Monday, October 1, 2007

Internet and Law Firm Marketing:

Continuation of excerpts from my 2000 LL.M. thesis, for research purposes.

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The ABA Commission on Advertising in 1998 issued a white paper entitled
AA Re-Examination of the ABA Model Rules of Professional Conduct Pertaining to Client Development in Light of Emerging Technologies@. (cf., American Bar Association [ABA] website).

It sought a re-examination of the current provisions of the Model Rules of Professional Conduct in the light of the birth of the new information and communication superhighway, specifically the Internet, the World Wide Web, and digital correspondence (e-mails). The ABA White Paper is extensively presented hereinbelow in view of its importance.

The use of the Internet by legal service providers creates a wide range of ethical issues. In addition to those aspects having to do specifically with lawyer advertising and solicitation, the application of rules on confidentiality, conflicts of interest, competence, unauthorized practice and multi-state jurisdiction come into question.
The legal profession and the organized bar in particular needs to address each of these issues in detail. (ABA website, supra).

According to the ABA White Paper, The nature of the Internet is described in detail in the district court decision in American Civil Liberties Union v. Reno. [929 F. Supp. 824 (E.D. Pa. 1996)].

Several factual findings are also set out in Cyber Promotions v. American Online, Inc. [948 F. Supp. 436 (E.D. Pa. 1996)]. They include:

*The Internet is ...a unique and wholly new medium of worldwide human communication;
* The content on the Internet is as diverse as human thought;"
* The Internet is a decentralized, global medium of communications -- or 'cyberspace' -- that links people, institutions, corporations, and governments around the world;
*Any person or organization with a computer connected to the Internet can 'publish' information. Publishers include government agencies, educational institutions, commercial entities, advocacy groups, and individuals. Publishers may either make their material available to the entire pool of Internet users, or confine access to a select group, such as those willing to pay for the privilege."52 However, there is no centralized point from which individual Web sites or services can be blocked from the Web.
* No single entity -- academic, corporate, governmental, or non-profit -- administers the Internet. It exists and functions as a result of the fact that hundreds of thousands of separate operators of computers and computer networks independently decided to use common data transfer protocol to exchange communications and information with other computers (which in turn exchange communications and information with still other computers.)"
* Anyone with access to the Internet may take advantage of a wide variety of communication and information retrieval methods." These methods include "electronic mail ('e- mail'), automatic mailing list services ('mail exploders,' sometimes referred to as 'List Serves'), 'newsgroups,' 'chat rooms,' and the 'World Wide Web.' All of these methods can be used to transmit text; most can transmit sound, pictures, and moving video images. Taken together, these tools constitute a unique medium -- known as cyberspace -- located in no particular location but available to anyone, anywhere in the world, with access to the Internet". (id.).

Another dimension of a web site is its ability to include advertising within it, commonly known as banner ads. Banner ads can be merely messages or, more likely, links to sites of related businesses. Clicking on the banner usually links the Internet user to the site of the advertiser.

A 1997 ABA survey revealed that 98 percent of large law firms (those with 75 or more lawyers) offered Internet access to at least some members of the firm and 61 percent of the survey respondents indicated the firms used the Internet to market their practices. Many lawyers with Internet access market their services without either a web site or banner ad of their own.

For example, almost every lawyer is at least listed on-line through a directory service such as Martindale-Hubbell, which claims to post the names of 900,000 lawyers at its Internet site.

Lawyers also commonly market their services through participation in various forms of internet-based discussion groups. (Id.).

The ABA Model Rules of Professional Conduct were promulgated in 1983, long before the proliferation of the use of the Internet as a tool for client development. (Id).

ABA Model Rule 7.1 broadly addresses "communications about the lawyer or the lawyer's services." The comment to this rule, which bans false or misleading communications, begins "This Rule governs all communications about a lawyer's services, including advertising permitted by Rule 7.2." While the rule is seemingly broad, it is probably not all encompassing.

