We Need One More Texas Ad Rule Re-do

The latest proposed re-do of the Texas attorney advertising rules (the Ad Rules) has just been released by the Committee on Disciplinary Rules and Referenda (CDRR) and, surprisingly, they make a lawyer’s subjective desire for pecuniary gain the sine qua non of the Ad Rules. If you don’t read any further at least please view the proposed rules, comment, and learn about public hearings on them here.

This new subjective standard is a problem.

It has long been settled that, when it comes to attorney advertising (aka commercial speech), what matters is not the speaker’s subjective intent but rather whether the actual words used mislead the public, tarnish the image of the profession or otherwise harm some legitimate value the bar is allowed to protect.

You will recall that the CDRR released its first version of proposed changes to the Ad Rules in November, 2018.  That version allowed Texas lawyers to use trade names. Much objection from the Bar followed. Those rules were scrapped, and, as predicted, the prohibition against trade names has been revived in this latest version–but with a twist. It now states:

Rule 7.07: A lawyer substantially motivated by pecuniary gain shall not practice under a trade name.

Every lawyer works for pecuniary gain except when working on a purely pro bono basis. If we look honestly at what motivates lawyers then all lawyers in private practice are forbidden to use trade names because the only reason to use a trade name is get more trade; that is, for pecuniary gain.

But wait . . . there’s more.

The newly revised Ad Rules are riddled with this phrase–substantially motivated by pecuniary gain appears 17 times in the latest version–and there is no guidance at all as to how to objectively determine whether a communication or advertisement qualifies as such.∗

This phrase is even being used to define the kind of communications to which the Ad Rules apply in the first place. See proposed Rule 7.01(b)(1).

Invitiation to ligitation? Probably. Invitation to confusion? Absolutely.

Back to Bates.

Although a lot of work went into the new advertising rules it was work based on a flawed notion of what principle should guide the Bar’s regulation of advertising. Instead of trying to look into the heart and mind of the lawyer, which is an enterprise fraught with the likelihood of error, the rules need to look at the effect of advertising and trade names on the public. Bates v State Bar of Arizona , 433 US 350 (1977), struck down rules that forbade truthful advertising and specifically permitted restrictions on advertising that is false or misleading. Our advertising rules only need to restrict false and misleading advertising–something that is recognizable by the actual content of the message and not the motivation behind it. The profit motive will remain a legitimate concern in regulations forbidding direct solicitation of individual clients because the profit motive creates an unacceptable risk of other kinds of misconduct∗∗, but for communications aimed at the general public it is the actual words, not the motive that matters.

Back to trade names.

By way of example (and this analysis should be done on each rule that includes the phrase substantially motivated by pecuniary gain), if there is a problem with trade names it must be that they are misleading because they imply a specialization or expertise that does not exist. “Worlds Greatest Law Firm” would be a pretty obvious example of this. Nothing about the intent behind the name matters or is relevant to determining whether it is misleading.

The proposed addition of the attorney’s subjective intent renders the prohibition against trade names meaningless because it allows for only two possibilities. It either:

(1) applies to every lawyer (if that is the intention–it simply needs to say “no trade names”)

OR

(2) every lawyer can use a trade name as long as they can explain that they were not “substantially motivated by pecuniary gain” in so doing. To put it mildly–it is a standard that any decent lawyer can drive a truck through.∗∗∗

We need a standard that is objective and consistent with the Courts’ rulings on attorney advertising. The new proposed Ad Rules are neither.

∗ There are no comments to the proposed Ad Rules. Comments to the rules are necessary and typically used to define, explain or interpret what is meant by the language used in the rules. Moreover, the only similar language we found in any current Texas statute is the phrase “substantially motivated by sincere religious belief” in the Texas Religious Freedom Restoration Act. The word “substantially” itself appears thousands of times in Texas statutes without, however, ever being defined. Thus, the proposed rule hangs on a never before used phrase whose most important word, “substantially,” is not defined.

∗∗This is made clear in the comments to existing rule 7.03 (covering prohibited solicitations), which largely follows the ABA Model Rule on direct solicitation.

∗∗∗For example, the lawyers practicing at “The ADA Firm” are going to say that they are substantially motivated not by making money but by protecting the public and educating them about important rights under the American with Disabilities Act (ADA). Copy and paste a similar argument for every firm operating under such a trade name.

