FTC Staff Comment Before the American Bar Association Concerning Attorney Advertising

COMMISSION 	AUTHORIZED
SUBMISSION OF THE STAFF
OF THE
FEDERAL TRADE COMMISSION~
TO THE
AMERICAN BAR ASSOCIATION
COMMISSION ON ADVERTISING
June 24, 1994
Washington, D. C .
• These 	views 	are 	those 	of the 	staff of the 	Federal Trade 	Commission, 	and 	are 	not
necessarily those of the Commission or any Commissioners.

I. 	Introduction
The staff of the Federal Trade Commission is pleased to offer these comments on the
issues presented by efforts to regulate lawyer advertising. These views are those of the staff of
the 	Federal Trade Commission, 	and 	are not 	necessarily 	those of the Commission or any
Commissioners.
Some degree of regulation of lawyer advertising may well be necessary to ensure against
deception, especially with respect to aspects of legal services about which the consuming public
is not well informed. 	But some rules addressed to particular risks of deception may be too
broad; by preventing the communication of truthful and nondeceptive information that consumers
may find useful in choosing a lawyer, they may inhibit competition and informed consumer
choice. Another concern, that undignified advertising undermines respect for the legal profession
and institutions of justice, has led some jurisdictions to impose severe constraints on advertising
style and content. These restraints, which may also inhibit competition and consumer choice,
may be stricter than necessary to promote the values at stake. Consumers appear to be more
discriminating 	than 	the 	profession 	has 	believed, 	for 	surveys 	generally 	show 	consumers
responding positively to advertising that would be considered "dignified" and also to some
advertising methods that the most restrictive rules prohibit. Preventing truthful, nondeceptive
communications that many consumers apparently do not find offensive and may even find useful
could impose costs that should be considered carefully.
II. 	Interest and Experience of the Federal 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. l 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 legislatures and administrative agencies and others. 3 As one of the
I IS U.S.C. Sec. 41 ~ g:g.
2 See, ~' American Medical Ass'n, 94 F.T.C. 701 (1979); Iowa Chapter of American Physical Therapy
Ass'n, III 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, 114 F.T.C. 708 (1991) (consent order); 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, D-9259 (administrative complaint issued July 9, 1993).
) Recent comments by the Commission staff about professional advertising include comments to the 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; and Texas Sunset Advisory
Commission, August 14, 1992 (medical boards).

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.
The 	Commission and 	its staff have had 	a long-standing 	interest 	in 	the effects on
consumers and competition of regulation of lawyer advertising. The Commission supported the
1983 amendments to the American Bar Association's Model Rules. which eliminated subjective
criteria and permitted media and direct mail advertising and the use of trade names. 4 The staff
submitted a conunent to this Commission on Advertising in 1986, advising against the adoption
of formal "guidelines" about dignity in lawyer advertising. 5 The Conunission submitted a brief
amicus curiae in the judicial challenge to Iowa's rules that sharply limit lawyer advertising,6 and
the staff later submitted a brief to Florida about the proposed rules there. 7 The staff has
commented frequently about other proposals to regulate lawyer advertising. 8
III. 	Federal 	Trade 	Commission 	Policies and 	Enforcement 	Actions 	Involving
Professional Advertising
Advertising informs consumers of options available in the marketplace and encourages
competition among finns seeking to meet consumer needs. This is as true of advertising by
professionals as it is of advertising by other kinds of business or service. These procompetitive
functions of advertising may be especially important in facilitating the entry of new finns, by
making them known to potential clients and helping them reach more quickly an efficient
competitive size. But these procompetitive functions may still be significant regardless of a
finn's size or age. Studies have shown that prices for certain professional services tend to be
lower where the services can be advertised than where advertising is restricted or prohibited. 9
4 Letter to Morris Harrell, President, ABA (January 17, 1983).
5 Letter to Thomas S. Johnson, ABA Commission on Advertising (December 8, 1986).
6 Brief of the Federal Trade Commission, State Bar v. Humphrey et al. (Supreme Ct. of Iowa, Law No. 69088,
Jan. 17, 1984).
7 Response to Petition to Amend Rules (Supreme Ct. of Florida, Case No. 70,366, May 13, 1987).
8 See. ~, comments to Supreme Court of Mississippi, January 14, 1994; Supreme Court of New Mexico, July
29, 1991; State Bar of Arizona, April 17, 1990; Ohio State Bar Association, November 3, 1989; Florida Bar Board
of Governors, July 17, 1989; New Jersey Supreme Court, November 9, 1987; Supreme Court of Alabama, March
31, 1987; State Bar of Georgia, March 31, 1987.
9 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
2

