FTC Staff Comment Before the Louisiana State Bar Association Concerning Proposed Rules on Lawyer Advertising and Solicitation

1 This letter expresses the views of the Federal Trade Commission’s Office of Policy Planning, Bureau of
Consumer P rotection, Bureau of Competition and Bureau of Econo mics. The letter does not necessarily represent
the views of the Federal Trade C ommission or of any individual Comm issioner. The Co mmission has, however,
voted to authorize us to submit these comments.
2 W e understand that the original deadline of Novem ber 24, 2006 for comments has been lifted, and that the
Committee has not set a new deadline.
3 The Propo sed R ules are availab le at http://www.lsba.org/com mittees/ethicrulescomm ents.asp.
4 Federal Trade Commission Act, 15 U.S.C. § 45.
UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580
Office of Policy Planning
Bureau of Consumer Protection
Bureau of Competition
Bureau of Economic
March 14, 2007
Richard Lemmler, Jr., Esq.
Ethics Counsel
Rules of Professional Conduct Committee
Louisiana State Bar Association
601 St. Charles Avenue
New Orleans, LA 70130-3404
Re: Louisiana State Bar Association Rules of Professional Conduct
Committee Request For Comments Regarding Proposed Rules on
Lawyer Advertising and Solicitation
Dear Mr. Lemmler:
The staff of the Federal Trade Commission’s (“FTC” or “Commission”) Office of Policy
Planning, Bureau of Consumer Protection, Bureau of Competition and Bureau of Economics1 is
pleased to submit these comments pursuant to the Louisiana State Bar Association Rules of
Professional Conduct Committee’s (“Committee”) Request for Comments2 to its Proposed Rules
on Lawyer Advertising and Solicitation (“Proposed Rules”).3 This letter briefly summarizes the
Commission’s interest and experience in the regulation of attorney advertising and solicitation
and provides the staff’s opinion regarding the anticipated effects of the Proposed Rules on
consumers and competition.
The FTC enforces laws prohibiting unfair methods of competition and unfair or deceptive
acts or practices in or affecting commerce, which includes primary responsibility for stopping
deceptive advertising practices.4 Pursuant to its statutory mandate, the Commission encourages
competition in the licensed professions, including the legal profession, to the maximum extent
compatible with other state and federal goals. In particular, the Commission seeks to identify