Although the ABA has not yet issued any ethics opinions on these issues, there
have now been about 20 state ethics opinions addressing the ethics of new technologies. Some of these opinions have addressed the application of the rules to advertising on the Internet, as well as solicitation through e-mail. Opinions from Alabama, Arizona, Illinois, Michigan, North Carolina, Tennessee and Utah have all concluded that advertising legal services on the Internet is acceptable ethical activity, as long as the lawyer complies with all other rules, in particular those governing lawyer advertising. (id.).

For example, Alabama opinion RO-96-07 states, "It is the Disciplinary Commission's opinion that any information made available to the public about a lawyer or a lawyer's services on the Internet or private on-line services is subject to regulation under the rules on advertising and solicitation...Any advertising or promotional activity transmitted through the use of a computer is subject to regulations like any other form of lawyer advertising." (Id.).

Similarly, North Carolina Proposed RPC 239 states, "All communications by a lawyer concerning the lawyer or the lawyer's services, including communications via computer, are subject to the prohibition in Rule 2.1 on false or misleading communications." Likewise, Michigan ethics opinion RI-276 concludes, "[A]ll forms of communications about lawyer services are governed by ethics rules, regardless or whether they are in person, on paper, billboard, telephone, fax, computer or otherwise."

Model Rule 7.1, prohibiting the communication of legal services that are false or misleading, is the cornerstone of the ethics provisions governing commercial speech. The rule includes four provisions that are deemed to be false or misleading:

a) Communications that contain a material misrepresentation;
b) Communications that contain an omission of fact necessary to make the statement considered as a whole not materially misleading;
c) Communications that are likely to create an unjustified expectation about results the lawyer can achieve; and
d) Communications that compare the lawyer's services with those of other lawyers, unless the comparison can be factually substantiated. (Id.).

While the propriety of selected URL's and domain names can be judged on their face, other unique features of client development on the Internet cannot.

For example, web site designers can take measures to create a priority placement on search engines through the use of repetitive phrases, meta tags and invisible ink.
When a consumer attempts to locate a lawyer through the Internet and does not know a firm's URL, he or she will most likely go to one of several search engines that are designed to perform key word searches of all those pages of the Internet that are registered with that search engine.

Although a search may result in tens of thousands or even hundreds of thousands of sources which match to the key words, the screen will typically only show ten or so at a time.

The consumer can go forward to additional screens, but will generally proceed from the beginning of the listing, much like consumers do when faced with a list of lawyers in the yellow pages.

As with yellow pages, a lawyer with a home page that appears at the beginning of the list from a search engine's search has a competitive advantage. (id.).

Search engines identify sites mechanically by the words that appear in the html language used to code the contents of the site.

Consequently, if a lawyer's home page has repetitive words or phrases that correspond to those words or phrases used by the consumer to do a search, that web site will appear at or near the top of the resulting search.

Potential clients may search common phrases such as "drunk driving" or "car accident" as well as simple, legal terms such as "divorce" or "bankruptcy."

Words or phrases such as these can be embedded into the html language in one of three ways. The words can be within the site itself, interspersed as part of the text or, sometimes, listed as a block at the end of the page.

This latter technique is confusing to viewers, looks out of place and is seldom used in sites promoting legal services. (Id.).

Secondly, the words and phrases can be embedded as meta tags. Meta tags are the words and phrases that are inserted into the coded html language in a way that does not make them appear on the home page itself.

While not visually appearing on the home page, meta tags key search engines to include the page for searches having those words. Meta tags can be seen by calling up the html language.

A viewer can click on "view" and then click on "source." An example of meta tags is found at the home page of the highly regarded law firm Kutak Rock. Go to Go to "view" and then "source." The html language appears, showing meta tags for words including "law," "legal," "intellectual," "property," "blue," "sky," "litigation," and "tax." (id.).

On the other hand, if a law firm were to create meta tags with the name of another law firm that may be used as key words in a search or lists practice areas in which it is not competent in its meta tags, those communications would probably be deemed false or misleading. It is not, however, the hidden nature of meta tags that create a misleading representation, it is the content of those words and phrases within the context of the law practice. (Id.).

Invisible ink is more problematic than either listing key words and phrases visibly on the site or using meta tags, which are revealed through its source code. Invisible ink is the placement of words on a background with the same color as the background so that they are not visible.

