	and 	hence 	misleading. 	But 	if 	that 	is 	the
case, 	it 	may 	be 	better 	to 	enforce 	a 	standard 	against 	misleading
advertising or 	to 	ensure 	that 	outdated material 	is 	withdrawn 	from
use, 	rather 	than 	to 	ban 	outright 	the 	use 	of 	media 	that 	might 	be
cost-effective 	alternatives 	to 	other 	forms 	of 	advertising.
~ 	There 	is 	some 	evidence 	that 	longer, 	more 	elaborate
disclosures 	are 	no 	more 	effective 	than 	shorter 	ones 	in 	alerting
consumers 	to 	issues 	that 	are 	otherwise 	undisclosed 	in 	an
advertisement. 	~ 	Murphy 	and 	Richards, 	Investigation 	of 	the
Effects 	of 	Disclosure 	Statements 	in 	Rental 	Car Advertisements, 	26
J. 	Cons. 	Aff. 	351 	(1992).
15

Some 	other 	features 	that 	would 	also 	make 	advertising 	more
difficult should be considered carefully. 	Requiring advertisements
to 	list 	each 	particular 	location 	where 	services 	will 	be 	provided
will 	increase 	costs 	and 	may 	make 	cooperative 	advertising
arrangements 	difficult 	or 	infeasible. 	The 	concern 	is 	evidently
that consumers might be misled if the office that provides services
is 	not 	the 	one 	identified 	in 	the 	advertising. 	But 	uncertainty
about 	particular locations would probably be 	cleared up 	the moment
the 	consumer 	called 	to 	:Jet 	up 	an 	appointment. 	In 	any event, 	such
problems 	could 	be 	dealt 	with 	by 	applying 	a' general 	rule 	againsc
deception, 	without 	the 	burdensome 	disclosure 	obligation 	that 	the
rule would 	impose. 	Requiring that only certain phrases 	be used in
describing 	the 	kinds 	of 	cases 	a 	lawyer 	takes, 	and 	preventing 	the
use 	of 	other 	terms 	regardless 	of 	whether 	they 	are 	deceptive, 	may
deprive 	consumers 	of 	particularly important 	information 	they need
in 	choosing a 	lawyer. 	Consumers 	may understand 	their problems 	by
rubrics 	that 	do 	not 	appear 	on 	the 	list 	of 	approved 	labels.
Finally, 	banning 	trade 	or 	fictitious 	names, 	regardless 	of
whether 	there 	has 	been 	any 	showing 	of 	deception, 	may 	deprive
consumers of valuable 	information, 	increase consumer search costs,
and 	lessen competition. 	In other contexts, 	the FTC has 	found 	that
restrictions 	on 	the 	use 	of 	non-deceptive 	trade 	names 	hinder 	the
growth and development 	of 	firms 	and make 	it 	difficult 	for 	them 	to
16

advertise 	multiple 	outlets. 35 	In 	some 	professional 	fields 	trade
names 	can 	be 	essential 	to 	the 	establishment 	of 	large 	gr0up
practices 	that 	can 	offer 	lower 	prices. 	Trade 	names 	can be 	chosen
that 	are 	easy 	to 	remember 	and, 	in 	addition, 	convey 	useful
information, 	such 	as 	the 	location 	or 	other 	characteristics 	of 	a
business. 	Over 	time, 	trade 	names 	can come 	to be associated with a
certain level of quality, 	service and price, 	thus aiding consumers'
search 	and promoting 	competition.
The proposed regulations 	would permit 	the use of 	two kinds of
trade 	names. 	The 	rules would condone 	the 	long-standing pattern 	in
the 	legal 	profession of 	retaining 	the 	names 	of 	former 	partners 	in
the 	"institutional" 	name 	of 	a 	practice. 	And 	they 	would 	permit
calling 	a 	practice 	a 	"clinic," 	if 	it 	was 	a 	low-price 	provider 	of
routine 	services.~ 	In 	each 	case, 	the 	words 	used, 	even 	though 	not
the 	name 	of 	any 	particular 	lawyer 	who 	would 	provide 	services,
convey 	information 	about 	the 	practice 	that 	consumers 	may 	find
35 Ophthalmic 	Practices 	Rule, 	Statement 	of 	Basis 	and 	Purpose,
54 	Fed. 	Reg. 	10285, 	10289 	(March 	13, 	1989).
~ Care 	should be 	taken that 	enforcement of 	this 	rule does 	not
lead 	to 	reductions 	in 	price 	competition. 	On 	the 	one 	hand,
standardizing 	terminology 	can 	benefit 	consumers: 	if 	the 	word
"clinic" 	applies 	only 	to 	providers 	whose 	fees 	are 	relatively 	low,
then those 	consumers who are concerned most 	about price could find
a 	suitable provider quickly by narrowing their search to "clinics."
But 	determining 	whether 	a 	firm 	is 	in 	compliance 	with 	this
regulation will 	require comparing its fees with those prevailing in
the 	community. 	The 	processes 	of 	determining 	the 	prevailing 	fees
and judging whether the 	firm's 	fees are enough lower to 	justify the
use 	of 	the 	"clinic" 	label 	should 	not 	be 	used 	by 	attorneys 	or 	law
firms 	to 	develop 	or 	maintain 	collusive, 	standard 	fee 	levels 	or
schedules 	in violation of 	federal 	or 	state 	antitrust 	laws.
17

valuable. 	in 	a 	way 	that 	is 	memorable 	and 	thus 	effective 	as 	a
marketing 	tool. 	Oth..;r 	words 	could 	serve 	the 	same 	informative
function 	without 	being 	deceptive 	or 	misleading. 	Restrictions 	on
. trade 	names 	are 	often 	intended 	to 	ensure 	identification 	and
accountability of 	individual 	practitioners. 	But 	this 	goal 	may be
achieved by other means, 	without losing the competitive benefits of
trade 	names.
IV. 	Conclusion.
Some 	parts 	of 	the 	proposed 	rule 	to 	regulate 	attorney
advertising may give 	insufficient weight 	to the 	contributions 	that
nondeceptive advertising can make 	to informed consumer choice. 	We
therefore 	suggest 	that 	you 	consider modifying 	the 	rules 	to permit
a 	wider 	range 	of 	truthful 	communications 	and 	to 	narrow 	their
prohibitions to target only those representations that pose a 	clear
likelihood 	of 	consumer 	injury 	through 	material 	unfairness 	or
18

deception, 	or 	that 	otherwise 	violate 	significant 	public 	policy
objectives 	in 	a 	way 	that 	threatens 	to 	cause 'injury 	to 	consumers.
We 	appreciate 	this 	opportunity 	to 	provide 	our 	views.
Respectfully 	submitted,
-
Mi,:,~:'.·· ~ 	'::' 	Wise
Acting 	Director
Office 	of 	Consumer 	and 	Competition
Advocacy
Federal 	Trade 	Commission
Sixth 	Street 	and 	Pennsylvania
Avenue, 	N. 	W.
Washington, 	D. 	C. 	20580
January 14, 1994
19