CONDUCT AND THE TASK FORCE ON LAWYER ADVERTISING

UREPORT OF THE COMMITTEE ON STANDARDS OF ATTORNEY CONDUCT AND THE TASK FORCE ON LAWYER ADVERTISING U ON U CHANGES TO THE NEW YORK RULES OF PROFESSIONAL CONDUCT IN LIGHT OF ALEXANDER V. CAHILL In light of the decision in UAlexander v. CahillU, 598 F.3d 79 (2d Cir. 2010), the New York State Bar Association Committee on Standards of Attorney Conduct (COSAC) and the State Bar s Task Force on Lawyer Advertising separately considered what recommendations to make to the Administrative Board in connection with the Rules regarding advertising by lawyers that the Court found to be unconstitutional or construed so as to avoid constitutional problems. COSAC and the Task Force reached similar conclusions and have agreed on this Joint Report that sets forth their recommendations regarding the Rules stricken or narrowed by the Second Circuit s decision. In brief, COSAC and the Task Force recommend that Rules 7.1(c)(1), (5) and (7), as well as Rule 7.1(g)(1), be stricken because they cannot be replaced with narrower provisions that are likely to withstand constitutional scrutiny other than by repeating, with respect to each prohibition, the overall prohibition on misleading advertisements. This would be confusing and create problems of its own. We recommend that these provisions be replaced with the term [Reserved], consistent with the convention elsewhere in the Rules where there are gaps in numbering. By contrast, we recommend that Rule 7.1(c)(3) should be revised to incorporate the Second Circuit s limiting interpretation of the prohibition on portrayal of a fictitious law firm and to collect various ways in which the portrayal of a sitting judge would be improper. If the foregoing recommendation that Rule 7.1(c)(1) be stricken is accepted, we recommend that a cross-reference to that Rule in Rule 7.1(d)(3) should likewise be stricken. 1

Rules 7.1(c)(1), (5) and (7) and Rule 7.1(g)(1) Redrafting v. Striking COSAC and the Task Force first considered whether an attempt should be made to redraft the stricken provisions in order to meet the constitutional objections to certain of the Rules. Rule 7.1(c)(1). Rule 7.1(c)(1) prohibited advertisements that included an endorsement of, or testimonial about, a lawyer or law firm from a client with respect to a matter still pending. The Second Circuit held Rule 7.1(c)(1) unconstitutional because the Court found that the Rule did not materially advance an interest in preventing misleading advertising, finding that such testimonials are not inherently misleading. Alexander v. Cahill, 598 F.3d at 92. Furthermore, to the extent that the prohibition did advance the interest in preventing misleading advertising, the Second Circuit held that it was not narrowly tailored to advance that interest, because it prohibits a category of advertising speech that is potentially misleading, but is not inherently or actually misleading in all cases. Id. at 96. Under the Second Circuit s reasoning, a prohibition against client testimonials could withstand constitutional scrutiny only to the extent that it prohibits client testimonials that are actually, rather than potentially, misleading. Because Rule 7.1(a)(1) already prohibits advertisements that contain statements that are false, deceptive, or misleading, any narrower prohibition of client testimonials would merely be duplicative of this general prohibition. Rule 7.1(c)(5). Rule 7.1(c)(5) prohibited advertisements that relied on techniques to obtain attention that demonstrate a clear and intentional lack of relevance to the selection of counsel, including the portrayal of lawyers exhibiting characteristics clearly unrelated to legal competence. The Second Circuit held that Rule 7.1(c)(5) s prohibition on the use of advertising techniques that are irrelevant to the practice of law did not materially advance any interest in preventing misleading advertising, because it found no evidence that such techniques are likely to mislead; to the contrary, the Court found that such techniques do not actually seem likely to mislead. 598 F.3d at 94. As with the prohibition against client testimonials, the Court held that the prohibition of irrelevant techniques was not narrowly tailored because it addressed content that was merely potentially misleading. As a result, the prohibition cannot reasonably be narrowed in a way that would address any conduct other than conduct already addressed by Rule 7.1(a)(1) s prohibition against false, deceptive, or misleading advertising. Rule 7.1(c)(7). Rule 7.1(c)(7) prohibited advertisements that utilize a nickname, moniker, motto or trade name that implies an ability to obtain results in a matter. The Second Circuit held that, although the use of nicknames, mottos, or trade names that imply an ability to obtain results is usually misleading, Rule 1.7(c)(7) s prohibition against using such names is nonetheless unconstitutional because it prohibits such descriptors... even when they are not 2

