Concept
Paying Advertising Costs
Permitted means of advertising and payment for recommendations
Paying Advertising Costs
An advertisement has to be paid for, and the payment looks at first like the very thing the ban on paid recommendations forbids. A newspaper that prints a lawyer's announcement, a directory that lists the lawyer under a practice heading, and a broadcaster that airs a spot each take the lawyer's money, and each is a channel through which the public learns the lawyer is available. Read formally, every one of those payments goes to someone who helps steer clients to the lawyer. Rule 7.2(b)(1) removes the difficulty with the broadest exception to the ban: a lawyer may pay the reasonable costs of advertisements or communications permitted by the Rule.1
The exception also finishes a thought the chapter began. Rule 7.2(a) lets a lawyer communicate information about the lawyer's services through any media, but media are businesses that sell access for a price.2 A permission to use every channel that did not carry a permission to pay for the channel would give lawyers a right they could never exercise. The exception therefore completes the first gate and opens no loophole in the second.
Two limits in its text keep the exception from growing. The cost must be reasonable, so an advertising label cannot launder a payment whose real purpose is to reward someone for sending clients, and a price far above the going rate shows that the excess buys something other than the advertisement. The exception also covers only advertisements or communications that the Rule permits, so it follows the permission to advertise and cannot extend it.3 Paying for a lawyer's advertising is not paying for a person's recommendation, and these two limits keep the difference visible. The three subsections below test the exception on media and directory fees, on marketing staff and lead generators, and on payments connected with press coverage.
Media and Directory Fees
The commonest use of Rule 7.2(b)(1) is the invoice from a medium that carries the lawyer's message.4 Rule 7.2(a) opens the channel, and the exception lets the lawyer pay the price of using it.5 The covered payments include directory listings, newspaper advertisements, television, radio, and internet advertising, and sponsorship fees.6
These payments fit the exception because of what the recipient does with the money. A newspaper, broadcaster, directory publisher, or website operator takes payment to transmit a message the lawyer composed, and the rules require a communication of this kind to identify the lawyer or law firm responsible for its content.7 The reader therefore knows the message comes from the lawyer and discounts it as advertising, the way a shopper discounts a seller's claims about the seller's own goods. The recipient vouches for no one. That feature separates these payments from the paid recommendation the general prohibition targets, in which a third party speaks in an apparently independent voice while holding a financial stake the client cannot see.
Sponsorships look least like advertising, so they repay a closer look. A lawyer who pays to sponsor a charity run or a community theater season buys display of the lawyer's name before the audience. That display is a communication, and the organizer is not asked to say anything about the lawyer's ability, so the fee is a cost of a communication in the same sense that a newspaper's rate is. Had the arrangement instead obliged the organizer to tell attendees to hire the lawyer, the money would buy a recommendation, and the word "sponsorship" would change nothing.
The line between a listing and a recommendation is the one most likely to be tested, because both can appear in the same publication. A directory organized by practice area places a lawyer's name, address, and telephone number under a heading such as estate planning. The entry conveys only facts the lawyer supplied, the fee pays for the space, and the publisher expresses no opinion. A ranking, a "best lawyers" designation, or a column in which an editor singles out a lawyer conveys a judgment, and the person who makes it speaks as though disinterested. When the lawyer's payment produces that judgment, the lawyer has paid a person for recommending the lawyer's services.
Reasonableness is the exception's second safeguard. Costs are measured against what the placement or service ordinarily sells for, so a lawyer who pays a medium its published rate for a spot pays a cost of advertising. A payment well above the going price leaves the excess unexplained, and the likeliest explanation is that it rewards the recipient for something other than carrying the message, such as sending clients over. If the label "advertising fee" could cover that excess, the exception would swallow the prohibition, which is why the reasonableness requirement sits in the text of the exception itself.8 The exception also reaches only communications the Rule permits. A payment to a person who approaches accident victims in person is no cost of a permitted communication, because the lawyer may not make that contact directly and so may not hire someone else to make it.9
On an exam, follow the money and ask what it buys. Placement of the lawyer's own message at a reasonable price falls within the exception, while a ranking, a pick, or a referral does not. Two errors recur. Some students read any payment to a third party who helps bring in clients as forbidden, which ignores that paying for advertising is expressly permitted, and others accept an "advertising" label without checking whether the payment buys an endorsement. The next subsection turns to people who are paid to provide marketing services instead of carrying the message.