The effect of creating priorities from key word searches on search engines is the same as having visible words or meta tags. However, the words can only be viewed by an examination of the html coded language.

These codes are more difficult to find within that language than meta tags, although they can be seen. Note that the various search engines may be designed to avoid the use of meta tags or repetitious words intended to create a priority placement.

However, lawyers who wish to seek such priority placements can research the search methods of the search engines and structure their web sites in ways that will benefit their positions.

This obviously challenges the ability to enforce violations of misleading representations and may call for a different regulatory need. (Id.).

A third way in which client development of legal services is unique on the Internet is through the use of links. Links are an integral feature of the web component of the World Wide Web. While a web site can be accessed directly through its URL, or indirectly through the key word search of a search engine, it can also be accessed through a link from any other linking site.

Likewise, a law firm's site can provide links to other sites, such as the home pages of representative clients or legal resources. Links are done with a click of the mouse and usually access is no more difficult than going to another page of the same web site. A primary question about the use of links is the extent to which a lawyer is responsible for the content of the linked information.

Consider, for example, a link to a client's page which includes information extolling the quality of the firm's services in a way that the firm could not do directly. Suppose the client material states something like the following "we've worked with lots of law firms, but none have demonstrated the quality of Smith & Doe."

This type of endorsement is within the client's constitutional rights of free speech, just as it would be if the client made the statement in any other type of media. However, if the law firm then uses the endorsement in its own promotional materials, it would result in the comparison of the firm's services to those of others without factual substantiation in violation of Model Rule 7.1(c).

Additionally, a communication to this effect could also create an unjustified expectation in violation of Model Rule 7.1(b). The question is whether the link brings the content within the commercial speech of the law firm and subjects it to the rules, resulting, in this example, in a violation. If a lawyer is responsible for the content of the links, the burden of review becomes enormous, which in turn limits the lawyer's ability to link to other sites. (Id.).

Domain names, meta tags and links create some of the most obvious dilemmas that are unique to the regulation of the Internet as a tool for client development for legal services. However, there are a host of more technologically complex issues which need to be briefly noted here.

First, a domain name can be hijacked.

Those who send junk e-mail promotions, known as spam, sometimes use someone else's domain name so that they do not have to address hostile responses, known as being flamed.

Consequently, messages that appear to be from a law firm may not be.
Conversely, e-mail can be sent anonymously through the use of anonymous

Therefore, a lawyer could send messages that were out of compliance, but not be traceable for the purpose of accountability. Additionally, banner ads can be tailored to the demographics of an individual who is accessing a web site, so that someone from a library may get a different banner ad on the same web site than someone from a corporate office. (Id.).

Model Rule 7.2 specifically addresses lawyer advertising. It includes four pertinent provisions.

The first provision, in a departure in the nature of most of the rules, specifically authorizes lawyer advertising through various listed media, as long as the advertising is in compliance with the other rules governing the communications of legal services;

The second rule is a rule of administrative convenience, requiring lawyers to retain copies of their advertisements or communications for two years, along with a record of the communication's dissemination;

The third part prohibits lawyers from giving anything of value for the recommendation of the lawyer's services, except for the reasonable costs of advertising (and other provisions that do not apply to this discussion);

The final provision of the rule on advertising is another administrative convenience, requiring any communications covered by the rule to name at least one lawyer responsible for the content of the advertisement. (Id.).

As discussed in the examination of false and misleading representations, the Internet provides quantitative and qualitative distinctions from other media. These differences can be problematic in the application of Rule 7.2(b), which requires the two year retention of a copy or recording of an "advertisement or communication," as well as a record of when and where it was used.

The comments make clear that this requirement is for the purpose of facilitating enforcement. In other words, if disciplinary counsel receives a complaint about an advertisement, the rule allows for an expedient method of obtaining a copy of the subject of the complaint. (Id.).