Empirical evidence also shows that while certain restrictions on professional advertising tend to
raise prices, the restrictions studied aid not generally increase the quality of available goods and
services. 1O Advertising is not, of course, invariably benign. 	Advertising may sometimes be
unfair or deceptive or may vjolate other legitimate goals of public policy. But truthful advertising
is generally beneficial and procompetitive. Thus, restraints on truthful advertising can restrain
competition 	and 	deprive 	consumers 	of the 	benefits 	of a competitive 	marketplace 	and 	of
information they may find useful and valuable in making decisions.
The FTC has examined the effects of many kinds of public and private restrIctIOns
limiting the ability of professionals to contact prospective clients and to advertise truthfully. The
leading decision is the Commission's 1979 ruling in American Medical Association C"AMA").ll
The Commission held there that the AMA's restraints on advertising, patient solicitation, and
alternative forms of practice violated both the competition and the consumer protection aspects
of Section 5. 12 But, in recognition of how consumer protection promotes healthy competition,
the Commission's order banning the restraints permitted the AMA to continue to monitor
advertising for the purpose of preventing deception. l3
The Commission has applied those principles many times, in many professional settings,
since AMA. In Massachusetts Board of Optometry,14 the Commission struck down restraints
that prevented not only advertising of prices and discounts, but also advertising of professional
affiliations and advertising that included testimonials or that was "sensational" or "flamboyant."
The 	Commission found 	there 	was 	no justification for 	such 	a 	flat 	ban 	on 	"undignified"
advertising. Other Commission actions during the 1980's dealt with restraints on advertising
among engineers, accountants, physicians, dentists, and optometrists. The cases considered both
restraints related to price and those addressed to other aspects of the content and style of
professional advertising. 15
Eyeglasses, 15 J .L. & Econ. 337 (1972). See Section IV infra for discussion of similar studies and results involving
the legal profession.
10 Bond et a1., supra n. 9; see also Benham, Licensure and Competition in Medical Markets, in Frech, ed.,
Regulating Doctors' Fees (1990); Cady, Restricted Advenising and Competition: The Case of Retail Drugs (1976).
11 American Medical Ass'n, 94 F.T.C. 701 (1979), affd, 638 F.2d 443 (2d Cir. 1980), aff'd memo by an
equally divided Coun, 455 U.S. 676 (1982).
12 Id. at 1010.
13 Id. at 1030.
14 110 F.T.C. 549 (1988).
15 Ass'n of Independent Dentists, 100 F.T.C. 518 (1982); Broward County Medical Ass'n, 99 F.T.C. 622
(1982); Michigan Ass'n of Osteopathic Physicians 102 F.T.C. 1092 (1983); Washington, D.C. Dermatological
Society, 	102 F.T.C. 	1292 (1983); Michigan Optometric Ass'n, 	106 F.T.C. 342 (1985); Montana Ed. of
Optometrists, 106 F.T.C. 80 (985); Louisiana State Ed. of Dentistry, 106 F.T.C. 65 (1985); Rhode Island Rd.
3

It has become increasingly difficult for professional associations to defend restraints on
non-deceptive advertisements of their practitioners' prices. Thus, attention is increasingly turning
to 	restraints 	on other aspects 	of advertising. 	The 	Commission's 	recent 	actions 	involving
professional advertising reflect this trend, addressing efforts to control advertising style and
content. 16 These cases, about restraints imposed on engineers, psychologists, social workers,
chiropractors, and dentists, have considered most of the same issues - 	banning testimonials,
"self-laudatory" claims, claims about quality or superiority, and appeals to emotion, and limiting
advertising to certain media and specified "tombstone" details - 	that are raised by proposals
to limit advertising by lawyers.
The AMA decision rests on the premise "that broad bans on advertising and soliciting
are 	inconsistent 	with 	the 	nation's 	public 	policy. "17 	In 	support 	of 	that 	conclusion, 	the
Commission cited the Supreme Court's principal decision applying the First Amendment to the
regulation of lawyer advertising. 18 The Commission's continuing application of the Federal
Trade Commission Act to professional advertising has been fully consistent with the Court's
application of the First Amendment to lawyer advertising. 19 However, the Commission has
brought no cases involving restraints on lawyer advertising. The reason it has not is the same
as the reason why the Supreme Court has applied the First Amendment, rather than the Sherman
Act, to those restraints. 20 The restraints are typically formal rules issued by the courts, and
thus, as state action, are not subject to antitrust enforcement.
The Bates Court recognized that consumers' unfamiliarity with what lawyers can do for
them 	might justify 	continuing 	supervision and 	even 	regulation of some 	aspects 	of legal
Of Accoumancy, 107 F.I.C. 293 (1986); American Academy of Optometry, Inc., 108 F,T.C. 25 (1986); Tarrant
County Medical Society, 110 F.T.C. 119 (1987); Structural Engineers Ass'n of Northern California, Inc., 112
F.T.C. 530 (1989).
16 Connecticut Chiropractic Ass'n, supra n. 2; Texas Bd. of Chiropractic Examiners, supra n. 2; American
Psychological Ass'n, supra n. 2; Ass'n of Soil & Foundation Engineers, C-3430 (consent order, June 11,1993);
Nat'j Ass'n of Social Workers, supra n. 2 (1993); Nat'l Soc. of Professional Engineers, C-3454 (consent order,
August 6, 1993); American Dental Ass'n, Dkt. 9093 (compliance letter, November 2, 1993); California Dental
Ass'n, supra n. 2.
17 94 F.T.C. at 1011.
18 Bates v. State Bar of 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).
19 See Peel v. Attorney Registration and Disciplinary Commission of Illinois, 496 U.S. 91 (1990) (attorney's
letterhead may use statement of bona fide specialty certification; Commission filed brief amicus curiae); Shapero
v. Kentucky Bar Ass'n, 486 U.S. 466 (1988) (nondeceptive targeted mail solicitation is protected); Zauderer v.
Office of Disciplinary Counsel of the Supreme Court of Ohio, 47 I U.S. 626 (1985) (upholds seeking business
through printed advertising containing truthful and nondeceptive information and advice about legal rights and
nondeceptive illustrations or pictures).
20 Bates, 433 U.S. at 359-363.
4

