The advertisement of prices for attorney services

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Reference no: EM131274564

Bates v. State Bar of Arizona
United States Supreme Court

Plaintiff-appellants Bates and O'Steen, licensed to practice law in the state of Arizona, opened a "legal clinic" in 1974. The clinic provided legal services to people with modest incomes for approximately two years, after which the clinic placed an advertisement in the Arizona Republic, a daily newspaper circulated in the Phoenix area, stating the prices it charged for legal services. The plaintiffs conceded that this advertisement was a violation of Disciplinary Rule 2-101(B) incorporated in Rule 29(a) of the Arizona Supreme Court rules, which stated in part:

A lawyer shall not publicize himself or his partner or associate, or any other lawyer affiliated with him or his firm, as a lawyer through newspapers, or magazine advertisements, radio, television announcements, display advertisements in the city telephone directories or other means of commercial publicity, nor shall he authorize others to do so in his behalf.

A complaint was initiated by the president of the State Bar of Arizona, and a hearing was held before a threemember special local administrative committee. The committee recommended to the Arizona Supreme Court that each of the plaintiffs be suspended from practice for not less than six months. The court agreed and ordered the plaintiffs suspended. The plaintiffs appealed to the U.S. Supreme Court.

Justice Blackmun
The heart of the dispute before us today is whether lawyers may constitutionally advertise the prices at which certain routine services will be performed. Numerous justifications are proffered for the restriction of such price advertising. We consider each in turn:

1. The Adverse Effect on Professionalism. Appellee places particular emphasis on the adverse effects that it feels price advertising will have on the legal profession. The key to professionalism, it is argued, is the sense of pride that involvement in the discipline generates. It is claimed that price advertising will bring about commercialization, which will undermine the attorney's sense of dignity and self-worth. The hustle of the marketplace will adversely affect the profession's service orientation, and irreparably damage the delicate balance between the lawyer's need to earn and his obligation selflessly to serve. Advertising is also said to erode the client's trust in his attorney. Once the client perceives that the lawyer is motivated by profit, his confidence that the attorney is acting out of a commitment to the client's welfare is jeopardized. And advertising is said to tarnish the dignified public image of the profession.

We recognize, of course, and commend the spirit of public service with which the profession of law is practiced and to which it is dedicated. The present Members of this Court, licensed attorneys all, could not feel otherwise. And we would have reason to pause if we felt that our decision today would undercut that spirit. But we find the postulated connection between advertising and the erosion of true professionalism to be severely strained. At its core, the argument presumes that attorneys must conceal from themselves and from their clients the reallife fact that lawyers earn their livelihood at the bar. We suspect that few attorneys engage in such self-deception. And rare is the client, moreover, even one of modest means, who enlists the aid of an attorney with the expectation that his services will be rendered free of charge.

Moreover, the assertion that advertising will diminish the attorney's reputation in the community is open to question. Bankers and engineers advertise, and yet these professionals are not regarded as undignified. In fact, it has been suggested that the failure of lawyers to advertise creates public disillusionment with the profession. The absence of advertising may be seen to reflect the profession's failure to reach out and serve the community. Studies reveal that many persons do not obtain counsel even when they perceive a need because of the feared price of services or because of an inability to locate a competent attorney. Indeed, cynicism with regard to the profession may be created by the fact that it long has publicly eschewed advertising, while condoning the actions of the attorney who structures his social or civic associations so as to provide contacts with potential clients.

2. Inherently Misleading Nature of Attorney Advertising. It is argued that advertising of legal services inevitably will be misleading. The argument that legal services are so unique that fixed rates cannot meaningfully be established is refuted by the record in this case. The appellee State Bar itself sponsors a Legal Services Program in which the participating attorneys agree to perform services like those advertised by the appellants at standardized rates.

3. The Adverse Effect on the Administration of Justice. Advertising is said to have the undesirable effect of stirring up litigation. But advertising by attorneys is not an unmitigated source of harm to the administration of justice. It may offer great benefits. Although advertising might increase the use of the judicial machinery, we cannot accept the notion that it is always better for a person to suffer a wrong silently than to redress it by legal action.