The scope of the retention requirement as it applies to the Internet is far from clear, however. The Internet creates a question of what a "copy" is. Is it printed or can it be electronic? Is a lawyer required to retain the entire web site or only the home page?
Does a lawyer need to retain all changes to a web site no matter how insignificant? Must a lawyer retain the links the firm makes to other sites? Must the lawyer retain the html code language if there is a challenge based on meta tags? Since different browsers create differing views of web sites, is there a standard or can the lawyer make a selection of the browser, even though viewers may see the material differently? What is sufficient to establish where and when the communication was used? Is a lawyer required to obtain and maintain logs showing the source of hits to the web site, or is it sufficient to identify the URL? Is a lawyer required to know the other members of a list server if he or she sends e-mail that may amount to commercial speech, or is it acceptable only to record the e-mail address of the list server? (Id.).

Hundreds of thousands of lawyers have a presence on the Internet through listings in directories, most notably the Martindale-Hubbell Lawyer Locator and the West Legal Directory. Several smaller directories exist, typically cross listing fields of practice with states to aid potential clients in finding a lawyer. For example, such cross-listings enable a potential client to locate a real estate lawyer in Colorado or a domestic relations lawyer in Oregon. Directories have been a long-standing method for consumers and lawyers alike to find lawyers, particularly when they have a need to do so in a jurisdiction outside of their own.

Although participation in directories is expressly permissible in Rule 7.2(a), the rules do not define either directories or lawyer referral services. While Rule 7.2(c) permits the reasonable costs of advertising and permits the usual charges of a not-for-profit lawyer referral service, it is ambiguous about the costs of participation in a lawyer referral service that is operated for a profit.

The need to clarify this issue is accentuated by the participation of so many lawyers in vehicles typically considered for-profit directories. Consequently, policy-makers may need to address the propriety of lawyers participating in for-profit lawyer referral services. To the extent participation may violate the rules, the comments should clarify the distinction between the impermissible referral services and the permissible participation in lawyer directories. (Id.).

Any clarification that limits a lawyer's participation in an on-line for-profit lawyer referral service must consider the constitutionality of the limitation, in light of the Central Hudson test, supra.. Standards that permit only directories or not-for-profit referral systems may distinguish the profession from other services and contribute toward the preservation of the monopoly.

However, the constitutionality of a standard that bans on-line for-profit lawyer referral services that are operated in ways that are not false or misleading, and therefore comply with the provisions of Rule 7.1, is questionable. This leads to the conclusion that the vehicles for client development should not be distinguished by their profit or non-profit modes, but rather by a dichotomy of truthfulness or deception. This is adequately addressed in the suggested proposed modification of Model Rule 7.1. (Id.).

There is a common misperception that lawyers are forbidden from soliciting clients. However, solicitations may be in writing and they may be to persons known to be in need of legal services, such as accident victims, or they may be to a group of people in general. In most states, solicitation may even be done in-person under certain circumstances. ABA Model Rule 7.3 addresses the many aspects of solicitation. The rule has four provisions, including:

A ban against in-person and live telephone solicitation of prospective clients with whom there is no family relation, no prior professional relation and when the solicitation is for the lawyer's pecuniary gain;

A ban against written or recorded solicitation if the potential client has made known to the lawyer the desire not be solicited or the solicitation involves coercion, duress or harassment;

A labeling requirement that every written or recorded solicitation to a potential client known to be in need of legal services, with whom the lawyer has no family or prior professional relationship include the words "Advertising Material" on the outside of the envelope and at the beginning and ending of any recorded material; and

A permissive provision allowing lawyers to participate in prepaid legal plans which solicit membership from persons not known to be in need of legal services provided by the plans. (Id.).

Whereas the advertising regulations of Rule 7.2 tend to be most applicable to a lawyer's use of the World Wide Web, the solicitation provisions of Rule 7.3 are most applicable to the forms of directed electronic communications, such as e-mail, usenet groups and chat rooms. Consequently, the threshold question is whether client development techniques used by lawyers through the Internet are analogous to in-person or live telephone solicitations, or to written communications, such as direct mail. (Id.).