advertising. After all, when a claim is made that the First Amendment protects commercial
speech, the first question to be asked is whether the speech is misleading; if it is, then the First
Amendment 	does 	not 	protect 	it. 21 	The 	Commission, 	in 	its actions 	involving 	professional
advertising, has taken care not to discourage self-regulation that disciplines false and deceptive
advertising. The Commission's orders against professional association restraints on advertising
include provisos such as that in the AMA order itself, permitting action against advertising
claims that the association "reasonably believes would be false or deceptive within the meaning
of Section 5 of the Federal Trade Commission Act. "22
IV. 	Effects of Advertising for Legal Services
Research has confirmed that advertising may have the same effects in markets for routine
legal services that have been shown in other professional service markets. 23 A study by the staff
of the FTC concluded that fees for simple legal services were higher in states where advertising
was restricted and found that lawyers who advertised generally charged lower prices. 24 Another
study, based on the same data as the FTC staff study, also concluded that increased advertising
leads to increased competition and lower prices for routine legal services. 25 The likely effects
on price and quality might be different for different kinds of services, with advertising more
likely to lead to lower prices at no loss in quality for relatively routine services that could be
standardized. 26
21 Central Hudson Gas & Electric Corp. v. Public Service Comm'n, 447 U.S. 557 (1980). The First
Amendment also does not apply to commercial speech about an act that is illegal. The other parts of this First
Amendment analysis ask whether the asserted state interest is substantial or merely arguable; whether the regulation
directly advances the asserted interest; and whether the regulation is more extensive than necessary to serve that
interest. Even non-misleading commercial speech may be restricted if the restriction directly advances a substantial
state interest and the restriction is no more extensive than necessary to serve the asserted interest.
22 American Medical Association, 99 F.T.C. 440, 441 (1982).
D The studies are summarized in Calvani. Langenfeld & Shuford, Attorney Advertising and Competition at the
Bar. 41 Vand. L. Rev. 761 (1988).
24 Jacobs et al., Improving Consumer Access to Legal Services: The Case for Removing Restrictions on Truthful
Advertising (1984).
25 Schroeter, Smith & Cox, Advertising and Competition in Routine Legal Service Markets: An Empirical
Investigation, 35 J. Indus. Econ. 49 (1987).
26 Muris & McChesney, Advertising and the Price and Quality of Legal Services: The Case for Legal Clinics,
1979 Am. Bar Found. Research J. 179 (1979). This study compared services provided by a legal "clinic" that
advertised heavily with those of traditional, non-advertising lawyers. Quality of service was assessed through a
questionnaire to elicit consumers' subjective satisfaction with the services they received and through an objective
comparison of results. Subjectively, consumers were at least as satisfied with the clinic's services as with those of
other lawyers along such dimensions as promptness of service, concern about the client's problems, keeping the
client informed, charging a fair and reasonable fee, and honesty. The objective test was a regression analysi~ to
5

To some extent, these studies dealt with simpler issues than those the legal profession is
facing now. Most of the studies examined the impact made by the fact of advertising, rather than
the effects of particular advertising techniques or particular regulatory restrictions. When these
studies were done, the profession was still responding to the basic change that Bates brought
about, from a profession with virtually no advertising to one with at least some. The Court in
Bates rejected several arguments that were advanced to justify banning advertising entirely, 27
but left many particular issues open. The profession is addressing the issues that the Bates
decision did not: what particular types of advertising might be deemed to be inherently false,
deceptive or misleading; how to treat advertising relating to the quality of services; and whether
media other than print raise special problems. This comment does not discuss in-person or mail
solicitation, the other issues that Bates explicitly left open.
Debate about regulation of lawyer advertising discloses continuing concerns to prevent
deceptive publicity that would mislead laypersons, cause distrust of the law and lawyers, and
undermine confidence in the legal system. 28 These are important policy concerns. We suggest
that the matters at stake be addressed by imposing restrictions on advertising that are tailored
to prevent unfair or deceptive acts or practices or otherwise to serve consumers, rather than
imposing restrictions that tend chiefly to dampen competition.
Two dimensions of the debate are deception and dignity. Thus, the Iowa rules counsel
against undue emphasis upon "style and advertising stratagems" and prohibit advertising that
appeals not only to "emotions" and "prejudices," but even to "likes and dislikes. "29 Its rules
claim that there is "no public benefit" from advertising that is too loud or too frequent or is
determine whether representation by the clinic's lawyers was a factor that improved the client's outcome in child
support proceedings; the study concluded there was evidence that it did. See also Hazard et aI., Why Lawyers
Should Be Allowed to Advertise: A Market Analysis of Legal Services, 58 N.Y.U. Law Rev. 1058 (1983),
predicting that advertising would be more useful, both to consumers and practitioners, for more standardized
services, but less important for services that are likely to vary greatly in individual cases.
27 In particular, Bates rejected the arguments that advertising of any kind about legal services would be
"inherently" misleading, 433 V.S. at 372-75; that advertising would lead to the undesirable economic effects of
raising costs and entry barriers, 433 V.S. at 377; that advertising would reduce the quality of legal services, 433
V.S. at 378; that prohibition is necessary because regulation would be too difficult, 433 V.S. at 379; that advertising
would undermine "professionalism," 433 V.S. at 368-72; and that advertising would harm the administration of
justice, 433 V.S. at 375-76.
28 See, ~, Iowa, Code of Professional Responsibility for Lawyers ("Iowa Rules"), EC 2-12. Iowa's rules are
also premised on the belief, echoing Bates, that public lack of sophistication about legal services and the importance
of the interests at stake justify special rules to avoid misleading the public and assure that information in advertising
is relevant to selection of counsel. Iowa Rules, EC 2-11. See also Mississippi Bar, Petition, Appendix 12, In Re
Amendment to the Mississippi Rules of Professional Conduct (Mississippi Supreme Ct., No. 89-R-99018),
expressing concerns about potential interference with the fair and proper administration of justice, because
misleading or overreaching advertising practices can create unjustified expectations and adversely affect the public's
confidence and trust in the judicial system.
29 Iowa Rules, EC 2-12.
6

