Legal Ethics and Marketing

My mistake on Virginia's Rule on Confidentiality

Yesterday I posted about In re Hunter, a Virginia disciplinary matter that addressed ethics obligations regarding blog posts. A three-judge panel upheld Hunter’s right to blog about cases without his client’s consent. I wrote that there are different state standards governing confidentiality and that bloggers should not depend on this decision because they may be in states that impose a higher standard on client confidentiality. I ended my post by encouraging states to adopt a rule like that of Minnesota, which prohibits a lawyer from revealing information related to the representation, but has the following exception, which seems to neatly enable marketing through blogs and other communications: A lawyer may reveal information relating to the representation of a client if “the information is not protected by the attorney-client privilege under applicable law, the client has not requested the information not be held inviolate, and the lawyer reasonably believes the disclosure not be embarrassing or likely detrimental to the client.”

I got that much right, but here’s what I got wrong. I had thought that Virginia was one of the states that prohibit lawyers from revealing “secrets and confidences” and therefore if the information is public knowledge, and no longer a secret, the lawyer may reveal that information. After looking at this case in a little more detail, I realize that Virginia has the same language as Minnesota.

My basic point remains the same – folks should not rely on a decision from one state when the rules of their state are different. But it is important also be clear about the rule at issue here.

Blogs and Client Confidentiality - a tale of two rules

Yesterday, Sharon D. Nelson posted on her blog, Ride the Lightning, about In Re Hunter. Several months ago, Virginia’s disciplinary office brought two charges against a lawyer because of the content of his blog. One charge claimed that the blog was an advertisement and as such the lawyer was in violation for failing to include a disclaimer required by the Virginia Rules. The other charge claimed that the lawyer violated his obligation of confidentiality because he blogged about client’s cases.

The Bar prevailed on both counts. The blog was determined to be an advertisement, and there was no dispute that the lawyer did not include the disclaimer. And, information on the blog was determined to have revealed confidential information. Last week, a three judge panel heard an appeal of both issues. The panel determined that the blog was an advertisement and upheld the disciplinary charge finding the lawyer failed to comply with the advertising rules. However, the panel did not uphold the disciplinary finding that the information violated the client’s confidences. The key to this decision is that the information the lawyer blogged about was publically available information.

So, the question becomes whether a lawyer may blog, or otherwise communicate information in advertising material, about the representation if that information is otherwise publically known or available. Here’s the problem with coming to that conclusion – the states have different standards governing the lawyer’s obligation to maintain information confidential. Virginia and a minority of states have an ethics rule (usually Rule 1.6) that requires a lawyer to maintain “secrets and confidences.” On the other hand, Rule 1.6 of the ABA Model Rules of Professional Conduct and the majority of states that have adopted it require that a lawyer not reveal “information relating to the representation.”

Seemingly, “information relating to the representation” is far broader than “secrets and confidences” in the marketing arena. If information is public knowledge, it is hardly a secret. However, “information relating to the representation” clearly, in my mind, covers information that is publically available. It is the client’s right that the lawyer not reveal information. Under either version of the rule, the client may provide consent for the lawyer to reveal the information. But, that decision rests with the client, and in the Model Rules states, that decision is designed to extend to information that may otherwise be publically known.

So, folks should be cautious about giving weight to the Hunter outcome. It is quite possible, if not likely, the decision would have been different in a Model Rule state.

One more wrinkle to this – Minnesota Rule 1.6 prohibits a lawyer from revealing information related to the representation, but has the following exception, which seems to neatly enable marketing through blogs and other communications: A lawyer may reveal information relating to the representation of a client if “the information is not protected by the attorney-client privilege under applicable law, the client has not requested the information not be held inviolate, and the lawyer reasonably believes the disclosure not be embarrassing or likely detrimental to the client.” Now, that’s a rule the states should get behind.

When is the cost of advertising reasonable?

A recent article in the ABA Journal discusses the use of what it calls "deal-of-the-day" coupons, in other words, the GroupOn model, as a method of client development. The article looks at aspects of three state ethics opinions that all come to the conclusion that with certain precautions the model is acceptable. Since the article was written, a fourth state has come to the opposite conclusion.

The issues examined by the ethics opinions and noted in the article include fee-splitting and misleading communications. However, one of those commenting on this article added another perspectice, which I had not thought of -- that is whether the cost of the "split" is a "reasonable cost."

