Rule 7.1

Communications Concerning a Lawyer’s Services (Rule Approved by the Supreme Court, Effective November 1, 2018) (a) A lawyer shall not make a false or misleading communication about the lawyer or the lawyer’s services. A communication is false or misleading if it contains a material misrepresentation of fact or law, or omits a fact necessary to make the communication considered as a whole not materially misleading. (b) The Board of Trustees of the State Bar may formulate and adopt standards as to communications that will be presumed to violate rule 7.1, 7.2, 7.3, 7.4 or 7.5. The standards shall only be used as presumptions affecting the burden of proof in disciplinary proceedings involving alleged violations of these rules. “Presumption affecting the burden of proof” means that presumption defined in Evidence Code sections 605 and 606. Such standards formulated and adopted by the Board, as from time to time amended, shall be effective and binding on all lawyers. Comment [1] This rule governs all communications of any type whatsoever about the lawyer or the lawyer’s services, including advertising permitted by rule 7.2. A communication includes any message or offer made by or on behalf of a lawyer concerning the availability for professional employment of a lawyer or a lawyer’s law firm* directed to any person.* [2] A communication that contains an express guarantee or warranty of the result of a particular representation is a false or misleading communication under this rule. (See also Bus. & Prof. Code, § 6157.2, subd. (a).) [3] This rule prohibits truthful statements that are misleading. A truthful statement is misleading if it omits a fact necessary to make the lawyer’s communication considered as a whole not materially misleading. A truthful statement is also misleading if it is presented in a manner that creates a substantial* likelihood that it will lead a reasonable* person* to formulate a specific conclusion about the lawyer or the lawyer’s services for which there is no reasonable* factual foundation. Any communication that states or implies “no fee without recovery” is also misleading unless the communication also expressly discloses whether or not the client will be liable for costs. [4] A communication that truthfully reports a lawyer’s achievements on behalf of clients or former clients, or a testimonial about or endorsement of the lawyer, may be misleading if presented so as to lead a reasonable* person* to form an unjustified expectation that the same results could be obtained for other clients in similar matters without reference to the specific factual and legal circumstances of each client’s case. Similarly, an 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 2 substantiated. An appropriate disclaimer or qualifying language often avoids creating unjustified expectations. [5] This rule prohibits a lawyer from making a communication that states or implies that the lawyer is able to provide legal services in a language other than English unless the lawyer can actually provide legal services in that language or the communication also states in the language of the communication the employment title of the person* who speaks such language. [6] Rules 7.1 through 7.5 are not the sole basis for regulating communications concerning a lawyer’s services. (See, e.g., Bus. & Prof. Code, §§ 6150–6159.2, 17000 et. seq.) Other state or federal laws may also apply.


Rule 7.2

Advertising (Rule Approved by the Supreme Court, Effective November 1, 2018) (a) Subject to the requirements of rules 7.1 and 7.3, a lawyer may advertise services through any written,* recorded or electronic means of communication, including public media. (b) A lawyer shall not compensate, promise or give anything of value to a person* for the purpose of recommending or securing the services of the lawyer or the lawyer’s law firm,* except that a lawyer may: (1) pay the reasonable* costs of advertisements or communications permitted by this rule; (2) pay the usual charges of a legal services plan or a qualified lawyer referral service. A qualified lawyer referral service is a lawyer referral service established, sponsored and operated in accordance with the State Bar of California’s Minimum Standards for a Lawyer Referral Service in California; (3) pay for a law practice in accordance with rule 1.17; (4) refer clients to another lawyer or a nonlawyer professional pursuant to an arrangement not otherwise prohibited under these Rules or the State Bar Act that provides for the other person* to refer clients or customers to the lawyer, if: (i) the reciprocal referral arrangement is not exclusive; and (ii) the client is informed of the existence and nature of the arrangement; (5) offer or give a gift or gratuity to a person* having made a recommendation resulting in the employment of the lawyer or the lawyer’s law firm,* provided that the gift or gratuity was not offered or given in consideration of any promise, agreement, or understanding that such a gift or gratuity would be forthcoming or that referrals would be made or encouraged in the future. (c) Any communication made pursuant to this rule shall include the name and address of at least one lawyer or law firm* responsible for its content. Comment [1] This rule permits public dissemination of accurate information concerning a lawyer and the lawyer’s services, including for example, the lawyer’s name or firm* name, the lawyer’s contact information; the kinds of services the lawyer will undertake; the basis on which the lawyer’s fees are determined, including prices for specific services and payment and credit arrangements; a lawyer’s foreign language ability; names of references and, with their consent, names of clients regularly represented; 2 and other information that might invite the attention of those seeking legal assistance. This rule, however, prohibits the dissemination of false or misleading information, for example, an advertisement that sets forth a specific fee or range of fees for a particular service where, in fact, the lawyer charges or intends to charge a greater fee than that stated in the advertisement. [2] Neither this rule nor rule 7.3 prohibits communications authorized by law, such as court-approved class action notices. Paying Others to Recommend a Lawyer [3] Paragraph (b)(1) permits a lawyer to compensate employees, agents, and vendors who are engaged to provide marketing or client-development services, such as publicists, public-relations personnel, business-development staff, and website designers. See rule 5.3 for the duties of lawyers and law firms* with respect to supervising the conduct of nonlawyers who prepare marketing materials and provide client development services. [4] Paragraph (b)(4) permits a lawyer to make referrals to another lawyer or nonlawyer professional, in return for the undertaking of that person* to refer clients or customers to the lawyer. Such reciprocal referral arrangements must not interfere with the lawyer’s professional judgment as to making referrals or as to providing substantive legal services. (See rules 2.1 and 5.4(c).) Conflicts of interest created by arrangements made pursuant to paragraph (b)(4) are governed by rule 1.7. A division of fees between or among lawyers not in the same law firm* is governed by rule 1.5.1. 1


