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February 15, 2006

To the Ohio Supreme Court on Proposed Lawyer Ethics Rules

Filed under: — David Giacalone @ 5:53 pm


                                                                                          Date: Feb. 15, 2006

To: Richard A. Dove


From: David A. Giacalone,


These Comments are submitted in response to the Request for Comments of the Ohio Supreme Court on the proposed adoption of the Ohio Rules of Professional Conduct and the repeal of the current Ohio Code of Professional Responsibility.


I am a retired member of the New York and District of Columbia Bars. Half of my legal career was spent at the Federal Trade Commission, where my focus was on limitations on competition (especially in regards to price and innovation) by the learned professions. 


I have come to believe that the best protection for consumers is the free availability of information and the existence of robust competition among providers of services.  I am currently editor of a weblog that frequently addresses issues of legal ethics, clients’ rights, and competition policy. 


There are two issues that I would like to comment upon. (A) 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? [Proposed Rules 7.1 to 7.3; current rule DR 2-101(A)(5)] (B) Should lawyers be required (for matters above $500) to communicate in writing with a client concerning the scope of engagement and the basis or rate of fees and expenses? [Proposed Rules 1.2(c) and 1.5(b)]

(A)  I believe the client, the profession, and the First Amendment, would be far better served, if the ABA’s  Model advertising rules and Comments [7.1, 7.2 and 7.3] were substituted in their entirety, for the current Ohio rules, without retaining additional prohibitions from the current DR 2-101.  In particular, I believe that it is injurious to clients to retain the prohibition on discount advertising by lawyers.  


It is unfortunate (and misleading) 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]

This is a per se rule making discount advertising by lawyers unethical.  The primary purpose of such a ban (eliminating or reducing price competition) and its primary result (higher prices for consumers of legal services) are clear.  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.  It will also be harder for lawyers to experiment with innovative and more efficient methods for providing services to clients. 


A Federal Trade Commission letter in September 2002 to the Alabama Supreme Court makes some important points (see their Press Release):

“[I]t is best for consumers if concerns about misleading advertising 

are addressed by adopting restrictions on advertising that are tailored

to prevent unfair or deceptive acts or practices. . . . [I]mposing overly

broad restrictions that prevent the communication of truthful and nond-

eceptive information is likely to inhibit competition and to frustrate

informed consumer choice.” As the Commission staff noted in a 1994

comment to the American Bar Association’s Commission on Advertising,

“research has indicated that overly broad restrictions on truthful advertising

may adversely affect prices paid by consumers, especially for routine

legal services.”


In addition, please note that the current Ohio Publicity Rule, DR 2-101 (5), prohibits the advertising of fees as being “discount,” but allows you to call your fees “reasonabl” 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 excessive” is “reasonable” in Ohio.  I believe that the public is far more likely to be misled, to their detriment, when a lawyer claims that fees are “reasonable,” although they are in fact average or above, or even just shy of being “clearly excessive,” than they are likely to be misled when a lawyer whose fees are genuinely lower than the local norm advertises those fees as “discount.”   


Consumers deserve the benefits of price competition, which can help assure innovation and better access to legal services and the justice system. 



(B)  I strongly support the recommendation of the Task Force requiring, in Rule 1.2 (c) and Rule 1.5 (b), a written statement on fees and scope of representation by given in a timely manner to the client, unless the matter is expected to cost less than $500.   In a world where both fee structures and scope of representation are more in flux than ever, this requirement will indeed protect both client and lawyer (see current EC 2-18).  


It is outlandish that the OSBA “ethics” subcommittee opposes this requirement.  It is not surprising, however, that they could come up with no explanation, other than preventing “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 lawyers and consumer advocates ask: “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 the proposed Rule and whose clients most need the in-writing mandate in Rule 1.2(c) and Rule 1.5(b) for their protection.

Thank you for your time and consideration of these Comments.


respectfully submitted,


David Giacalone

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