 

 

 

 

Texas Ethics in the News: Spring Edition

Diversity, pro bono and access oh my.

By now you have heard something about the lawsuit against the State Bar that was filed by a trio of attorneys who do not want to be compelled to subsidize activities the Bar’s “‘diversity’ initiatives, its legislative program, and its advocacy of pro bono and ‘access to justice’ programs.”

They are also challenging the legality of a mandatory bar.[1]

Not to be left out, Attorney General Ken Paxton filed an amicus brief in support of the Plaintiffs’ MSJ on liability—a brief in which he asked a federal judge to put a halt to the state bar’s “current practice of forcing all licensed Texas attorneys to fund a host of ideological and political activities through mandatory membership dues.”

The State Bar Executive Director has responded in the most recent Bar Journal and vows to defend against the attack. Summary Judgment Motions are pending, with the State Bar having just filed its own Cross-Motion for Summary Judgment.

While this challenge to the bar plays itself out in the courts, and regardless of where you fall in this clearly partisan game, it never hurts to remember that having a license to practice law in which the state grants you a special privilege not available to other people comes with obligations back to the public and those less fortunate.[2]

Who’s Afraid of Trade Names?

One of the most hotly debated proposed disciplinary rule changes in the past months called for eliminating the prohibition in Rule 7.01(a) against the use of trade names for lawyers. This was part of a proposed and much needed overhaul of the lawyer advertising rules. On its surface the change seemed to fill an obvious need; Texas is only one of a handful of states that does not allow lawyers and law firms to use trade names, requiring instead that lawyers practice under the names of current, deceased or retired firm members.

Nonetheless, it seems that members of the Bar were generally opposed to the trade name change, and as a result the proposed revisions to the ad rules have now been withdrawn and are being re-worked. The new proposed revision will be published for comment on June 1, 2019 in the Texas Bar Journal, with public hearings to follow in June and July[3] and will presumably not change the existing prohibition against trade names.

In the meantime, many Texas lawyers may find the prohibition has little practical effect. The use of domain names that look just like a trade name is not prohibited, for example, www.themalpracticedefensefirm.com would be perfectly acceptable as a descriptive URL or nickname—just not as the name under which the lawyer or firm does business.[4] Slogans and logos are also allowed – the Carwreck Cowboy and the Texas Hammer won’t get in trouble unless they fail to include their real firm names in advertising materials. Under these circumstances an actual change in the name of a firm seems superfluous.

However, if you want to anticipate the possible future and think about practicing under a trade name, or just up your advertising game by adding a descriptive URL or nickname, you should ask yourself a few questions:

  • Is the name you want available and not currently used by someone else? You don’t want to invest in a name that leads to a trademark dispute.
  • If the name is available can it receive trademark protection? Trade names have value because they are exclusive, and a trade name that cannot be trademarked may have not real value.
  • Is the name or something like it available as a domain name? Law firm marketing is internet marketing.
  • Is the name deceptive or misleading? No matter how the new rules come out on using trade names they are certain to always prohibit names that would violate other advertising rules by suggesting unique expertise or qualifications that cannot be verified or misleading the public about the attorneys’ affiliation with other groups.[5]

We will see in a week what the Committee on Disciplinary Rules and Referenda has come up with. For now, the existing advertising rules seem to leave plenty of room for creative lawyers to use trade-name-like slogans and nicknames in their advertising and promotions.

Texas Legislature Hopes to Reign in Anti-SLAPP!

While you are considering how you want to come down on the suit against the Bar and what names/phrases you want to trademark, you should keep an eye on the bill that has just passed the Texas House and Senate that would narrow the Anti-SLAPP law (a.k.a. the Texas Citizens Participation Act) to, in part, exclude attorney discipline cases. The current text of the bill is here.

The attempt to remove disciplinary matters from the reach of Anti-SLAPP is likely in response to an ongoing case in Travis County where the respondent attorney successfully used the law to have the grievance against him dismissed by the district court. For more details on this see my partner’s recent blog on this topic at www.accessdefense.com.

