FTC Staff Comment Before the Supreme Court of Hawaii Concerning Proposed Rule to Permit the Name of Retired or Deceased Partners in Law Firms

March 	30, 	1987
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BUR£AI) Of COMPETlllON
UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C 2OS80
Honorable 	Herman 	Lum
Chief 	Justice
Supreme 	Court 	of 	Hawaii
Aliiolani 	Hale
P.O. 	Box 	2560
Honolulu, 	Hawaii 	96804
Dear 	Chief 	Justice 	Lum:
The 	Federal 	Trade 	Commission 	staff 	is 	pleased 	to 	submit
these 	comments 	regarding 	the 	proposed 	amendment 	to 	Disciplinary
Rule 	2-102(B) 	of 	the 	Rules 	of 	the 	Supreme 	Court 	of 	Hawaii.
The 	proposal 	before 	the 	Court 	would 	permit 	the 	use 	of 	names
of 	retired. or 	deceased 	partners 	in 	law 	firm 	names. 	We 	support
this 	relaxation 	of 	current 	restrictions. 	The 	proposed 	rule,
however, 	would 	prohibit 	the 	use 	of 	trade 	names 	that 	include 	any
information 	in 	addition 	to 	an 	attorney's 	name. 	This 	prohibition
may 	limit 	the 	efficient 	dissemination 	of 	truthful, 	nondeceptive
information 	to 	consumers. 	We 	therefore 	suggest 	that 	the 	proposed
rule 	be 	amended 	to 	remove 	this 	restri=tion.
The 	proposed 	amendment 	to 	Rule 	2-102(B) 	provides 	that 	"the
name 	under 	which 	a 	lawyer 	practices 	shall 	be 	limited 	to 	the 	full
or 	last 	name 	of ·the 	lawyer, 	the 	name 	or 	names 	of 	another 	lawyer
or 	lawyers 	in 	the 	firm, 	the 	name 	of 	a 	lawyer 	that 	appears 	in 	the
name 	of 	a 	professional 	law 	corporation 	that 	is 	a 	partner 	in 	the
firm, 	or 	the 	name 	or 	names 	of 	one 	or 	more 	deceased 	or 	retired
partners 	of 	the 	firm, 	or 	of 	a 	predecessor 	firm 	in 	a 	continuing
line 	of 	succession."
~y allowing 	firm 	names 	that 	include 	the 	names 	of 	deceased 	or
retired 	members, 	the 	proposed 	rule 	would 	facilitate 	consumers'
search 	for 	a 	lawyer. 	Consumers' 	association 	of 	a 	firm 	name 	with
a 	particular 	level 	of 	quality 	or 	service 	would 	be 	lost 	if 	the
firm 	name 	had 	to 	be 	changed 	each 	time 	a 	name 	partner 	died 	or
retired, 	and 	consumers 	might 	thereafter 	be 	confused 	as 	to 	the
identity 	of 	the 	law 	firm. 	We 	therefore 	support 	the 	proposal 	to
permit 	a 	law 	firm 	to 	use 	the 	names 	of 	deceased 	or 	retired 	firm
members 	in 	its 	name.
I 	This 	letter 	represents 	the 	views 	of 	the 	FTC's 	Bureaus 	of
Competition, 	Consumer 	Protection, 	ana 	Economics, 	and 	not
necessarily 	those 	of 	the 	Commission. 	The 	Commission 	has,
however, 	voted 	to 	authorize 	the 	staff 	to 	submit 	these
comments 	to 	you.