(Former Rule 1-400) Advertising and Solicitation EXECUTIVE SUMMARY The Commission for the Revision of the Rules of Professional Conduct (“Commission”) evaluated current rule 1-400 (Advertising and Solicitation) in accordance with the Commission Charter, with a focus on the function of the rule as a disciplinary standard, and with the understanding that the rule comments should be included only when necessary to explain a rule and not for providing aspirational guidance. In addition, the Commission considered the national standard of the ABA counterparts to rule 1-400, which comprise a series of rules that are intended to regulate the commercial speech of lawyers: Model Rules 7.1 (Communication Concerning A Lawyer’s Services), 7.2 (Advertising), 7.3 (Solicitation of Clients), 7.4 (Communication of Fields of Practice and Specialization), and 7.5 (Firm Names and Letterheads). Rule As Issued For 90-day Public Comment The result of the Commission’s evaluation is a three-fold recommendation for implementing: (1) The Model Rules’ framework of having separate rules that regulate different aspects of lawyers’ commercial speech: Proposed rule 7.1 sets out the general prohibition against a lawyer making false and misleading communications concerning the availability of legal services. Proposed rule 7.2 will specifically address advertising, a subset of communication. Proposed rule 7.3 will regulate marketing of legal services through direct contact with a potential client either by real-time communication such as delivered in-person or by telephone, or by directly targeting a person known to be in need of specific legal services. Proposed rule 7.4 will regulate the communication of a lawyer’s fields of practice and claims to specialization. Proposed rule 7.5 will regulate the use of firm names and trade names. (2) The retention of the Board’s authority to adopt advertising standards provided for in current rule 1-400(E). Amendments to the Board’s standards, including the repeal of a standard, require only Board action; however, many of the Commission’s changes to the advertising rules themselves are integral to what is being recommended for the Board adopted standards. Although the Commission is recommending the repeal of all of the existing standards, many of the concepts addressed in the standards are retained and relocated to either the black letter or the comments of the proposed rules. (3) The elimination of the requirement that a lawyer retain for two years a copy of any advertisement or other communication regarding legal services. The five proposed rules were adopted by the Commission during its March 31-April 1, 2016 meeting. Following consideration of public comment, a change was made to proposed rule 7.1 2 and rule 7.1 was circulated for an additional 45-day public comment period. There were no substantive changes made to proposed rules 7.2, 7.3, 7.4, and 7.5. See the Executive Summary for proposed rule 7.1. 1. Recommendation of the ABA Model Rule Advertising & Solicitation Framework. The partitioning of current rule 1-400 into several rules corresponding to Model Rule counterparts is recommended because advertising of legal services and the solicitation of potential clients is an area of lawyer regulation where greater national uniformity would be helpful to the public, practicing lawyers, and the courts. The current widespread use of the Internet by lawyers and law firms to market their services and the trend in most jurisdictions, including California, toward permitting some form of multijurisdictional practice, warrants such national uniformity. In addition, a degree of uniformity should follow from the fact that all jurisdictions are bound by the constitutional commercial speech doctrine when seeking to regulate lawyer advertising and solicitation. 2. Recommendation to repeal or relocate the current Standards into the black letter or comments of the relevant proposed rule but to retain current rule 1-400(E), which authorizes the Board to promulgate Standards. The standards are not necessary to regulate inherently false and deceptive advertising. The Commission reviewed each of the standards and determined that most fell into that category. Further, as presently framed, the presumptions force lawyers to prove a negative. They thus create a lack of predictability with respect to how a particular bar regulator might view a given advertisement. The standards also create a risk of inconsistent enforcement and an unchecked opportunity to improperly regulate “taste” and “professionalism” in the name of “misleading” advertisements. In the absence of deception or illegal activities, regulations concerning the content of advertisements are constitutionally permitted only if they are narrowly drawn to advance a substantial governmental interest. Central Hudson Gas & Elec. v. Pub. Serv. Comm’n, 447 U.S. 557 (1980); Alexander v. Cahill, 598 F.3d 79 (2d Cir. 2010) (state’s ban on “advertising techniques” that are no more than potentially misleading are unconstitutionally broad). Nevertheless, although the Commission’s review led it to conclude that none of the current standards should be retained as standards, it determined that proposed rule 7.1 should carry forward current rule 1-400(E), the standard enabling provision, in the event future developments in communications or law practice might warrant the promulgation of standard to regulate lawyer conduct. 