August 2007

INSIDE THE LAWYER ADVERTISING RULES CHANGES: AN INTERVIEW WITH NEVADA SUPREME COURT JUSTICE HARDESTY

BY BEAU STERLING

On September 1, 2007, the first major revision of the Nevada Supreme Court’s rules governing lawyer advertising goes into effect.  Some previous prohibitions have been relaxed or eliminated, while other new provisions have been added.  Several of the changes will affect all attorneys, even those who do not actively advertise their services in print, radio, or television.

According to their proponents, the new rules are designed to bring Nevada into conformity with United States Supreme Court decisions limiting the constitutionally-permissible scope of government regulation of commercial speech, to eliminate some of the needless pitfalls in the former advertising rules that previously could lead to discipline, and generally to clarify what are and are not acceptable lawyer advertising practices.  The new rules are also designed to help consumers make better informed choices when looking for a lawyer.

Nevada Supreme Court Justice James Hardesty, who was also a member of the Lawyer Advertising Study Committee, recently sat down with Nevada Lawyer editor Beau Sterling at the State Bar offices to discuss the new rules, their purpose, and their likely impact on members of the bar.

NL:  Why are the new advertising rules needed?

Justice Hardesty:  The lawyer advertising study committee identified, as an important issue, the need to increase enforcement of existing rules and to bring our rules into compliance with the constitutional requirements and the constitutional regulation of lawyer advertising.  These rules step up the enforcement capabilities of the bar and make several changes so that the bar is no longer regulating taste, which is prohibited under the constitution.  The issue, the lawyer advertising issue, has been the most important issue commented upon by lawyers throughout the state, and by clients for that matter. So, I think it was an important issue for the state bar to take up and for the court to take up.  And, interestingly, I think it’s probably been 15-plus years since lawyer advertising rules have been reviewed.  So it certainly was time to do that, and I think the committee did an outstanding job.  Bill Turner, as the chairman of that committee, dedicated an enormous amount of time and effort–all the committee members did–and he is to be commended for his effort in moving the whole state forward on this advertising issue.

NL:  When the new rules were being considered, were there many comments from the public?

Justice Hardesty:  We got a lot of comments from the public and lawyers.  We also explored other states’ alternatives and we took a hard look at the American Bar Association’s recommendation.  Interestingly though, the problem with adopting the ABA’s recommendations is that almost all of the states are deviating substantially from the ABA recommended rules.  One of the perceived benefits in adopting the ABA rules would be to get some guidance from other states on how they’re dealing with certain issues, but that wasn’t going to happen because all the states are selecting particularized rules dealing with their own state’s issues and problems.  So, the committee felt it was appropriate to look at other options and they did that.  And I think what they’ve done is select the best of multiple worlds.  They have selected some aspects of enforcement mechanisms in Texas, but they have been careful to be respectful of avoiding prior restraint issues and, at the same time, stepping up enforcement for ads that are misleading or false.

NL:  What is the most important change?

Justice Hardesty:  I think the most important change is the obligation on the part of the members of the bar association to send non-tombstone ads¹ to the bar within 15 days after they begin publication of an advertisement.  What was the purpose behind that?  Well, one of the things that the committee discovered and that the Board of Governors, I think, acknowledged was the need to increase our enforcement effort.  The bar association and the bar counsel really didn’t have a good knowledge of all the advertising that’s in the marketplace, so it’s very difficult to have the bar association monitoring every ad on every station, in every newspaper, in every phone book.  So, we thought we would require the ads to be submitted to us.  The failure to submit those ads is itself an independent basis for discipline.  Acknowledging concerns expressed to us by the advertising lawyers, though, they wanted some protection, some mechanism that would allow them to have their ad reviewed in advance.  And if it is factual and it’s not false or misleading, get some prior protection against later discipline.  And that is because they invest so much money into these ads, you didn’t want to be in a position of having to take an ad down that might be violative when you’ve spent a lot of money on production and display of these ads. 

NL:  That’s the function of the advisory committees that are created under the rule?

Justice Hardesty:  Correct.  The rule creates advisory committees for the south and for the north and their role is to look at ads that are submitted to them on a voluntary basis by lawyers and provide some opinion about the compliance of the ad with the new rules.  Those opinions, as long as the information provided by the lawyer is not false and misleading, provide that attorney with some protection against discipline later on that ad.

NL:  That’s essentially a safe-harbor provision.

Justice Hardesty:  Correct.  But it’s not mandatory.  It’s voluntary.  And it does not involve prior restraint in any respect.