Honorable 	Herman Lum 	-2-
We 	see 	no 	justification, 	however, 	for 	the 	prohibition 	on
more 	descriptive 	names. 	The 	comment 	accompanying 	the 	proposed
amendment 	states 	that 	names 	such 	as 	"'The 	Jones 	Law 	Clinic',
'Smith's 	Bankruptcy 	Law Center', 	or 	'Nanakuli 	Legal 	Services'
would 	not 	~e permissible," 	and 	suggests 	that 	trade 	names 	mislead
consumers.
We 	agree 	that 	deception 	should 	be 	prohibited. 	Trade 	names,
however, 	are 	not 	inherently 	misleading 	as 	to 	the 	identity 	of 	or
services 	provided 	by 	a 	law 	firm. 	Like 	any 	other 	trade 	name, 	a
law 	firm 	name 	identifies 	the 	firm 	and 	comes 	to 	be 	associated 	with
the 	services 	that 	the 	firm 	offers. 	The 	drafters 	of 	the 	proposed
amendment 	recognized 	this 	fact 	when 	they 	allowed 	the 	use 	of 	such
names 	by 	nonprofit 	legal 	aid 	organizations, 	public 	ioterest 	law
firms, 	and 	firms 	organized 	under 	the 	laws 	of 	jurisdictions 	other
than 	Hawaii. 	Further, 	trade 	names 	convey 	no 	less 	information 	to
consumers 	about 	the 	identity 	of 	the 	attorney 	who 	will 	actually
provide 	the 	legal 	services 	than 	do 	the 	firm 	names 	authorized 	by
the 	proposed 	rule. 	Neither 	the 	proposed 	rule 	nor 	the 	existing
rules 	require 	that 	the 	names 	of 	all 	the 	lawyers 	in 	the 	firm 	be
included 	in 	the 	firm 	name, 	and 	a 	consumer 	who 	knows 	the 	name 	of
the 	firm 	will 	not, 	thereby, 	necessarily 	learn 	the 	identity 	of 	the
lawyers 	who 	will 	actually 	provide 	the 	legal 	service. 	Indeed, 	a
firm 	name 	that 	includes 	information 	or 	words 	other 	than 	an
attorney's 	name 	may 	provide 	more 	information 	to 	consumers 	about
the 	firm·'s 	services 	than 	would 	the 	firm 	names 	permitted 	by 	the
proposed 	rule.
The 	use 	of 	a 	trade 	name 	by 	a 	law 	firm 	can 	convey 	useful
information 	about 	the 	firm, 	including 	the 	location, 	fields 	of
practice, 	and 	other 	characteristics 	of 	its 	practice. 	For
example, 	the 	use 	of 	a 	name 	such 	as 	"The 	Bankruptcy 	Law 	Center"
would 	inform 	consumers 	that 	the 	firm 	offers 	services 	in
bankruptcy 	law. 	Trade 	names 	may 	also 	be 	easier 	for 	consumers 	to
distinsuish 	and 	remember 	than 	names 	consisting 	only 	of 	proper
names. 	By 	precluding 	these 	efficiencies 	the 	proposed 	rule 	would
inhibit 	the 	communication 	of 	useful 	information 	to 	the 	public.
The 	United 	States 	Supreme 	Court 	has 	ruled 	that 	regulation 	of
advertising 	is 	permissible 	if 	the 	advertising 	is 	inherently
misleading 	or 	the 	record 	indicates 	that 	the 	advertising 	has, 	in
fact, 	been 	misleading. 	See 	In 	re 	R.M.J., 	455 	u.S. 	191, 	202-203
(1982). 	On 	the 	other 	hand, 	the 	Court 	has 	also 	made 	clear 	that
states 	may 	not 	absolutely 	prohibit 	the 	dissemination 	of
2 	Comment 	on 	Proposed 	Amended 	DR 	2-102, 	Hawaii 	Code 	of
Professional 	Responsibility 	at 	3 	(1986).

Honorable 	Herman 	Lum 	-3-
informat:on merely 	because 	it 	has 	the 	potential 	to 	be 	misleading,
if 	it 	could 	also 	be 	presented 	in 	nonmisleading 	ways, 	and 	that
advertising 	restrictions 	"may 	be 	no 	broader 	than 	reasonably
.necessary 	to 	prevent 	deception." 	!d. 	at 	203. 	The 	Supreme 	Court
observed 	that 	it 	had 	allowed 	Texas~o prohibit 	optometrists'
trade 	names 	in 	Friedman 	v. 	Rogers, 	440 	u.s. 	1 	(1979), 	because 	the
record 	contained 	evidence 	of 	a 	"considerable 	history 	in 	Texas 	of
deception 	and 	abuse" 	by 	Texas 	optometrists 	through 	the 	use 	of
trade 	names. 	455 	U.S. 	at 	202. 	However, 	in 	Friedman, 	the 	Court
. die 	not 	hold 	that 	trade 	names 	are 	inherently 	misleading. 	The
Court 	simply 	addressed 	the 	constitutionality 	of 	the 	Texas 	law,
not 	whether 	it 	was 	the 	best 	means 	of 	protecting 	consumers. 	The
comment 	to 	the 	proposed 	rule 	cites 	no 	evidence 	indicating 	that
Hawaii 	lawyers 	have 	used 	or 	would 	be 	likely 	to 	use 	deceptive
trade 	na~es.
In 	short, 	the 	proposed 	rule's 	broad 	prohibition 	of 	trade
names 	restricts 	the 	communication 	of 	useful 	information 	and 	does
not 	appear 	necessary 	to 	prevent 	deception. 	Therefore, 	we
recommend 	that 	the 	Court 	modify 	Rule 	2-l02(B) 	to 	remove 	the
remaining 	restrictions 	on 	the 	use 	of 	non deceptive 	trade 	names.
We 	appreciate 	the 	opportunity 	to 	present 	these 	views.
Respectfully 	submitted,
Competition