Guidelines Legal Services Advertising, Marketing and Promotion The purpose of these Guidelines is to provide practitioners with a starting point for

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1 Guidelines Legal Services Advertising, Marketing and Promotion The purpose of these Guidelines is to provide practitioners with a starting point for seeking general information about their professional obligations. They are not an exhaustive statement of all the relevant professional obligations that might apply to specific circumstances. These Guidelines are not intended to, and do not, replace or amend a legal practitioner s obligations under the Australian Solicitors Conduct Rules. If you need advice that addresses a specific set of facts, please contact Ethics and Practice on Preamble 1. These Guidelines aim to assist providers of legal services to produce advertisements and promotional material that comply with ethical and statutory obligations, and therefore reduce the risk of a finding of misleading and deceptive conduct (whether in the context of breaches of ethical obligations, or consumer law, or otherwise). 2. The Guidelines provide information with respect to areas of risk for legal practitioners in relation to promoting their businesses. 3. The Guidelines do not have the force of law. 4. Where there is doubt about whether a legal advertisement or promotion is misleading or deceptive, or breaches a professional obligation, expert advice should be sought before it is published or broadcast. When should these Guidelines be consulted? 5. The Guidelines are relevant to all forms of advertisement, promotion and marketing including all forms of print, radio, TV, internet, or other forms of visual advertising/promotion, letterheads, signage, tenders, CVs/resumes, business cards, and logos. 6. Careful note should be made of the fact that representations by and about legal practitioners on social networking sites such as LinkedIn, Facebook and Twitter (whether as part of a personal profile, firm profile, paid advertisement or 1

2 comment on a third party s page), may also be considered to be advertising or promotional in nature and would therefore be relevant to these Guidelines. 7. These Guidelines are relevant to any means by which you seek new business and make claims about the legal services you provide. Limitation of Liability Scheme Requirements 8. If you are a participant in the Law Society of South Australia s Limitation of Liability Scheme you should be aware of the requirements of the Scheme with respect to disclosure and the use of the Cover of Excellence logo. 9. For further information about the requirements of the Scheme, please go to Ethical Obligations 10. In addition to the statutory obligations that exist with respect to all forms of advertising under the Consumer Law, legal practitioners are bound by ethical obligations which are sourced from the common law and which are directly relevant to advertising. 11. Legal practitioners are ethically required by common law and equity to ensure that any advertising, marketing, or promotion engaged in by them is not: false; misleading or deceptive or likely to mislead or deceive; offensive; or prohibited by law. 12. These ethical obligations are referred to in Rule 36 of the Australian Solicitor s Conduct Rules (ASCR). 13. The following issues are those which most commonly arise with respect to legal advertising, and which present the most risk for legal practitioners. Qualifications 14. It would be false or misleading for legal practitioners to claim that they have qualifications they do not have, or to accept endorsements for qualifications they do not possess. 15. Practitioners should also ensure that any qualifications they claim to have are upto-date, not exaggerated and are presented exactly as they are so that a false or misleading impression of their worth is not created. 16. Care should also be taken with respect to claims about links with professional and industry organisations. Claims of membership should always reflect current 2

3 status and the organisation should actually exist and not have been created solely for the purpose of the promotion or advertisement in question. Expertise 17. The use of the word expert in advertising is an area of potential risk for legal practitioners because it is difficult to define and can mean different things to different consumers of legal services. 18. A legal practitioner must not convey a false, misleading or deceptive impression of expertise. 19. This means that the practitioner should not state they are an expert unless such a claim is well-founded. A well-founded claim of expertise would consider such matters as the number of years over which the expertise has been gained, and the level of expertise the practitioner has in the eyes of the legal profession. 20. Practitioners or practices who claim expertise in all areas of the law are at risk because such a claim would be difficult to justify because the law is so big and complex. This might lead to a finding of misleading and deceptive conduct especially when an objective assessment of the practitioner s or practice s expertise does not support such a claim. 21. As referred to in ASCR 36.2, the words accredited specialist, or a derivative of those words, can not be used unless the practitioner is a specialist accredited by the relevant professional body. Representations of Prior Success 22. Some practitioners or practices claim that they have never lost a case, or that they have won every case they have conducted, or that they have been successful on a certain percentage of occasions. 23. Advertisements which quote or refer to past success rates can imply to consumers that future cases will have the same success rate and are therefore likely to be misleading and deceptive. 24. Such statements can also be misleading and deceptive if the method of calculation of those success rates is not explained, if the calculation of success is not transparent, or is false, contrived, illusory, out of date, or if it is stated or implied that past success is an indicator of probable future success, regardless of the merits of a case. 25. While practitioners are free to make claims about the existence or availability of legal rights and remedies in certain circumstances, generic claims about the chances of success should be avoided due to the increased risk of breaching ethical or statutory requirements. Expectations of Results 3

