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22 July, 2010  
Snake oil regulation

Lawyer advertising … Self-regulation keeps the lean and hungry lawyers at bay and controls the snake oil salesmen … Ad hocery galore … Why should the industry trade unions decide what lawyers can spruik? ... Brydens (when winning is everything) takes on the regulators … Tulkinghorn goes to town

imageUS finance professor George Bittlingmayer says that most of the time, most economists argue that advertising promotes competition.

Para 2.3.2 of the National Legal Profession Reform Project – Consultation Regulation Impact Statement released in May says that the aims of legal profession regulation include “promoting healthy competition within the legal services market”.

Lawyer regulation should not restrict lawyer advertising.

It should be left to non-lawyer bodies to intervene when advertising by lawyers (or anyone else) is misleading or deceptive. So, for example, as Professor Bittlingmayer explains:

“At the federal level, the US Federal Trade Commission has jurisdiction over advertising by virtue of its ability to regulate ‘deceptive’ acts or practices. It can issue cease-and-desist orders, require corrective advertising, and mandate disclosure of certain information in ads.”

Australia has laws against misleading or deceptive conduct and there is no shortage of non-lawyer outfits that could be the primary regulators of lawyer advertising.

imageThere is an Advertising Standards Bureau, an Australian Competition and Consumer Commission and Fair Trading departments at a state level, and in NSW a Consumer, Trader and Tenancy Tribunal and Small Claims Tribunal etc.

But what if lawyers, like politicians, are actually purveyors of snake oil?

We would see lots of websites like Better Call Saul, which go right to the edge, saying things like “we’ll get you off no matter how guilty you are … nobody can play more dirty legal tricks than us … we win every time” (that last one actually having a perverse sort of honesty about it).

In response to the question “what do lawyers do?” legal experts have said:

“Although academics have pursued this question, practitioners rarely write on the topic.”

How does one safely advertise a service that cannot be identified in terms accessible to a client, unless it descends to Better Call Saul promises?

imageLawyers, being high class purveyors of snake oil, cannot possibly permit a proper lawyer advertising regime.

They want one that helps lawyers, not consumers.

Well established purveyors (who run the profession) know that “lean and hungry” snake oil vendors, in their endeavours to compete, would “queer the pitch” with ever more extravagant claims about their products, eventually sinking almost the entire legal services industry.

imageThe solution is the creation of Snake Oil Associations to “self regulate” the snake oil profession and whose function it is to “maintain standards” in relation to advertising.

This solution gives lawyers control of their own advertising regime.

All that is then needed is a judiciary of lawyers who will “justify” it.

Professor Benjamin Barton of the University of Tennessee College of Law, in an article Do Judges Systematically Favor the Interests of the Legal Profession? explains how US judges uphold “legal ethics” rules that ban advertising and “soliciting” by legal professionals, while telling all other professionals that such bans are an affront to the concept of free speech.

In 1993 the US Supreme Court held that accountants could not be banned from soliciting clients it having said the opposite in 1978 as regards lawyers.

In 1998 a lawyer (who wanted to solicit) went to the US Court of Appeals in 1998 to check if the Supreme Court’s 1978 lawyers’ decision had been effectively overruled by its 1993 accountants’ decision.

This called for some fancy footwork by the Court of Appeals.

It said that an accountant was not …

“a professional trained in the art of persuasion. A CPA’s training emphasizes independence and objectivity, not advocacy.”

In his article Professor Barton (comparing the Supreme Court’s two decisions) said:

“The main difference appears to be that a lawyer is a ‘professional trained in the art of persuasion’ and thus much more likely to succeed in taking advantage of a potential client. It is ironic that the court upholds an ethical rule on the assumption that lawyers are uniquely dangerous and unprofessional.”

Bans on advertising and solicitation have existed since medieval times (see footnote 109 of Professor Barton’s article which refers to a 1953 ethics tome).

These bans exist to help minimize competition from both internal and outside sources (footnote 111).

On July 14 The Sydney Morning Herald reported that Brydens Compensation Lawyers, “one of the state’s largest compensation law firm … is taking the NSW government to the High Court in an attempt to have its contentious ban on personal injury advertising declared invalid”.

Most lawyers (both here and in the US) want advertising bans generally to exist, although they are prepared to make “concessions” to the powerful personal injury lobby.

On March 12 the American Bar Association updated its list of “Differences Between State Advertising and Solicitation Rules and the ABA Model Rules of Professional Conduct”.

It contains a truly enormous list of state rules on lawyer advertising and solicitation.

Supporters of bans and restrictions on lawyer advertising and solicitation say that the bans are created to protect consumers and to discourage excessive litigation.

Lawyers who run the lawyer trade unions, and who have got lots of clients, generally support bans and restrictions, while hungrier lawyers tend not to.

Carolyn Elefant is a US lawyer who has studied small law firm issues for a long time.

In an article entitled Who Do These New York Bar Rules Target – Let’s Not Kid Ourselves she wrote:

“I have to confess that when I initially heard about New York’s proposed gag rule on attorney advertising, I suspected that it was just another way to perpetuate the big law-small firm double standard by targeting forms of advertising like websites and weblogs that have proven especially beneficial for small law firms.”

The proposed rules became law in 2007 in New York state, which led to a challenge by a law firm to some of them.

However, the law firm had “stopped running advertisements portraying its attorneys as giants towering over downtown buildings, depicting its attorneys counseling space aliens concerning an insurance dispute, and representing its attorneys running as fast as blurs to reach a client in distress”.

In 2005 our High Court gave the seal of approval to legislation restricting lawyer advertising and solicitation in personal injury claims

Justice Kirby’s dissenting judgment proved that the law could be the opposite of what the majority had ordained, if they were minded to make it so.

Brydens Compensation Lawyers (motto: “When winning is everything” – although “winning” is ill-defined, and the page on “How Winning Feels” is a little light on detail) continues to advertise on commercial radio claiming it wins more than 98 per cent of cases.

If the Brydens’ High Court case makes it to judgment then one can be sure of one thing: There will be no reference to the need to protect the business interests of well established snake oil vendors.