marked by unspecified "excesses" of content or scope. 30 The rules show that the concern is that
such communications to a consuming public that lacks sophistication about legal services would
hinder, rather than facilitate, intelligent selection of counsel. 31
To the extent these concerns are about deception, they might be analyzed in much the
same way that the Commission addresses deception and competition issues under Section 5 of
the FTC Act. These will be discussed in more detail below, in the context of particular proposals
that 	would 	apparently 	treat 	certain 	types 	of information 	or communication 	as 	inherently
misleading.
To the extent the concerns are about "dignity," the Supreme Court has said that First
Amendment 	rights 	cannot 	be 	infringed 	merely 	to 	preserve 	"dignity" 	in 	professional
communications. 32 To be sure, the issue has been framed in terms of maintaining respect for
the system of justice, not just maintaining respect for members of a professional class. Before
attempting to promote this respect through actions that could inhibit competition and consumer
interests, by preventing communications that are truthful, useful, and even, to many consumers,
acceptably "dignified," one should examine carefully the basis for concerns that undignified
advertising by lawyers would undennine public confidence in the system of justice.
Consumers appear to be less hostile to professional advertising than lawyers are. 33
Results of the ABA Commission's opinion survey suggest that consumers respond b('~h to
production quality and to content, and that both factors matter in conveying dignity. This survey
also showed that consumers did not necessarily find print advertising to be more dignified than
television advertising and that advertisements that used sophisticated production techniques may
have been perceived as more, rather than less, "dignified. "34
30 Iowa Rules, 	EC 2-11. This rule also expresses concern about advertising that "unduly emphasizes
unrepresentative biographical information."
31 Iowa Rules, EC 2-11.
32 Zauderer v. Office of Disciplinary Counsel of the Supreme Court of Ohio, 471 U.S. 626 (1985).
33 American Bar Association, Commission on Advertising, Report on the Survey on the Image of Lawyers in
Advertising ("ABA Commission Survey") (January, 1990); Note, An Empirical Examination of the Iowa Bar's
Approach to Regulating Lawyer Advertising, 77 Iowa Law Review 179 (1991) ("Iowa-Wisconsin Survey"); Weeks
& Stem, Media and Price Disclosure Effects in Legal Service Advertising: A Comparison of Attorney and
Consumer Attitudes, 3 J. of Professional Services Marketing 257 (1987). Surveys about attitudes toward advertising
by other professionals show similar results: although the professionals involved are deeply suspicious, consumers
are significantly more tolerant. Burton, Medical Doctors and Consumers View Medical Advertising, 9 Health
Marketing Quarterly 81 (1991); Burton, Attitudes Toward the Advertising by Lawyers, Doctors, and CPA's, 8 J.
of Professional Services Marketing 115 (1991).
34 ABA Commission Survey, supra n. 33 at 29. Some print advertisements were found less dignified than some
telt:vi:;iul1 advertisements, and the advertisement that was viewed most positively was a television spot. The results
also suggest that "dignity" alone may not capture everything that consumers would find positive about an
7

