FTC Staff Comment In re: Petition to Amend the Rules Regulating the Florida Bar

IN 	THE 	S~PREME 	COURT 	OF 	FLORIDA
(Before 	a 	Referee)
In 	re: 	Petition 	to 	Amend 	the
Rules 	Regulating 	The 	Florida
Bar Case 	No. 	70,366
RESPONSE 	TO 	THE 	PETITION
TO 	AMEND 	THE 	RULES
REGULATING 	THE 	FLORIDA 	BAR
The 	Federal 	Trade 	Commission 	staff 	is 	pleased 	to 	submit 	this
statement 	of 	our 	views 	on 	the 	petition 	to 	amend 	the 	Rules
Regulating 	The 	Florida 	Bar. l 	Our 	comments 	focus 	on 	the 	proposed
rules 	regarding 	fees 	and 	advertising, 	and 	on 	the 	existing 	rules
regarding 	fees, 	practice 	with 	nonlawyers, 	advertising, 	and
solicitation. 	The 	proposed 	rules 	would 	relax 	the 	restrictions 	on
fees 	and 	should 	permit 	more 	price 	competition 	than 	do 	the
existing 	rules. 	We 	therefore 	support 	this 	change. 	We 	are
concerned, 	however, 	that 	some 	of 	the 	other 	proposed 	rules 	may
harm 	consumers 	by 	discouraging 	referrals 	and 	associations 	between
attorneys, 	and 	by 	unnecessarily 	limiting 	the 	information
available 	to 	consumers. 	We 	are 	also 	concerned 	that 	no 	amendments
have 	been 	proposed 	for 	certain 	existing 	rules 	that 	may 	also 	be
harmful 	to 	consumers. 	Such 	rules 	include 	those 	restraining 	price
competition, 	hindering 	the 	development 	of 	innovative 	and
potentially more 	efficient 	forms 	of 	legal 	practice, 	and
prohibiting 	truthful, 	nondeceptive 	advertising 	and 	SOlicitation.
As 	is 	discussed 	in more 	detail 	below, 	we 	support 	proposed
Rule 	4-1.5(a) 	to 	the 	extent 	that 	it 	would 	relax 	restrictions 	on
fees. 	In 	addition 	to 	that 	change, 	however, 	we 	also 	recommend
that 	the 	Court: 	(1) 	delete 	Rule 	4-1.5(D) (4)b.l 	and 	b.2 	to 	remove
the 	ceilings 	on 	contingent 	fees: 	(2) 	delete 	proposed 	Rule
1.5(f) (2), 	(f) (4)d, 	and 	(g) 	so 	as 	not 	to 	discourage 	referrals 	and
1 	These 	comments 	represent 	the 	views 	of 	the 	Federal 	Trade
Commission's 	Bureaus 	of 	Competition, 	Consume~ Protection, 	and
Economics, 	and 	not 	necessarily 	those 	of 	the 	Commission 	itself.
The 	Commission 	has, 	however, 	voted 	to 	authorize 	us 	to 	submit
these 	comments 	for 	your 	consideration.

associations 	of 	attorneys 	in 	different 	law 	fi~s 	for 	particular
cases: 	(3) 	eliminate 	the 	restrictions 	in 	Rule 	~-5.' 	on 	practice
with 	nonlawyers: 	(4) 	amend 	Rule 	4-7.1 	to 	clar:~y that 	trut~ful,
nondeceptive 	endorsements 	and 	experience, 	success, 	and 	cornpariso;.
claims 	are 	permitted: 	(5) 	delete 	Rule 	4-7.2(a;: 	(6) -modify 	Rule
4-7.2(c) 	to 	allow 	the 	payment 	of 	referral 	fees 	to 	attorneys:
(7) 	delete 	portions 	of 	the 	comment 	accompanyi;.g 	Rule 	4-7.2 	to
eliminate 	the 	requirement 	that 	advertisements 	comport 	with 	t~e
dignity 	of 	the 	profession 	and 	to 	permit 	the 	use 	of 	advertising
techniques 	such 	as 	slogans 	and 	soundtracKs; 	(8) 	delete 	proposed
Rule 	4-7.3 	so 	as 	not 	to 	discourage 	advertising 	of 	legal 	services
in 	tort 	cases; 	(9) 	modify 	Rule 	4-7.3 	to 	remove 	the 	broad 	ban 	on
solicitation: 	(10) 	modify 	Rule 	4-7.4 	to 	allow 	express 	and 	implied
claims 	of 	specialty 	and 	certification; 	and 	(11) 	delete 	Rule 	4-
7.6(a) (2) 	so 	as 	not 	to 	discourage 	participatio~ in 	lawyer
referral 	services.
Proposed 	Rule 	4-1.5(a) (1): 	Reasonableness 	of 	Fee
Existing 	Rule 	4-1.5(B) 	prohibits 	attorneys 	from 	charging 	a
fee 	in 	excess 	of 	a 	reasonable 	fee 	and 	subparagraph 	(3) 	provides
that 	the 	"fee 	customarily 	charged 	in 	the 	locality 	for 	similar
legal 	services" 	is 	to 	be 	considered 	in 	determining
reasonableness. 	Proposed 	Rule 	4-1.5(a) (1) 	would 	prohibit 	only
fees 	that 	exceed 	a 	reasonable 	fee 	"to 	such 	a 	degree 	as 	to
constitute 	clear 	overreaching 	or 	an 	unconscionable 	demand 	by 	the
attorney 	.•.. " 	We 	do 	not 	believe 	that 	consumers 	of 	legal
services 	benefit 	from 	price 	regulation, 	whether 	a 	minimum 	or
maximum 	price 	is 	imposed. 	Setting 	a 	minimum 	price 	may 	increase
prices 	and 	setting 	a 	maximum 	price 	may 	reduce 	the 	quality 	of
services 	offered. 	While 	both 	the 	existing 	and 	the 	proposed 	rules
set 	limits 	on 	fees, 	the 	maximum 	provided 	in 	the 	proposed 	rule
appears 	to 	be 	higher, 	which 	would 	allow 	consu:ers 	more
flexibility 	to 	pay 	the 	price 	necessary 	to 	employ 	the 	attorney 	of
their 	choice. 	The 	proposed 	rule 	would, 	at 	the 	same 	time, 	prevent
possible 	abuse 	of 	consumers, 	without 	regulating 	fees 	as
stringently 	as 	does 	the 	existing 	rule. 	We 	therefore 	support 	the
proposed 	rule 	to 	the 	extent 	that 	it 	would 	allow 	consumers 	and
attorneys 	more 	latitude 	in 	negotiating 	fees 	for 	legal 	services
than 	does 	the 	existing 	rule. 	We 	do, 	however, 	caution 	that 	any
price 	regulation 	raises 	the 	possibility 	that 	it 	could 	be
interpreted 	so 	broadly 	as 	to 	stifle 	legitimate 	price 	competition.
Rule 	4-1.5(0) (4)b: 	Ceiling 	on 	Contingent 	Fees
Rule 	4-1.5(0) (4)b.l 	provides 	that 	in 	a 	tort 	action 	in 	which
a 	contingent 	fee 	is 	charged, 	the 	fee 	is 	presu=ed 	to 	be 	clearly
excessive 	if 	it 	is 	greater 	than 	the 	percentages 	of 	the 	recovery
set 	forth 	in 	the 	rule. 	This 	rule 	thus 	sets ~ 	ceiling 	on 	fees,
2