actually misleading. 598 F.3d at 95. As with the other prohibitions, because the Second Circuit s reasoning appears to support only a prohibition against trade names that are actually misleading, any conduct that would be prohibited by a reasonably narrowed prohibition is already prohibited by Rule 7.1(a) s general prohibition of false, deceptive, or misleading advertising. Moreover, Rule 7.1(d) and (e) specifically regulate advertisements that contain a broader category of statements that are reasonably likely to create an expectation about results the lawyer can achieve. The Rules require that the statements are capable of being factually supported and are accompanied by a specified disclaimer. There is no reason these safeguards do not also apply to nicknames, monikers, mottos and trade names (to the extent trade names can be used at all under Rule 7.5(b)). Rule 7.1(g)(1). Rule 7.1(g)(1) prohibited lawyers or law firms from utilizing a pop-up or pop-under advertisement in connection with computer-accessed communications, other than on the lawyer or law firm s own web site or other web presence. The Northern District of New York struck the provision, rejecting the argument that a categorical ban on pop-up and popunder advertisements was necessary because their fleeting nature is such that the State could not enforce lesser restrictions, and noting that the prohibition go[es] beyond regulating potentially misleading advertisements to prohibit bland, entirely truthful advertisements. Alexander v. Cahill, 634 F. Supp. 2d 239, 251 n.13 (N.D.N.Y. 2007). Although this provision was not addressed on appeal, the Second Circuit s reasoning would appear to support only a prohibition against pop-up or pop-under advertisements that are misleading, rather than such advertisements that are truthful or merely potentially misleading. As a result, as with the other prohibitions, this prohibition cannot reasonably be narrowed in a way that would address conduct other than conduct already addressed by Rule 7.1(a)(1) s prohibition against false, deceptive, or misleading advertising. We note that, like all other advertisements, pop-up or pop-under advertisements are required to be retained by the advertising law firm or lawyer for a period of at least three years. More generally, while we have not considered the advisability or policy bases for these rules, we believe that each of the foregoing provisions operated around the edges of the central prohibition on misleading advertisements. As a consequence, we conclude that the principal goals of the stricken Rules can be achieved within the remaining Rules after Alexander v. Cahill. COSAC and the Task Force considered as a possible alternative appending the phrase in such a manner as to be false, deceptive or misleading (or a similar phrase) to each of the foregoing rules. We concluded that this would not be wise, because it would add nothing substantive to the existing prohibition on false or misleading advertising, would provide no useful guidance as to what would be misleading, and would be inconsistent with the other provisions in the same Rule that do not include that qualifier. The inconsistency in particular would likely lead to confusion and unintended results and increase the chances of a constitutional challenge to the remaining provisions succeeding. For example, Rule 7.1(c)(4) requires disclosure that actors are being used. If other provisions in the same rule were expressly limited to, for example, misleading attention-getting devices or mottos, the absence of such a 3

qualification in the case of the rule on use of actors would be argued to suggest that it was specifically intended to require disclosure even when the advertisement was not misleading. Such drafting could well increase the likelihood that such a challenge would be successful. Accordingly COSAC and the Task Force recommend that rather than redrafting, the stricken provisions should be removed from the Rules. Method of Showing Stricken Provisions COSAC and the Task Force considered various methods by which the Rules could indicate the stricken provisions. We concluded that a line through or a deletion with renumbering would be cumbersome and confusing. Instead, we recommend using [Reserved] for the stricken Rules. This is consistent with the convention in other parts of the Rules and avoids the confusion which might arise by renumbering. Rule 7.1(c)(3) Rule 7.1(c)(3) prohibits advertisements that include the portrayal of a judge, the portrayal of a fictitious law firm, the use of a fictitious name to refer to lawyers not associated together in a law firm, or otherwise imply that lawyers are associated in a law firm if that is not the case. The Second Circuit struck the prohibition of portrayals of judges, and upheld the prohibition of portrayals of fictitious law firms, subject to a limiting interpretation discussed below. COSAC and the Task Force believe Rule 7.1(c)(3) should be redrafted to include a narrower prohibition on the portrayal of judges that we believe is likely to withstand constitutional scrutiny, and to incorporate the limiting interpretation on the law-firm prohibitions.. Portrayal of a Judge The Second Circuit held that a wholesale prohibition on portrayals of judges in advertising could not withstand constitutional scrutiny. 598 F.3d at 92-93. Here, COSAC and the Task Force believe that a Rule could usefully pull together several ways in which the portrayal of a judge would be misleading: if the judge is sitting, the advertisement might give the misleading impression of a relationship between the judge and the advertising lawyer, suggest an ability to improperly influence the court and, if used without the judge s consent, be tortious, see N.Y. CIVIL RIGHTS LAW 51 (providing a cause of action for any person whose name, portrait, picture or voice is used within this state for advertising purposes without written consent). Thus, the rule might prohibit: the portrayal of a sitting judge (i) in a manner so as to give the impression of a relationship between the judge and the advertising lawyer, (ii) in a manner so as 4