4 26. It is potentially misleading to advertise in terms of win or lose. 27. The use of these words should be handled carefully to ensure that an impression is not created that the result of any given case is a foregone conclusion. 28. What is considered a win by one consumer of legal services may not be a win to another. 29. Many consumers of legal services may have little or no understanding of important concepts such as the adversarial litigation system, the difference between solicitor/client and party/party costs, fault-based compensation, statutory debts, or commercial settlements. 30. In addition, many cases are settled without coming to trial or hearing and such settlements are difficult to describe in terms of win or loss. Comparative Advertising 31. Comparative advertising involves making a claim that the advertiser is better or more competent than another specified practitioner or practice, or even just any other unnamed group of practitioners or practices. 32. Of relevance here are claims such as, We are the best lawyers in Adelaide or We are better lawyers than the rest or We win more cases or we are the biggest law firm in Adelaide. 33. The problem with comparative advertising is the difficulty of comparing like with like and it therefore presents a significant risk to the advertiser. 34. As a minimum, to avoid a finding of misleading and deceptive conduct, comparative advertising should be accurate, should disclose the basis for the comparison, should only compare like with like, and should ensure that the claims made will remain true for the life of the advertisement. 35. For example, a claim that a law firm is the biggest in Adelaide should be accompanied with an explanation of what is meant by biggest (ie. largest number of legal practitioners, or largest numbers of staff, or largest premises), and on what sort of data is the claim based (including an explanation of the steps taken to make sure that the claim is true having regard to the numbers of staff and size of premises of other practitioners). 36. If disclaimers or explanatory notes are used in the advertisement for the purpose of clarification, those notes should themselves be clear and accurate. Fee Advertising 37. Advertisements stating that the first interview or appointment is free can be misleading if there is no explanation of what is meant by the first interview or appointment. For example, does it mean an initial telephone conversation in which the consumer of legal services speaks to the lawyer to provide a brief over 4

5 view of the matter? Does it mean a consultation in which the consumer provides details of the case but in which no advice is provided? Does it mean a meeting for the purpose of taking initial instructions? Is the appointment limited to a time period? Is it free only if certain conditions apply? 38. When a free first interview is offered, it is recommended that it not be limited to a specific duration of time (as so doing raises issues of commencing work without a retainer), and that it not be conditional on the client providing instructions to act (as so doing makes the use of the word free misleading). 39. Because legal practitioners differ in what they mean by first appointment free, and consumers do not know what to infer from those words, advertising that refers to a free first interview or appointment should clearly explain the terms and conditions of that offer. 40. Advertisements that include references to legal fees and costs should be presented so that an ordinary consumer can understand what is meant by those terms and can form a reasonable expectation as to the possibility of what might be payable by them. 41. Where fees are referred to in advertising, the consumer should at least be informed that there is a possibility of there being additional fees or costs that might be payable. This includes making a distinction between liability for fees for legal services and for disbursements. 42. The use of phrases such as no win no fee or no win no pay expose legal practitioners to significant risks with respect to their ethical obligations and requirements under consumer legislation. 43. An ordinary consumer may not understand what win and fee are intended to mean in this context and the use of those words, without any explanation, has a tendency to lead such consumers into error. Such phrases used without explanation would have a tendency to imply to a normal person that the practitioner will provide their services either entirely free of charge, or without the consumer having to pay at all. This is rarely, if ever, the true state of affairs because even if there is a win, there will usually be sums payable by the consumer such as disbursements, in the case of no win there may be disbursements and costs payable to the other side. 44. In addition there is the problem of defining what is meant by win which is dealt with above under Expectations of Results. 45. The test of whether a statement made in advertising is misleading is determined by whether the statement was apt to bring a consumer into negotiation with the advertiser 1. A practitioner cannot avoid his or her obligation not to engage in 1 See ACCC v TPG Internet Pty Ltd [2013] HCA 54 5