Richard Lemmler, Esq.
March 14, 2007
Page 2 of 5
5 Specific statutory authority for the FTC’s advocacy program is found in Section 6 of the FTC Act, under
which Congress authorized the FT C “[t]o gather and comp ile information concerning, and to investigate from time to
time the organization, business, conduct, practices, and management of any person, partnership, or corporation
engaged in or whose business affects commerce,” and “[t]o make public from time to time such portions of the
information obtained by it hereunder as are in the public interest.” Id. § 46 (a), (f).
6 See, e.g., Letter fro m FT C Staff to the Office of Court A dministration, Supreme C ourt of New York (Sept.
14, 2 006 ), available at http://www.ftc.gov/os/2006/09/V060020-image.pdf; Letter from FT C Staff to the
Pro fessiona l Ethics C omm ittee for the State B ar of T exas (M ay 26, 200 6), ava ilable a t http://www.ftc.gov/os/
2006/05/V060017CommentsonaRequestforAnEthicsOpinionImage.pdf; Letter from FTC Staff to Committee on
Attorney Advertising, Sup reme Court of N ew Jersey (M ar. 1, 2006 ), available at
http://www.ftc.gov/be/V060009.pdf; see also, e.g., Letter from FTC Staff to Robert G. Esdale, Clerk of the Alabama
Supreme Court (Sept. 30, 200 2), available at http://www.ftc.gov/be/v020023.pdf. In addition, the staff has provided
its comments on such pro posals to, am ong o ther entities, the Sup reme Court of M ississippi (Jan. 14, 19 94); the State
Bar of Arizona (Apr. 17, 19 90); the Ohio State Bar Association (Nov. 3, 1989); the Florida Bar Bo ard of Governors
(July 17, 19 89); and the State B ar of G eorgia (M ar. 31 , 198 7). See also Submission of the Staff of the Federal Trade
Commission to the American Bar Association Commission on Advertising (June 24, 1994) (available online as
attachm ent to Sept. 30, 20 02, L etter to A labam a Sup reme Court, supra).
7 See, e.g. Tim othy J. M uris, California Dental Association v. Federal Trade Commission: The Revenge of
Footnote 17, 8 Supreme C ourt Economic Re view 265, 293-304 (2000) (discussing the empirical literature on the
effect of advertising restrictions in the professions); In the Matter of Polygram Holdings, Inc, et al, FTC Docket No.
929 8 (F.T .C. 20 03), at 38 n. 52 (sa me); Frank H. S tephen and James H. Love, Regulation o f the Lega l Professions,
586 0 Encycloped ia of Law and Eco nomics 987, 99 7 (1999 ) available at http://encyclo.findlaw.com/5860book.pdf
(Concluding that empirical studies demonstrate that restrictions on attorney advertising likely have the effect of
raising fees); Submission of the Staff of the Federal Trade Commission to the American Bar Association
Commission on Advertising, 5-6(June 24, 1994) (available online as attachment to Sept. 30, 2002, Letter to Alabama
Supreme Court, supra).
and prevent, where possible, business practices and regulations that impede competition without
offering countervailing benefits to consumers.5 The Commission and its staff have had a long-
standing interest in the effects on consumers and competition arising from the regulation of
lawyer advertising and solicitation.6 The FTC believes that while false and deceptive advertising
by lawyers should be prohibited, imposing overly broad restrictions that prevent the
communication of truthful and non-misleading information that some consumers value is likely
to inhibit competition and frustrate informed consumer choice. This position is supported by
research indicating that overly broad restrictions on truthful advertising may adversely affect
prices paid and services received by consumers.7
The FTC Staff is concerned that several provisions of the Proposed Rules unnecessarily
restrict truthful advertising and may adversely affect prices paid and services received by
consumers. In addition, provisions regarding advertising screening and approval by a committee
composed of competing attorneys may deter truthful and non-misleading advertising and present
risks to competition. The FTC Staff believes that Louisiana consumers can be adequately
protected from false and misleading advertising by using less restrictive means and through
enforcement of narrower rules.
In several respects, the Proposed Rules are nearly identical to rules proposed by the New
York Unified Court System in June, 2006, particularly those involving prohibitions against

Richard Lemmler, Esq.
March 14, 2007
Page 3 of 5
8 See provisions co ntained in §§ 7.2(c)(1) and 7.5(b)(1) of the Proposed R ules.
9 See id at § 7.2(c)(1)(G).
10 See id at §§ 7.2(c)(1)(D) and, to the extent applicable, 7.2(c)(14).
11 See id at § 7.1(c)(1)(L), and to other portions of § 7.1(c) as applicable.
12 See id at § 7.2(c)(1)(K).
13 See Letter from FTC Staff to the Office of Court Administration, Supreme Court of New York (Sept. 14,
200 6), available at http://www.ftc.gov/os/2006/09/V060020-image.pdf. Because these parts of the Proposed Rules
are nearly identical to the New York Proposed Amendments, Maureen Ohlhausen, Director of the FTC Office of
Policy Planning, supplied a copy of our New York comments to the Louisiana Bar in November, 2006.
14 The revised Rules of the Unified Court System of New York (with red-lined changes comparing the initial
draft) are available at http://www.nycourts.gov/rules/attorney_ads_amendments.shtml. Among the changes, New
York would allow claims regarding past success, if they are substantiated and accompanied by a brief disclosure, and
removed several of the other proposed restrictions. We note that the FTC Staff does not endorse the new rules
entirely as many of the rules require disclosures that may not be necessary. Unnecessary disclosures can have a
deterrent effect on ad vertising and increase costs to consumers. See generally Letter from Federal Trade
Comm ission to the New Jersey Supreme C ourt’s Committee on Attorney Advertising (November 9, 19 87) ava ilable
at 1987 WL 874590.
15 See § 7.7 of the P roposed Rules.
certain selected forms of advertising including actor portrayals, depictions and similar dramatic
techniques;8 comparative claims;9 statements about endorsements and testimonials;10
communications that create an expectation of results an attorney is likely to achieve;11 and
advertisements that look like legal pleadings.12 The FTC Staff submitted comments to the New
York Office of Court Administration in September, 2006, in which we recommended eliminating
or modifying such rules.13 We advised generally that, although such broad prohibitions might be
based on a concern that such advertising could mislead consumers about the results lawyers can
achieve, it would be better addressed by a rule directed more narrowly to claims that could be
construed as having some bearing on likely outcomes. On January 4, 2007, the New York
Unified Court system promulgated revised rules, which incorporated nearly all of the FTC Staff’s
recommendations.14
In addition to our concerns with restrictions similar to those proposed in New York, the
FTC Staff has a particular concern with provisions requiring attorneys to file advertisements for
review by a committee composed of competitors.15 First, a requirement that ads be filed with the
Committee will likely raise the cost of doing business for attorneys and thus likely result in
higher prices that consumers must pay.
Second, the Proposed Rules allow the review committee to issue opinions of non-
compliance. Although under the terms of the Proposed Rules, Committee opinions of non-
compliance would not carry the weight of law, such finding must be reported to the Bar’s Office
of Disciplinary Counsel (unless the advertising attorney agrees in writing that she will not

