A. INTRODUCTION
12.1 In the light of the discussion in previous chapters we turn now to state our conclusions and recommendations in relation to individual advertising by solicitors. In this chapter we make recommendations about a general scheme for regulating such advertising. We do so under the following headings:
- our general approach;
- a recommended scheme;
- some ancillary matters.
In chapter 13 we consider special issues in relation to advertising in particular media, such as radio and television.
B. OUR GENERAL APPROACH
I. The Need for Change
12.2 In our view, the present restrictions on advertising by solicitors in New South Wales are unduly restrictive, especially in relation to advertising about fees and fields of practice. They deprive members of the public, especially those who are socio-economically, disadvantaged, of access to important information about lawyers. As a result, some people choose lawyers who are not well-suited for the work in question, and others are deterred from seeking legal assistance. The restrictions inhibit competition innovation and efficiency in the profession and, as a consequence, the quality, speed and cost of legal services are adversely affected. New practices and small practices are especially disadvantaged by the present restrictions. These weaknesses would be reduced somewhat by the Law Society’s proposed amendments to the present regulations, but they would remain substantial.
II. A Range of Options
12.3 As mentioned earlier we described in our Discussion Paper, Advertising and Specialisation, three general approaches (Broad, Medium and Narrow) to relaxation of the existing restrictions. 1 Each of these approaches would require advertising to comply with four basic rules, including, for example, a rule against false or misleading advertising. 2 Under the Broad Approach, there would be no further restrictions. Under the Medium Approach, additional restrictions would apply to four special areas, namely fees, fields of practice, clientele and speed of service. In these special areas, advertising would be confined to such types of information as are on an approved list. 3 Under the Narrow Approach these restrictions in relation to special areas would apply but, in addition advertising in all other areas would be confined to specified types of information on an approved list. 4
Narrow Approach
12.4 The Narrow Approach has the virtue of specificity. 5 It would leave little room for doubt as to whether a particular type of advertisement falls within the rules. Specificity would facilitate policing of the rules, thus reducing the danger of contraventions which might harm the public or cause unfairness between practitioners. Much would depend, of course, on the range of items on the approved list, especially in relation to the special areas.
12.5 A major weakness of the Narrow Approach is its reliance on predicting types of information which lawyers might wish to advertise, and on predicting the extent to which particular types are likely to be advertised in a false, misleading or otherwise undesirable manner. Individual practices might wish to advertise particular information which is quite unexceptionable, but which was not thought of when the approved list was compiled. Moreover, whereas particular wording (such as “close to the railway station” or “friendly professional services”) might be generally regarded as unobjectionable, it might be difficult to draft an item for the approved list which would permit such wording but would not permit other wording that might be regarded as objectionable. Much time and effort might be expended in debating and formulating additions to the approved lists, and the lists might become complex and unwieldy.
Broad Approach
12.6 The Broad Approach avoids the disadvantages of reliance on approved lists, to which we have referred in relation to the Narrow Approach. 6 Its restrictions are expressed in terms of what we see as the basic justifications f or prohibiting advertising. It is important to note that it does not settle merely for a “false or misleading” standard; it includes prohibitions on advertising which claims superiority, is disreputable, or contains testimonials. These prohibitions would preclude many of the hypothetical examples of flamboyant advertising which are often referred to by people who oppose relaxation of the present restrictions. The Broad Approach is similar to the new rules for engineers which were approved in 1981 by the Trade Practices Tribunal as being consistent with the Commonwealth Trade Practices Act. 7
12.7 The main weakness of the Broad Approach is its lack of specificity. This could make it difficult to police, thus increasing the possibility of abuse, uncertainty and inconsistency. Practitioners who are in doubt about the precise application of the rules might unwittingly infringe them or, for fear of doing so, might be excessively conservative in their advertising. The breadth of the rules might put pressure on the regulatory body to issue a large number of advisory opinions on their meaning. Any of the three approaches would be likely to need supplementation by opinions of this kind, but under the Broad Approach they might become very numerous and, in effect, might reduce substantially the intended breadth of the rules.
