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Ohio Bar Won’t Allow Lawyers to Say They Offer Cut Rate Service

by Carolyn Elefant on January 25, 2006 · 10 comments

in Ethics & Malpractice Issues, Marketing Ethics, Setting and Collecting Fees

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Via this post from Allison Shields as LegalEase is a link to this ABA e-report article (1/20/06) on the Ohio Bar’s disiplinary board’s recent ruling that ocupons for free or discounted legal services violate the Ohio Code.  The board found that coupons characterize a lawyer’s legal services as “discount” and thus, run afoul of commentary to the Ohio rules that provides:
“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.”

As with all bar regulation, the rules sound benign enough in practice – protecting consumers from deceptive practices and preventing lawyers from acting like undignified hucksters.  Here’s the reality, though.  Services like We the People aren’t subject to bar rules – and thus, they’re able to proclaim, as a tag line, that they offer “Low cost accurate document preparation.”  Can an Ohio lawyer do the same?  As I read the commentary, I’d argue yes, but it’s a close call since both “low cost” and “accurate” are charaterizations of service.  And for that reason, the Ohio Bar’s rules have a chilling effect on lawyers who want to advertise their service in a way that allows them to compete with We the People.

Many bars have tried going after companies like We the People but the problem remains, that it’s a service that fills a void for consumers who don’t want to handle a case pro se and need affordable service.  Given that a need for affordable, basic service remains unmet, don’t we want to do all we can to ensure that this service is provided by attorneys?  Overbearing and restrictive regulations like those of the Ohio Bar sure don’t make that easy.

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    Ohio bar to lawyers: Naw, you AND your clients should suffer

    Oh how I wish Carolyn Elefant is being read in Columbus, in Wooster, in the ferny law libraries and sweaty arbitration theatres of Ohio. Because today she is doing a true service to attorneys and needy clients alike. In Ohio

  • http://legalblogwatch.typepad.com/legal_blog_watch/2006/01/ohio_bar_to_law.html Inside Opinions: Legal Blogs

    Ohio bar to lawyers: Naw, you AND your clients should suffer

    Oh how I wish Carolyn Elefant is being read in Columbus, in Wooster, in the ferny law libraries and sweaty arbitration theatres of Ohio. Because today she is doing a true service to attorneys and needy clients alike. In Ohio

  • http://blogs.law.harvard.edu/ethicalesq/2006/01/26#a5841 f/k/a

    action alert: Guild-Bar, Columbus (OH)

    On Jan. 27, 2006, the OSBA House of Delegates will consider whether to support the completely revamped set of ethics rules.

  • http://blogs.law.harvard.edu/ethicalesq/2006/01/26#a5841 f/k/a

    action alert: Guild-Bar, Columbus (OH)

    On Jan. 27, 2006, the OSBA House of Delegates will consider whether to support the completely revamped set of ethics rules.