The ABA Commission Survey apparently did not address whether consumers thought
better or worse of lawyers and the legal profession, either individually or in general, because
of the advertisements. Another survey of consumers in Iowa and Wisconsin, adjacent states with
different rules about lawyer advertising, has attempted to do that. 35 The ABA Commission may
find 	it useful 	to study the results of this survey. 	Neither the staff nor the Federal Trade
Commission has adopted or endorsed the methods or results of any of the surveys and research
reports cited here. Consumers were asked to make judgments about the attributes of honesty,
competency, 	helpfulness, 	effectiveness, 	and 	reliability. On 	scale 	of 	1 	(low) 	to 	7, 	Iowa
consumers' ratings of all lawyers on these attributes averaged 4.74, compared to Wisconsin's
4.32. 	Concerning lawyers who advertise, 	the Iowa responses averaged 3.88, 	compared to
Wisconsin's 3.84; the difference was reportedly not significant. 	Responses from consumers
generally showed no significant differences between their perception of lawyers' advertisements
and of advertisements in general. 	However, 	those Iowa consumers who had actually seen
lawyers' 	advertisements thought they 	were more truthful than most advertisements. 	These
consumers rated lawyers' advertisements at 2.82 on a scale of 1 (most truthful) to 5, compared
to 2.96 for advertisements in general; that difference was reportedly significant. These Iowa
consumers' response might, of course, be explained by their having seen only the kinds of
limited advertising that the Iowa rules permit. This response, and the Iowa consumers' slightly
higher rating of the legal profession in general, suggest that regulating advertising more closely
may improve somewhat the profession's public image.
Other parts of the Iowa-Wisconsin Survey project analyzed individual 	responses to
particular advertisements and methods. Responses were similar to those reported for the ABA
Commission Survey. 36 To the direct question, whether the individual consumer would use the
services of an attorney who advertised, most consumers who participated in the Iowa-Wisconsin
Survey said yes, and the proportion increased after the advertisements were viewed, from 67
percent to 74 percent. About that same proportion of consumers did not agree that advertising
would tend to lower the dignity of the profession and the public's image of lawyers. Consumers'
reactions 	to 	the 	first 	of these 	statements 	were 	essentially 	unchanged 	after 	viewing 	the
commercials. Viewing the commercials did increase the proportion who thought advertising
would lower the public's image of lawyers and the proportion who thought advertising would
advertisement. Consumers rated an advertisement that deliberately used humor more positively than several others
that were judged more dignified. ABA Commission Survey at 35-36.
35 Iowa-Wisconsin Survey, supra n. 33.
36 A 1983 survey commissioned by the Iowa bar association found that consumers generally had high
expectations about the possible informational value of lawyer advertising; however, after seeing three actual
television advertisements, their opinions about lawyers were sharply lower. Res Gestae, p. 59, August 1988. It is
difficult to tell from the published report what kinds of advertisements the subject audience saw. Inconsistencies
between the results of this survey and those of later surveys might be explained in part by differences in the number
and nature of the particular advertisements used. The ABA Commission survey, for example, used five television
spots and five print advertisements, of widely varying style and content, perhaps encouraging the subjects to make
more discriminating judgments.
8

lower 	the 	profession' 	credibility; 	both 	views 	were 	in 	significant 	minority, 	though. 37 The
consumers in the Iowa-Wisconsin Survey tended to identify offers of help, 	identification of
expertise or specialization, truthfulness or sincerity, humor, production quality, and absence of
a hard-sell as "positive." Conversely, they identified hard-sell mentality, greed or manipulation
of the system, cheap production quality, insincerity or slickness, and patronizing or manipulative
tone as "negative. "38
Although the empirical surveys have not addressed this question, it is possible that some
consumers are most effectively reached by advertising that might be considered undignified. If
so, 	some 	lawyers 	may 	choose 	to direct that 	kind 	of advertising 	to 	those 	consumers. 	In
considering regulations intended to preserve public esteem for the system of justice, the imerest
of effectively communicating the availability of legal services to such consumers should not be
ignored.
One of the most important questions is also one of the most difficult to answer: whether
different rules about advertising produce differences in the price and quality of legal services.
The studies cited above tend to show that increased advertising lowers prices for 	routine
services, without reducing quality. 39 No more recent systematic research on this issue has been
reported. The results of the Iowa-Wisconsin Survey, which asked lawyers to report on their fees,
are ambiguous.
V. 	Issues about Deception Raised by Restrictions on Advertising Methods·
Most of the particular proposals to prohibit or regulate the content or style of lawyer
advertising can be understood as being about whether the practices are misleading. The rules in
most jurisdictions state a basic, general policy against advertising that is false, 	fraudulent,
misleading, deceptive, or unfair. 40 Often, the rules call particular attention to misrepresentations
about likely outcomes. 41 The concerns expressed by these principles are consistent with the
37 Before viewing the commercials, 33 percent agreed that advertising would lower the profession's dignity;
afterwards, the figure was 34 percent. Before, 16 percent agreed that advertising would lower the public's image
of lawyers; afterwards, the figure was 20 percent. Before, 23 percent agreed that advertising would lower the
profession's credibility; afterwards. the figure was 34 percent.
38 Views on the value of disclaimers were divided. Fifty-four percent thought disclaimers were useful, although
many of these also thought they were likely to be ineffective or to invalidate the advertisement, while 46 percent
thought they were self-evident, redundant, patronizing, or unlikely to provide useful information.
39 Jacobs et al., supra n. 24; Schroeter et aI., supra n. 25; Muris & McChesney, supra n. 26.
40 See, ~, Iowa Rules. DR 2-10 I(A); Florida, Rules of Professional Conduct (" Florida Rules "), Rule 4-7.1;
American Bar Association, Model Rules of Professional Conduct ("ABA Model Rules"), Rule 7.1.
41 See,~, Iowa Rules, EC 2-12, referring to "false hopes of success or undue expectations"; Florida Rules,
Rule 4-7.I(b); ABA Model Rules, Rule 7.Ub).
9

