Formal Advisory Opinion No. 05-6
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STATE BAR OF GEORGIA
FORMAL ADVISORY OPINION NO. 05-6
Approved and Issued On May 3, 2007 Pursuant to Bar Rule 4-403
By Order Of The Supreme Court Of Georgia Thereby Replacing FAO No. 92-2
Supreme Court Docket No. S06U0799
Ethical propriety of a lawyer advertising for legal business with the intention of referring a majority of that business out to other lawyers without disclosing that intent in the advertisement.
It is ethically improper for a lawyer to advertise for legal business with the intention of referring a majority of that business out to other lawyers without disclosing that intent in the advertisement and without complying with the disciplinary standards of conduct applicable to lawyer referral services.
Correspondent seeks ethical advice for a practicing attorney who advertises legal services but whose ads do not disclose that a majority of the responding callers will be referred to other lawyers. The issue is whether the failure to include information about the lawyers referral practices in the ad is misleading in violation of the Georgia Rules of Professional Conduct. Rule 7.1 of the Georgia Rules of Professional Conduct governing the dissemination of legal services permits a lawyer to "advertise through all forms of public media...so long as the communication is not a false, fraudulent, deceptive, or misleading communication about the lawyer or the lawyer's services." A communication is false or misleading if it "[c]ontains a material misrepresentation of fact or law or omits a fact necessary to make the statement considered as a whole not materially misleading," Rule 7.1(a)(1).
The advertisement of legal services is protected commercial speech under the First Amendment. Bates v. State Bar of Arizona, 433 U.S. 350 (1977). Commercial speech serves to inform the public of the availability, nature and prices of products and services. In short, such speech serves individual and societal interests in assuring informed and reliable decision-making. Id. at 364. Thus, the Court has held that truthful ads including areas of practice which did not conform to the bar's approved list were informative and not misleading and could not be restricted by the state bar. In re R.M.J., 455 U.S. 191 (1982).
Although actually or inherently misleading advertisements may be prohibited, potentially misleading ads cannot be prohibited if the information in the ad can be presented in a way that is not deceiving. Gary E. Peel v. Attorney Registration and Disciplinary Comm'n of Illinois, 496 U.S. 91, 110 S.Ct. 2281, 2287-2289 (1990). Requiring additional information so as to clarify a potentially misleading communication does not infringe on the attorney's First Amendment. Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626, 651 (1985).
Georgia Rules of Professional Conduct balance the lawyer's First Amendment rights with the consumer's interest in accurate information. In general, the intrusion on the First Amendment right of commercial speech resulting from rationally based affirmative disclosure requirements is minimal.
A true statement which omits relevant information is as misleading as a false statement. So, for example, when contingency fees are mentioned in the communication, the fees must be explained. Rule 7.1(a)(5). The Rules prohibit communications which are likely to create an unjustified explanation about results the lawyer can achieve or comparison of service unless the comparison can be substantiated. Rule 7.1(a)(2), (3).
The Rules evidence a policy of full disclosure enabling the client to investigate the attorney(s) and the services offered. Any advertisement must be clearly marked as an ad, unless it is otherwise apparent from the context that it is such a communication and at least one responsible attorney's name must be included. Rule 7.1(a)(4), (6)(b). Law firms practicing under a trade name must include names of practicing attorneys. The firm's trade name cannot imply connections to an organization with which it has no connection. Rule 7.5(a)(2). An attorney is prohibited from implying associations with other attorneys when an association does not exist and may state or imply practice in a partnership or other organizations only when that is the fact. Rule 7.5(d). These disclosure requirements assure that the public receives accurate information on which to base decisions.
Similarly, other jurisdictions have required disclosure of attorney names and professional associations in the advertisement of either legal services or referral services. A group of attorneys and law firms in the Washington, D.C. area planned to create a private lawyer referral service. The referral service's advertising campaign was to be handled by a corporation entitled "The Litigation Group." Ads would state that lawyers in the group were willing to represent clients in personal injury matters. The person answering the telephone calls generated by the ad would refer the caller to one of the member law firms or lawyers.
The Virginia State Bar Standing Committee on Legal Ethics found the name misleading because it implied the entity was a law firm rather than simply a referral service. The Committee required the ad include a disclaimer explaining that "The Litigation Group" was not a law firm. Virginia State Bar Standing Committee on legal Ethics, Opinion 1029, 2/1/88.
The Maryland State Bar Association Committee on Ethics was presented with facts identical to those presented in Virginia. The Maryland Committee also required additional information in the ad to indicate the group was not a law firm or single entity providing legal services. Maryland State Bar Association Committee on Ethics, Opinion 88-65, 2/24/88.
Similarly, an opinion by the New York Bar Association prohibited an attorney from using an advertising service which published ads for generic legal services. Ads for legal services were required to include the names and addresses of participating lawyers and disclose the relationship between the lawyers. New York Bar Association, Opinion 597, 1/23/89.
The situations presented to the Virginia, Maryland and New York committees are analogous to the facts presented here. The advertiser in all these cases refers a majority of the business generated by the ad, without disclosure. The ad here does not disclose any association with other attorneys.
The advertisement at issue conveys only the offer of legal services by the advertising attorney and no other service or attorney. The ad does not accurately reflect the attorney's business. The ad conveys incomplete information regarding referrals, and the omitted information is important to those clients selecting an attorney rather than an attorney referral service.
Furthermore, the attorney making the referrals may be circumventing the regulations governing lawyer referral services. Attorneys may subscribe to and accept referrals from a "a bona fide lawyer referral service operated by an organization authorized and qualified to do business in this state; provided, however, such organization has filed with the State Disciplinary Board, at least annually a report showing its terms, its subscription charges, agreements with counsel, the number of lawyers participating, and the names and addresses of lawyers participating in the service." Rule 7.3(c)(1). These regulations help clients select competent counsel. If the attorney is not operating a bona fide lawyer referral in accordance with the Rules, the client is deprived of all of this information. The attorneys accepting the referrals also violate Rule 7.3(c) by participating in the illicit service and paying for the referrals.
Assuming that the advertisements at issue offers only the advertising attorneys services and that the attorney accepts cases from the callers, the ad is not false or inherently misleading. However, where a majority of the responding callers are referred out, this becomes a lawyer referral service. The Rules require disclosure of the referral as well as compliance with the Rules applicable to referral services.
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