  • Peter S. Chamberlain

    If I were General Counsel or an officer or director of the Ohio Bar, I would be very leery about this regulaton against advertising low fees or limited fees for limited services drawing the unwantged attention of both low and moderate income would-be consumers in need of legal services, and the FTC and the courts, on antitrust and unfair competition grounds. Didn’t we learn anything from Bates v. Arizona State Bar and Goldfarb v. Virginia State Bar, etc.?
    I think, and, during one of my three active terms, one as subcommittee chair, of the Dallas Bar Association’s Committee on Advisory Legal Ethics Opinions back when these cases were in litigation, heard one federal judge say that he thought, that any attempt by the State Bar, either by Disciplinary Rule or concerted pressure, to sanction lawyers for advertising based upon any such subjective criteria as whether an ad was “dignified” or in “good taste,” or any attempt at regulation beyond the minimum required to prevent it having a tendency to mislead, defraud, or confuse unsophisticated consumers, would violatge both the First Amendment and antitrust law.
    The real danger of the kind of price advertising targeted is not that it is “undignified,” or that, as in hte Goldfarb case, might tend to reduce the market price [fee], but that it could lead to sales below cost to drive out a competitor, loss leaders subsidized by another income source, bait-and-switch-up advertising, offering a price without being able to meet the foreseeable demand at that price, or other decepitve and anticompetitive practices.
    Conversely, it would be particularly important in offering such low-fee, limited-service cases that the attorney advertising and offering these make what services he is offering and the client is paying for, and what the client is likely to need that is not included in the low-price deal, very clear, in the ads and in clearly worded fee contracts.
    When I took Legal Ethics & Professionalism at Vanderbilt from the late great Prof. Ellliott Cheatham, who had written the then-current Case Book on the subject before mandatory retirement at Harvard, and was my first-year advisor, he compared the Bar’s absolute ban on advertising very unfavorably with the less restrictive rules in the medical profession which, unlike lawyers at that time, permitted their being listed by specialty. He cautioned us against “ethical” rules that were really designed, intended, and calculated not to protect the public but to preserve lawyers’ monopoly for our own economic benefit alone.
    When I started practicing in 1964, the State Bar of Texas published an official Minimum Fee Schedule in conjunction with a mandatory disciplinary rule against low fees. It was abolished long ago to avoid the State Bar being sued for illegal price fixing. This is the same thing in new dress.
    Early in my practice, long before modern word processors and computers on every desk, bankruptcy forms that had to be produced with specialized computer programs, etc., and, after some research and after discussing this with one former State Bar and ABA President among others, I asked the State Bar and ABA for opinions on the legal and ethical viability and requirements for a legal document preparation service available only to other lawyers who would retain ultimate responsibility to see that the finished document met their and their clients’ needs. The State Bar wrote back saying this was so clearly unethical and prohibited that they were surprised I would ask, and citing an opinion from before World War II based upon an ethics rule long since repealed. Later, in response to my and others’ similar requests, the ABA wrote a detailed formal opinion saying this was entirely proper under their ethics standards, which Texas had adopted, and suggesting that it was a good idea.
    The State Bars and ABA talk a good game when it comes to committees and professions of commitment to legal services to the poor in civil matters, but the fact is that a large and increasing percentage of the population at the lower end of the income spectrum, with disproportionate need for legal services, can not afford them.
    The State Bar of Texas went after Nolo Press, and the author of a very good book on how a prisoner, not allowed an attonrey at the critical early stages, can deal legally with the prison discipline and parole processes, for the unauthorized practice of law, not to mention introducing “conraband” into a prison, for crying out loud, but not publishers of various “Do our Own Divorce in Texas Without a Lawyer” books whose forms, “by a Texas lawyer” were so deficient that their lay users very often got to the end of the hearing and found, if the judge was good enough to tell them, that their proposed Decree lacked such required elements as the mandatory Standard Visiation Schedule, required by law to be posted at the courthouse, which is so infernally complex and rigid anyway that I was always getting calls from clients who, or whose ex-spouses, couldn’t begin to figure it out over Easter break, for example. I have prepared many decrees for people who got to the end of the hearing before realizing that they couldn’t do this themselves after all. If the parties are dividing a retirement package and need a Qualified Domestic Relations Order, good luck, because, at the end of a very frustrating State Bar video CLE program on how to draft a QDRO, the presenter said, in substance, “send me $1,500.00 and I’ll draft it. I spent more time, effort, and money for telephone calls, etc., on one QDRO, after getting my disabled client most of the community estate, than I did on the bitterly contested divorce case through several days of trial.
    That time, I gambled on collecting my flat fee, and got paid, after another lawyer had drained and dropped the client, whom he had known couldn’t come up with any more when he took her retainer, because he couldn’t figure out how to get paid. It was one of those rare cases where a contingent percentage fee would have been ethically permissible in family law, the horrors of the misuse of which I have seen, and made me even more money, but I felt reasonably sure we had the facts, the law, the equities, and a source from which to recover, on our side and didn’t think the odds justified that.
    I don’t envy any lawyer who tries to compete on low, low prices [fees] for legal services. Clients tend not to respect you, and give you a hard time, unless you charge them a high fee. I did, however, become known at one point as the “Lawyer of Last Resort” for undertaking more than my share of cases pro bono [free] or for nominal or reduced fees where it appeared that a child had been, was being, or was in danger of being abused, etc., as well as for being willing to tackle legal challenges that scared other lawyers off., which angered some of my colleagues. What an attorney charges or doesn’t charge a client is nobody else’s business unless it’s a clearly excessive or deceptive fee or he doesn’t do, or fouls up, the work.