ABA Model Rule 7.2(b) and its state counterparts prohibit a lawyer from giving anything of value for the recommendation of the lawyer's services. One of the exceptions to this prohibition is the "reaonable costs of advertisements." In other words, a lawyer may pay the "reaonable costs" of advertisements. But here's the problem -- In a system where the lawyer must assume the risk of ROI, how do we measure a reasonable cost.

In the 1990s, the ABA conducted a study of the Yellow Pages. It found that about 20% of lawyers brought in less fees than the cost of their ads and an additional 10% only broke even. Nearly a third of the lawyers with Yellow Pages ads did not make any profit from them. So, was the cost of the advertisements reasonable to them? What about for lawyers who spent 90 cents to make a dollar, or 50 cents? Where does it become reasonable and how is it possible to determine reasonableness prospectively?

The problem is that the rule presumes a lawyer will know the rate of return and be able to avoid excessive costs, when a lawyer has no ability to predict this. On the other hand, the deal-of-the-day model enable the lawyer to know the rate of return going into the deal, which, as I understand it, is as high as a 50-50 split.

So, is it possible that Rule 7.2(b) actually says that it is permissible for a lawyer to buy ad space in a directory where the lawyer ultimately gets no return (or looses money), but it is impermissible for that lawyer to enter into a deal-of-the-day agreement where the lawyer gets half of the fees that are generated from the advertisement? That doesn't sound reaonable at all.

The fleet-footedness of deceptive marketing

Recently I was gathering material for a program and wanted to illustrate Google’s local search function. As I understand it, when someone searches for a service or product in a specific location, the matrix for the organic search gives priority to those with a Google profile and consumer reviews. So, if you search “Los Angeles divorce attorney,” the first page of the search includes a series of local law firms, with maps to their offices and links to their profiles and reviews.

The first thing I noticed when I did this is that Google doesn’t care what the content of the reviews say, only that there are reviews. A company, or law firm, can go to a competitor's profile and write a review that runs down the firm being “reviewed” or that does nothing more than blatantly use the review platform to praise their own firm or company.

Actually this was the second thing I noticed. The first thing I noticed was that the reviews were more often than not giving high praise and don’t really sound like real clients. I then drilled down, and this is what I thought was interesting. After searching “Los Angeles divorce attorney,” I clicked on one of the firms coming up under the local search feature. According to the review by “Lenny,” this firm did an excellent job and calmed his irate wife. Then I clicked on “Lenny” to see who else he reviewed. It turns out, he wrote 10 reviews over a six-week period in 2010. Seven of them were for law firms, six of which were divorce firms. In addition to that LA firm that did an excellent job, the firm is Toledo was a “real good experience;” the one in El Paso was “affordable;” the one in Greenville “helps you understand your options;” and the one in Philadelphia has a “high-quality reputation.” (Is this guy in the Grateful Dead -- "I've got a wife in Reno, baby, and one in Cherokee?)

Same thing happened with “Donald” – 12 reviews, nine of which were for law firms in as many states.

So, if you are a lawyer interested in getting on the first page of an organic search when potential clients use Google to seek a lawyer in your town and field of practice, it seems you can hire a company to provide you with fake reviews to optimize that possibility.

On one level, this is such blatant fraud. On another, it is so subterranean that no one figures it out. What a great example of the fleet-footedness of deceptive marketing.

Free CLE - Sort of...

For the past 20 years I have been presenting CLE programs for bar associations and marketing organizations. These programs have centered on the ethics of client development in various forms, including the use of technology and new media. From time to time law firms have asked me to participate in their programming. I've been reluctant to do this since it is outside of the scope of my day job and compensation for this type of service is complicated. So, I've reconciled this by offering free CLE presentations to law firms in exchange for their pledge to donate to a pro bono project. Not really "free." I get that, but it is a win-win. Let me know if your firm is interested. It's a standing offer.

I'm Back!

For years now I have treated this blog like the child who really really wanted a Christmas present, only to finally get it, play with it a few times and put it on a closet shelf. I came to the conclusion that I was a tweeter and not a blogger. But now I'm starting to get that they go hand in hand. I need a blog to expand on ideas - so I'm back. I hope you find what I have to say of some interest.

And thanks to Kevin and his team at LexBlog for their patience and direction as I make this reentry.

