f/k/a archives . . . real opinions & real haiku

If you care about legal ethics and client rights, and can be in Columbus,

Ohio, tomorrow afternoon, Jan. 27, please start making plans to be at the

headquarters of The Ohio State Bar Association by 1 P.M.  If you can’t be

there — and especially if you are a member or future member of OSBA or

the Ohio Bar — you should also read on, and take action by email or phone,

or at your website.

As explained below, we believe OSBA is (or is about to be) a

prime example of our Bar & Guild Theory: Most bar groups

spend much of their time acting like guilds — promoting the

interests of their members, and “protecting” the public from

competition, information, innovation and choice.

The Urgency: On Jan. 27, 2006, the OSBA House of Delegates

will consider whether to support a completely revamped set

of ethics rules.

The two issues I will focus on here are: (1) Should lawyers be

allowed to characterize their fees or rates in ads as “discount,” 

“cut-rate,” “lowest,” or “special,” when the terms are not used

in a false of misleading fashion?  (2) Should lawyers be required

(for matters bove $500) to communicate in writing with a client

concerning the scope of engagement and the basis or rate of

fees and expenses? [You may find other favorite issues that

need your or our attention.] [UPDATE: Our efforts failed. The Ohio Bar included the ban on advertising discount fees in its recommendations to the Ohio Supreme Court, which then included the provision in the Comment to Rule 7.1, which has been in effect since February 2007.]

After lengthy consideration on how to modernize the current Ohio ethics

Code, and to bring it more into line with the ABA’s Model Rules, a Supreme

Court Task Force issued its Report and Proposed Rules (with Comparisons

to the Model Rules and the current Code) for comment, in October 2005.

An OSBA ethics subcommittee has also issued its Bar Recommendations.

As OSBA President E. Jane Taylor recently announced:

On Jan. 27, 2006, at 1 p.m., the Council of Delegates will hold a

special meeting at OSBA Headquarters, 1700 Lake Shore Drive,

Columbus, to consider recommendations of the Supreme Court

Task Force on Rules of Professional Conduct.

In addition, all members of the Association “have the privilege of the

floor on a parity with delegates. . . [and] Members wishing to address

this matter at the upcoming Council of Delegates meeting are asked

to communicate their interest to Bill Weisenberg in advance so

they can be recognized at the meeting. [you can contact Bill at

wweisenberg@ohiobar.org; phones: (614) 487-8585; (800) 232-7124;

FAX (614) 487-8808]

Here’s why I am concerned and am asking for your help:

First: As the ABA eJournal reported last week, and Carolyn Elefant

at My Shingle decried yesterday (via Lisa at Inside Opinions): “Ohio

Bar Won’t Allow Lawyers to Say They Offer Cut Rate Service,” Jan.

25, 2006). In Opinion 2005-9, (Dec. 2, 2005), the Bar Ethics Committee

held that it had no choice but to apply the current Code to the “coupons”

in question.  Ohio Code DR- 2-101(A) specifies that a lawyer shall not

use any form of publicity that:

(5) Contains characterizations of rates or fees chargeable by the

lawyer or law firm, such as “cut-rate,” “lowest,” “giveaway,” “below

cost,” “discount,” and “special;” however, use of characterizations

of rates or fees such as “reasonable” and “moderate” is acceptable.

Clearly, this antiquated rule, which almost certainly violates 1st Amendment

commercial speech rights, and would violate antitrust laws if promulgated by

the Association rather than by the Court, deserves to be thrown out.  There is

nothing inherently misleading about a discount claim — there is, of course,

something inherently competitive about them, which might be the rub. Rules

such as these, which have been eliminated in all but a few jurisdictions, are

wrapped in concern for misleading claims, but “belie the legal profession’s

basic dislike of lawyer advertising, competition, and affronts to its bloated

feelings of self-importance.” (see prior post on the NYSBA war against adver-

tising, and a round-up of recent action by the profession’s “dignity police.”

They contain excerpts from the ABA and the Federal Trade Commission,

on the harm to consumers from broad lawyer advertising bans that are not

narrowly tailored to prevent unfair or deceptive acts or practices.)

