Legal advertising in the United States

In the United States, advertising of services by members of the profession of law is typically permitted but regulated by state court and bar association rules.

Advertisements for lawyers and law firms take various forms: print, television, radio, the yellow pages, and most recently online advertising. Among the most common type of legal advertisements are those by tort lawyers, whose branch of law includes personal injury, medical malpractice, negligence, and product liability cases involving compensation for harm or damages caused by another. Yet legal advertisements are used by lawyers who specialize in other areas of the practice of law, including criminal defense, bankruptcy, property law, and family law.

History

Before the Canons of Professional Ethics were published by the American Bar Association (ABA) in 1908, advertising within the legal profession was common.[1] The ABA believed that lawyer advertising was unprofessional and shone a negative light on the profession of law.[1] They also realized that a court was a place where parties can "inflict heavy losses on one another".[2] The ABA wanted to prevent the bringing forth of cases wherein there was no basis for their claim. Lawyers were still allowed to be included in law directories which contained the lawyers basic information, including their name and contact information. They were also allowed to print business cards and use professional letterhead, but otherwise advertising was strictly prohibited. The Chicago Bar Association believed that "The most worthy and effective advertisement possible...is the establishment of a well-merited reputation for professional capacity and fidelity to trust".

Bates v. State Bar of Arizona

In 1972 John Bates and Van O'steen were admitted to the State Bar of Arizona.[3] Immediately after their admittance to the bar the pair began working for the Maricopa County Legal Aid Society.[4] After working there for a period of two years they founded their own practice.

As a firm they handled cases for clients who could not qualify for government grants despite moderate incomes. Bates and O’steen decided that, rather than charge expensive fees for their services, they would focus on a large volume of cases in order to generate their income; as such, the firm focused its practice on low-fee cases such as uncontested divorces, adoptions, simple bankruptcy cases, and name changes.[4] They realized that in order to obtain the necessary volume they needed to advertise their name and their services to the public. Bates and O’steen placed an advertisement in the Arizona Republic on February 22, 1976.[3] The State Bar acted reviewed the case. Both Bates and O'steen were suspended from practicing law for six months in accordance with the regulations of the State Bar of Arizona.[3] Bates and O'steen petitioned the Arizona Supreme Court to review their case on the grounds that a total ban on advertisement violated the Sherman Antitrust Act and the First Amendment to the United States Constitution.[3] The state supreme court rejected both of their claims, but did reduce their suspensions, in part, because the court believed that Bates and O’steen advertised as a way to test the constitutionality of the ban on advertising within the legal industry.[3]

The Supreme Court of the United States recognized that they had the power to review judicial decisions of lower courts and set the case for argument. Chief Justice Warren E. Burger threw out the claim that a total ban on advertising by lawyers and law firms was in violation of the Sherman Antitrust Act.[3] He based his position on the precedent set in Goldfarb v. Virginia State Bar. This case set the precedent that "lawyers engage in trade or commerce," and lawyers and the practice of law were therefore NOT exempt from the Sherman Antitrust Act.

On the claim of the violation of free speech, the Supreme Court ruled in favor of Bates and O'steen, stating that Arizona's ban of advertising "inhibit[ed] the free flow of information and ke[pt] the public in ignorance".[3] The Supreme Court therefore removed the ban on advertising. However, they still allowed the State Bar to "regulate" advertising in order to make certain that the information presented was true and did not mislead others or make false claims. State bar associations across the country quickly began to lift their bans on advertising.[5]

Advertising boom

In 1977, the day after the U.S. Supreme Court decision, Group Matrix, secured their first legal client. The firm, guided by CEO Richard Sackett, was the very first attorney advertising agency to advertise legal services in mass media. Group Matrix currently represents nationwide 30 of the most visible and dominant firms practicing Personal Injury. Attorney advertising from Group Matrix is seen by more than 35 million people a day. Group Matrix produces over 400 lawyer television commercials, and even more radio, yellow page, internet and billboard advertisements every year.[6]

Additionally, in the days after the U.S. Supreme Court decision, law firm Jacoby & Meyers placed a print ad in the Los Angeles Times. The first television ads were produced by Sackett’s firm for attorney Morris Bart in New Orleans. The firm was the very first attorney advertising agency to advertise legal services in electronic media.

Initially the majority of lawyer advertisements were directed at "car wreck" victims. Today the majority of Television ads are directed at this group. These potential clients are those affected by large pharmaceutical companies, whose drugs have been recalled or have unanticipated or undisclosed side effects. Examples of cases involving major pharmaceutical companies include the recall of the drugs Redux and Pondimin by American Home Products after studies showed that the drugs caused heart valve defects. After the medications were recalled in September 1997 many lawsuits were filed. The company has paid out $12 billion to patients affected by the drugs.[7] Additionally, those who have been affected by the negligence of others, including automobile crash and medical malpractice victims, are among the targeted group. These prospective clients seek damages for their medical bills, pain, and suffering.