Medium Approach
12.8 Save in the four special areas, this approach is the same as the Broad Approach. 8 But it avoids many of the disadvantages of that approach by applying tighter and more specific restrictions in the special areas (such as fees and fields of practice) where lack of specificity might be likely to give rise to abuse or uncertainty. In these special areas of difficulty, the Medium Approach is as rigorous as the Narrow Approach, but in the other areas it eschews the list technique of the Narrow Approach, thereby fostering initiative and beneficial competition and avoiding the need to develop a lengthy and complex list which would require much time and effort to compile and administer.
III. Our Recommended Approach
12.9 We recommend adoption of the Medium Approach. In our view, that Approach is preferable to the Narrow Approach because it gives greater encouragement to initiative and efficiency within the profession and is likely to be simpler to administer. It is preferable to the Broad Approach because it applies stricter controls to areas such as fees and fields of practice, in which there might otherwise be a serious risk of undesirable types of advertising. In addition, its specificity in those areas may encourage practitioners to venture into advertising in them, rather than being deterred by a fear of contravening the less precise restrictions of the Broad Approach.
12.10 In the next section of this chapter we make detailed recommendations for a scheme which adopts the Medium Approach. It may be considered, however, that the Medium Approach would constitute too great a relaxation of the present restrictions, at least in the immediate future. We do not take that view but we describe in Appendix II of this Report another scheme, adopting the Narrow Approach which might be suitable for implementation pending introduction of our recommended scheme. We emphasise that this interim scheme would allow advertising in the four special areas to the same extent as would be permissible under the Medium Approach. If the scheme prohibited such advertising it would, in our view, not constitute an adequate relaxation, even on an interim basis.
C. A RECOMMENDED SCHEME
12.11 In this section we describe the principal elements of our recommended scheme. We recommend first a number of basic prohibitions applying to all advertising, then we recommend additional restrictions in relation to advertising about the four special areas, namely fees, fields of practice, clientele and speed of service.
I. Basic Prohibitions
12.12 False or Misleading Claims. There can be no doubt that false or misleading advertisements should be prohibited. A prohibition of this kind applies to advertising generally, whether by solicitors or otherwise, under consumer protection legislation. 9 It may be desirable to define the word “misleading” in any such prohibition. An appropriate definition might be whether there is a reasonable possibility of the advertisement being misunderstood by an ordinary, reasonable person who is likely to become aware of it.
12.13 Claims of Superiority. Difficulties can arise in interpreting and enforcing a prohibition on false or misleading advertisements. Many of these difficulties would be reduced by adding to it a prohibition against claiming to be superior to other solicitors. Such a prohibition would also help to strike the necessary balance between enabling greater competition and diversity within the profession yet not causing an unprincipled free-for-all.
12.14 Sensationalism. In our view, solicitors should be free to advertise in a manner which openly encourages and invites people to utilise their services. Such advertising should not be prohibited as demeaning or undignified to the profession But solicitors should be deterred from adopting sensationalism of a kind which is likely, for example, to confuse, rather than to assist, the public in making informed and objective choices, or to create public expectations of unscrupulous conduct within the profession. These distinctions are difficult to draw and if subjective and somewhat vague terms are used in any regulation on-the matter there is a danger that bodies responsible for interpreting them may take an excessively conservative approach Nevertheless, we think that at least in the initial stages, there should be a prohibition aimed at the type of abuse which we have described.
12.15 Testimonials and Endorsements. A difficult question arises over advertising laudatory statements by clients or other people about particular lawyers. Evaluations by clients may be of considerable value as an indicator of a lawyer’s qualities, but may be misleading if stated in an abbreviated form and out of context. Moreover, some solicitors might resort to improper inducements in order to obtain favourable evaluations. On balance, we think that these types of advertisements raise so many dangers that they should be prohibited.