“Complaint BillF”

The Ohio Supreme Court Task Force recommends new Rules 7.1 and 7.2,

which largely follow the much-improved ABA Model advertising rules. They

move many prohibitions “in deference to constitutional concerns about the

regulation of commercial speech.” (Task Force Report) The Model Rules ban

only a false or misleading communication — that is, one which “contains a

material misrepresentation of fact or law, or omits a fact necessary to make

the statement considered as a whole not materially misleading.”  In a

Comment to Rule 7.1, there is this appropriate conclusion about fees:

“[A]n unsubstantiated comparison of the lawyer’s services or fees

with the services or fees of other lawyers may be misleading if

presented with such specificity as would lead a reasonable person

to conclude that the comparison can be substantiated. The inclusion

of an appropriate disclaimer or qualifying language may preclude a

finding that a statement is likely to create unjustified expectations

or otherwise mislead a prospective client.”

It is unfortunate (and misleading), however, that the Proposed Ohio Rule 7.1

removes the ban on terms such as “discount” and “cut-rate” from the body

of the Rule, but insert the provisions again in Comment [4] to Rule 7.1, which

states:

4] Characterization of rates or fees chargeable by the lawyer or law

firm such as “cut-rate,” “lowest,” “giveaway,” “below cost,” “discount,”

or “special” is misleading. [emphasis added]

It is a per se rule making discount advertising by lawyers unethical.  That can

only have one purpose (eliminating or reducing price competition) and one

result: higher prices for consumers of legal services.  The higher price will,

of course, mean that more and more Americans will be functionally eliminated

from the legal services marketplace, and have their legal needs unmet or met

through nonlawyer sources.

The drafter of the Task Force Report sounds rather unhappy about this result,

reading between the lines.  And, the OSBA ethics committee could have

corrected it, advocating for the Model Rule version, the First Amendment,

and competition.  However, it did not.  The committee’s Recommendations

adopt the Task Force’s version of the advertising rules in their entirety.

The written fee and scope of engagement requirement has a bit

of a different posture.

The current Code says, in relevant part:

EC 2-18 As soon as feasible after a lawyer has been employed,

it is desirable that he reach a clear agreement with his client as

to the basis of the fee charges to be made. Such a course will

not only prevent later misunderstanding but will also work for

good relations between the lawyer and the client. It is usually

beneficial to reduce to writing the understanding of the parties

regarding the fee, particularly when it is contingent.

Model Rule 1.5 (b) states that the engagement/fee agreement must be

communicated before or within a reasonable time after commencing the

representation, “preferably in writing.”  But, the Ohio Task Force decided

to go farther — giving, in reality, both the client and lawyer more protection,

by requiring a written agreement unless the matter is expected to cost less

than $500.

Rule 1.5 (b) The scope of the representation and the basis or

rate of the fee and expenses for which the client will be responsible

shall be communicated to the client in writing, before or within a

reasonable time after commencing the representation, unless the

lawyer will charge a client whom the lawyer has regularly represented

on the same basis as previously charged or the fee is $500.00 or less.

Any change in the basis or rate of the fee or expenses is subject to

division (a) of this rule and shall also be promptly communicated to

the client in writing.

How did the OSBA “ethics” subcommittee react to this written requirement?

The majority of the members rejected it — with the following eloquent and

thoughtful, but remarkably frank analysis:

“A majority of the subcommittee recommended changing Rule 1.2

to eliminate the writing requirement concerning scope of representation

and fee-and-expense agreements to prevent violations of that requirement

forming the basis of a disciplinary complaint.”

Ironically, the OSBA website has a LawFacts e-pamphlet, titled Lawyers,

which states:

“You should ask the lawyer to put into writing fee and billing agreements

to avoid any misunderstanding.”

In a modern, information world — with clients who can almost always read and write

(and with the scope of representation in more flux than ever ) — many of us surely ask

ourselves: “What kind of a lawyer wouldn’t use a written agreement when representing

a client.”   My reply: Exactly the type of lawyer who would oppose this Rule and whose

clients most need the in-writing mandate in Rule 1.5(b) for their protection.