which 	may 	have 	harmful 	effects 	on 	competitio~. 	Attorneys 	wil:
not 	offer 	services 	that 	cost 	more 	to 	provide 	(:~clud:ng the
opportunity 	cost 	of 	the 	attorney's 	time) 	tha~ ~~e 	fees 	they 	are
permitted 	to 	charge. 	In 	addition, 	a 	consumer 	.:th 	~ 	claim 	for
which 	the 	possibility 	of 	recovery 	is 	small 	may 	~ot 	be 	able 	to
retain 	an 	attorney 	because 	attorneys 	may 	not 	.a~t to 	bear 	the
risk 	of 	litigating 	such 	a 	case 	unless 	they 	ca~ earn 	a 	greater
percentage 	of 	the 	recovery 	than 	the 	ceiling 	wc~:d allow. 	Also,
if 	the 	total 	amount 	of 	recovery 	in 	personal 	i~:~ry cases 	is
reduced, 	as 	through 	legislation 	that 	sets 	a 	ca? 	on 	jUdgments, 	the
ceilings 	established 	by 	a 	percentage 	rule 	may 	become 	too 	low.
Rule 	4-1.5(0) (4)b.2 	does 	permit 	a 	circuit 	cou~ to 	authorize 	a
higher 	fee 	but 	that 	would 	impose 	on 	the 	cons~er the 	expense 	of
preparing 	and 	filing 	a 	petition 	with 	the 	court. 	For 	these
reasons, 	we 	recommend 	that 	the 	court 	consider 	deleting 	Rule 	4-
1. 5 (D) (4) b. 1 	and 	b. 2 .
Proposed 	Rule 	4-1.5(f) 	and 	(g): 	Fee-Splittinc
Proposed 	Rule 	4-1.5(f) 	and 	(g) 	would 	impose 	certain
requirements 	when 	attorneys 	in 	different 	firms 	divide 	a 	client's
fee 	because 	they 	have 	both 	provided 	legal 	representation 	in 	a
particular 	case 	or 	because 	one 	compensates 	the 	other 	for 	a
referral. 	The 	requirements 	vary 	depending 	on 	whether 	or 	not 	the
case 	involves 	a 	contingent 	fee. 	Proposed 	Rule 	4-1.5(f) (2)
provides 	that 	in 	a 	contingent 	fee 	case, 	every 	lawyer 	who 	receives
compensation must 	assume 	joint 	responsibility 	for 	performance 	of
the 	legal 	services. 	Proposed 	Rule 	4-1.5(f) (4)d 	provides, 	in
addition, 	that 	in 	a 	tort 	case 	in 	which 	a 	contingent 	fee 	is
charged 	and 	lawyers 	in 	different 	firms 	provide 	legal 	services 	to
the 	plaintiff, 	the 	lawyer 	assuming 	primary 	responsibility 	for 	the
legal 	services 	must 	receive 	a 	minimum 	of 	75% 	0: 	the 	fee 	and 	the
lawyer 	assuming 	secondary 	responsibility 	may 	receive 	no 	more 	than
25% 	of 	the 	fee, 	unless 	there 	is 	"substantially 	equal 	active
participation." 	Proposed 	Rule 	4-1.5(g) 	provides 	that, 	in 	non-
contingent 	fee 	cases, 	a 	fee 	may 	be 	divided 	ei~~er 	(1) 	in
proportion 	to 	the 	services 	performed 	by 	each 	lawyer 	or 	(2) 	by 	any
other 	mutually 	agreeable 	method, 	provided 	that 	a 	written
agreement 	with 	the 	client 	requires 	each 	lawyer 	to 	assume 	joint
responsibility 	for 	the 	representation. 	Paragraph 	(f) 	requires
that 	the 	client 	agree 	in 	writing 	that 	the 	fee 	~ay be 	divided, 	as
does 	paragraph 	(9) 	if 	the 	lawyers 	choose 	the 	alternative 	of
accepting 	joint 	responsibility. 	We 	are 	concerned 	that 	these
proposed 	rules 	might 	unnecessarily 	discourage 	both 	referrals 	and
associations 	between 	lawyers 	in 	different 	law 	firms 	under
circumstances 	in 	which 	such 	activity would 	likely 	benefit
consumers.
Division 	of 	fees 	may 	provide 	incentives\ for 	attorney
referrals 	and 	associations 	that 	are 	desirable 	for 	the 	client.
3

Referrals 	by 	one 	lawyer 	to 	another 	may 	help 	cc~sumers ident:~y a
lawyer 	with 	the 	relevant 	expertise 	and 	whose 	caseload 	allows
prompt 	attention 	to 	their 	particular 	case. 	~sent a 	referral,
consumers 	might 	have 	t9 	use 	less 	efficient 	mea~s of 	engaging 	t~e
services 	of 	an 	attorney 	qualified 	to 	handle 	t~eir matter. 	I~
addition, 	a 	referral 	to 	a 	lawyer with 	partic~:ar expertise, 	eve~
if 	based 	in 	part 	on 	the 	financial 	interest 	o~ 	the 	referring
lawyer, 	may 	serve 	the 	client's 	interest 	better 	than 	rete~t:on 0:
the 	case 	by 	a 	lawyer 	who 	lacks 	the 	requisite 	expertise.
Proposed 	Rule 	4-1.5(f) 	and 	(g) 	might 	inhibit 	such 	referrals
by 	lawyers. 	First, 	paragraph 	(f) (2) 	would 	re~~ire that 	lawyers
assume 	joint 	responsibility 	for 	performance 	of 	the 	services. 	In
order 	to 	protect 	himself 	or 	herself 	from 	the 	potential 	liability
for 	malpractice 	that 	joint 	responsibility 	could 	entail, 	the
referring 	attorney 	might 	feel 	compelled 	to 	review 	the 	other
attorney's 	work. 	This 	could 	result 	in 	costly 	duplication 	of
effort. 	Second, 	the 	additional 	requirement 	in 	proposed
Rule 	4-1.5(f) (4)d, 	that 	fees 	must 	be 	divided 	on 	the 	basis 	of 	the
degree 	of 	responsibility 	that 	the 	lawyers 	assume 	for 	the 	legal
services, 	might 	be 	interpreted 	to 	prohibit 	referral 	fees. 	It 	is
unclear 	whether 	giving 	a 	prospective 	client 	the 	name 	and
telephone 	number 	of 	another 	lawyer 	competent 	to 	handle 	that
client's 	legal 	problems 	constitutes 	"assuming 	secondary
responsibility 	for 	the 	legal 	services.,,2 	Even 	if 	this 	provision
were 	interpreted 	to 	permit 	referral 	fees, 	it 	might 	be 	interpreted
to 	allow 	only 	nominal 	fees. 	Attorneys 	may 	be 	reluctant 	to 	make
referrals 	if 	they 	can 	earn 	only 	a 	nominal 	fee, 	partiCUlarly 	if
they 	must 	assume 	joint 	liability 	for 	the 	legal 	representation.
Third, 	the 	requirements 	established 	by 	paragraph 	(g) 	for 	fee
division 	in 	non-contingent 	fee 	cases 	(~, 	that 	the 	referring
attorney 	either 	assume 	joint 	responsibility 	or 	share 	in 	the 	fee
in 	proportion 	to 	the 	services 	he 	or 	she 	performs) 	might
discourage 	referrals 	for 	the 	same 	reasons 	that 	(f) (2) 	and 	(f) (4)d
might 	discourage 	them 	in 	contingent 	fee 	cases.
Two 	justifications 	have 	been 	offered 	to 	support 	bans 	on
referral 	fees. 	First, 	it 	has 	been 	argued 	that 	permitting 	such
fees 	would 	tempt 	some 	lawyers 	to 	refer 	legal 	matters 	to 	the
lawyer 	who 	paid 	the 	highest 	referral 	fee, 	rather 	than 	to 	the 	best
2 	According 	to 	case 	law 	and ABA 	Opinions, 	a 	mere 	referral
does 	not 	constitute 	a 	legal 	service 	and 	therefore 	an 	attorney 	is
not 	entitled 	to 	any 	portion 	of 	the 	fee 	when 	he 	has 	merely
referred 	a 	client 	to 	another. 	See 	Corti 	v. 	Fleisher, 	417 	N.E.2d
764, 	772 	(Ill. 	App. 	Ct. 	1981); 	Palmer v. 	Breyfogle, 	217 	Kan. 	128,
535 	P.2d 	955, 	958 	(1975); 	McFarland v. 	George, 	316 	S.W.2d 	662
(Mo. 	1968); 	Note, 	Referral 	fees 	and 	the 	Effect 	of 	DI~sciplinary
Rule 	2-107, 	8 	J. 	Legal 	Prof. 	225, 	228-29 	(1983); 	Note, 	Division
of 	Fees 	Between 	Attorneys, 	3 J. 	Legal 	Prof.· 	179, 	186 	(1978)
(citing ABA Opinions). 	\
4