4. The Undesirable Economic Effects of Advertising. It is claimed that advertising will increase the overhead costs of the profession, and that these costs then will be passed along to consumers in the form of increased fees. Moreover, it is claimed that the additional cost of practice will create a substantial entry barrier, deterring or preventing young attorneys from penetrating the market and entrenching the position of the bar's established members.

These two arguments seem dubious at best. Neither distinguishes lawyers from others and neither appears relevant to the First Amendment. The ban on advertising serves to increase the difficulty of discovering the lowest cost seller of acceptable ability. As a result, to this extent attorneys are isolated from competition, and the inventive to price competitively is reduced. Although it is true that the effect of advertising on the price of services has not been demonstrated, there is revealing evidence with regard to products: where consumers have the benefit of price advertising, retail prices often are dramatically lower than they would be without advertising. It is entirely possible that advertising will serve to reduce, not advance, the cost of legal services to the consumer.

The entry-barrier argument is equally unpersuasive. In the absence of advertising, an attorney must rely on his contacts with the community to generate a flow of business. In view of the time necessary to develop such contacts, the ban in fact serves to perpetuate the market position of established attorneys. Consideration of entry-barrier problems would urge that advertising be allowed so as to aid the new competitor in penetrating the market.

5. The Adverse Effect of Advertising on the Quality of Service. It is argued that the attorney may advertise a given "package"of service at a set price, and will be inclined to provide, by indiscriminate use, the standard package regardless of whether it fits the client's needs . . . . Even if advertising leads to the creation of "legal clinics" like that of appellants-clients that emphasize standardized procedures for routine problems-it is possible that such clinics will improve service by reducing the likelihood of error.

6. The Difficulties of Enforcement. Finally, it is argued that the wholesale restriction is justified by the problems of enforcement if any other course is taken. Because the public lacks sophistication in legal matters, it may be particularly susceptible to misleading or deceptive advertising by lawyers.

It is at least somewhat incongruous for the opponents of advertising to extol the virtues and altruism of the legal profession at one point, and, at another, to assert that its members will seize the opportunity to mislead and distort. We suspect that, with advertising, most lawyers will behave as they always have: They will abide by their solemn oaths to uphold the integrity and honor of their profession and of the legal system.

In sum, we are not persuaded that any of the proffered justifications rise to the level of an acceptable reason for the suppression of all advertising by attorneys. As with other varieties of speech, it follows as well that there may be reasonable restrictions on the time, place, and manner of advertising.

The constitutional issue in this case is only whether the State may prevent the publication in a newspaper of appellants' truthful advertisement concerning the availability and terms of routine legal services. We rule simply that the flow of such information may not be restrained, and we therefore hold the present application of the disciplinary rule against appellants to be violative of the First Amendment.

As you know, a judge's reasoning is not always clear. In the course of writing an opinion, a judge may discuss an assortment of topics. Your task, as a reader, is to organize those topics into a meaningful pattern and then locate the reasoning in the decision. Only then are you ready to think critically about the case. The following questions should help you better understand the reasoning in Case 8-2.

1. The Court clearly listed the reasons the State Bar of Arizona offered for restricting price advertising. Justice Blackmun evaluated those reasons.As critical thinkers, you realize that identifying the link between the conclusion and reasons is imperative. What reasons did the Court offer for allowing attorneys to advertise their prices?

Clue: Remember that the Court concluded that, under the First Amendment, the state may not suppress advertising by attorneys. What reasons did Justice Blackmun use to reach this conclusion?

2. What primary ethical norm dominated the Court's consideration of the advertisement of prices for attorney services?

Clue: Go back to the Court's examination of the reasons offered by the State Bar of Arizona. Look closely at Justice Blackmun's response to reason 3. Furthermore, consider the last two paragraphs of the opinion

3. Suppose that the State Bar of Arizona had introduced evidence that advertising causes the price of attorney's services to increase. Do you think Justice Blackmun would have come to a different conclusion? Why or why not?

Clue: Look at the discussion of undesirable economic effects on advertising. Consider the primary ethical norm you identified in question 2. Do you think Justice Blackmun would consider this piece of evidence to be extremely persuasive?

Reference no: EM131274564

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