NL:  This is one of the areas where the court was particularly mindful of first amendment concerns?

Justice Hardesty:  An important change in the advertising rules, as I mentioned, was the striking of the taste limitations.  As you know the Supreme Court has announced some decisions that make it pretty clear that regulating taste of ads is inappropriate.  Those portions of the rules were stricken.  And another important area that we reviewed came as a direct result of input we received from lawyers in the rural communities and that had to do with the advertising of practice areas, or expertise, or specialization.  A number of lawyers indicated a desire to advertise an area of emphasis–a practice area of emphasis.  The way the rules were originally configured, basically you wouldn’t be able to do that unless you engaged in a specialization; you went through special CLE.  And frankly it wasn’t very helpful to the public in choosing a lawyer nor was it helpful to the lawyers who wanted to let the public know that their practice area was limited to a certain area, and so we made some changes in those rules that now permit lawyers to identify areas of emphasis in their practice.  So that they’re not getting phone calls about criminal cases when they really only want to do personal injury or trust or contract cases. I think that’s actually an advantage to the public in selecting a lawyer. 

NL:  What other changes should lawyers be aware of?

Justice Hardesty:  Another change [has] to do with the advertisement of the fee arrangements.  If a lawyer advertises a fee arrangement, they must make full disclosure of the entire fee arrangement.  We also require now that the lawyers maintain, in their office and available for distribution, a complete and accurate resume of their background, both educational and professional.

NL:  That’s the “lawyer’s biographical data form?”

Justice Hardesty: Correct.

NL:  What kind of advertising-related complaints was the bar getting prior to the new rules?

Justice Hardesty:  I’ll give you a few examples that illustrate the problem that the study committee found and I think the board of governors saw.  [First is] a lawyer who advertises a reduced contingent fee and does not make full disclosure and the client comes in and signs the contract only to discover when the case is settled, several weeks or months later, that the contingent fee doesn’t resemble anything like the fee that brought that client to the office in the first place.  And the second area had to do with unjustified expectations: where you open a yellow page ad and someone advertises that they have a 16-million judgment and you research that case and discover that it’s a default judgment; there was no adjudication by the court–probably not even collected.  There were other examples that the committee heard, but those two are the standouts.  On the issue of taste, I don’t think there is any question that the trend of the Supreme Court and Federal District Court cases was to preclude regulation of taste.  So, if a lawyer wants to stand on top of a building and say something about their law practice, with a cape in hand, they’re able to do that, as long as what they say is truthful.

NL:  Which, of course, is the kind of advertisement that lawyers themselves get the most complaints about.

Justice Hardesty:  It is, but you know, there is an important balance that has to be undertaken when you regulate commercial speech, which is what this is.  I think the BOG and the committee did a great job of finding that balance and hopefully the court’s ratification of the rules has done the same thing.  We received a lot of input on this, from attorneys who advertise, from attorneys who don’t.  Standing on the top of the stratosphere with a cape may not be the best way to uphold the dignity of the profession.  But the Supreme Court has pretty much indicated that that’s commercial speech and as long as it’s not false and misleading you can engage in that conduct.  If a client wants to choose a lawyer like that, then that’s up to them.

Beau Sterling, a Las Vegas appellate attorney, is Chair of the Nevada Lawyer Editorial Board.  For more information, please visit www.sterlinglaw.us.

1. Tombstone. Advertisements which are limited to the following information shall be considered “tombstone” advertisements which are exempt from filing under this Rule:

(a) The name of the lawyer or firm and lawyers associated with the firm, with office addresses, telephone numbers, office and telephone service hours, telecopier numbers, e-mail and website information, and a designation of the profession such as attorney, lawyer, law office, or firm;

(b) The fields of law in which the lawyer or firm advertises a certification, limited practice, or specialty, and required related information as set forth in RPCs 7.2 and 7.4,provided the lawyer is otherwise qualified to make those statements in compliance with those Rules;

(c) The date of admission of the lawyer or lawyers to the State Bar of Nevada, to federal courts, and to the bars of other jurisdictions;

(d) Technical and professional licenses granted by this state and other recognized licensing authorities;

(e) Foreign language ability;

(f )Identification of prepaid or group legal service plans in which the lawyer participates provided the participation is otherwise compliant with SCR 42.5;

(g) The acceptance or nonacceptance of credit cards; and

(h) In addition to the exceptions listed in subparagraphs (a)-(g) above, listings in a regularly published law list; newsletters or other similar publications directed primarily to other lawyers and legal professionals; and announcements limited to change of address, affiliation, or staffing are exempt from filing.