qualified 	lawyer. 	In 	personal 	injury 	a~d 	ot~:= cases 	that 	a=e
taken 	on 	a 	contingent 	fee 	basis, 	however, 	the 	=eferring 	lawyer
typically 	receives 	one-third 	of 	any 	fee 	recove=ed 	by 	the 	lawyer
who 	handles 	the 	case. 3 	. Thus, 	it 	is 	probable 	~~.at t_he 	referring
attorney 	will 	select 	the 	lawyer 	who 	he 	or 	she 	=elieves 	is 	the
most 	likely 	to 	recover 	the 	largest 	award 	for 	~~e prospective
client. 	Clearly, 	20% 	of 	an 	attorney's 	recove~: in 	a 	contingent
fee 	case 	is 	better 	than 	40% 	of 	nothing; 	to 	t~:s extent, 	the
attorney's 	and 	the 	client's 	interests 	are 	the 	same. 	In 	addition,
a 	lawyer 	referring 	a 	client 	to 	a 	specialist 	r.as 	every 	incentive
to 	make 	good 	referrals 	in 	order 	to 	maintain 	c::ent 	goodwill, 	in
the 	interest 	of 	obtaining 	repeat 	business 	and 	== 	preserving 	his
or 	her 	professional 	reputation.
Second, 	some 	have 	argued 	that 	the 	attorne; 	to 	whom 	the 	case
is 	referred 	will 	increase 	the 	total 	fee 	paid 	t; 	the 	client 	in
order 	to 	recoup 	the 	referral 	fee. 	This 	does 	~=t 	appear 	to 	be 	a
valid 	concern. 	First, 	in 	a 	genuinely 	competit:ve 	market 	for
legal 	services--that 	is, 	one 	in 	which 	informat:on 	about 	services
and 	fees 	is 	easily 	available 	to 	consumers--att:rneys 	cannot 	raise
their 	fees 	without 	losing 	some 	clients 	who 	are 	price-sensitive.
If 	competition 	is 	less 	than 	perfect, 	attorneys 	will 	charge 	supra-
competitive 	prices whether 	or 	not 	they 	are 	pay:ng 	referral 	fees.
In 	addition, 	by 	facilitating 	referrals 	to 	attc:-neys 	with
expertise, 	referral 	fees 	may 	actually 	reduce 	~e 	total 	fees
charged 	to 	clients. 	Experts, 	because 	of 	their 	more 	predictable
and 	more 	specialized 	workload, 	may 	be 	able 	to 	reduce 	costs 	and
pass 	such 	savings 	on 	to 	clients. 	If 	referral 	fees 	were 	not 	an
efficient means 	of 	attracting 	clients, 	lawyers 	would 	not 	pay 	them
but 	would 	instead 	use 	alternative 	marketing 	tc=ls.
An 	association 	of 	two 	or 	more 	lawyers 	frc= 	different 	firms
may 	also 	benefit 	consumers. 	As 	is 	stated 	in 	t~e comment 	to
proposed 	Rule 	4-1.5, 	entitled 	"Division 	of 	Fee," 	such
associations 	may 	benefit 	a 	client 	in 	cases 	in .hich 	neither
attorney 	alone 	could 	serve 	the 	client 	as 	well. 	One 	lawyer 	may
not 	have 	sufficient 	time, 	resources, 	or 	expe~:se to 	handle 	all
aspects 	of 	a 	particular 	client's 	case~
Proposed 	Rule 	4-1.5 	might 	discourage 	such 	associations. 	The
requirement 	in 	paragraph 	(f) (2) 	that 	the 	assoc:ating 	lawyer
assume 	joint 	responsibility 	appears 	likely 	to 	deter 	associations
for 	the 	same 	reasons 	that 	it 	would 	deter 	refe~als. 	The
additional 	requirement 	in 	paragraph 	(f) (4)d 	that 	the 	lawyer 	who
assumes 	primary 	responsibility 	receive 	at 	leas~ 75% 	of 	the 	fee
would 	tightly 	constrain 	allocation 	of 	the 	fee. 	If 	associating
lawyers 	were 	allowed 	to 	negotiate 	their 	respec~ive shares 	of 	the
total 	fee, 	they 	could 	allocate 	the 	fee 	accord:~g to_other
3 	Referral 	Fees: 	Everybody 	Does 	It, 	'By,,: 	Is 	It 	OK?, 	ABA 	J.,
Feb. 	1985, 	at 	40.
5

factors, 	'such 	as 	prior 	knowledge 	of 	the 	fac~5, 	relationship 	with
the 	client, 	reputation, 	degree 	of 	exper~ise, ~~ the 	relative
amount 	of 	work 	each 	would 	perform. 	They 	mig~~ also 	choose 	a
ratio 	other 	than 	75/2S, 	such 	as 	65/35. 	Fina::y, 	the 	provisions
of 	paragraph 	(g) 	that 	the 	division 	be 	in 	propc~ion- to 	services
performed 	or, 	alternatively, 	be 	based 	on 	ass~ption of 	joint
legal 	responsibility, 	might 	deter 	associatior.s 	of 	attorneys 	in
non-contingent 	fee 	cases 	for 	the 	same 	reasons 	~hat paragraphs
(f) (2) 	and 	(f) (4)d 	might 	do 	so 	in 	contingent 	~ee cases.
The 	requirements 	in 	paragraphs 	(f) 	and 	(g) 	that 	there 	be 	a
written 	agreement 	with 	the 	client 	concerning 	~~e division 	of 	fees
appear 	to 	be 	based 	on 	a 	concern 	that 	clients 	know 	of 	and 	consent
to 	a 	division 	of 	fees. 	If 	consumers 	are 	not 	generally 	aware 	of
the 	practice 	of 	paying 	referral 	fees, 	the 	Cou=t 	may 	deem 	such
disclosure 	necessary 	so 	that 	consumers 	can 	use 	that 	information
to 	judge 	the 	quality 	of 	the 	referral. 	Care 	s~ould be 	taken,
however, 	to 	avoid 	disclosure 	requirements 	tha~ 	impose 	unnecessary
costs 	on 	consumers.
For 	the 	reasons 	stated 	above, 	we 	urge 	the 	Court 	to 	delete
proposed 	Rule 	4-1.5(f) (2), (f) (4)d, 	and 	(g).4 	It 	is 	not 	clear
that 	there 	is 	any 	need 	to 	regulate 	the 	division 	of 	fees. 	If 	some
such 	regulation 	is 	deemed 	necessary, 	the 	less 	restrictive
alternative 	of 	requiring 	disclosure 	to 	the 	client 	of 	the
existence 	of 	the 	fee 	division 	arrangement 	might 	be 	imposed.
Rule 	4-5.4: 	Professional 	Independence 	of 	a 	Lawyer
Rule 	4-5.4 	prohibits 	a 	lawyer 	from 	forming 	a 	partnership 	or
sharing 	legal 	fees 	with 	a 	nonlawyer, 	except 	under 	limited
circumstances, 	or 	from 	practicing 	in 	an 	organization 	authorized
to 	practice 	law 	for 	a 	profit 	if 	a 	nonlawyer 	o.~s an 	interest 	in
the 	organization 	or 	is 	an 	officer 	or 	director. 	This 	rule 	may
limit 	the 	ability 	of 	lawyers 	to 	establish 	mUl~i-disciplinary
practices 	with 	other 	professionals, 	such 	as 	psychologists 	or
accountants, 	to 	deal 	efficiently with 	both 	the 	legal 	and 	nonlegal
aspects 	of 	specific problems. 	Rule 	4-5.4 	also would 	appear 	to
prohibit 	lawyers 	from 	inclUding 	any 	lay 	perso~s, such 	as
marketing 	directors, 	as 	partners 	in 	their 	law 	firms. 	Finally,
such 	a 	restriction 	would 	appear 	to 	prohibit 	corporate 	practice,
and 	thereby 	prevent 	the 	use 	of 	potentially 	ef~icient business
formats.
---
4 	We 	object 	to 	the 	comparable 	provisions 	in 	Rule 	4-
1.5(0) (2) 	and 	(E) 	on 	the 	same 	grounds 	and 	urge 	that 	they 	be
deleted 	if 	the 	Court 	chooses 	to 	retain 	the 'e~:sting rule 	rather
than 	adopting 	the 	proposed 	rule.
6

In 	American 	Medical 	Association, 	94 	F.T.C. 	701, 	1017-:8
(1979), 	aff'd, 	638 	F.2d 	443 	(2d 	Cir. 	1980), 	a~~'d memo 	bv 	a~
equally 	divided 	Court, 	455 	U.S. 	676 	(1982), 	t~e 	Federal 	Trade
Commission 	found 	that 	the 	AHA's 	ethical 	restric~ions on 	the
formation 	of 	professional 	associations 	with 	nc~physicians had 	a~
adverse 	effect 	on 	competition. 	The 	AHA's 	fo~ 	of 	practice
restrictions 	precluded 	a 	wide 	variety 	of 	professional 	ventures
and 	potentially 	efficient 	business 	formats, 	suc~ as 	health
maintenance 	organizations 	and 	prepaid 	health 	care 	plans. 	The
Commission 	concluded 	that 	the 	prohibitions 	were 	much 	broader 	than
needed 	to 	prevent 	nonphysician 	influence 	over 	medical 	procedures
or 	consumer 	deception 	about 	the 	skills 	of 	a 	nonphysician 	partner
or 	associate.
The 	staff 	of 	the 	Federal 	Trade 	Commission's 	Bureau 	of
Economics 	concluded 	from 	a 	study 	of 	the 	optometric 	profession
that 	the 	price 	of 	optometric 	services 	is 	lower 	in 	jurisdictions
in 	which 	business 	associations 	between 	professionals 	and 	lay
persons 	are 	permitted. 5 	Restrictions 	on 	such 	business
associations 	impede 	the 	formation 	of 	chain 	fi~s and 	other 	volume
operations 	and 	may 	make 	it 	difficult 	to 	achieve 	economies 	of
scale.
Rule 	4-5.4 	may 	limit 	potentially 	procompetitive 	professional
ventures, 	innovative 	business 	formats, 	and 	perhaps 	some 	forms 	of
prepaid 	legal 	services. 	Paragraphs 	(c) 	and 	(d) (3) 	alone 	should
adequately 	preserve 	the 	lawyer's 	independent 	professional
judgment. 	We 	therefore 	urge 	the 	Court 	to 	delete 	all 	of 	Rule 	4-
5.4, 	except 	paragraphs 	(c) 	and 	(d) (3).
Rule 	4-7.1: 	Communications 	Concerning 	a 	Lawyer's 	Services
The 	beneficial 	effects 	of 	advertising 	are 	widely 	recognized.
Truthful, 	nondeceptive 	advertising 	communicates 	information 	about
individuals 	or 	firms 	offering 	the 	services 	that 	consumers 	may
wish 	to 	obtain. 	Such 	information 	helps 	consumers 	make 	purchase
decisions 	that 	reflect 	their 	true 	preferences 	and 	promotes 	the
efficient 	delivery 	of 	services. 	Before 	advertising 	by 	attorneys
was 	permitted, 	many 	Americans 	failed 	to 	obtain 	the 	services 	of 	an
attorney, 	even when 	they 	had 	serious 	legal 	problems,6 	primarily
5 	Bureau 	of 	Economics, 	Federal 	Trade 	Commission, 	Effects 	of
Restrictions 	on 	Advertising 	and 	Commercial 	Practice 	in 	the
Professions: 	The 	Case 	of 	optometry 	25-26 	(1980).
6 	For 	example, 	a 	nationwide 	survey 	in 	1974 	by_the 	American
Bar 	Foundation 	and 	the 	American 	Bar 	Association 	found 	that 	only
nine 	percent 	of 	the 	people 	who 	had 	property damage 	problems, 	ten
percent 	of 	those 	who 	had 	landlord 	problems,' ~d one 	percent 	of
(continued ... )
7