  • Peter S. Chamberlain

    If I were General Counsel or an officer or director of the Ohio Bar, I would be very leery about this regulaton against advertising low fees or limited fees for limited services drawing the unwantged attention of both low and moderate income would-be consumers in need of legal services, and the FTC and the courts, on antitrust and unfair competition grounds. Didn’t we learn anything from Bates v. Arizona State Bar and Goldfarb v. Virginia State Bar, etc.?
    I think, and, during one of my three active terms, one as subcommittee chair, of the Dallas Bar Association’s Committee on Advisory Legal Ethics Opinions back when these cases were in litigation, heard one federal judge say that he thought, that any attempt by the State Bar, either by Disciplinary Rule or concerted pressure, to sanction lawyers for advertising based upon any such subjective criteria as whether an ad was “dignified” or in “good taste,” or any attempt at regulation beyond the minimum required to prevent it having a tendency to mislead, defraud, or confuse unsophisticated consumers, would violatge both the First Amendment and antitrust law.
    The real danger of the kind of price advertising targeted is not that it is “undignified,” or that, as in hte Goldfarb case, might tend to reduce the market price [fee], but that it could lead to sales below cost to drive out a competitor, loss leaders subsidized by another income source, bait-and-switch-up advertising, offering a price without being able to meet the foreseeable demand at that price, or other decepitve and anticompetitive practices.
    Conversely, it would be particularly important in offering such low-fee, limited-service cases that the attorney advertising and offering these make what services he is offering and the client is paying for, and what the client is likely to need that is not included in the low-price deal, very clear, in the ads and in clearly worded fee contracts.
    When I took Legal Ethics & Professionalism at Vanderbilt from the late great Prof. Ellliott Cheatham, who had written the then-current Case Book on the subject before mandatory retirement at Harvard, and was my first-year advisor, he compared the Bar’s absolute ban on advertising very unfavorably with the less restrictive rules in the medical profession which, unlike lawyers at that time, permitted their being listed by specialty. He cautioned us against “ethical” rules that were really designed, intended, and calculated not to protect the public but to preserve lawyers’ monopoly for our own economic benefit alone.
    When I started practicing in 1964, the State Bar of Texas published an official Minimum Fee Schedule in conjunction with a mandatory disciplinary rule against low fees. It was abolished long ago to avoid the State Bar being sued for illegal price fixing. This is the same thing in new dress.
    Early in my practice, long before modern word processors and computers on every desk, bankruptcy forms that had to be produced with specialized computer programs, etc., and, after some research and after discussing this with one former State Bar and ABA President among others, I asked the State Bar and ABA for opinions on the legal and ethical viability and requirements for a legal document preparation service available only to other lawyers who would retain ultimate responsibility to see that the finished document met their and their clients’ needs. The State Bar wrote back saying this was so clearly unethical and prohibited that they were surprised I would ask, and citing an opinion from before World War II based upon an ethics rule long since repealed. Later, in response to my and others’ similar requests, the ABA wrote a detailed formal opinion saying this was entirely proper under their ethics standards, which Texas had adopted, and suggesting that it was a good idea.
    The State Bars and ABA talk a good game when it comes to committees and professions of commitment to legal services to the poor in civil matters, but the fact is that a large and increasing percentage of the population at the lower end of the income spectrum, with disproportionate need for legal services, can not afford them.
    The State Bar of Texas went after Nolo Press, and the author of a very good book on how a prisoner, not allowed an attonrey at the critical early stages, can deal legally with the prison discipline and parole processes, for the unauthorized practice of law, not to mention introducing “conraband” into a prison, for crying out loud, but not publishers of various “Do our Own Divorce in Texas Without a Lawyer” books whose forms, “by a Texas lawyer” were so deficient that their lay users very often got to the end of the hearing and found, if the judge was good enough to tell them, that their proposed Decree lacked such required elements as the mandatory Standard Visiation Schedule, required by law to be posted at the courthouse, which is so infernally complex and rigid anyway that I was always getting calls from clients who, or whose ex-spouses, couldn’t begin to figure it out over Easter break, for example. I have prepared many decrees for people who got to the end of the hearing before realizing that they couldn’t do this themselves after all. If the parties are dividing a retirement package and need a Qualified Domestic Relations Order, good luck, because, at the end of a very frustrating State Bar video CLE program on how to draft a QDRO, the presenter said, in substance, “send me $1,500.00 and I’ll draft it. I spent more time, effort, and money for telephone calls, etc., on one QDRO, after getting my disabled client most of the community estate, than I did on the bitterly contested divorce case through several days of trial.
    That time, I gambled on collecting my flat fee, and got paid, after another lawyer had drained and dropped the client, whom he had known couldn’t come up with any more when he took her retainer, because he couldn’t figure out how to get paid. It was one of those rare cases where a contingent percentage fee would have been ethically permissible in family law, the horrors of the misuse of which I have seen, and made me even more money, but I felt reasonably sure we had the facts, the law, the equities, and a source from which to recover, on our side and didn’t think the odds justified that.
    I don’t envy any lawyer who tries to compete on low, low prices [fees] for legal services. Clients tend not to respect you, and give you a hard time, unless you charge them a high fee. I did, however, become known at one point as the “Lawyer of Last Resort” for undertaking more than my share of cases pro bono [free] or for nominal or reduced fees where it appeared that a child had been, was being, or was in danger of being abused, etc., as well as for being willing to tackle legal challenges that scared other lawyers off., which angered some of my colleagues. What an attorney charges or doesn’t charge a client is nobody else’s business unless it’s a clearly excessive or deceptive fee or he doesn’t do, or fouls up, the work.

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