Will

New Jersey Disclaimer Could be BIG

The New Jersey Supreme Court's Committee on Attorney Advertising has issued the latest in a string of ethics opinions imposing limitations on the use of the Internet for client development. Opinion 36, issued January 2, 2006, states that lawyers who pays a flat fee for an online listing and receives an exclusive listing for a county for a particular field of practice "must ensure that the listing or advertisement contains a prominently and unmistakably displayed disclaimer, in a presentation at least equal to the largest and most prominent font and type on the site, declaring that "all attorney listings are a paid attorney advertisement, and do not in any way constitute a referral or endorsement by an approved or authorized lawyer referral service."

Usually ethics opinions are presented as sources of direction that fall short of legal authority. But this opinion states that a lawyer "must" ensure that the advertiser provide this specific disclaimer. Some might conclude that this should be the role of the court itself and, if important enough, the court should change its rule to provide such a requirement.

The Strong Arm Gets Muscled

The Colorado Supreme Court has rules that the Colorado Consumer Protection Act applies to lawyers and held that a law firm client who believes he was strong-armed into a low-ball settlement can sue under the law and seek triple damages from his lawyer. According to an AP article, the lawyer believes the suit is frivolous.

States have come down on different sides of the fence on the applicability of consumer protection acts against lawyers. Some courts conclude that if the law does not specifically state that lawyers are covered, they are not, since lawyers are regulated by the courts and not the legislature under the separation of powers doctrine. Other courts have concluded that lawyers are subject to such statutes in addition to the regulation of the courts. Some of these cases are discussed in "Spamming for Legal Services: A Constitutional Right within a Regulatory Quagmire" 22 John Marshall Journal of Computer & Information Law, 97 (2003).

Marketing is always ahead of regulation - Always

According to an article in the Guardian, a UK group called Nationwide Accident Services, which specializes in personal injury actions, has developed a word-search puzzle for children. The game involves circling words in a box of jumbled letters. The puzzles have been placed in hospitals and doctors' offices so that kids have something to do while waiting for their appointments. Here's the good part - The words include phrases such as "claim today," "compensation" and "no win, no fee." What's next? Maybe fortune cookie messages.

MADD is Mad at DUI Defense Advertising

According to the CBC, a Canadian chapter of Mothers Against Drunk Drivers is disturbed by the advertising of the Impaired Driving Office on behalf of criminal defense lawyers interested in impaired-driving cases. The ads appear on city buses in various Canadian provinces, but have been taken off of the buses in at least one city as a result of the complaints lead by MADD. The issue represents competing policies. Does the advertising give a green light to those who might drink and drive, or does it help people obtain legal counsel when they've been charged?

Branding or Name Blame?

Can a firm brand itself by using one name, when that name is shared with another firm? That's the issue reported in American Lawyer, as Foley & Lardner seeks to be known simply as "Foley" over the objection of Foley Hoag. The conflict began when Foley & Lardner sought to register a logo with the PTO. Foley Hoag claims the prominent use of Foley will create confusion. Meanwhile Foley & Lardner has the domain name www.foley.com., but www.foley.net looks like it's up for grabs. As this moves to conclusion, you have to wonder if a firm can trademark a letter -- like the big round "O"?

A Lawyer's Good Name -- Take it or leave it

The Connecticut Law Tribune reports on a lawyer suing his former firm because the firm didn't remove his bio from the firm's web site. Robert P. Murphy filed against Del Sole and Del Sole after opening a new practice and registering with various search engines. He learned that he was "widely listed as still being associated with the firm" and claims the firm misrepresented his status by not promptly removing his name. Murphy claims his information was not removed form the firm's site for more than a year. It's hard to tell how much time is reasonable to avoid creating a misrepresentation, but appears obvious that firms need to pay attention to their stale cyberspace information.

Associations Weigh In on Policies

Two vastly different professional associations are advancing policies on client development issues: The West Virginia Trial Lawyers Association and the Legal Marketing Association.

]]> According to Lawyers Weekly USA, the West Virginia Trial Lawyers Association has promulgated a voluntary code of conduct governing solicitation, which was passed by the association's board in September. Some of the guidelines appear to be coterminous with ethics rules, e.g. prohibitions against going to the site of tragedy to solicit clients and filing frivolous suits. Others are unique, e.g. not contacting the media for at least 10 day after an event. Although the guidelines are positioned as voluntary, violators could be expelled from the association. Next up, recommendations on lawyer advertising.