because 	they 	feared 	that 	legal 	representa~io~ .:~ld ccs~ 	~oo muc~
or 	they 	were 	unable 	to 	locate 	a 	la~er 	suffic:e~~ly 	s~i~led 	at
handling 	their 	particular 	problems. 	A rece~~ 	e~pirica: 	study
suggests 	that 	the 	removal 	of 	restrictions 	on 	~~e dissemination 	of
truthful 	information 	about 	lawyers 	and 	legal 	se~ices will 	tend
to 	enhance 	competition 	and 	lower 	prices. 8 	Al~~ough 	some 	have
voiced 	concern 	that 	advertising 	may 	lead 	to 	a 	:owerqua:ity 	of
legal 	services, 	the 	empirical 	evidence 	s~gges~s that 	~he 	quality
of 	legal 	services 	provided 	by 	firms 	that 	adve~:se is 	at 	least 	as
high 	as, 	if 	not 	higher 	than, 	that 	provided 	by 	~:rms that 	do 	not
advertise. 9
We 	fully 	endorse 	the 	view 	that 	false 	and 	:eceptive
advertising 	should 	be 	prohibited. 	Nonetheless, 	as 	set 	forth
below, 	we 	are 	concerned 	that 	the 	definition 	of 	"false 	or
misleading" 	contained 	in 	Rule 	4-7.1 	may 	prohi=~~ 	much 	truthful,
nondeceptive 	advertising.
Rule 	4-7.1Cb): 	"Unjustified 	Expectations"
Rule 	4-7.1(b) 	defines 	"false 	or 	misleadir.; 	communications"
to 	include 	those 	that 	are 	"likely 	to 	create 	a~ ~njustified
expectation 	about 	results 	the 	lawyer 	can 	aChieve." 	The
accompanying 	comments 	appear 	to 	be 	derived 	fre: 	comments 	drafted
by 	the 	American 	Bar 	Association 	with 	respect 	to 	the 	identical
provisions 	in 	ABA 	Hodel 	Rule 	7.1. 	The 	ABA 	co~ents 	state:
The 	prohibition 	in 	paragraph 	(b) 	of
statements 	that 	may 	create 	"unjustif~ed
expectations" 	would 	ordinarily 	prec:'~de
advertisements 	about 	results 	obtaine~ on
behalf 	of 	a 	client, 	such 	as 	the 	amo~~ of 	a
damage 	award 	or 	the 	lawyer's 	record 	:~
obtaining 	favorable 	verdicts, 	and
6( .•• continued)
those 	who 	felt 	that 	they 	were 	the 	victims 	of 	e:ployment
discrimination 	sought 	the 	services 	of 	an 	attorney 	after 	the 	most
recent 	occurrence. 	B. 	Curran, 	The 	Legal 	Needs 	of 	the 	Public:
The 	Final 	Report 	of 	a 	National 	Survey 	135 	(19ii).
7 	~ 	at 	228, 	231.
8 	Cleveland 	Regional 	Office 	and 	Bureau 	cf 	Economics,
Federal 	Trade 	Commission, 	Improving 	Consumer 	A:cess 	to 	L~gal
Services: 	The 	Case 	for 	Removing 	Restrictions 	C~ Truthful
Advertising 	(1984).
9 	Huris 	& McChesney, 	Advertising 	and 	the 	Price 	and 	Quality
of 	Legal 	Services: 	The 	Case 	for 	Legal 	Cl in·iC\s, 	1979 	Am. 	B.
Found. 	Research 	J. 	179.
8

advertisements 	containing 	client
endorsements.
The 	comments 	go 	on 	to suggest 	that 	such 	infor=a~ion_ "may 	crea~e
the 	unjustified 	expectation 	that 	similar 	resu:~s can 	be 	obtai~ed
for 	others 	without 	reference 	to 	the 	specific 	fa=~ua1 and 	legal
circumstances." 	This 	interpretation 	of 	the 	pt=ase 	"likely 	to
create 	an 	unjustified 	expectation" 	is 	so 	bread 	~~at 	it 	could
chill 	the 	use 	of 	much 	advertising 	that 	is 	~~~~~~~l and 	beneficia:
to 	consumers. 	For 	example, 	consumers 	may 	wish 	~o 	consider 	an
attorney's 	past 	results 	as 	one 	of 	several 	factc=s 	in 	selecting 	a
lawyer. 	While 	it 	may 	be 	impossible 	to 	provide 	complete
information 	about 	prior 	cases 	in 	an 	advertiseme~t, there 	is 	no
reason 	to 	believe 	an 	advertisement 	of 	prior 	e~e=ience could 	not
be 	presented 	in 	a 	way 	that 	is 	not 	deceptive. 	:~formation that 	is
less 	than 	complete 	may 	nonetheless 	not 	be 	misleading 	as 	long 	as
it 	does 	not 	omit material 	facts. 	"[I)t 	seems 	peculiar 	to 	deny
the 	consumer, 	on 	the 	ground 	that 	the 	informatie~ is 	incomplete,
at 	least 	some 	of 	the 	relevant 	information 	needed 	to 	reach 	an
informed 	decision." 	Bates 	v. 	State 	Bar 	of 	Arizona, 	433 	U.S. 	350,
374 	(1977).
Advertising 	by means 	of 	testimonials 	and 	e~dorsements has
traditionally 	been 	recognized 	as 	effective 	by 	sellers 	of 	goods
and 	services. 	For 	example, 	the 	listing 	of 	certain 	clients 	such
as 	major 	banks 	or 	corporations 	in 	the 	Martinda:e-Hubbe11
directory 	suggests 	that 	a 	firm 	can 	handle 	complicated 	legal
problems 	in which 	large 	sums 	of 	money 	may 	be 	at 	risk.
Advertising 	in 	which 	clients 	attest 	truthfully 	~hat they 	use 	a
firm's 	legal 	services 	gives 	the 	general 	pUblic 	~he 	same
information 	that 	is 	available 	to 	users 	of 	lega: 	directories.
Advertising 	in 	which 	clients 	discuss 	their 	reasons 	for
satisfaction 	with 	a 	law 	firm 	conveys 	even more 	information 	than
do 	legal 	directories. 	An 	advertisement 	in 	whic~ a 	famous 	athlete
or 	actor 	states 	truthfUlly 	that 	he 	or 	she 	uses 	a 	particular 	firm
or 	attorney 	indicates 	to 	consumers 	that 	someone 	who 	can 	spend 	a
substantial 	sum 	to 	find 	a 	good 	attorney, 	and 	who 	may 	have
significant 	assets 	at 	stake, 	believes 	a 	particular 	lawyer 	to 	be
effective. 	Testimonials 	are 	not 	necessarily 	misleading 	and 	may
be 	effective 	in 	attracting 	and 	retaining 	cons~er interest 	in 	the
advertiser's 	message.
In 	short, 	we 	believe 	that 	advertisements 	containing 	client
endorsements 	or 	information 	about 	past 	successes 	can 	be 	presented
in 	ways 	not 	likely 	to 	create 	unjustified 	expec~ations. 	We
therefore 	urge 	the 	Court 	to 	modify 	the 	ABA 	com:entary 	with
respect 	to 	Rule 	4-7.1(b) 	and 	make 	clear 	that 	advertisements
containing 	endorsements 	and 	testimonials, 	and 	a~torneys' prior
results 	are 	permitted.
The 	comment 	to 	Rule 	4-7.1 	also 	defines ~s 	a 	"material
misrepresentation 	or 	misleading 	omission" 	COJnln\:.-lications 	in which
9