to suggest an ability to improperly influence the court, or (iii) where tortious or otherwise prohibited by law or court rule. Alternatively, this part of the Rule could be stricken and these points could be covered in a new Comment, leaving the actual Rule silent on the subject. Fictitious Law Firm The Second Circuit reinstated the portion of the Rule prohibiting the portrayal of a fictitious law firm, but subject to a limiting interpretation that the prohibition is of such a portrayal that is actually misleading as to the existence or membership of a firm. 598 F.3d at 89-90. COSAC and the Task Force recommend that the Rule be re-drafted to adopt this construction and make it explicit. An amended version thus would prohibit advertisements that: imply, as by the portrayal of a fictitious law firm or the use of a fictitious name, that lawyers are associated together in a law firm if that is not the case. (Because our suggested revision of the provisions regarding portrayals of sitting judges results in a relatively lengthy provision, we suggest that this proposed provision on portrayals of fictitious law firms be moved to fill the spot vacated by striking paragraph (c)(5) of the Rule.) Rule 7.1(d)(3) Rule 7.1(d)(3), dealing with testimonials or endorsements of clients, makes reference to paragraph 7.1(c)(1), which has now been stricken. COSAC and the Task Force recommend that, if the foregoing recommendation not to attempt to revise Rule 7.1(c)(1) is accepted, the phrase where not prohibited by paragraph (c)(1), should be deleted from this Rule. * * * * A black-lined version of Rule 7.1 showing the changes we recommend is attached as Appendix A. 5

APPENDIX A RULE 7.1 ADVERTISING (a) A lawyer or law firm shall not use or disseminate or participate in the use or dissemination of any advertisement that: (1) contains statements or claims that are false, deceptive or misleading; or (2) violates a Rule. (b) Subject to the provisions of paragraph (a), an advertisement may include information as to: (1) legal and nonlegal education; degrees and other scholastic distinctions; dates of admission to any bar; areas of the law in which the lawyer or law firm practices, as authorized by these Rules; public offices and teaching positions held; publications of law related matters authored by the lawyer; memberships in bar associations or other professional societies or organizations, including offices and committee assignments therein; foreign language fluency; and bona fide professional ratings; (2) names of clients regularly represented, provided that the client has given prior written consent; (3) bank references; credit arrangements accepted; prepaid or group legal services programs in which the lawyer or law firm participates; nonlegal services provided by the lawyer or law firm or by an entity owned and controlled by the lawyer or law firm; the existence of contractual relationships between the lawyer or law firm and a nonlegal professional or nonlegal professional service firm, to the extent permitted by Rule 5.8, and the nature and extent of services available through those contractual relationships; and (4) legal fees for initial consultation; contingent fee rates in civil matters, when accompanied by a statement disclosing the information required by paragraph (p); range of fees for legal and nonlegal services, provided that there be available to the public free of charge a written statement clearly describing the scope of each advertised service, hourly rates, and fixed fees for specified legal and nonlegal services. (c) An advertisement shall not: (1) [Reserved]; Sinclude an endorsement of, or testimonial about, a lawyer or law firm from a client with respect to a matter still pending;s (2) include a paid endorsement of, or testimonial about, a lawyer or law firm without disclosing that the person is being compensated therefor; 6

(3) include the portrayal of a sitting judge (i) in a manner so as to give the impression of a relationship between the judge and the advertising lawyer, (ii) in a manner so as to suggest an ability to improperly influence the court, or (iii) where tortious or otherwise prohibited by law or court rules or otherwise imply that lawyers are associated in a law firm if that is not the cases; (4) use actors to portray the lawyer, members of the law firm, or clients, or utilize depictions of fictionalized events or scenes, without disclosure of same; (5) imply, as by the portrayal of a fictitious law firm or the use of a fictitious name, that lawyers are associated together in a law firm if that is not the casesrely on techniques to obtain attention that demonstrate a clear and intentional lack of relevance to the selection of counsel, including the portrayal of lawyers exhibiting characteristics clearly unrelated to legal competences; (6) be made to resemble legal documents; or (7) [Reserved] Sutilize a nickname, moniker, motto or trade name that implies an ability to obtain results in a matters. (d) An advertisement that complies with paragraph (e) may contain the following: (1) statements that are reasonably likely to create an expectation about results the lawyer can achieve; (2) statements that compare the lawyer s services with the services of other lawyers; (3) testimonials or endorsements of clientss, where not prohibited by paragraph (c)(1),s and of former clients; or (4) statements describing or characterizing the quality of the lawyer s or law firm s services. (e) It is permissible to provide the information set forth in paragraph (d) provided: (1) its dissemination does not violate paragraph (a); (2) it can be factually supported by the lawyer or law firm as of the date on which the advertisement is published or disseminated; and (3) it is accompanied by the following disclaimer: Prior results do not guarantee a similar outcome. 7

