FTC Staff Comment Before the New Jersey Supreme Court Concerning Attorney Advertising

UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580
Office of Policy Planning
Bureau of Consumer Protection
Bureau of Economics
March 1, 2006
Committee on Attorney Advertising
Supreme Court of New Jersey
Attn: Committee Secretary, Professional Services
Richard J. Hughes Justice Complex
P.O. Box 037
Trenton, NJ 08625-0037
Re: 	Proposed Attorney Advertising Guideline 4
Dear Committee Secretary:
The staff of the Federal Trade Commission’s (“FTC” or “Commission”) Office of Policy
Planning, Bureau of Consumer Protection, and Bureau of Economics1 is pleased to submit these
comments on Proposed Attorney Advertising Guideline 4 (“Proposed Guideline”),2 which
addresses the use by lawyers or law firms of endorsements or testimonials from clients. This
letter briefly summarizes the Commission’s interest and experience in the regulation of attorney
advertising and provides the staff’s opinion regarding the anticipated effects on consumers and
competition of the Proposed Guideline. The FTC staff believes that, while deceptive advertising
by lawyers should be prohibited, restrictions on advertising should be specifically tailored to
prevent deceptive claims and should not unnecessarily restrict the dissemination of truthful and
non-misleading information.
The FTC enforces laws prohibiting unfair methods of competition and unfair or deceptive
acts or practices in or affecting commerce.3 Pursuant to this statutory mandate, the Commission
encourages competition in the licensed professions, including the legal profession, to the
1 This letter expresses the views of the Federal Trade Commission’s Office of Policy Planning, Bureau of
Consumer Protection, and Bureau of Economics. The letter does not necessarily represent the views of the Federal
Trade Commission or of any ind ividual Com missioner. The Comm ission has, however, voted to autho rize us to
submit these comments.
2 The Proposed Guideline is available at
http://www.judiciary.state.nj.us/notices/reports/ProposedCAAGuideline4.pdf.
3 Federal T rade Commission Act, 15 U.S.C. § 4 5.

Committee Secretary
March 1, 2006
Page 2 of 3
maximum extent compatible with other state and federal goals. In particular, the Commission
seeks to identify and prevent, where possible, business practices and regulations that impede
competition without offering countervailing benefits to consumers.4 The Commission and its
staff have had a long-standing interest in the effects on consumers and competition arising from
the regulation of lawyer advertising.5
Debate about attorney advertising involves important policy concerns, such as preventing
statements that would mislead lay people and thereby undermine public trust in lawyers and the
legal system. The FTC staff’s view is that consumers are better off if concerns about potentially
misleading advertising are addressed through the adoption of advertising restrictions that are
narrowly tailored to prevent deceptive claims. By contrast, imposing overly broad restrictions
that prevent the communication of truthful and non-misleading information is likely to inhibit
competition and to frustrate informed consumer choice. In addition, research has indicated that
overly broad restrictions on truthful advertising may adversely affect prices paid by consumers,
especially for relatively routine legal services.6
The Proposed Guideline would prohibit truthful, non-misleading claims about the nature
of legal services,7 the quality of legal services,8 and comparisons between providers of legal
services,9 if such claims are made through a client endorsement or testimonial. Because these
types of claims can convey valuable information to consumers and help spur competition, the
staff recommends that they be prohibited only if the endorsement or testimonial itself deceives
4 Specific statutory authority for the FTC’s advocacy program is found in Section 6 of the FTC Act, under
which Congress authorized the FT C “[t]o gather and comp ile information concerning, and to investigate from time to
time the organization, business, conduct, practices, and management of any person, partnership, or corporation
engaged in or whose business affects commerce,” and “[t]o make public from time to time such portions of the
information obtained by it hereunder as are in the public interest.” Id. § 46 (a), (f).
5 See, e.g., Letter from FT C Staff to Robert G. Esdale, Clerk of the Alabama Supreme Court (Sept. 30, 2002),
available at http://www.ftc.gov/be/v020023.pdf. The staff, on November 9, 1987, filed comments with the Supreme
Court of N ew Jersey on a previous p roposal to regulate attorney adv ertising. In addition, the staff has provided its
comments on such proposals to, among other entities, the Supreme Court of Mississippi (Jan. 14, 1994); the Supreme
Court of New Mexico (July 29, 1991); the State Bar of Arizona (Apr. 17, 1990); the Ohio State Bar Association
(No v. 3, 19 89); the Florida B ar Board of Governors (July 17 , 198 9); and the State Bar of Georgia (M ar. 31 , 198 7).
See also Submission of the Staff of the Federal Trade Commission to the American Bar Association Commission on
Advertising (June 24, 1 994 ) (available as attachm ent to Sept. 30, 20 02 L etter to A labam a Sup reme Court supra).
6 See, e.g, id. at 5-6.
7 This would include basic inform ation that would provide so me context for the endorsement or testim onial,
such as a client’s general description of the nature of the legal services that the attorney or law firm provided.
8 The Proposed Guideline would prohibit, for example, claims that convey the importance that an attorney or
firm places on aggressiveness or inno vation in the delivery of legal services.
9 For example, comparative claims regarding aspects of the service provided by an attorney or firm, such as
claims that one lawyer returns calls more promptly than another lawyer or is more professional than another lawyer,
would be prohibited under the Proposed Guideline.

Committee Secretary
March 1, 2006
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consumers. For example, as explained in the FTC’s Endorsement Guides,10 a consumer
testimonial is likely to be deceptive if the experience described is not the consumer’s actual
experience or is not representative of what consumers generally experience.11
In conclusion, the FTC staff believes that, while deceptive advertising by lawyers should
be prohibited, restrictions on advertising that are specifically tailored to prevent deceptive claims
provide the optimal level of protection for consumers. Consumers benefit from robust
competition among attorneys and from important price and quality information that advertising
can provide. Rules that unnecessarily restrict that competition or the dissemination of truthful
and non-misleading information are likely to harm consumers of legal services in the state of
New Jersey.
Respectfully submitted,
Maureen K. Ohlhausen, Director
Office of Policy Planning
Lydia B. Parnes, Director
Bureau of Consumer Protection
Michael A. Salinger, Director
Bureau of Economics
10 See generally Federal T rade Commission, G uides Concerning the U se of E ndorsements and Testimonials in
Advertising, 16 C.F.R. Part 255. The Com mission’s regulatory review of its Endorsement Guides is pending.
11 W e would note that the lawyer (as the advertiser) should have a reasonable basis (apart from the
endorsement) to support the claim that the experience depicted in a client endorsement is representative.