Richard Lemmler, Esq.
March 14, 2007
Page 4 of 5
16 See id at §§ 7.7(g) & (h).
17 See Deborah Platt Majoras, “Self Regulatory Organizations and the FTC,” Address to the Council of Better
Business B ureaus (April 11, 2005 ), availab le at http://www.ftc.gov/speeches/majoras/050411selfregorgs.pdf.
18 Indeed, several prominent Supreme Court cases have involved state bar ethics rules and opinions that were
found to restrain competition. See g enerally Bates v. State Bar of Arizona, 433 U.S. 350, 372-74 (1977); Goldfarb
v. Virginia State Bar, 421 U.S. 773, 792 (1975); and Ho over v. Ro nwin, 466 U.S. 558 , 568 (1984 ).
19 Due to the risk of anticompetitive behavior, a leading antitrust treatise advocates subjecting any
governmental agency made of members of the profession that it regulates to direct and active governmental
supervision. See AREEDA & HO V EN K AM P, I ANTITRUST LAW ¶227a, at 5 00 (2d ed. 20 00) (“W ithout reasonable
assurances that the body is far more broadly based than the very persons who are to be regulated, outside supervision
seems required.”).
disseminate the advertisement), and will be given evidentiary weight if the matter is prosecuted.16
In this manner, the Proposed Rules likely would compel substantial compliance by Louisiana
attorneys because non-complying attorneys would face serious risks to their livelihoods.
The FTC supports legitimate and fair industry self regulation because, when implemented
properly, it can provide efficiencies and other benefits to consumers.17 However, there are risks
to competition when one group of competitors is charged with regulating another. For example,
attorneys on the advertising committee may have the incentive, and would have the ability, to
limit advertising by competitors to soften competition rather than to protect consumers.18
The FTC Staff recommends that the Committee forego the filing and screening
components of the Proposed Rules in favor of enforcing the general prohibition against deceptive
and misleading claims through sanctions for violations. If the Committee nevertheless believes
that screening is necessary to curtail consumer harm, given the risks to competition, we
recommend that the Committee take steps to ensure that the review Committee as a whole, and
its members individually, are fully subject to federal and state antitrust laws.19
In conclusion, the FTC Staff believes that while deceptive advertising by lawyers should
be prohibited, reasonable restrictions on advertising that are specifically tailored to prevent
deceptive claims in ways that preserve competition provide the optimal level of protection for
consumers. Consumers benefit from robust competition among attorneys and from important
price and quality information that advertising and solicitation can provide. Rules that
unnecessarily restrict the dissemination of truthful and non-misleading information are likely to
limit competition and harm consumers of legal services in Louisiana.
Respectfully submitted,
Maureen K. Ohlhausen, Director
Office of Policy Planning

Richard Lemmler, Esq.
March 14, 2007
Page 5 of 5
Lydia B. Parnes, Director
Bureau of Consumer Protection
Jeffrey Schmidt, Director
Bureau of Competition
Michael A. Salinger, Director
Bureau of Economics