Summary
12.16 We recommend that advertising bv solicitors should be sub’ect to four basic rules, namely
- it must not be false or misleading in any material particular;
- it must not claim superiority for the advertising solicitor over any or all other solicitors;
- while it may make clear the intention of the solicitor to seek custom, it must not be vulgar, sensational or otherwise of such a character as to be likely to bring the profession into disrepute;
- it must not contain testimonials or endorsements concerning the advertising solicitor.
12.17 The first three of these rules are broadly similar to the three basic prohibitions which were suggested by the Monopolies and Mergers Commission in the United Kingdom in 1976. 10 The Draft Model Code of the American Bar Association has counterparts to the first two rules, but is much more liberal in relation to the third. 11 A rule similar to our fourth rule is in force, together with other rules, in many parts of the United States. 12
II. Special Areas: An Approved List
12.18 As mentioned earlier, we consider that there is a substantial public need for readier access to information about individual lawyers’ fees, fields of practice, actual or potential clientele, and speed of service. But these are also areas in which there is a considerable likelihood of advertisements being false or misleading, or in some other way being in breach of the four basic prohibitions, and in which these prohibitions are difficult to interpret and enforce.
12.19 Accordingly, we recommend that advertisements in relation to those areas should be prohibited unless they relate to particular types of information on an approved Special Areas List We indicate below (paras.12.21-12.24) a number of types of information which we consider should be on that list. In compiling the list we have been influenced principally by whether or not particular types of information are of such a nature that advertisements about them are likely
- to be of interest and utility to members of the public;
- not to be false or misleading;
- if false or misleading, to be demonstrable as such (for example, because they relate to objective and specific facts rather than being vague or subjective assertions).
12.20 In its response to our Discussion Paper, the Law Society opposed advertising in relation to most of the items which we recommend below. 13 In our view, the Society over-estimates the likelihood of false or misleading advertisements about these matters and under-estimates the benefits which members of the public and the profession could obtain from relaxing the present restrictions in these respects. In relation to some of the items, we anticipate that, at least in the early stages of the new scheme, there might be few solicitors who are interested in advertising about some items on our recommended list. For example, they may not be willing to commit themselves to maximum fees, or to maximum times for completion in relation to specified types of work. But we do not regard that as a justification for prohibiting advertisements by those who are willing to commit themselves in such a way.
Fields of Practice
12.21 We recommend that the following items in relation to fields of practice should be on the Special Area List:
(i) willingness to accept work, either generally or in particular fields of practice;
(ii) unwillingness to accept work in particular fields;
(iii) willingness or unwillingness to accept work directly from clients, either generally or in particular fields of practice;
(iv) if the low-medium fields of practice scheme described in Part II of this Report is established, such information about fields of practice as it is permissible to advertise under that scheme.
These items accord with the recommendations made in Part 11 of this Report. 14 We mentioned in that Part a number of jurisdictions in which a broadly similar approach has been adopted. 15
Fees
12.22 We recommend that the following items in relation to fees should be on the Special Areas List:
(i) acceptance of credit cards;
(ii) availability of information about a practice’s methods for determining fees;
(iii) willingness to give written estimates of fees;
(iv) fixed or maximum fees charged for specific services;
(v) fixed or maximum hourly rates charged for specific services;
(vi) ranges of fees charged for specific services, provided that the maximum does not exceed the minimum by more than a prescribed percentage (say 25%);
(vii) fixed or maximum proportions of statutory scale fees which will be charged for the services defined in the scales.
The items on this list are drawn largely from Proposal B of the American Bar Association. 16 There is now considerable freedom to advertise about fees in many parts of the United States, and in British Columbia. 17 The UK Monopolies and Mergers Commission, the Royal Commission on Legal Services in Scotland, and the Professional Organisations Committee in Ontario all recommended that a considerable range of advertising about fees should be permitted, while the Royal Commission on Legal Services in England and Wales recommended a limited form of fee advertising. 18
Actual or Potential Clientele
12.23 We recommend that the items on the Special Areas List should include
willingness to accept, or interest in accepting, work from particular types of client.