6 misleading or deceptive advertising simply by ensuring that the consumer is provided with a detailed explanation of what is meant by no win no fee on attendance at the office or in consultation with the practitioner concerned. That merely satisfies the ethical obligation to properly inform a consumer who becomes a client about the probable range of fees and costs that he or she may have to pay in the specific matter being dealt with. 46. A practitioner in Western Australia who published advertisements using the phrase no compensation = no legal fees was found guilty of unprofessional conduct on the basis that the advertisements were misleading. The Tribunal said: [27] In our view, the expression no legal fees would be construed by a member of the public as encompassing more than simply the practitioner s own fees. In particular, we do not accept that a member of the public would draw an distinction between the legal fees of his or her own practitioner, and legal fees which might be payable to the defendant s solicitors in the event of an unsuccessful claim. Nor do we consider that a member of the public, who was told that there would be no legal fees, would conclude that there might be a liability for disbursements, such as court fees, payable in respect of a claim Practitioners who wish to advertise the availability of no win no fee arrangements, must ensure that the advertisement contains the information necessary to ensure that it is not misleading or deceptive. 48. The requirement is to relieve the statement of its misleading character. This cannot be achieved by simply including the phrase, conditions apply or an invitation to make further enquiries. The dominant message of the advertisement retains its misleading character and still induces the consumer to contact the advertiser on that basis. 49. The inclusion of a phrase along the lines of, some costs and charges may apply depending on the circumstances of your case is considered unlikely to rectify the matter as it does not alert the potential client of the possibility of being liable for an adverse costs order. 50. It is likely that any advertisement which refers to no win no fee or a similar phrase, and which does not include a complete explanation of what is meant by the phrase or words used and the conditions that apply would be considered to be misleading. 51. Advertisements which refer to no win no fee and which do not contain adequate explanation expose practitioners to disciplinary action for a breach of the ASCR, 2 Legal Practitioners Complaints Committee and Browne [2006] WASAT 201 6

7 and of prosecution for a breach of the Australian Competition and Consumer Act Testimonials and Endorsements 52. Testimonials are spoken or written recommendations from existing or former clients. 53. Endorsements are a form of testimonial which is usually a recommendation or statement of approval by a specific person such as a celebrity. 54. The use of or publication of testimonials and endorsements is risky and should be treated with great care by practitioners as they are inherently misleading unless certain precautions are taken. Recent cases and statements by the Australian Competition and Consumer Commission suggest that practitioners need to actively monitor testimonials and endorsements posted online, particularly on social media. 55. Testimonials need to be accurate, true and verifiable. A practitioner using testimonials should maintain a register or file in which all testimonials are recorded along with the name and address and contact details of the person making the statement so that the accuracy and truth of the statement can be checked. A failure to do this may result in the statement not being verifiable and a finding that the advertisement is misleading and deceptive as a result. The burden of proving that a testimonial is accurate, true and verifiable rests with the practitioner relying on it. Without being in a position to prove that a published testimonial is accurate, true and verifiable, it would be difficult to defend a claim that the advertisement was misleading and deceptive. 56. The contents of the testimonial should be accurate. Testimonials including words such as, I didn t have to do anything or I didn t have to pay a thing must be strictly true to avoid a finding that they are false, misleading or deceptive. 57. Testimonials should also not create unrealistic expectations. A testimonial for a law practice providing legal services for motor vehicle accident victims which states, They negotiated a big sum which set me up for my future is in danger of being considered to be misleading and inaccurate because it creates an unrealistic expectation that compensation for motor vehicle accident injuries is a windfall which will provide a significant and enduring benefit, whereas it is in fact designed to reimburse/compensate the injured person for economic and noneconomic loss caused by the accident. 58. Testimonials or endorsements that have been scripted or are received in response to a fee or reward should contain a clear disclosure to that effect so that consumers are not misled or deceived into believing that they are unsolicited and genuine. 7