In 1978, the U.S. Supreme Court upheld the right of the states to constitutionally impose a ban on in-person solicitation when the lawyer was soliciting for his or her own financial benefit, or pecuniary gain. The justification for the ban was two-fold: lawyers are trained in the art of persuasion and people in need of legal services may be emotionally vulnerable and subject to overreaching.118 These rationales were reiterated in extensive dictum by the Court in Edenfield v. Fane,119 decided in 1994. Model Rule 7.3 expands the ban to include live telephone contacts under the presumption that overreaching is possible in that format, but excludes the application of the ban to family members and prior clients, since lawyers are less likely to engage in abusive practices against them. (Id.)

The comment to Rule 7.3 explains that solicitation is unlike advertising because the contents of in- person or live telephone solicitations are subject to dispute, are not likely to be recorded and, therefore, are not subject to third party scrutiny. According to the comment, "they [solicitations] are much more likely to approach (and occasionally cross) the dividing line between accurate representations and those that are false or misleading." (Id.).

A text-based e-mail, with an easily kept record from either the sender or recipient, which is not sent and received in real time, is akin to direct mail correspondence in these respects. The constitutional basis that justifies the ban on in-person solicitation therefore should not apply to e- mail. (id.).

Note, however, that a lawyer's participation in chat groups or chat rooms provides a
different dynamic that could lead to the conclusion it is more like in-person solicitation. Although chat is currently primarily text-based, it is real time and is not likely to include a record. It will probably evolve into audio-based communications in the near future. Based on some of these considerations, Utah Ethics Opinion 97-10 has opined that client development in chat rooms violates the solicitation ban, whereas other forms of Internet client development are acceptable as long as they comply with all rules. (Id.).

Since Rule 7.3(a) explicitly forbids only in-person and live telephone contacts under the circumstances noted above, practitioners need direction regarding which forms of electronic communications are covered by this rule. If the issue is the level of persuasion that applies only to real time back and forth communications, then this may need to serve as the basis for an alteration to the rule. In this case, the introduction of electronic communications shifts the dichotomy from one of spoken versus written communication, to one of real time versus time-delayed communications. (Id.).

Model Rule 7.3(b) imposes limits on all solicitations which are otherwise permissible by forbidding a lawyer from going forward with a solicitation if doing so involves coercion, duress or harassment. Solicitation is also forbidden if the perspective client has made known to the lawyer a desire not to be solicited by the lawyer. (id.).

If a lawyer's activities in a chat room are not deemed unethical by virtue of Rule 7.3(a), then the provision of 7.3(b) prohibiting coercion, duress or harassment would be a prominent aspect of governing this type of communication. (Id.).

The economics of spamming have changed the face of direct marketing. Spamming has no cost for paper, printing or mailing. Virtually the only cost to the spammer is that of acquiring an e- mail address list. Spammers such as Cyber Promotions, Inc. route uninvited e-mail messages to millions of Internet users for only hundreds of dollars. These economics require a very small return to justify the cost and can quickly lead to a profitable marketing technique. (id.).

Lawrence Canter was a lawyer who spammed e-mail List Serves and usenet groups with a promotion for his immigration practice. His endeavor resulted in hundreds of complaints that led to disciplinary action in Tennessee. Canter was charged with the violation of several ethics rules, including: 1) failure to label his e-mail as advertising material, 2) failure to submit a copy of the e- mail to the state bar disciplinary authorities, 3) making reference to himself as an "immigration lawyer," in violation of a rule governing specialization, and 4) engaging in conduct prejudicial to the administration of justice. After a hearing in which Canter did not participate, the Tennessee Supreme Court suspended his license for one year as a result of this spamming. (Id.).

Not only is there nothing in the Tennessee rules that were in effect at that time that specifically prohibited or limited spamming, but the ABA Model Rules do not have provisions consistent with the first three violations noted above. Although Model Rule 8.4 prohibits activities prejudicial to the administration of justice, business getting endeavors of this sort are speech, subject to First Amendment protection, rather than activities which carry no such protection. Consequently, it is unlikely that Rule 8.4 could serve as a limit on spamming. (id.).