a 	"lawyer 	states 	or 	implies 	certification 	or 	~e=og~ition as 	a
specialist 	other 	than 	in 	accord 	with 	rule 	4-7.~." 	For 	the
reasons 	set 	forth 	below 	in 	our 	discussion 	of 	~~:e 	4-7.4, 	we 	urge
the 	Court 	to 	delete 	this 	comment.
Rule 	4-7.1Cc): 	Comparative 	Advertising
Rule 	4-7.1(c) 	defines 	false 	and 	misleadi~; communication 	to
include 	communication 	that 	"compares 	the 	lawye~ts services 	with
other 	lawyers' 	services, 	unless 	the 	compariso~ can 	be 	factually
substantiated." 	We 	believe 	that 	this 	rule 	may 	~nnecessarily
inhibit 	competition. 	Information 	that 	accurately 	compares 	the
particular 	qualities 	of 	competing 	law 	firms 	may 	encourage
improvement 	and 	innovation 	in 	the 	delivery 	of 	services 	and 	may
assist 	consumers 	in 	making 	rational 	purchase 	decisions. 	Of
course, 	comparisons 	containing 	false 	or 	deceptive 	statements 	of
fact, 	either 	about 	the 	advertiser 	or 	a 	competitor, 	provide 	no
benefit 	to 	consumers 	and 	can be 	harmful. 	However, 	such
statements 	already 	are 	prohibited 	by 	Rule 	4-7.:(a).
We 	are 	concerned 	that 	Rule 	4-7.1(c) 	may 	deter 	the 	use 	of
comparative 	advertising 	and 	preclude 	truthful, 	nondeceptive
statements 	merely 	because 	they 	are 	not 	amenable 	to 	empirical
testing. 10 	Examples 	of 	such 	statements 	are 	"Friendlier 	service"
or 	"More 	convenient 	hours." 	Even 	though 	such 	statements 	are 	not
readily 	subject 	to 	verification, 	they 	may 	be 	truthful 	and
nondeceptive, 	and 	indicate 	the 	qualities 	that 	the 	advertiser
believes 	are 	important 	to 	consumers. 	Moreover, 	such 	statements
can 	attract 	consumers' 	attention 	to 	the 	advertising 	attorney.
Even 	advertising 	that 	is 	designed 	only 	to 	attract 	attention 	can
10 	In 	a 	statement 	of 	policy 	regarding 	co~parative
advertising, 	the 	Federal 	Trade 	Commission 	recognized 	the 	benefits
of 	comparative 	advertising 	and 	indicated 	concern 	about 	standards
set 	by 	self-regulatory 	bodies 	that 	might 	disco~rage the 	use 	of
such 	advertising:
On 	occasion, 	a 	higher 	standard 	of
substantiation by 	advertisers 	using
comparative 	advertising 	has 	been 	required 	by
self-regulation 	entities. 	The 	Commission
evaluates 	comparative 	advertising 	in 	the 	same
'manner 	as 	it 	evaluates 	all 	other 	advertising
techniques 	.... 	[I]nterpretations 	that
impose 	a 	higher 	standard 	of 	substantiation
for 	comparative 	claims 	than 	for 	unilateral
claims 	are 	inappropriate 	and 	should 	be 	-
revised.
16 	C.F.R. 	14.15(c) (2) 	(1986).
10
\

inform 	cc~sumers of 	a 	lawyer's 	prese~ce i~ 	a 	=:=~unity, 	w~ic~ 	~
and 	of 	i~self is 	useful 	information.
Rule 	4-7.1(c)'s 	requirement 	of 	factual 	s~stantiation
appears 	to 	be 	broader 	than 	necessa~y to 	preve~~ deception. 	T~e
Commissio~ generally 	requires 	that 	advertise~s ~ave a 	"reaso~ab:e
basis" 	for 	any 	objectively 	verifiable 	and 	mate=ial 	claims 	that
they 	make, 	because 	the 	act 	of 	making 	such 	a 	c:aim 	implies 	some
basis 	for 	it, 	and 	consumers 	would 	be 	deceivec 	:f 	a 	reasor.able
level 	of 	support 	were 	lacking. 11 	However, 	"p-.:.ffery" 	and
sUbjective 	claims 	do 	not 	similarly 	imply 	tha~ 	s~bstantiation
exists, 	and 	so 	may 	be 	employed 	without 	it.
We 	therefore 	urge 	the 	Court 	to 	modify 	Rule 	4-7.1(c) 	to
require 	only 	that 	an 	attorney 	have 	a 	reasonab:e 	basis 	for 	any
material, 	objective 	claims, 	and 	that 	such 	clai=s 	be 	truthful 	and
nondeceptive.
Rule 	4-7.2: 	Advertising
Rule 	4-7.2(a): 	Permissible 	Advertising 	~edia
Attorneys 	may 	interpret 	the 	list 	of 	media 	in 	Rule 	4-7.2(a)
as 	exclusive 	and 	conclude 	that 	advertising 	in 	~edia not 	listed 	is
prohibited. 	The 	listing 	of 	specific media 	tha~ may 	be 	used 	in
advertising 	could 	discourage 	innovation 	in 	ways 	not 	intended 	by
the 	Court, 	especially 	since 	the 	phrase 	"public 	media" 	is
ambiguous. 	For 	example, 	the 	rule 	might 	be 	interpreted 	to
prohibit 	sponsorship 	of 	museum 	exhibits 	or 	yo~~h sports 	teams.
In 	addition, 	the 	specificity 	of 	the 	rule 	fails 	to 	anticipate
changing 	technologies. 	Thus, 	for 	example, 	the 	rule 	might 	be
interpreted 	to 	exclude 	advertising 	in 	compute~ bulletin 	boards,
on-line 	directories, 	or 	similar media 	that 	may 	become
increasingly 	important 	as 	electronic 	communica~ion becomes 	more
common. 	Therefore, 	we 	recommend 	that 	the 	Cou~ delete 	Rule 	4-
7.2(a) .
Comment 	to 	Rule 	4-7.2: 	Dignity 	of 	the 	profession
The comment 	to 	Rule 	4-7.2 	states 	that 	the 	"content 	and
format 	of 	a 	legal 	advertisement 	should 	comport 	with 	the 	dignity
of 	the 	profession 	.••• 	Advertisements 	utilizing 	slogans,
gimmicks, 	or 	other 	garish 	techniques, 	or 	the 	use 	of 	large
electrical 	or 	neon 	signs, 	sound 	tracks, 	or 	other 	extravagant
media, 	fail 	to 	meet 	these 	standards 	.... " 	:his 	comment 	may
deprive 	consumers 	of 	truthful, 	nondeceptive 	i~formation about 	the
availability 	of 	legal 	services.
11 	See 	FTC 	Policy 	Statement 	Regarding ~cvertising
Substantiation, 	104 	F.T.C. 	839 	(1984).
11