“tinyredcheck” Ohio consumers need your voice in support of the proposed

Rule 1.5(b), and to help make it easier for Ohio lawyers to compete

on price (with its resulting benefits in innovation and acces).

In addition to letting the OSBA know how you feel, you can

write the Supreme Court of Ohio, which is seeking comments, until Feb.

15, 2006.  Ask them to keep the in-writing requirement and to junk

the ban on discount advertising.

You might also contact OSBA President E. Jane Taylor (click for her

firm profile and email address), or Robert K. Leonard, Chair of OSBA’s Legal

Ethics and Professional Liability Committee (at 119 N. West, Lima, OH 45801,

(419) 228-1020 ,  (419) 228 5490 Fax.

Please excuse the lateness of this alert.  Youf humble editor

learned of the OSBA Meeting this morning.

Ohio weblogers (and other concerned citizens), please do whatever you can at

your website to help bring Ohio’s lawyer ethics rules into the 21st Century and the

era of Consumer Sovereignty.    How about it, Modern Esquire; Dale Oesterle at

Business Law Prof; the (in)famous Law Dork, Chris Geidner; the anonymous

proprietor of Law v. Life (who recently started to take criminal cases, too); Prof.

Dan Tokaji of Equal Vote; and Prof. Douglas A. Berman at the award-winning

Sentencing Law & Policy ?

p.s. In August 2003, in a moment of deep insight and/or cynicism, I

suggested the following Warning be placed on all bar association

websites:

Warning:  We are a guild, here to serve the economic interests of our

members.  We’ll fight (’til your last dollar) to protect you from any legal

adversary and to secure your legal rights.  However, when it comes to

your financial interests versus our own, we will put ours first whenever

possible.

afterthought (Jan. 27, 2006):  Another aspect of the Proposed

Rule 1.5 bothers me — the Model Rule 1.5‘s ban on “unreasonable”

fees or expenses is rejected in favor of keeping the current ban in

Ohio’s DR 2-106 on “clearly excessive” fees.  Furthermore, the

fee, to be excessive, under the current and the proposed rule,

must leave a “lawyer of ordinary prudence” with “a definite and firm

conviction that the fee is in excess of a reasonable fee.” [emphasis

added] (Apparently a layperson on any Ohio grievance committee

cannot apply his or her own prudent judgment on the excessiveness

of a fee, after studying the circumstances. That’s one more concern)

Good lawyers use or choose particular words purposefully. Here,

it is hard to avoid the conclusion that merely banning “unreasonable”

fees seemed too harsh for Ohio’s lawyers.  Indeed, even a ban on

“excessive” fees was apparently too draconian — a fee needs to be

“clearly” excessive to be unethical.

I do not buy the excuse, if offered by the

Task Force and the Bar committee, that the

benefits of continuity outweighed adoption of

the standard used in most jurisdictions. Keeping

the “clearly excessive” standard is a clear signal

that the burden of proof for anyone challenging a

fee is extremely high — so that few, if any, fees will

be held to be excessive by your peers.  If your fee

isn’t illegal or fraudulent (e.g., demonstrably padded),

you’re safe in Ohio.

One final point of irony:  The current Ohio Publicity Rule, DR 2-101 (5),

prohibits the advertising of fees as being “discount,” but allows you to

call your fees “reasonable” and “moderate.” Comment [4] to Proposed

advertising rule 7.1, also declares discount claims to be misleading

and therefore banned. Notice how this ties in with the current and

proposed ethics rules on fees: any legal fee that is not “clearly exces-

sive” is “reasonable” in Ohio.  It makes you wonder which is more likely

to mislead the public, a “discount” claim by a lawyer whose fees are

genuinely lower than the local norm, or a “reasonable” claim by an

Ohio lawyer whose fees are just shy of being “clearly excessive.”

fresh snow
for the hands,
for the face

applauding

the mime

in our mittens

under the

blackest doodle

something unerasable

John Stevenson

“applauding the mime” – Quiet Enough (2004)

“under the” – Something Erasable (1995)

“fresh snow“– The Heron’s Nest (June 2005)