That case is on appeal and while Texas courts have applied Anti-SLAPP to an increasingly broad set of circumstances—it is hard to believe that it was ever intended to apply to disciplinary proceedings. The most obvious reasons are (1) the default method of deciding disciplinary complaints is not a suit in District Court, but an evidentiary hearing that is simply not within the scope of Anti-SLAPP law at all, and (2) the law itself (Section 27.010(b)) exempts proceedings against sellers of goods or services (which lawyers are) arising out of conduct in which the intended audience is an actual or potential consumer. This would cover the majority of disciplinary proceedings.

Given this, it is unlikely that the legislature ever intended the dismissal tool to apply to any disciplinary proceeding. Stay on top of the bill’s progress here.

 

[1] Currently, Washington, Oregon, Nevada, Texas, Wisconsin and Oklahoma have litigation pending that challenges the legality of a mandatory bar association.

[2] Lawyers are different; our Texas disciplinary rules set out some of the ways that we have different responsibilities, including: (1) a moral obligation to provide free legal services to those unable to pay reasonable fees; (2) a special responsibility to maintain the quality of justice for everyone; and (3) the duty to each aid the legal profession in pursuing these objectives and help the bar regulate itself in the public interest.

[3] To make sure that you do not miss out on any CDRR updates, notices of meetings (you can listen in by phone or attend in person) or proposed texts of new rules for comment, sign up here.

[4] That domain name is available it appears. But just make sure that you don’t mislead the public—i.e. by adding the word “best” in front of it. See the Ad Rules Interpretive Comments relating to firm names, comments 17(i) and 28

[5] One of the State Bar’s complaints in the much commented on Oscar Rosales case was that his trade name suggested a non-existent connection to the Veteran’s Administration.

Hot of the Presses: Texas Grievance Procedural Guide Explains it All

Thanks to a recent publication from the Texas State Bar, we now know how the Texas Chief Disciplinary Counsel (CDC) intends to conduct an Investigatory Hearing–a new type of hearing in the grievance process that is now being utilized in most grievance matters. This makes it critical that Texas attorneys caught up in the grievance process understand what will happen during this kind of hearing.

Reminder: The legislature amended the State Bar Act (the law) in 2017 as a result of the 2016-17 Sunset Review and created a new type of hearing that may take place during the grievance process–the Investigatory Hearing.  The law has few details about just exactly what this type of hearing is and the amended Rules of Disciplinary Procedure are similarly lacking.

And so, until just recently, Texas lawyers did not know what the CDC thought this hearing was for or how they were going to use it. This was a problem because, without the rules of the game, Texas lawyers could neither prepare for nor defend themselves at this new type of hearing.

The answer is now here in the CDC’s Procedural Guide—the handbook distributed to Texas grievance committee members around the state that instructs them how to do their job when sitting as grievance panel members. Before now this was not publicly available.

Now, for the first time, all Texas attorneys will now know the rules because the Procedural Guide will be available on the state bar website. This is only fair since the game being played decides the fate of Texas attorneys who are facing discipline before the grievance committee.

While I recommend that you read the Procedural Guide in full for what it says about all types of hearings before the grievance committee, here are a few highlights about what will take place at the new Investigatory Hearing (page references to the Procedural Guide):

  • The Investigatory Panel members are told that their job is to determine whether there is “Just Cause” to find that the attorney before them violated any disciplinary rule. (Page 5, 9, 28).
  • If the panel finds “Just Cause” they will prepare a written report listing “Professional Misconduct Found” and recommend a sanction based on their findings that is an offer of settlement. (Pages 5, 9, 10, 29, 42, 43).
  • They will do all of the above in the span of an hour or two “informal” and “non-adversarial” hearing after interrogating the Respondent attorney (as well as any other witnesses present) under oath and on video tape. (Pages 9, 28, 43-44).
  • The complaining party or their attorney may be allowed to interrogate the responding attorney by having the panel chair ask questions for them. (Page 29).
  • The Investigatory Panel acts as both judge and prosecutor in making its decisions since it shares the privilege with the CDC and uses information that the CDC shares with it in private that the attorney will ever know about. (Page 6, 28, 29; TRDP 17.08).

If you are thinking these procedures do not match up with your understanding of how the disciplinary process works or the grievance committees’ proper role in that process, I agree with you–they do not. Until they are revised to conform with the law, however, every Texas attorney invited to an Investigatory Hearing should read the Procedural Guide to understand just how the CDC is using this process.