An example of such an advertisement would be “pensioners welcome”. We do not recommend that it should be permissible to advertise the identity of past or present clients, or to advertise about types of clientele (for example, “accident victims a specialty”) as a way of avoiding the restrictions which we have recommended above in relation to advertising about fields of practice.
Speed of Service
12.24 We recommend that the Special Areas List should include the following items in relation to speed of service:
(i) willingness to give written estimates concerning completion of particular work;
(ii) maximum times within which specific services will be completed;
(iii) ranges of times within which specific services will be completed, provided the maximum does not exceed the minimum by more than a prescribed percentage (say 25%).
III. Special Areas: Controls on Terminology
12.25 We do not recommend that the terminology to be used in advertisements about items on the Special Areas List (for example, to express a willingness to accept work from particular types of client) should have to be approved in advance. Such a requirement would be likely to be excessively restrictive and bureaucratically burdensome. However, some steps should be taken to avoid the use of terminology which is misleading or ambiguous, whether intended to be so or otherwise, and to promote the use of standard, defined terms.
12.26 Accordingly, wt recommend that the general regulatory body for solicitors should publish lists of terminology which it regards as acceptable or unacceptable. For example, it could suggest short descriptions (such as “standard family company incorporation”) for particular types of work in relation to which solicitors might wish to advertise their fees or their speed of service. It might also give detailed definitions of some of these suggested descriptions. 19 If solicitors wished to use these descriptions, they should be required to use them in accordance with the regulatory body s definition (if any) and to supply a copy of that definition to any client who requests it. In addition, solicitors wishing to use terminology which had not been suggested by the regulatory body should be required to send the proposed advertisement to the body within a specified period in advance; save if the advertisement is to be confined to a publication circulating principally within the profession (such as the Law Society journal or the Australian Legal Directory).
12.27 Although prior approval by the regulatory body would not be necessary, most solicitors wishing to advertise certain terminology are likely to decide not to do so if it has been disapproved explicitly by that body. If a solicitor were found by a disciplinary tribunal or court to have broken the statutory restrictions, his or her disregard of explicit disapproval by the regulatory body might be taken into account in determining the appropriate disciplinary sanction.
12.28 These recommended controls on terminology are not closely similar to any existing scheme, so far as we are aware. However, the notion of approving certain terminology provided it is used in accordance with official definitions has been adopted in a number of North American jurisdictions in relation to advertisements about fields of practice, 20 and in British Columbia in relation to types of service (such as “simple wills”, “conveyances”, “uncontested divorces”) for which a practitioner advertises that specified fees will be charged. 21 We give examples of these British Columbian definitions in Appendix III of this Report.
D. SOME ANCILLARY MATTERS
Introduction
12.29 In this section we consider some ancillary matters relating to the general scheme recommended above. These matters were considered at greater length in our Discussion Paper, Advertising and Specialisation. 22
Incidental Advertising
12.30 We explained in chapter 9 the present restrictions concerning incidental advertising, such as advertising for new staff. 23 The Law Society’s proposed new regulations apply only to advertising which “can reasonably be regarded as calculated to attract business to a solicitors practice”. In our view, this wording is appropriate. Questions of interpretation will arise from time to time, but many of the present difficulties in this area would cease to be of practical significance if either the Narrow, Medium or Broad approaches were adopted. 24 Where problems remain, we think it will usually be sufficient for the general regulatory body to issue an advisory ruling.
Size and Format
12.31 The Law Society’s proposed new regulations include a number of restrictions on size and format of advertisements. For example, they include restrictions on overall size, size of type used, colours, and the use of graphics. We do not favour these restrictions. They are aimed partly at excessive expenditure, which we discuss later in this section, and partly at misleading or undignified presentation. In relation to controls over presentation, we consider that our recommended scheme’s basic prohibitions on advertising that is false, misleading or disreputable to the profession are likely to be sufficient for this purpose. Large advertisements, large type and the use of colour or pictorial material do not necessarily make an advertisement misleading or disreputable. They can add substantially to the effectiveness of an advertisement, especially in communicating with those most in need of assistance in finding a lawyer.