Advertising 	that 	is 	not 	false 	or 	decepti~e, even 	though
viewed 	by 	some 	as 	lacking 	in 	dignity, 	nonethe:ess 	may 	assist
consumers 	in 	choosing 	legal 	services 	that 	bes~ suit 	their 	needs.
For 	example, 	some 	lawyers 	consider 	the 	advertise~ent of 	holiday
discounts 	on 	legal 	services 	to 	be 	undignified. 	However, 	an
advertisement 	offering 	a 	reduced 	price 	on 	lega: 	services 	provides
information 	that 	consumers 	concerned 	about 	the 	=ostof 	legal
services 	might 	find 	very 	useful.
Whether 	an 	advertisement 	is 	"dignified" 	is 	a 	matter 	of 	the
viewer's 	individual 	standards. 	It 	is 	virtual:: 	impossible 	to
write 	a 	definition 	of 	"dignified" 	that 	can 	be 	applied 	to 	all
lawyer 	advertising. 	As 	the 	ABA 	states 	in 	its 	=omment 	to 	Model
Rule 	7.2, 	"[qJuestions 	of 	effectiveness 	and 	tas~e 	in 	advertising
are 	matters 	of 	speculation 	and 	subjective 	jUdg=ent." 	Last 	year,
the 	ABA's 	Commission 	on 	Advertising 	considered 	a 	proposal 	to
issue 	guidelines 	on 	dignity 	in 	lawyer 	advertising. 	The
Commission 	rejected 	the 	proposal 	because 	of 	tr.e 	difficulty 	of
defining 	dignity. 	Attorneys 	may 	not 	be 	able 	t~ determine 	whether
a 	particular 	advertisement 	could 	be 	considered undignified 	and
may 	therefore 	abandon 	a 	proposed 	advertisement 	even 	though 	the
Court 	would 	not 	consider 	it 	undignified.
The 	comment 	to 	Rule 	4-7.2 	prohibits 	the 	~se of 	advertising
techniques 	that 	have 	proven 	effective 	in 	marke~ing goods 	and
services. 	A slogan may 	be 	easy 	to 	remember 	an= 	may 	enhance
consumer 	retention 	of 	information 	in 	an 	advertisement. 	In
addition, 	it 	can 	serve 	as 	a 	unifying 	theme 	for 	a 	firm's
advertising 	campaign, 	linking 	the 	firm's 	varic~s advertisements
in 	the 	consumer's 	mind, 	and 	thereby 	increasing 	the 	impact 	of 	the
advertising. 12 	A musical 	soundtrack 	may 	draw 	and 	retain
consumers' 	interest 	in 	an 	advertisement. 	Sigr.s 	can 	communicate
information 	about 	the 	identity 	and 	location 	of 	attorneys 	and
firms 	offering 	legal 	services. 	The 	size 	of 	the 	sign 	and 	the 	use
of 	light 	in 	a 	sign 	can 	draw 	consumers' 	attenti=n. 	If 	attorneys
are 	not 	permitted 	to 	use 	such 	techniques, 	thei~ advertisements
may 	be 	less 	effective.
We 	therefore 	recommend 	that 	the 	Court 	delete 	the 	portion 	of
the 	comment 	that 	addresses 	dignity 	and 	the 	use 	of 	slogans,
gimmicks, 	garish 	techniques, 	signs, 	soundtracks 	and 	extravagant
media.
Rule 	4-7.2(c): 	Referral 	Fees
Rule 	4-7.2(c) 	appears 	to 	prohibit 	the 	pa~ent of 	fees 	to
lawyers 	who 	refer 	prospective 	clients 	to 	other 	lawyers. 	As 	we
mentioned 	in 	our 	discussion 	of 	proposed 	Rule 	4-1.5(f) 	and 	(g),
12 	L. 	Andrews, 	Birth Of 	A Salesman 	34 	~lS80).
12

such 	a 	prohibition 	could 	have 	substantial 	ant:=:=petitive
ef:ects. 	For 	these 	reasons, 	we 	urge 	the 	Cour~ ~o 	delete 	the
requirements 	in 	Rule 	4-7.2(c) 	that 	lawyers 	no~ pay 	refe~ral fees
to 	other 	lawyers.
Proposed 	Rule 	4-7.3: 	Legal 	Service 	Informatio~
Proposed 	Rule 	4-7.3 	requires 	that 	a 	lawyer 	.ho 	advertises
legal 	services 	in 	tort 	cases 	in 	which 	a 	contir.;ent 	fee 	is 	charged
have 	available 	a 	factual 	statement 	detailing 	h:s 	or 	her
background, 	training 	and 	experience. 	The 	pro~csed rule 	requires
that 	the 	lawyer 	provide 	the 	statement 	to 	cons~ers upon 	request,
and 	state 	in 	all 	electronic 	or 	print 	advertis:~; sUbstantially
the 	following, 	"Free 	written 	information 	conce~ing
qualifications 	and 	experience 	available 	on 	re~~est." 	We 	believe
that 	this 	rule 	might 	result 	in 	lawyers 	providi~; less, 	rather
than 	more, 	information 	to 	consumers.
The 	proposed 	rule 	would 	increase 	the 	cost 	of 	advertising 	by
requiring 	lawyers 	to 	prepare 	and 	print 	a 	factua: 	statement 	and
purchase 	additional 	advertising 	time 	and 	space 	to 	include 	the
prescribed 	statement. 	An 	attorney 	with 	a 	limited 	advertising
budget 	might 	find 	the 	additional 	costs 	imposed 	by 	the 	proposed
rule 	to 	be 	significant. 	Increasing 	the 	cost 	may 	dissuade 	lawyers
from 	placing 	certain 	advertisements.'
The 	concern 	expressed 	in 	the 	comment 	to 	the 	proposed 	rule 	is
that 	consumers 	will 	be 	exposed 	to 	numerous 	adve~tisements and 	not
be 	able 	to 	compare 	the 	offers 	of 	legal 	services 	without 	visiting
the 	lawyers' 	offices 	to 	obtain 	more 	informatior.. 	The 	resolution
of 	this 	concern 	does 	not 	appear, 	however, 	to 	require 	the 	proposed
rule 	and 	its 	attendant 	costs. 	Consumers 	who 	desire 	information
beyond 	that 	contained 	in 	advertisements 	can 	si:ply 	call 	the
attorney. 	Even 	in 	the 	absence 	of 	the 	proposed 	rule, 	an 	attorney
has 	an 	incentive 	to 	provide 	adequate 	informatic~ about
qualifications 	to 	a 	prospective 	client. 	If 	an 	attorney 	refuses
to 	furnish 	information, 	the 	consumer 	can 	call 	~~other attorney
who 	advertises 	his 	or 	her 	services.
The 	Bar 	has 	presented 	in 	support 	of 	its 	p~oposal no 	evidence
that 	consumers 	have 	been misled 	about 	the 	ability 	of 	personal
injury 	lawyers. 	Absent 	such 	evidence, 	it 	would 	be 	undesirable 	to
impose 	requirements 	that 	might 	discourage 	adve~ising. 	We
therefore 	recommend 	that 	the 	Court 	delete 	propcsed 	Rule 	4-7.3.
Rule 	4-7.3: 	Direct 	Contact 	With 	Prospective 	C:ient~
Rule 	4-7.3 	generally 	prohibits 	all 	forms 	c: 	direct 	client
\
13

solicitation 	except 	written 	co~~unicationslJ =e=a~se, 	according
to 	the 	Comme~t to 	the 	rule, 	there 	is 	a 	"pote~~:al 	for 	abuse
inherent 	in 	direct 	solicitation." 	By 	allowing 	~argeted mailings,
SUbject 	to 	some 	restrictions, 	as 	well 	as 	gene~a: mailings, 	the
rule 	permits 	lawyers 	to 	use 	an 	efficient 	method 	of 	communicati;.g
with 	consumers 	who 	are 	likely 	to 	require 	lega: 	~epresentation.
We 	believe 	that 	other 	forms 	of 	solicitation 	as 	.ellcan 	provide
consumers 	with 	helpful 	information 	about 	the 	na~Ure and
availability 	of 	legal 	services, 	and 	that 	any 	po~ential abuses 	ca~
be 	effectively 	prevented 	through 	more 	limited 	a~d specific
regulatory 	provisions. 	We 	urge 	the 	Court, 	the~efore, to 	modify
Rule 	4-7.3 	and 	adopt 	more 	limited 	restrictions 	on 	solicitation.
Telegrams 	and 	other 	forms 	of 	written 	comm~nication from
lawyers 	may 	provide 	useful 	information 	to 	prospective 	clients.
For 	example, 	by 	sending 	a 	telegram 	to 	a 	particular 	audience, 	the
lawyer 	can 	provide 	information 	to 	those 	consume~s who 	are 	most
likely 	to 	need 	legal 	services 	and 	to 	benefit 	from 	information
about 	what 	services 	are 	available, 	and 	who 	may 	need 	to 	have 	a
lawyer 	take 	action 	expeditiously 	on 	their 	behalf.
Telegraph 	advertising, 	as 	long 	as 	it 	is 	truthful 	and
nondeceptive, 	poses 	little 	danger 	of 	consumer 	harm. 	Although 	it
is 	not 	impossible, 	it 	is 	unlikely 	that 	such 	written
communications 	will 	be 	intrusive 	or 	coercive, 	or 	involve
intimidation 	or 	duress. 	A telegram 	from 	an 	attorney 	offering
legal 	services 	requires 	no 	immediate 	response. 	The 	consumer 	can
give 	the 	communication 	careful 	consideration 	and make 	a 	reasoned
decision 	about 	selecting 	a 	lawyer.
In-person 	contact 	may 	also 	provide 	consumers 	with 	truthful,
nondeceptive 	information 	that 	will 	help 	them 	select 	a 	lawyer. 	As
the 	Supreme 	Court 	stated 	in 	Ohralik 	v. 	Ohio 	State 	Bar
Association, 	436 	U.S. 	447, 	457 	(1978), 	in-person 	contacts 	can
convey 	information 	about 	the 	availability 	and 	terms 	of 	a 	lawyer's
legal 	services 	and, 	in 	this 	respect, 	serve 	much 	the 	same 	function
as 	advertising.
We 	recognize 	that 	abuses 	may 	result 	from 	in-person
solicitation 	by 	lawyers. 	Injured 	or 	emotionally 	distressed
people 	may 	be 	v-ulnerable 	to 	the 	exercise 	of 	undue 	influence 	when
face 	to 	face 	with 	a 	lawyer, 	as 	the 	Supreme 	Court 	reasoned 	in
Ohralik, 	436 	U.S. 	at 	465. 	We 	do 	not 	believe, 	however, 	that 	this
justifies 	a 	broad 	prohibition 	on 	all 	in-person 	solicitation. 	The
Federal 	Trade 	Commission 	considered 	the 	concerns 	that 	underlie
the 	Ohralik 	opinion when 	it 	decided 	American 	Medical 	Association,
13 	The 	rule 	does 	not 	apply 	to 	the 	solicitation 	of 	family
members 	or 	those 	with 	whom 	the 	lawyer 	had 	a 	prior 	professional
relationship, 	or where 	pecuniary 	gain 	is 	not 	a 	significant 	motive
for 	the 	SOlicitation. 	\
14