FTC's policy concerns in the enforcement of its own basic law prohibiting "unfair or deceptive
acts or practices. "42
The following discussion addresses some particular rules that treat certain practices as,
in effect, inherently misleading. The discussion is based on the rules of Iowa and Florida, two
states whose rules are among the most strict. It discusses several particular kinds of restraints.
and compares the rules to how the Commission has treated similar rules in its law enforcement
actions concerning restraints on professional advertising.
Some of these restraints are apparently addressed to a concern that consumers not be
misled by overconfident assertions or subtle but unfounded implications that a lawyer can
achieve particular results in their case. Other restraints, which prohibit the use of common
advertising techniques and production tools, seem motivated by a belief that it is improper for
a consumer to base the choice of a lawyer on any considerations other than assessment of
"objective" facts, and a belief that the "stratagems" of advertising corrupt the communication
of those facts. 43
A. 	"Self-laudatory" 	claims, 	testimonials, 	and 	substantiation
requirements
Banning assertions because they are "self-laudatory" or relate to the quality of services
offered44 may be unnecessarily broad. "Self-laudatory" statements and claims concerning the
quality of legal services 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 finn places on courtesy and attentiveness
in the delivery of legal services to the public, can also convey infonnation of some value. 45
42 Whether an advertisement is considered false or deceptive under Section 5 depends on whether it makes a
representation that is material and that is likely to mislead a consumer acting reasonably in the circumstances, or
whether it fails to disclose information necessary to prevent the representations that are made from creating a
materially misleading impression. See Thompson Medical Co., 104 F.T.C. 648 (1984); International Harvester, 104
F.T.C. 949 at 1057 (1984).
43 Thus, Iowa's policy is to limit public communications to information that is unambiguous and relevant to a
layperson's decision about legal rights or selection of counsel, communicated in ways that comport with the dignity
of the profession and do not demean the administration of justice. Iowa' rules disapprove "undue emphasis on style
and advertising stratagems which serve to hinder rather than to facilitate intelligent selection of counsel." Iowa
Rules, EC 2-12.
44 Iowa Rules, DR 2-101(A); Florida Rules, Rule 4-7.2(f).
45 Recognizing the risk that an overbroad ban could discourage dissemination of useful and procompetitive
information, the Commission has often taken action against restrictions on "flamboyant" or "self-laudatory" or
subjective "superiority" claims in advertisements. See California Dental Ass'n, supra n. 2 (complaint); Mass. Rd.
10

Similarly, rules against any comparative claims and illustrations that cannot be factually
substantiated could be too broad. 46 Requiring that material claims be substantiated can, 	of
course, 	serve 	consumers 	by 	helping 	to 	ensure 	that 	claims 	are 	not 	misleading. 	But 	if
substantiation is demanded for representations that, although not misleading, concern subjective
qualities 	that are not easy 	to measure and 	for 	which substantiation may 	not normally 	be
expected, then messages that consumers may find useful may be barred. For example, 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 	always
susceptible 	to 	objective 	substantiation, 	may 	nonetheless 	communicate 	useful 	information,
indicating qualities that the firm seeks to emphasize in its practice. The broad prohibition might
be based on a concern that unsubstantiated claims could mislead consumers about the results
lawyers can achieve. But if that is the concern, then it would be better addressed by a rule
directed more narrowly to claims that could be construed as having some bearing on likely
outcomes. 47
Rules restricting a wide class of claims may be aimed at a limited subset of that class,
such as materially misleading and unfounded claims about a lawyer's ability to secure relief for
clients or about the relative quality of a lawyer's work product. Such claims might be disciplined
.through narrower prohibitions that did not present as great a risk of chilling potentially useful
communications. For example, some states ban endorsements and testimonials outright. 48 The
bases for such a ban could be belief that one client's experience with a lawyer has no bearing
on what another client could expect or that endorsements and testimonials pose too great a risk
OT VplOmetry, supra n. 14; Montana Bd. of Optometrists, 106 F.T.C. 80 (1985); Nat'l Soc. of Professional
Engineers, supra n. 16; Structural Engineers Ass'n of Northern California, Inc., 112 F.T.C. 530; Texas Bd. of
Chiropractic Examiners, supra n. 2.
46 Iowa Rules, DR 2-101(A) (no claim that is not verifiable); Florida Rules, Rule 4-7.1(c), Rule 4-7.2(f) (no
comparisons of services or illustrations unless they can be factually substantiated; cf. ABA Model Rules, Rule 7.1 (c)
(substantiation required for comparative claims, but not for illustrations).
47 The Commission's actions on this issue balance a concern that rules not be overly restrictive with a
recognition that substantiation may sometimes be required. See American Dental Ass'n, supra n. 16, where the
Commission objected to the Association's ban on all claims implying quality or superiority that are not susceptible
to reasonable verification by the public, as imposing a far greater limitation than required by the Commission's
substantiation policy; Texas Chiropractors, supra n. 2 (complaint details restrictions in rules; order prohibits
disciplinary actions and rules prohibiting advertising, but permits such actions against practices reasonably believed
to be false, misleading or deceptive, or otherwise prohibited by law); American Psychological Ass'n, supra n. 2
(order against rules banning advertisements about comparative desirability of offered services and truthful claims
of unusual or "one of a kind" abilities, but permitting rules and policies about, among other things, solicitation of
testimonial endorsements from persons who, because of their particular circumstances, are vulnerable to undue
influence): Connecticut Chiropractic Ass'n, supra n. 2 (order permits rules requiring substantiation of claims about
qualifications).
48 See, ~, Florida Rules, Rule 4-7.I(d).
11

