Online advertising by attorneys via pay-per-click* is an effective and most likely necessary means of reaching many of the prospective consumers of new normal legal services, as discussed in our previous post on "shouting." 

But before jumping in, what is the regulatory environment?  Simply put, is this allowed?

More than a few of our lawyer colleagues think so because they are already doing it.  Googling "commercial litigation lawyer" returns a slew of attorney  ads along the right side of the search results page, including, for example:

Fletcher Business Law

Supporting Bay Area Businesses
Call for Consultation: 510-709-5435
San Francisco-Oakland-San Jose, CA

www.fletcherlp.com

So far so good, but most of us are going to want better information on the applicable regulations.

The answer is that pay-per-click online services are not prohibited and instead enjoy the same limited First Amendment protection of commercial speech that is afforded other forms of attorney advertising.  However, the regulatory environment is far from settled, as discussed after the jump.

Currently PPC is Neither Prohibited Nor Specially Regulated

The United States Supreme Court gave its qualified approval of attorney advertising in Bates v. State Bar of Arizona, 433 U.S. 350 (1977).  Truthful and non-deceptive attorney advertising is protected under the First Amendment; however, like other commercial speech, attorney advertising is subject to regulation by the states.

Attorneys seized the opportunity to promote themselves across traditional radio, television, direct mail and print media, and, like other states, California responded by adopting rules prohibiting false, misleading and deceptive advertising messages in both its Rules of Professional Conduct (section 1-400 (A)-(D)) and Business and Professions Code (sections 6157 to 6158.3).

More recently, in the not exactly complimentary words of the Ninth Circuit, "attorneys [began] trolling for clients on the internet," due to "sufficiently widespread use of the internet, within the past five or ten years, that makes internet advertising worthwhile."  See Barton v. US Dist. Court, 410 F.3d 1104, 1109 (9th Cir. 2005). 

State bar associations have attempted to address the real or perceived challenges of regulating Internet-based advertising.  California’s Board of Governors has adopted a revamped set of Rules of Professional Conduct that includes, in Article 7, revamped attorney advertising rules expressly addressing communications on "web pages and web sites," "electronic transmissions," "electronic media" and the "Internet."  These new rules await the approval of the California Supreme Court.  Florida enacted and has since stayed enforcement of a bizarre and unduly burdensome set of regulations directed to attorney advertising over the Internet.  Consumer rights group Public Citizen has challenged not just the new regulations in Florida but also those in New York and Louisiana, as recounted in "Florida puts brakes on lawyer advertising rules."

The ABA Commission on Ethics 20/20 and its reporter Professor Andrew Perlman have also joined the issue, publishing on Sept. 20, 2010 a whitepaper "Concerning Lawyer’s Use of Internet Based Client Development Tools" and soon thereafter a podcast on the same subject.  The ABA solicits guidance among other things "on whether pay-per-click and pay-per-lead arrangements" might violate Model Rule 7.2 (Advertising).

The upshot is that, notwithstanding the high level of chatter, pay-per-click attorney advertising currently is neither prohibited nor specially restricted by state ethical regulations.

Greater Regulation of PPC in Future is Unlikely

Furthermore, reading the tea leaves, there won’t be any special regulation of pay-per-click advertising in the future.

not an impermissible payment for specific referral

In most jurisdictions, lawyers cannot pay or give "anything of value" to someone for referring a particular client or case.  See Proposed Cal RPC 7.2(b); ABA Model Rule 7.2(b).  Traditional advertising does not violate this rule because the advertisement is not targeted at a particular person with a specific legal problem and the advertising fee is paid regardless of whether anyone ever reads the ad or contacts the lawyer – the connection between the payment for the ad and the contact with the prospective client is attenuated at best.

But does pay-per-click advertising, where payment is made not for the posting of the ad but rather for someone clicking on the ad and consequently landing on the lawyer’s website, rise to the level of impermissible payment for a specific referral?  Not so, according to the lawyerist.com in "Pssst, Buddy – Wanna Buy a Client?

So, the lawyer pays for clicks. Sounds pretty close to paying for each referral. But Google has no idea whether the clicker needs legal services, is just curious, or is bored at the office. Nor does Google guarantee a certain number of clicks or that the clickers will actually turn into paying clients. In the end, it looks more like targeted advertising than paying for clients.

does not fall within the categories of false, misleading or deceptive practices

In addition, the typical pay-per-click ad, like that above, does not fall within any of the categories of false, misleading or deceptive communications described by the California Board of Governors. It does not contain a guarantee, testimonial, dramatization, state "no fee without recovery," state that legal services can be provided in a language other than English, or state a range of fees lower than that actually charged. See Cal Rule 1-400 Standards 1-17; Cal RPC 7.2(b) Standards (1)-(6).  Of course, a pay-per-click ad that crosses the line into one of these categories is not permitted, but this is no different from the restrictions on traditional advertising.

is not a prohibited solicitation

The use of pay-per-click ads also comports with California State Bar Ethics Opinion No. 2001-155, which concluded that an attorney website is not an impermissible "solution" under Rule 1-400(B) even if it includes electronic mail facilities allowing direct communication to and from the attorney.  The Opinion distinguished what it called "the static nature of an email message" from a direct, real-time communication made in person or by telephone.  Unlike the latter, the email message "allows a potential client to reflect, re-read and analyze; the written form allows the potential client to share and discuss the communication with others and maintain a permanent record of its contents; and the mechanical steps involved in sending and receiving messages impose a measured pace on the interchange."  Similarly, the pay-per-click ad allows reflection, sharing, and recording over a linear and measured progression of steps, and, therefore falls well outside the scope of impermissible solicitation.

Of course, the very nature of Internet communications brings the pay-per-click ad within the auspices of numerous, potentially inconsistent if not conflicting state bar regulatory schemes.  The possibility always exists of an outlier jurisdiction finding that lawyer pay-per-click is an unauthorized practice of law, but not so far and probably not in the future.

Still to come:

We’ve proposed that lawyer shouting via online channels is necessary, and further proposed that pay-per-click is ethically permissible.  In our last installment, Part III, we turn to whether the benefits of the pay-per-click service provided through the leading Google AdWords outweighs the expense.

 

*Pay-per-click advertising is a service for which a lawyer pays a fee to a third-party each time an Internet user clicks on an advertisement that directs the user to the lawyer’s website.  Google AdWords is one of the most well-known of these services.