 

Thank You–Next! Withdrawing like a Rock Star

Every lawyer knows the signs; most don’t learn the lesson:

  • The client is not getting you the answers you need to move the case forward
  • The “evergreen” deposit (aka retainer) is not as fresh as it should be
  • Invoices to the client for costs are ignored
  • Important deadlines are looming with no continuance or extension in sight

Instead of promptly addressing the signs of cloudy client relations, most lawyers wait until it is too late to withdraw as efficiently and ethically as they should.

Acting at the first sign of stormy weather is one route to a smooth withdrawal. In order to avoid other common perils and pitfalls, read my latest article entitled “You’re Fired!” . . . “No, I quit!” , published in the April, 2019 edition of the Dallas Bar Association’s Headnotes.

 

Baby Steps: Additional Amendments (yes, again) to the Texas Rules of Disciplinary Procedure

Just a quick update: On August 28, 2018 the Texas Supreme Court issued yet another set of Amended Rules of Disciplinary Procedure that added a couple of key protections to the investigatory subpoena process for respondent attorneys.

The link to the Order and newly amended rules is here.

Both changes concern a respondent attorney’s right to object to an investigatory subpoena regardless of whether s/he is the subject of that subpoena, and both changes were mandated by the underlying law. See Government Code Section 81.080(b).

It is good news both that the amended rules are now in compliance with the law with respect to this issue and that Texas attorneys caught up in the grievance process have a bit more due process than under the last version of these rules.

 

 

 

A Letter to the Editor of the Texas Bar Journal

Friends,

I am back from vacation and there are many pressing issues concerning legal ethics that need to be explored.

However, before I do that, please indulge me this one last comment on the newly amended Texas Rules of Disciplinary Procedure. It is a letter to the Editor of the Texas Bar Journal that I thought needed to be written. In the event it is never published in the Journal, I am publishing it here.

To the Editor of the Texas Bar Journal: 

In the July edition President Longley dropped a footnote on his President’s Page regarding the newly amended  Texas Rules of Disciplinary Procedure. Those new rules and the Order accompanying them are here. In the footnote, President Longley pointed out that the CDC was tasked with providing a process for an attorney respondent who was the subject of a grievance to object to a subpoena issued under the new investigatory subpoena procedure.

Unfortunately, there is simply no procedure in the new rules for the Respondent attorney to object to an investigatory subpoena not directed to him/her.

Rule 2.12(D) deals with a subpoena that is not yet being enforced in District Court and only allows the person who is being subpoenaed to object. It states in part that “[b]efore the time specified for compliance, a person commanded to appear or make production must present any objection . . . .”

Rule 2.12 (E) deals with objections to a subpoena that is being enforced by the CDC in District Court. For this scenario, it seems as if the Supreme Court actually intended to give the Respondent attorney the right to object to third party subpoenas. The June 21, 2018 Supreme Court Order entitled “Final Approval to the Amendments to the Texas Rules of Disciplinary Procedure”, paragraph 3(d), states, in part: “Rule 2.12(E) has been revised to state that if the Chief Disciplinary Counsel pursues enforcement of a subpoena in district court: The Respondent may raise any good faith objection to the subpoena . . . . ”

I looked for this revision, but it has not been made. Instead, Rule 2.12(E) provides only that the“person commanded to appear or make production may raise any good faith objection to the subpoena”. Once again, only if the Respondent is the subject of the investigatory subpoena can s/he make a good faith objection to it.

Shortly after the new rules were published, I called and then emailed the office of the Supreme Court rules attorney and pointed out that Rule 2.12(E) had not, in fact, been “revised” as the Supreme Court had so clearly ordered.

Attorneys who I have spoken to, who, for lack of a better term, have “been around for a while” all say that the rule error will not be corrected and that no one cares.

I hope they are not right.

I have not received a response to my email and the discrepancy between the Supreme Court’s order and the rule remains.

It is disheartening that, after months of receiving comments on the new rules, the Supreme Court made so few changes to rules that are short on due process to start with. Doubly so when we see that even a minor change that the Supreme Court actually intended to be made was ignored. 

As President Longley points out in his President’s Page article, going forward, the Bar will have a chance to vote on all rule changes. And, because there is a new committee and process for making such rule changes, we can hold out hope that someone will care enough before too long to not only make the change discussed above, but to make the rest of the changes necessary to provide Texas lawyers the due process rights in the grievance process to which they are entitled.

JMH