of promising particular outcomes in court. The two concerns are distinct, and the first one
especially may be overly cautious. To be sure, testimonials and endorsements can be used in
ways that mislead about likely outcomes, and it may be both appropriate and necessary to take
action against those that do. 49 But some aspects of professional services, unrelated to particular
outcomes, might well be communicated truthfully and usefully by a report of a client's actual
experience. Rather than a conclusive ban, an approach might be taken similar to that of the
Commission's guides on this subject, that seeks to ensure that client testimonials are truthful and
not misleading. 50 More generally, 	rules might target those claims that make 	insupportable
representations about particular results or that inaccurately imply the existence of objective
substantiation.
Disclaimer and other disclosure obligations, which many jurisdictions require, 51 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. Because of these effects, disclosure requirements that are
unnecessary can reduce the amount of useful information available to consumers. Disclosures
and disclaimers can sometimes be necessary to prevent deception. 52 It is important in evaluating
disclosure requirements to weigh the costs against the expected benefits.
49 For example, the Commission has taken many actions against the use of deceptive testimonials in
advertisements of weight loss and diet firms. See, ~, Nutri/System. Inc., C-3474, Diet Center. Inc., C-3475, and
Physicians Weight Loss Centers, Inc., et aI., C-3476 (consent orders issued December 22, 1993, 59 Fed. Reg.
6647-48 (February II, 1994»; Weight Watchers International, Inc., Dkt. 9261, and Jenny Craig. Inc., Dkt. 9260
(administrative complaints issued September 24, 1993). The complaints allege that advertisements containing
testimonials and stories of individual consumer experiences were false and misleading because the advertising firms
lacked a reasonable basis to substantiate the representation that the experiences depicted were typical. The cease and
desist orders would prohibit advertisements with endorsements or testimonials about weight loss success if that
success is not representative of what other participants in the program generally achieve, unless the advertisement
also contains specified disclosures about actual success rates or disclaimers that the success depicted is not typical.
50 Federal Trade Commission, 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. In enforcement actions, the
Commission has issued orders against rules prOhibiting truthful, nondeceptive testimonials from actual consumers.
American Psychological Ass'n, supra n. 2; Massachusetts Bd. of Optometry, supra n. 14; Nat'l Ass'n of Social
Workers, supra n. 2; Texas Bd. of Chiropractic Examiners, supra n. 2.
51 Iowa Rule DR 2-101(A), (B)(I); Florida Rules, Rule 4-7.2(d).
5c Thus, the orders in the Commission's recent diet center cases, supra n. 49, would require disclosures or
disclaimers in connection with certain testimonials and representations about fees.
12

B. 	Regulation of style and content of media advertising
Constraints 	on the 	style and 	content of broadcast advertisements 	could 	discourage
competition in the legal profession. Such restraints have been defended as intended to ensure that
advertising is limited to what is "useful," "factual," and" informational," presented in a manner
that 	is 	"nonsensational. "53 	But 	such 	restraints 	can 	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 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 effectiveY
The apparent intent and effect of the most severe rules is to limit radio and television
advertising to nondramatic narration by a single voice of specified facts about a practice's
identity and location. 55 Visual material is banned or sharply limited, and even background
music is sometimes forbidden or regulated. These severe restraints on media advertising have
been 	supported 	by 	claims 56 	that 	"unique" 	characteristics 	of 	TV 	and 	radio, 	including
"pervasiveness," purported "ease" of abuse through them, and audience "passiveness," make
them "especially subject to regulation in the public interest". Such restraints are designed to
prohibit 	"suspense," 	"exaggerations," 	"situations calling 	for 	legal 	services," 	and 	"scenes
53 See Mississippi Bar Petition, supra n. 28.
54 The Commission has issued orders against rules that restricted infonnation to "tombstone" details about
identity and office hours and locations, Wyoming Bd. Of Podiatry, 107 F.T.C. 	19 (1986); Texas Bd. of
Chiropractic Examiners, supra n. 2; that required advertising to "contribute to the esteem of the profession" or be
in good taste, Connecticut Chiropractic Ass'n, supra n. 2; cf. Nat'l Soc. of Professional Engineers, supra n. 16;
California Dental Ass'n, supra n. 2 (complaint); and that prohibited advertising likely to appeal to emotions,
American Psychological Ass'n, supra n. 2. In these actions, the Commission's concern has not been whether
particular advertisements were dignified, but that efforts to maintain dignity, without regard to truthfulness or
deception, may restrict competition. Whether or not an advertisement is dignified, or whether greater dignity would
promote a social value or interest other than competition and the welfare of consumers, would not nonnally be
considered relevant to any issue in an enforcement action under Section 5 of the Federal Trade Commission Act.
55 Iowa Rules, DR 2-101(B)(5) (single voice, not melodramatic, with visual content limited to same items as
print; voice must not be that of the lawyer); Florida Rules, Rule 4-7.2(b), (e), (f) (single voice, no background
sound except instrumental music; illustrations allowed if "verifiable"; no dramatizations; voice may be that of the
lawyer or employee, but must not be a recognizable celebrity).
56 Mississippi Bar Petition, supra n. 28.
13