In the top 75 television markets nationwide, 2,000 lawyers advertise on television and spend close to $200 million collectively on advertising.[7] The Majority of Lawyer advertising still follows the formulae created by Sackett and his group.While no one company makes the majority of the television ads, Mr. Sackett’s firm is considered the leader in the field with over 400 TV ads produced annually with its two studios and traveling location crews. With lawyers in over 65 cities under contract the Group Matrix firm remains in the leadership position. It is also the oldest firm with its roots going back to 1971 when it began serving the retail industry throughout the deep South before adopting the legal community as its sole specialty.Twenty percent of low-income households who have sought after legal counsel or advice have found their lawyer through the lawyer’s advertisements.[8]

It is estimated that 75 percent of law firms advertise.[1] Research has suggested that the smaller the firm the more likely they are to advertise. According to an article published in the Service Marketing Quarterly, 94% of Americans are familiar with lawyer television advertisements. It is the belief of Michael Parkinson and Sabrina Neeley of the Service Marketing Quarterly that the success of legal advertisements can be measured by the number of litigation claims. Within the past ten years the number of third party claims, claims brought before a court by a defendant claiming that another party is liable for damages, has more than doubled.[1]

Public perception

In the Bates v. State Bar of Arizona case, the Arizona State Bar argued against advertising by law firms because they believed that advertising would place too much burden on the legal system. They believed that the advertising may be too effective and dangerously increase litigation. They also believed that lawyers would raise the cost of their services in order to compensate for their increased overhead due to the additional cost of advertising. Another fear was that the legal profession would be viewed as a common trade rather than the noble profession they believed they were part of. They also believed that the public could not protect themselves against false advertisements that they thought would go hand in hand with allowing advertising. The bar also argued that legalizing advertising would cause more and more people to pursue a career in law. This was a result of a study that showed that between the years of 1951 and 1971 the number of lawyers increased by 326%. They also believed that an increase in advertising would promote a larger client base and would make it harder for lawyers to serve their clients.[1]

Regulations

Individual bar associations continue to restrict and regulate advertisements. For example, New York print ads are only allowed to contain the address and phone number and only print specialties unless the firm is licensed in that specialty. The ABA as a whole has also laid down a legal standard that regulates advertising. “The state may prohibit speech that is false or misleading. If the communications are truthful and non-deceptive, the state may limit [advertisements] if the state asserts a substantial government interest. The regulation under scrutiny must directly advance state interest. The regulation must be a reasonable fit narrowly tailored to achieve the desired objective.[8] There has been a constant battle between law firms and the ABA since lawyer advertising was made legal. Court cases that have been filed challenging advertisements involve advertising that is absurd to crude but more often than not the advertiser wins as courts uphold the lawyer’s right of free speech. For example, a case in Florida is being reviewed by the Supreme Court of Florida in which lawyers began sent direct-mail solicitations to those who had been affected by wrongful-death or personal injury.[8]

New forms

The advent of the internet has reduced to one-time dominant yellow pages to an arcane listing that does not include cell phones. Victim use of the internet as the phone and location reference listing has virtually rendered the yellow pages as extinct, especially in the urban areas. The Group Matrix model leads the field with a Digital Division supplementing the broad reach of its Television Division Legal advertisers with large visibility can now pinpoint clients in a variety of demographics and geographies with messages that form a synergism with their Broadcast and Cable images. While there are thousands of “internet” advertising firms and many TV producers, the combination of which Group Matrix is the prime example are the most effective for increasing client base.

The Internet has made it easier for law firms to find potential clients who have been victims of personal injury or have been victims of the adverse effects of drugs. It also helps victims find a lawyer to represent their case. According to the District of Columbia Bar Ethics Opinion 302, “It is permissible for lawyers to use Internet-based web pages to seek plaintiffs for class action lawsuits, provided they comply with all applicable D.C. Rules of Professional Conduct. It also is permissible for lawyers to obtain legal work through Internet-based web pages on which potential clients post requests for bids on legal projects.” A recent study conducted by the Canadian Medical Association Journal cataloged the number of internet hits relating to websites that advertised representation for those who had possibly been affected by the drug gatifloxacin after the U.S. Food and Drug Administration (FDA) issued a warning about the drug and its connection to the development of hyperglycemia and hypoglycemia. They continued to monitor these websites for four months. The data they collected showed a rapid increase of hits to these websites, especially after the drug had been removed from the market.[9]

The United States Chamber of Commerce Study on Lawyer Internet Advertising

Search engines, such as Google, sell keywords, which help ads appear closer to the top of the search results page, to lawyers that the lawyers perceive as having high claim values.[10][11] According to a report conducted by the United States Chamber of Commerce, the word with the highest value on the Internet is mesothelioma, a disease with no known cure that a person may acquire after exposure to asbestos.[10][11] Topping the spending list for advertising was a law firm identified as spending over $16 million a year for online advertising.[10][11] The study details the online networks, websites and investments of lawyers who make large investments in online advertising.[11]

See also

References

  1. 1 2 3 4 5 Parkinson, Michael G., and Sabrina Neeley. "Attorney Advertising: Does It Meet Its Objective?" Services Marketing Quarterly. 24.3 (2003).
  2. ↑ Reichstein, Kenneth J. "Ambulance Chasing: A Case Study of Deviation and Control Within the Legal Profession". Society for the Study of Social Problems. 13.1 (1965): 3-17.
  3. 1 2 3 4 5 6 7 Morgan, Thomas D. Legal Ethics (2005), p. 145.
  4. 1 2 Bates v. State Bar of Arizona, 433 U.S. 350 (1977).
  5. ↑ Journal of Accountancy 143.5 (1977): 27-28.
  6. ↑ "'Heavy hitter' thriving behind ad campaign - Memphis Business Journal". Memphis Business Journal. Retrieved 2016-03-29.
  7. 1 2 Freedman, Michael. "New Techniques in Ambulance Chasing." Forbes. 168.12 (2001): 56-8.
  8. 1 2 3 Fulkerson, Jennifer. "When Lawyers Advertise". American Demographics. 17.6 (1995): 54-6.
  9. 1 2 3 Alison Frankel. "Plaintiffs' lawyers spend millions in online ads. Should we care?".
  10. 1 2 3 4 Institute of Legal Reforms. "The Plaintiffs' Bar Goes Digital" (PDF).
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