94 	r.T.C. 	701 	(1979), 	aff'd, 	638 	r.2d 	443 	(2d 	C:r. 	1980), 	aff'd
memo 	by 	an 	equally 	divided 	Court, 	455 	U.S. 	676 	'1982). 	After
weighing 	the 	possible 	harms 	and 	benefits 	to 	co~s~mers, the 	FTC
ordered 	the 	AHA 	to 	cease 	and 	desist 	from 	banni~g solicitation,
but 	permitted 	it 	to 	proscribe 	uninvited, 	in-person solicitation
of 	persons 	who, 	because 	of 	their 	particular 	ci==~mstances, are
vulnerable 	to 	undue 	influence.
In-person 	solicitation 	by 	lawyers 	in 	many 	:nstances 	does 	net
involve 	coercion 	or 	the 	exercise 	of 	undue 	infl~ence. 	Lawyers
often 	encounter 	prospective 	clients 	at 	meetings 	of 	political 	and
business 	organizations 	and 	at 	social 	events. 	:~deed, 	many
lawyers 	traditionally 	have 	built 	their 	law 	prac~ices through 	such
contacts. 	Under 	such 	circumstances, 	the 	possi~ility of 	abuse
seems 	minuscule. 	Similarly, 	lawyers 	present 	s~eeches and
seminars 	to 	prospective 	clients 	that 	establish 	goodwill 	and 	help
attendees 	to 	understand 	the 	law 	and 	identify 	si~uations in 	which
they 	might 	need 	a 	lawyer. 	Such 	personal 	contac~s present 	little
risk 	of 	undue 	influence, 	but 	do 	enable 	prospective 	clients 	to
assess 	the 	personal 	qualities 	of 	attorneys. 	Since 	lay 	persons
might 	find 	aggressive 	solicitation 	to 	be 	offensive, 	lawyers 	have
an 	incentive 	not 	to 	engage 	in 	such 	conduct.
Telephone 	solicitation 	can 	also 	provide 	useful 	information,
and 	it 	may 	present 	less 	risk 	of 	harm 	to 	consumers 	than 	does 	in-
person 	solicitation. 	We 	recognize, 	of 	course, 	that 	telephone
sales 	can 	be 	used 	to 	injure 	consumers. 	consequently, 	we 	would
not 	oppose 	a 	prohibition 	on 	false 	or 	deceptive 	telephone 	.
solicitation. 	However, 	the 	use 	of 	the 	telephone 	to 	sell 	goods
and 	services 	has 	become 	relatively 	common 	in 	our 	society. 	It 	is
not 	clear 	to 	us 	that 	telephone 	selling 	by 	lawyers 	is 	necessarily
likely 	to 	harm 	consumers. 	For 	example, 	a 	lawyer may 	call 	an
acquaintance 	who 	owns 	a 	business 	and 	offer 	a 	legal 	service, 	or 	a
lawyer 	may 	hire 	a 	telephone 	marketing 	firm 	to 	call 	all 	residents
of 	a 	neighborhood 	and 	offer 	the 	lawyer's 	services 	to 	write 	a
will. 	In 	both 	cases, 	consumers 	will 	be 	provided 	useful
information 	and 	the 	lkelihood 	of 	harm 	seems 	small.
Thus, 	we 	support 	Rule 	4-7.3 	to 	the 	extent 	that 	it 	permits
targeted 	mailings, 	but 	we 	oppose 	the 	broad 	ban 	on 	other 	forms 	of
solicitation. 	We 	would 	not 	oppose 	more 	limited 	restrictions 	on
solicitation 	directed 	at 	actual 	abuses. 	For 	example, 	we 	believe
it 	would 	be 	appropriate 	for 	the 	Court 	to 	prohibit: 	I} 	false 	or
deceptive 	solicitation;14 	and 	2) 	solicitation 	directed 	to 	any
person 	who 	has 	made 	it 	known 	that 	he 	or 	she 	does 	not 	wish 	to
receive 	communications 	from 	the 	lawyer.
14 	Rule 	4-7.1 	(a) 	already 	prohibits 	fatse 	or 	deceptive
communications.
15

In 	addition, 	the 	court 	may 	wish 	to 	prohi=:~ all 	forms 	of
solicitation 	that 	involve, 	in 	the 	language 	of 	~~e 	comment 	t9 	R~:e
4-7.3, 	"undue 	influence, 	intimidation, 	[or] 	ove=reaching."l~ 	If,
on 	the 	basis 	of 	experience 	or 	a 	reasonable 	be~:ef that 	a
particular 	form 	of 	solicitation 	will 	abuse 	cor.s·~ers, the 	Court
concludes 	that 	such 	a 	prohibition 	is 	necessary, 	we 	urge 	that 	its
terms 	be 	interpreted 	narrowly. 	Some 	licensing 	boards 	and 	private
associations 	in 	other 	professions 	have 	interp=e~ed these 	or
similar 	terms 	broadly 	and 	have 	applied 	them 	to 	ban 	solicitation
under 	circumstances 	that 	pose 	no 	danger 	of 	abuse. 	So 	long 	as
these 	terms 	are 	interpreted 	fairly 	and 	objectively, 	such 	a
provision 	would 	adequately 	protect 	consumers 	a~d simultaneously
allow 	them 	to 	receive 	helpful 	information 	abou~ legal 	services.
Rule 	4-7.4: 	Communication 	of 	Field 	of 	Practice
Rule 	4-7.4 	limits 	the 	circumstances 	in 	which 	an 	attorney 	may
state 	that 	he 	or 	she 	is 	a 	"specialist." 	The 	use 	of 	this 	term,
however, 	may 	be 	the 	clearest, 	most 	efficient 	way 	to 	communicate
information 	that 	an 	attorney 	has 	developed 	skills 	or 	focused 	his
or 	her 	practice 	on 	a 	specific 	area 	of 	the 	law. 	Unless 	there 	is
reason 	to 	believe 	that 	an 	attorney's 	claim 	to 	be 	a 	"specialist"
will 	imply 	to 	lay 	persons 	that 	a 	lawyer 	has 	ob~ained formal
recognition 	or 	certification 	as 	a 	specialist, 	it 	is 	undesirable
to 	restrict 	such 	claims.
Rule 	4-7.4 	also 	prohibits 	an 	attorney 	fro~ merely 	implying
that 	he 	or 	she 	is 	a 	specialist. 	This 	provision 	could 	be
interpreted 	to 	prohibit 	a 	wide 	variety 	of 	truthful 	statements
about 	experience 	and 	special 	training. 	For 	example, 	a 	true
statement 	that 	an 	attorney 	is 	a 	member 	of 	an 	organization 	of
trial 	lawyers 	might 	be 	interpreted by 	some 	as 	an 	implied 	claim 	of
specialization, 	yet 	such 	a 	statement 	can 	benefit 	consumers 	by
informing 	them 	that 	the 	attorney 	has 	sufficient 	interest 	in 	trial
advocacy 	to 	join 	the 	organization 	and 	has 	access 	to 	the
organization's 	training 	and 	materials. 	There 	are 	many 	ways 	to
obtain 	expertise, 	and 	information 	that 	an 	attorney 	has 	special
experience 	or 	skills 	in 	a 	particular 	field 	is 	clearly 	useful 	to
consumers 	needing 	help 	in 	that 	field. 	Nor 	do 	we 	believe 	that
advertising 	as 	a 	"specialist" 	would 	create 	an 	unjustified
expectation 	about 	the 	results 	that 	a 	lawyer 	can 	aChieve, 	any 	more
than 	identifying 	oneself 	as 	a 	surgeon 	generates 	an 	expectation
15 	\ Different 	kinds 	of 	solicitation may 	p=esent 	different
risks 	of 	abuse, 	so 	the 	proper 	interpretation 	of 	these 	terms 	may
depend 	on whether 	the 	solicitation 	at 	issue 	involves 	mail,
telephone, 	or 	in-person 	contact. 	Written 	communications 	seem 	to
present 	little 	danger 	of 	coercion 	or 	undue 	influence. 	Telephone
solicitation may 	present 	less 	potential 	for 	abuse 	than 	in-person
solicitation because 	telephone 	calls 	are 	easier 	to 	terminate 	than
face-to-face 	conversations. 	\
16