creating consumer problems through characterization and dialogue ending 	with the lawyer
solving the problem. "57
These restrictions effectively prohibit dramatizations. 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. 	Dramatizations 	or
illustrations that some consumers - 	and professionals - 	view as tacky or offensive, but are not
deceptive, may not offend other consumers at all, and those who do find them objectionable may
register their distaste 	by 	refusing to patronize 	the offenders. 	The comment 	to the 	recent
Mississippi proposal describes one ideal of "dignified" advertising, namely lawyers speaking to
the audience personally to explain consumers' legal rights and the lawyers' services, background,
and experience. 58 Survey research suggests that such advertisements are viewed most positively
by consumers as well as by lawyers. 59
Some other proposals that would also make advertising more difficult could restrict
communication of truthful, non-deceptive information. Requiring advertisements to list each
particular location where services will be provided will increase costs and may make cooperative
advertising arrangements difficult or infeasible. 60 The concern is evidently that consumers
might be misled if the office or firm that provides services is not the one identified in the
advertising. But if the advertisement leaves room for uncertainty about the identity and location
of the particular attorney, that uncertainty would probably be cleared up when the consumer
called the attorney (or the advertised telephone number) to set up an appointment. In any event,
such problems could be dealt with by applying a general 	rule against deception, 	without
burdensome disclosure obligations. 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. 61 Consumers may understand their problems by rubrics that do not appear
on lists of approved labels.
57 Id.
5R Rules are designed "to encourage a focus on providing useful information to the public about legal rights and
needs and the availability and terms of legal services." Mississippi State Bar Petition, supra n. 28.
59 Some proposals would require on-screen or on-microphone appearances by the lawyers, which could
discourage many professionals from using broadcast advenising. The limitation could reward the telegenic, for
others could not hire on-the-air professionals to help them put their message out. It is curious that other rules, such
as Iowa's, prohibit such personal appearances. The effect of requiring personal panicipation may be to prevent the
use of advenising materials that are produced professionally and sold to lawyers in many different jurisdictions.
Rather than prevent deception, the result could be to prevent effective advenising by requiring more expensive
individually-tailored productions.
60 Florida Rules, Rule 4-7.2(1).
61 Iowa Rules, DR 2-105.
14

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. 62 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 advertise multiple outlets. 63 In some professional fields trade names can
be essential to the establishment of large group 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.
Two kinds of trade names are already commonly permitted in the law. The long-standing
pattern of retaining the names of former partners in the "institutional" name of a practice is
widely condoned. And rules now usually permit calling a practice a "clinic," if it is a low-price
provider of routine services. 64 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 valuable, in a way that is memorable and thus effective as a marketing tool.
Other 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.
VI. 	Conclusion
Truthful, non-deceptive advertising promotes competition and consumer choice. This is
as true of advertising for professional services as it is of advertising for other services and
products. Determining what is non-deceptive depends on context, of course, and requires an
assessment 	of consumers' 	experience and expectations. 	To the extent 	that consumers are
unfamiliar with what lawyers can actually do for them, it may be necessary to pay particular
attention to ways that lawyers' advertising might mislead. But it should not be assumed that
consumers cannot understand advertising messages or resist the blandishments of advertising
artistry. Some rules addressed to particular risks of misrepresentation seem too broad and risk
preventing communication of truthful, nondeceptive information. Much of the current debate
about legal advertising displays a concern that advertising lacking "dignity" will diminish public
62 Iowa Rules, EC 2-13 (use of trade or assumed name "could mislead" about the lawyer's identity,
responsibility, or status); but see Florida Rules, Rule 4-7 .7(b) (non-deceptive trade name permitted as long as lawyer
actually practices under the trade name).
63 Federal Trade Commission, Ophthalmic Practices Rule, Statement of Basis and Purpose, 54 Fed. Reg. 10285,
10289 (March 13, 1989).
64 See. ~, Iowa Rules, DR 2-101(G) ("clinic" must limit its practice to the specific legal services for which
fixed fees may be advertised).
15

respect for the legal profession and, in turn, for the courts and the institutions of justice. We do
not doubt the importance of maintaining public respect for the integrity of the judicial system.
But broad rules to enforce criteria of "dignity" may prevent the conununication of useful,
nondeceptive information and thus inhibit competition and consumer choice. 	Strict rules to
enforce "dignity" may not give consumers enough credit, for consumers apparently respond
more positively to advertising that would be considered ·'dignified." And consumers appear to
be less offended by certain supposedly undignified methods than professionals themselves are.
16