Had Canter repeatedly spammed the same groups and therefore, the same individuals, he could have been interpreted to be in violation of Model Rule 7.3(b) for harassment. The Canter case demonstrates a need to consider direction on the use of widespread e-mail for legal services. One issue that was a prominent consideration in the Canter disciplinary decision was the effect of shifting costs with spam from the sender to the recipient. For junk mail, the sender must pay postage.

But for spam, if there is a cost of transmitting the material, it is in the cost of those recipients who pay for their access to the Internet by time. For example, customers of America On Line have an option of paying a flat monthly fee for unlimited access, or of paying a lesser base charge for a limited number of hours and an hourly charge for use above that minimum level. Therefore, customers are paying for the time it takes them to read through or cull their spam. In this situation, the question focuses on the propriety of shifting the cost of an advertisement or solicitation to the potential consumer. Consideration should be given to amending Model Rule 7.3(b) in a way that prohibits shifting the costs of uninvited solicitations such as e-mail messages to their recipients. (id.).

Model Rule 7.3(c) requires solicitations to "prospective clients known to be in need of legal services in a particular matter" to be labeled as "Advertising Material." The labeling must be on the outside of an envelope or at the beginning and ending of a recorded communication. People who do not generally receive mail from lawyers may be alarmed when they do. Consequently, the requirement to label the envelope immediately alerts the recipient the correspondence is no more than promotional literature. As the rule applies to client development through the Internet, practitioners need direction on labeling information where there is no envelope, nor beginning and end of a recorded communication. In a set of rules proposed by the Florida Bar which is now pending with the Florida Supreme Court, lawyers would be required to designate e-mail solicitations as advertising materials in the subject line of the e-mail transmission.128 This would alert recipients of the nature of the solicitation. E-mail filters could be employed by those who did not want to receive the information. However, subject lines may have a limited number of characters in the e-mail log and the complete message may not be apparent to recipients. A rule requiring conspicuous labeling at the beginning of the text is an alternative to this proposal. (Id.).

A second issue is more difficult.

Throughout the recent history of lawyer advertising and solicitation there has been some controversy about whether lawyers have the right to send only mass mailing solicitations or targeted direct mail, in other words, solicitations to persons known to be in need of legal services.

In 1988, the Supreme Court held that lawyers could send mail specifically to those known to be in need of services, such as accident victims, judgment debtors and foreclosure defendants.

As a result, the Model Rules impose the labeling requirement only on solicitations directed to those who are known to be in need of services.

While this provides consumer protection, it also allows law firms targeting corporate clients to send attractive brochures to an audience that purportedly does not need the warning required by the label.

The economies of spamming, however, may make a mass e-mailing less expensive than a targeted one that would only go to those known to need services.

The interest of consumer protection would suggest the need to label e-mail communications where the intended recipients include those who may be alarmed by the receipt of information from a lawyer.

Model Rule 7.3(c) should be amended to meet this concern. Model Rule 7.3(d) is one that permits lawyers to participate in prepaid and group legal plans even if they seek members in-person or through live telephone contact. The rule has little relevance to this discussion and is not further analyzed here. There are two major issues not addressed in the rules governing the solicitation of legal services that pertain to client development on the Internet, yet are broader.

Any reexamination of the rules should consider lawyer-to-lawyer communications and invited solicitations.

To the extent the rules restricting solicitation are intended to provide consumer protection, they have limited justification in their application to lawyer-to-lawyer solicitation.

Corporate counsel in major businesses and industries do not suffer from the emotional vulnerability that may demand consumer protection on behalf of the mass disaster victim.

While in-house counsel should be able to opt out of unwanted solicitations, they do not need the same protection that merits labeling or even bans on in-person solicitation.

The marketplace is probably a far greater control than the ethics rules to govern appropriate behavior.

Consequently, those rules should be limited in their application to lay persons.

Second, the current rules fail to differentiate invited and uninvited solicitation.

In fact, neither the rules nor the comments define solicitation at all.

If a potential client asks a lawyer for information about the lawyer's service, what is the lawyer's response if not a solicitation, albeit an invited one.

If a lawyer's home page asks its visitors if the lawyer may provide them with further information and the visitors accept the offer, is the subsequent exchange of information anything other than solicitation? (Id.).

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