that 	every 	procedure 	that 	the 	surgeon 	perfor.=s 	.:1: 	be 	a 	s~ccess.
Rule 	4-7.4(c) 	also 	provides 	that 	a 	lawyer 	=ay_info~ the
public 	about 	certification 	he 	or 	she 	has 	rece:ved 	only 	if 	the
lawyer 	has 	been 	certified 	under 	the 	Florida 	Ce~ification Plan 	or
by 	a 	national 	group 	whose 	standards 	for 	certi::=ation 	are
"substantially 	the 	same" 	as 	those 	of 	the 	Flor:~a Plan. 	The
advertising 	of 	certification 	can 	provide 	cons~ers with 	useful
facts 	about 	attorneys' 	special 	skills 	whenever 	certification
requirements 	are 	reasonably 	related 	to 	assurir.; 	proficiency 	in
the 	subject 	area 	certified, 	whether 	or 	not 	they 	are
"substantially 	the 	same" 	as 	the 	requirements 	c: 	the 	Florida 	Plan.
Conversely, 	when 	certified 	attorneys 	are 	prohi:ited 	from
truthfully 	advertising 	their 	training 	and 	skills, 	consumers 	will
be 	deprived 	of 	information 	to 	help 	them 	choose 	among 	qualified
practitioners 	who 	are 	certified 	but 	who 	cannot 	advertise 	such
certification.
Rule 	4-7.4 	also 	appears 	to 	prohibit 	clai~s of 	certification
by 	a 	private 	organization 	in 	any 	area 	of 	the 	law 	in 	which 	Florida
has 	no 	certification 	program. 	Such 	claims 	may, 	however, 	be 	an
important 	source 	of 	information 	for 	consumers 	precisely 	because
of 	the 	absence 	of 	a 	state 	certification 	progra=. 	We 	therefore
recommend 	that 	the 	Court 	remove 	all 	prohibitio~s against
truthful, 	nondeceptive 	claims,16 	express 	or 	i~plied, 	that 	a
lawyer 	is 	a 	specialist 	or 	has 	been 	certified. 	This 	would 	not, 	of
course, 	prevent 	the 	lawyers 	who 	have 	actually 	obtained 	Florida
certification 	from 	advertising 	that 	fact.
Rule 	4-7.6: 	Referral 	Services
By 	permitting 	lawyers 	to 	accept 	referrals 	:rom 	for-profit
referral 	services, 	Rule 	4-7.6 	helps 	consumers 	select 	an 	attorney
qualified 	to 	provide 	the 	desired 	legal 	services. 	For-profit
referral 	services 	enable 	lawyers 	to 	pool 	their 	advertising
resources 	while 	maintaining 	independent 	practi=es. 	Consumers 	in
need 	of 	legal 	advice 	on 	a 	particular 	subject may 	benefit 	from 	the
knOWledge 	that 	such 	services 	possess 	about 	the 	particular
expertise 	of 	each 	member 	attorney. 	A for-profit 	referral 	service
may 	be 	able 	to 	provide 	more 	useful 	information 	to 	consumers 	than
a 	nonprofit 	bar 	association 	referral 	service, 	which 	may 	be
obliged 	to 	give 	referrals 	on 	an 	equal 	basis 	to 	all 	attorneys.
16 	By 	prohibiting 	false 	or 	misleading 	co:muni~ations, Rule
4-7.1 	bans 	claims 	of 	certification 	by 	attorneys 	who 	have 	not
achieved 	certification 	or who 	have 	been 	certified 	by 	an
organization 	whose 	standards 	are 	not 	related\to 	assuring 	skills
in 	the 	area 	certified.
17

Paragraph 	(a) (2) 	and 	the 	comme~~ appear 	~: 	prohibit 	la.:·e~s
from 	compensating 	a 	for-profit 	referral 	serv:=e 	by 	any 	mea~s
other 	than 	a 	pre-arranged, 	fixed 	pa~ent. 	Cc=~e~sation may
therefore 	not 	be 	calculated 	on 	the 	basis 	of 	~~e number 	of
referrals 	received, 	although 	that 	may 	be 	a 	mere 	accurate 	~e3s~~e
of 	the 	value 	to 	the 	lawyer 	of 	participation 	i~ 	~he 	service. 	!~e
rule 	may 	therefore 	result 	in 	some 	lawyers 	ove~ ;aying, 	whi=~
could 	discourage 	their 	participation 	in 	referr~: services. 	:~e
intent 	of 	the 	rule 	may 	be 	to 	avoid 	lawyers 	s~=:tting to 	press~re
from 	referral 	services 	to 	take 	on 	cases 	that 	are 	not 	meritor:ous,
or 	that 	the 	attorney 	lacks 	the 	skill 	or 	time 	~~ handle. 	R~:es~
1.1, 	4-1.3, 	and 	4-3.1 	prohibit 	lawyers 	from 	d=:~g so, 	and
paragraph 	(a) (2) 	is 	thus 	unnecessary 	and 	could 	discourage
participation 	in 	referral 	services. 	We 	there~~re 	recommend 	tha~
the 	court 	delete 	paragraph 	(a) (2) .
Conclusion
While 	the 	rules 	proposed 	by 	the 	Florida 	Bar 	would 	benefit
consumers 	by 	relaxing 	certain 	existing 	restric~ions on 	price
competition, 	they 	nonetheless 	may 	injure 	cons~ers by 	imposing
unnecessary 	restrictions 	on 	referrals 	and 	associations, 	and
discouraging 	dissemination 	of 	information 	abou~ legal 	services.
In 	addition, 	the 	existing 	rules 	restrain 	price 	competition,
prohibit 	efficient 	forms 	of 	practice, 	and 	proh:bit 	some 	fo~s 	of
truthful, 	non-deceptive 	advertising, 	all 	of 	wh:ch 	may 	be
detrimental 	to 	consumers. 	In 	the 	interest 	of 	eliminating
unnecessary 	restrictions 	on 	competition 	among 	attorneys, 	we 	urge
that 	the 	court: 	(1) 	delete 	Rule 	4-1.5(D) (4)b.: 	and 	b.2 	to 	remove
the 	ceilings 	on 	contingent 	fees; 	(2) 	delete 	pr~posed Rule
1.5(f) (2), 	(f) (4)d 	and 	(g) 	so 	as 	not 	to 	discourage 	attorney
referrals 	and 	associations 	of 	attorneys 	in 	di~~erent firms 	for
particular 	cases; 	(3) 	eliminate 	the 	restrictior.s 	in 	Rule 	4-5.4 	on
practice 	with 	nonlawyers; 	(4) 	modify 	Rule 	4-7.1 	to 	make 	clear
that 	truthful, 	nondeceptive 	endorsements 	and 	s~ccess and
experience 	claims 	are 	permitted, 	and 	to 	require 	only 	that 	an
attorney 	have 	a 	reasonable 	basis 	for 	any 	mate~ial, objective
claims; 	(5) 	delete 	Rule 	4-7.2(a); 	(6) 	modify 	Rule 	4-7.2(c) 	to
allow 	the 	payment 	of 	referral 	fees 	to 	attorneys: 	(7) 	delete
portions 	of 	the 	comment 	accompanying Rule 	4-7.2 	to 	eliminate 	the
requirement 	that 	advertisements 	comport 	with 	the 	dignity 	of 	the
profession 	and 	to 	permit 	the 	use 	of 	advertising 	techniques 	such
as 	slogans, 	soundtracks, 	etc.: 	(8) 	delete 	proposed 	Rule 	4-7.3 	so
as 	not 	to 	discourage 	advertising 	of 	legal 	serv:ces 	in 	tort 	cases;
(9) 	modify 	Rule 	4-7.3 	to 	remove 	the 	broad 	ban 	on 	solicitation:
(10) 	alter 	Rule 	4-7.4 	to 	allow 	express 	and 	imp:ied 	claims 	of
specialty 	and 	certification; 	and 	(11) 	delete 	R~le 	4-7.6(a) (2) 	so
as 	not 	to 	discourage 	participation 	in 	lawyer 	referral 	services.
We 	hope 	that 	this 	response 	will 	be 	of. ass:stance 	in 	pointing
out 	ways 	in 	which 	particular 	rules 	may 	restrict 	competition 	and
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injure 	consumers, 	and 	we 	appreciate 	having 	ha: 	~~e 	oppo~t~ni~y .-
present 	these 	views.
Respectfully 	sub=::ted,
Jeffrey 	I. 	Zucke~an
Director
Karen 	G. 	Bokat
Counsel
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