On the other hand, the Legal Marketing Association, a national group of about 2,500 law firm marketers and vendors, is considering its first policy recommendation. The policy will encourage the states to adopt the ABA Model Rule provisions governing client development that resulted from the ABA Ethics 2000 initiative. The rules, which are being considered in several states, loosen the definition of "false and misleading," drop the requirement for firms to retain advertising copy for two years and permit lawyers to solicit business from other lawyers in-person. The LMA, however, encourages states to modify Model Rule 8.5, governing choice of laws, before enacting it. The rule currently provides, in part, "A lawyer not admitted to this jurisdiction is also subject to the disciplinary authority of this jurisdiction if the lawyer provides or offers to provide any legal services in this jurisdiction." LMA recommends the words "or offers to provide" be stricken from the rule. As written, the rule subjects lawyers in large firms to the rules of the states where the firms advertise, which is frequently every state.

Name That Client

Marketing, even the most traditional types, often includes reference to clients or case information. Listing "representative" clients in a directory like Martindale-Hubbell goes back to near the beginning of time. Clearly, web sites have expanded on this theme as firms include not only client names, but details about results. Sometimes the client names are omitted but the results are promoted.

But to what extent is a lawyer obligated to maintain the representation of a client confidential? I have always thought that a lawyer must keep the client's identity secret, even if the representation is public knowledge, unless the client consents to reveal the existence of the representation or outcome of the case. From time to time ethics experts have disagreed with that position, indicating that it is acceptable to reveal a client's name if it is general public knowledge. I never understood why. After posting the question on a listserv for legal ethicists, I've figured it out.

]]> ABA Model Rule 1.6, which is in effect in many states, says "A lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent, the disclosure is impliedly authorized in order to carry out the representation or the disclosure is permitted by paragraph b." Paragraph (b) does not include any exceptions that pertain to this issue. This is no wiggle room under this rule. The fact that the law firm represents the client is the client's confidence. The lawyer has no right to use that information for his or her marketing, without the client's informed consent. "Informed consent" incidentally suggests that a client cannot consent in total at the beginning of the engagement, but must know the details of the marketing usage prior to consenting. Therefore, under ABA Model Rule 1.6, a lawyer cannot list a client in promotional material, even a directory listing, without the client's consent.

However, other states have a variation of this rule. For example, Virginia's Rule 1.6 states, "A lawyer shall not reveal information protected by the attorney-client privilege under applicable law or other information gained in the professional relationship that the client has requested be held inviolate or the disclosure of which would be embarrassing or would be likely to be detrimental to the client unless the client consents after consultation..."

So, while the Model Rule states have a broad ban on such disclosures, other states, like Virginia appear to permit disclosure unless it is embarrassing or detrimental. In the case of marketing, particularly where the relationship is generally known to the public, it is hard to see where disclosure of the existence of the representation would be embarrassing or detrimental. Hence two different rules, two different results.

Of course, most marketers would ask how it could ever be good business to list a client or case information without asking the client. But that's business and this is ethics.

Are Cute Puppies Okay?

There's a lot of reaction to the Supreme Court of Florida decision to sanction lawyers for their use of Pit Bulls in their advertisements, and it ranges from critical to scathing. That may be expected from lawyers, most of whom now use various client development methods to get business while a few others tend to embrace the First Amendment. Take a look at Carol Elefant's blog, My Shingle, for a dialogue between lawyers on the court's obligation to protect the public and its over-reaching protectionism. All but one of those posting comments is critical of the decision. No one is as critical as David Giacalone, who has a contest to find a symbol for Florida's high court. Contenders include a number of birds - the dodo, the cuckoo and the ostrich. Yikes.

]]> But lawyers aren't the only ones troubled by The Florida Bar v. Pape. The voice of the public, as filtered through newspaper editorials, has shown the decision is not popular in the court of public opinion. The Pantagraph, in Central Illinois, ran an editorial asking if the court would have preferred kittens or teddy bears? "We would agree the ad does nothing to enhance the legal profession, but neither does the Florida Supreme Court's lack of a sense of humor." The St. Petersburg Times was more pointed. It stated the harm in question was the dignity of the legal profession, but the real harm was to the First Amendment. "But the court is kidding only itself if it thinks that censoring the profession's advertising will make lawyers look like pussycats to the people who have felt their claws."