Advertising_of_the_Legal_Industry Tutorials
Advertising of the legal industry refers to the advertisement of services by lawyers and law firms. Legal advertisements take various forms including, print ads, television ads, radio ads, yellow page ads, and most recently internet advertising. Legal advertisements are typically published by tort lawyers. This branch of law includes, personal injury, medical malpractice, negligence, and product liability cases. People who seek tort lawyers are generally looking to be compensated for harm or damages caused by someone else. Before the Canons of Professional Ethics were published by the American Bar Association (ABA) in 1908, advertising within the legal profession was common practice [1]. The ABA believed that lawyer advertising was unprofessional and shined 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,” according to an article written by Kenneth Reichstein [2]. The Bar wanted to prevent the bringing fourth 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 letterheads, 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.” In 1972 John Bates and Van O’steen were admitted to the Arizona State Bar [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. They focused their practice on uncontested court cases such as, divorce, adoption, simple bankruptcy cases, and name changes. 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 [4]. They quickly 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 Arizona State Bar acted quickly and reviewed the case. Both Bates and O’steen were suspended from practicing law for six months in accordance with the regulations of the Arizona State Bar [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 Arizona 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 (Morgan). The United States Supreme Court recognized that they had the power to review judicial decisions of lower courts and set the case for argument. The Chief Justice of the United State Supreme Court, who at the time was Warren E. Burger, quickly 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 by the Supreme Court case, 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 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. They stated, “Arizona’s ban of advertising inhibits the free flow of information and keeps the public in ignorance” [3]. The United States 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]. Initially the majority of lawyer advertisements were directed at “slip and fall” victims [6]. As advertising has expanded, becoming more commonplace and acceptable, most advertisements are now directed to specific groups. 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 the company American Home Products after studies showed that the drugs caused heart valve defects. After the medications were recalled in September of 1997 many lawsuits were filed. The company has paid out $12 billion dollars to patients affected by the drugs [6]. Additionally, those who have been affected by the negligence of others, including automobile crash and medical malpractice victims, are among the targeted group. These perspective clients seek damages for their medical bills, pain, and suffering. In the top seventy-five television markets nation wide two-thousand lawyers advertise on television and spend close to $200 million collectively on advertising [6]. A majority of the advertisements seen on television are created by a large corporation called Network Affiliates Inc. which also produces medical advertisements. Most of these advertisements are directed at the low income market because other than the lawyer advertisements this group has little contact with lawyers, compared to those in the middle and upper classes [7] who already consult lawyers on such things as contracts and wills. 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 seventy-five 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]. During 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 cliental base and would make it harder for lawyers to serve their clients [1]. It is often thought by the general public that lawyer advertisements have tarnished the reputation of lawyers. On the contrary, a study conducted by Richard Cebula, of the Georgia Institute of Technology School of Economics, has shown that as lawyers cut costs due to increased volume the perception by the public has actually improved. The reduced costs have led their clients to feel they are being treated more fairly. The same study also shows that as the number of advertisements have increased so has a positive image with the public [9]. The ABA believes that advertisements have led to a decline in public perception, but studies show that this is not necessarily the case. The Cebula study contradicts other studies such as the Gallup Poll for 2008 that ranks professions according to their honesty and ethical rankings. The poll ranks lawyers 12th out of 21 professions (just above advertisers at 18th). A majority of people, however, ranked them in the average to low category when asked their opinion of the legal profession’s ethics and honesty [10]. 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 [11]. 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 [11]. Although advertising in phone books still remains the most popular and prominent in our society, new forms of advertising have emerged. Television advertisements are a relatively new form of advertising and are becoming increasingly more popular. The newest form of advertising by law firms and lawyers is over the internet. Problems have already occurred, including an instance were a lawyer sent hundreds of SPAM emails. He was suspended for this act [7] 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 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 [12]. |
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