Expenditure and Frequency
12.32 The main arguments for controlling frequency and expenditure in relation to advertising are, first, that the cost of extensive advertising may outweigh any consequential economies, and secondly, that large and wealthy firms may get substantial advantages by advertising on a scale which is beyond the resources of other firms. 25 We have expressed earlier the view, supported by the recent American experience, that these consequences are unlikely to occur. 26 Even if they were to occur, there would need to be a strong case to justify interference with market forces in this respect. We recommend that there should not be any restrictions on frequency or expenditure, at least in the initial stages of the new scheme.
Duration of Representations
12.33 We recommend that where solicitors advertise representations about fees, they should be bound by them for a prescribed period. Such a requirement presently applies in some parts of the United States and Canada. 27 A similar requirement should apply to other representations concerning, for example, speed of service, or willingness to accept a particular type of work. The prescribed period could vary according to the frequency of publication of the journal in which the advertisement appears, and would be subject to express variation in the advertisement itself. Another possibility is simply to require that the duration of representations must be indicated in the advertisements themselves.
Records of Advertisements
12.34 We recommend that in order to facilitate enforcement of the restrictions on advertising, practitioners should be required to make a copy or recording of each advertisement published by them, excluding repetitions, and to retain it for a period of one year after the advertisement was last published. This requirement would be especially important if radio and television advertisements were permitted, an issue which we consider in the next chapter.
FOOTNOTES
1. Pp. 1 37-145.
2. For these rules, see para. 10.3 of this Report.
3. For the suggested list, see our Discussion Paper, Advertising and Specialisation, pp.139-140.
4. For the suggested list, see Advertising and Specialisation, pp.142-143.
5. For a fuller discussion of the matters mentioned in paras.12.4-12.5, see Advertising and Specialisation, pp.145-146.
6. For a fuller discussion of the matters mentioned in paras.12.6-12.7, see Advertising and Specialisation, pp.146-147.
7. See paras.3.35 and 9.23 of this Report.
8. For a fuller discussion of the matters mentioned in para.12.8, see Advertising and Specialisation, pp.147-148.
9. See para.9.21 of this Report.
10. See note 9.26.2 of this Report.
11. See American Bar Association, Model Rules of Professional Conduct (Proposed Final Draft and Proposed Alternative Draft) (Chicago, 1981), rules 7.1 and 2-101 respectively. The rules are summarised in our Discussion Paper, Advertising and Specialisation, pp.117-118.
12. For examples, see L Andrews. Birth of a Salesman (American Bar Association, Chicago, 1980).
13. “Advertising and Specialisation” (Submission No.412). p.20.
14. Chapter 6.
15. Chapter 3.C: see also our Discussion Paper, Advertising and Specialisation, chapter 3.
16. American Bar Association Journal (1977). vol.63, p.1236: and our Discussion Paper, Advertising and Specialisation, pp.115-116.
17. See Advertising and Specialisation, pp.109-112, 114-117, and the Sources cited thereto.
18. For the reports of these bodies, see notes 9.26.1, 9.26.2, 9.26.1 and 9,27.2 of this Report: for further details see Advertising and Specialisation, pp.107-109, 112.
19. For some examples, see Appendix III.
20. See Andrews (footnote 12 above).
21. See Law Society of British Columbia, Professional Conduct Handbook, Part C., ruling 2.
22. Pp.148-151.
23. Para.9.18-9.19.
24. For a fuller discussion of this point- see Our Discussion Paper, Advertising and Specialisation, p.149.
25. These arguments were put by, for example, the Law Society of New South Wales (“Advertising and Specialisation”, Submission No.412, p.21).
26. See paras.11.17-11.19.
27. See eg. Andrews (footnote 12 above): and Law Society of British Columbia, Professional Conduct Handbook.