8 59. Considerable care should be taken when using paid endorsements. Consumers are conditioned to rely on celebrity endorsements for a wide range of goods and services. However, few professions enjoy the special privileges which legal practice affords, and this imposes higher ethical and professional responsibilities on lawyers when advertising their services. Clear disclosure of a fee or reward should be made on the face of the advertisement in order to avoid a claim that the advertisement is misleading and deceptive. Use of search tools 60. Some practitioners use internet search tools to maximise their ability to advertise and promote themselves. For example, practitioners may embed certain phrases in their web pages, of have specific alternative web pages created, so that searches containing certain words or phrases result in their web page being at the fore of the results. 61. Such search tools are capable of being used to mislead and expose practitioners to risk of a breach of ethical and statutory requirements. 62. Search tools should not create a false impression with respect to the legal services being promoted. For example, if a practitioner uses location search tools which result in the name of her or his practice being listed in search results for practitioners servicing certain locations, or a version of the practice web page is created for each location so that it is included in search results for practitioners in those locations, the practitioner should be prepared to provide legal services in those locations. If not, the use of that location as a search tool would be considered to be false or misleading. Social Media 63. The expression social media is used to describe websites which facilitate easy and quick, and therefore informal, communication. Examples include Facebook, Twitter, YouTube, and Linkedin. 64. These websites also provide a mechanism by which consumers can review, rank, like and share opinions, comments and testimonials, on the services provided by businesses including legal practices. 65. Practitioners need to exercise care and caution before linking to, publishing or endorsing such comments. If the comments are inaccurate, untrue, out of date or incorrect, they will be misleading and the endorsement or publishing of them by a practitioner could amount to misleading and deceptive conduct on the part of the practitioner. 8

9 Checklist 66. The following checklist provides a useful guide to the issues raised in these Guidelines: Does the advertisement/promotional material accurately describe the status and qualifications of the practitioner? Does it accurately describe the level of expertise or specialisation of the practitioner? Does it avoid making comparisons with other legal service providers? Does it avoid making unrealistic claims about the expected results of a legal action? If the advertisement refers to fees, are they referred to so that the consumer can see the advertised costing structure at face value? If the advertisement refers to no win-no fee or similar, does it contain a complete explanation of what is meant by the phrase or words used and the conditions that apply? Are any testimonials used accurate, genuine, and verifiable? If there is a reference to a free first interview or appointment, is it accompanied by an explanation of the conditions that apply? Is the advertisement capable of being identified by an ordinary consumer as being an advertisement? Does the advertisement avoid making claims about the success of future cases based on the results of past cases? Does the advertisement avoid creating unrealistic expectations in the mind of an ordinary consumer? Are any search tools that are used accurate and genuine? Conclusion Are any social media links, quotes, or references that are used in advertising or promotion true and verifiable? 67. It is important to stress that these Guidelines are not rules of conduct and do not have the force of law. They are for the purpose of highlighting troublesome issues relating to the advertising, marketing and promotion of the providers of legal services, and explaining the risks for practitioners that are associated with those issues. 9

10 68. A failure to comply with the recommendations in these Guidelines does not of itself constitute misconduct on the part of a legal practitioner. It is where a practitioner has demonstrably breached his or her obligations with respect to advertising that the issue of misconduct arises. The Guidelines merely assist in identifying risky advertising practices and providing solutions for practitioners. 69. If you have any questions about legal advertising, or these Guidelines, please call Ethics and Practice on

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