3. Recommendation to eliminate the record-keeping requirement. Following the lead of most jurisdictions in the country and the ABA itself, the Commission recommends eliminating the two-year record-keeping requirement in current rule 1-400(F). The ABA Ethics 2000 Commission explained the rationale for the deletion of the requirement, which had appeared in Model Rule 7.2: “The requirement that a lawyer retain copies of all advertisements for two years has become increasingly burdensome, and such records are seldom used for disciplinary purposes. Thus the Commission, with the concurrence of the ABA Commission on Responsibility in Client Development, is recommending elimination of the requirement that records of advertising be retained for two years.” (See ABA Reporter’s Explanation of Changes, rule 7.2(b).) The Commission also notes that because a “web page” is an electronic communication, (see State Bar Formal Ethics Op. 2001-155), it would be extraordinarily burdensome to require a 3 lawyer to retain copies of each web page given how often the information on web pages are changed, and how often web pages are deleted. Nevertheless, the Commission also notes that even with the deletion of the requirement in rule 1-400(F), a one-year retention requirement would remain in Business and Professions Code section 6159.1. A description of each of the proposed rules follows. Rule 7.2 (Advertising) As noted, proposed rule 7.2 would specifically address advertising, a subset of communication. Paragraph (a), derived from Model Rule 7.2(a) as modified, permits lawyers to advertise to the general public their services through any written, recorded or electronic media, provided the advertisement does not violate proposed rule 7.1 (prohibition on false or misleading communications) or 7.3 (prohibition on in-person, live telephone or real-time electronic communications). The addition to Model Rule 7.2(a) language of the terms “any” and “means of” are intended to signal that the different modes of communication listed (written, recorded and electronic) are expansive and not limited to currently existing technologies. Paragraph (b) prohibits a lawyer from paying a person for recommending the lawyer’s services except in the enumerated circumstances set forth in subparagraphs (b)(1) through (b)(5). Subparagraph (b)(1) carries forward current rule 1-320’s Discussion paragraph, which does not “preclude compensation to the communications media in exchange for advertising the member’s or law firm’s availability for professional employment.” The term “reasonable” was added to modify “costs” to ensure such advertising costs do not amount to impermissible fee sharing with a nonlawyer. Subparagraph (b)(2) clarifies that payment of “usual charges” to a qualified lawyer referral service is not the impermissible sharing of fees with a nonlawyer. Subparagraph (b)(3) carries forward the exception in current rule 2-200(B). Subparagraph (b)(4) has no counterpart in the California rules. However, permitting reciprocal referral arrangements recognizes a common mechanism by which clients are paired with lawyers or nonlawyer professionals. Because these arrangements are permitted only so long as they are not exclusive and the client is made aware of them, public protection is preserved. Subparagraph (b)(5) carries forward the substance of the second sentence of current rules 2-200(B) and 3-120(B), which permit such gifts to lawyers and nonlawyers, respectively. Paragraph (c), derived from Model Rule 7.2(c), as modified, requires the name and address of at least one lawyer responsible for the advertisement’s content. It carries forward the concept in current Standard No. 12. There are four comments that provide interpretative guidance or clarify how the rule should be applied. Comment [1] provides interpretive guidance on the kinds of information that would generally not be false or misleading by providing a non-exhaustive list of permissible information. The comment’s last sentence carries forward the substance of rule 1-400, Standard No. 16 regarding misleading fee information. Comment [2] clarifies that neither rule 7.2 nor 7.3 [Solicitation of Clients] prohibits court-approved class action notices, a common form of communication with respect to the provision of legal services. Comment [3] provides interpretive guidance by clarifying that a lawyer may not only compensate media outlets that publish or air the lawyer’s advertisements, but also may retain and compensate employees or outside contractors to assist in the marketing the lawyer’s services, subject to proposed rule 5.3 (Responsibilities Regarding Nonlawyer Assistants). Comment [4] clarifies how the rule should be applied to reciprocal referral arrangements, as permitted under subparagraph (b)(4), specifically 4 focusing on the concept that such arrangements must not compromise a lawyer’s independent professional judgment.


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