(f) Every advertisement other than those appearing in a radio, television or billboard advertisement, in a directory, newspaper, magazine or other periodical (and any web sites related thereto), or made in person pursuant to Rule 7.3(a)(1), shall be labeled Attorney Advertising on the first page, or on the home page in the case of a web site. If the communication is in the form of a self-mailing brochure or postcard, the words Attorney Advertising shall appear therein. In the case of electronic mail, the subject line shall contain the notation ATTORNEY ADVERTISING. (g) A lawyer or law firm shall not utilize: (1) [Reserved] Sa pop up or pop under advertisement in connection with computeraccessed communications, other than on the lawyer or law firm s own web site or other internet presence; ors (2) meta tags or other hidden computer codes that, if displayed, would violate these Rules. (h) All advertisements shall include the name, principal law office address and telephone number of the lawyer or law firm whose services are being offered. (i) Any words or statements required by this Rule to appear in an advertisement must be clearly legible and capable of being read by the average person, if written, and intelligible if spoken aloud. In the case of a web site, the required words or statements shall appear on the home page. (j) A lawyer or law firm advertising any fixed fee for specified legal services shall, at the time of fee publication, have available to the public a written statement clearly describing the scope of each advertised service, which statement shall be available to the client at the time of retainer for any such service. Such legal services shall include all those services that are recognized as reasonable and necessary under local custom in the area of practice in the community where the services are performed. (k) All advertisements shall be pre-approved by the lawyer or law firm, and a copy shall be retained for a period of not less than three years following its initial dissemination. Any advertisement contained in a computer-accessed communication shall be retained for a period of not less than one year. A copy of the contents of any web site covered by this Rule shall be preserved upon the initial publication of the web site, any major web site redesign, or a meaningful and extensive content change, but in no event less frequently than once every 90 days. (l) If a lawyer or law firm advertises a range of fees or an hourly rate for services, the lawyer or law firm shall not charge more than the fee advertised for such services. If a lawyer or law firm advertises a fixed fee for specified legal services, or performs services described in a fee schedule, the lawyer or law firm shall not charge more than the fixed fee for such stated legal service as set forth in the advertisement or fee schedule, unless the client agrees in writing that the services performed or to be performed were not legal services referred to or implied in the 8

advertisement or in the fee schedule and, further, that a different fee arrangement shall apply to the transaction. (m) Unless otherwise specified in the advertisement, if a lawyer publishes any fee information authorized under this Rule in a publication that is published more frequently than once per month, the lawyer shall be bound by any representation made therein for a period of not less than 30 days after such publication. If a lawyer publishes any fee information authorized under this Rule in a publication that is published once per month or less frequently, the lawyer shall be bound by any representation made therein until the publication of the succeeding issue. If a lawyer publishes any fee information authorized under this Rule in a publication that has no fixed date for publication of a succeeding issue, the lawyer shall be bound by any representation made therein for a reasonable period of time after publication, but in no event less than 90 days. (n) Unless otherwise specified, if a lawyer broadcasts any fee information authorized under this Rule, the lawyer shall be bound by any representation made therein for a period of not less than 30 days after such broadcast. (o) A lawyer shall not compensate or give anything of value to representatives of the press, radio, television or other communication medium in anticipation of or in return for professional publicity in a news item. (p) All advertisements that contain information about the fees charged by the lawyer or law firm, including those indicating that in the absence of a recovery no fee will be charged, shall comply with the provisions of Judiciary Law 488(3). (q) A lawyer may accept employment that results from participation in activities designed to educate the public to recognize legal problems, to make intelligent selection of counsel or to utilize available legal services. (r) Without affecting the right to accept employment, a lawyer may speak publicly or write for publication on legal topics so long as the lawyer does not undertake to give individual advice. 9