Marketing Staff and Lead Generators
Comment 5 to Rule 7.2 extends the exception from the media to the people who produce the marketing. It permits a lawyer to compensate persons "who are engaged to provide marketing or client development services, such as publicists, public-relations personnel, business-development staff and website designers."11 The same comment lets a lawyer pay another person for generating client leads, meaning identifying people who may need a lawyer and passing along their contact information, subject to three conditions taken up below.12 Both permissions build on the exception for the reasonable costs of permitted advertisements and communications.13
The permission exists because building a website, drafting a press release, and running a business-development program are the labor that produces a communication. A lawyer who pays for that labor buys what a lawyer buys from a newspaper: help in putting the lawyer's own message before the public. The person paid vouches for the lawyer to no prospective client, so nobody is misled about who is speaking. A salaried manager and an outside agency therefore stand in the same position, since what counts is what the money buys and not whether the payee is an employee or a vendor. The permission stays tied to the rest of the Rules, however. A lawyer may not employ another person to carry out advertising or solicitation that the lawyer could not do directly, so a marketing hire who telephoned accident victims live to win their business would be doing for the lawyer what Rule 7.3 bars the lawyer from doing.14
A lead generator sits closer to the line than a designer or a publicist, because its product is a prospective client, who arrives carrying whatever the generator chose to say along the way. Each of the three conditions in Comment 5 closes a different route by which a payment for leads could turn into a payment for a recommendation.15
The first two conditions protect the prospect from an endorsement the prospect does not know was bought. The general rule bars giving anything of value to a person for recommending the lawyer's services, and a lead generator that recommends a lawyer is exactly that person, so the permission covers delivering leads and stops short of endorsing anyone.16 The second condition reaches a subtler version of the same problem. A site that tells a visitor it has reviewed the visitor's situation and picked a lawyer invites the visitor to treat the choice as a neutral judgment, when the referral may simply go to whoever pays for it. The client cannot see the payment, so the false impression does the work of a purchased recommendation. That is why the condition forbids creating the impression and does not wait for an express endorsement.
The third condition and the fourth step rest on the rule against sharing legal fees with a nonlawyer, which exists out of fear that the lawyer's professional independence will be undermined. The same worry makes payments to nonlawyers for helping procure legal work suspect, since a lawyer who depends on a paid source of cases may hesitate to disappoint it.17 A person who collects a share of each fee profits only when a prospect signs, and so has a reason to push prospects toward signing by pressure or by advice that no one supervises, which the bar would find hard to police. A fee for a lead avoids that incentive because the work is finished once the lead is delivered, and the generator is owed the same amount whether the prospect hires the lawyer, hires someone else, or hires no one. A fee that turns directly on the person's retention of the lawyer for particular services is the equivalent of impermissible fee sharing.18 The test looks at what triggers the payment, so a sum owed only when a prospect signs a retainer is no better than a percentage, and a "marketing fee" of one-third of the recovery is a share of the fee whatever the invoice calls it.
A single exam stem can hide the defect in either place. A flat per-lead fee clears the fee conditions and the arrangement can still fail on what the generator tells the people it finds, and the reverse is equally possible. Students also err in two directions. Some treat any lead generator as forbidden because it sends clients to the lawyer, which overlooks that Comment 5 expressly permits paying for leads, and others accept anything labeled marketing, which overlooks that a label does not change a payment that buys an endorsement or a stake in the legal fee. The question at the second gate is what the money buys and what triggers it. Work or leads that put the lawyer's own message before the public are permitted, while a recommendation, the impression of an analysis, or a share of the fee is not.
Paid Press Coverage
Rule 7.2(a) opens every medium to the lawyer, and Rule 7.2(b)(1) lets the lawyer pay the reasonable cost of a permitted communication, but neither provision says whether a lawyer may pay the press itself for coverage.20 A news story is written under a news organization's editorial control and is not the lawyer's own communication, and the rules do not address that payment directly.21 The answer comes from the general prohibition on false or misleading communications in Rule 7.1, so the analysis of paid press runs through that rule and leaves the advertising-cost exception out of it.22 The reason is voice. A lawyer who buys an advertisement speaks in the lawyer's own voice, and every reader knows it. A lawyer who seeks a news story hopes to be described in a voice the reader takes to be independent.
A lawyer has several legitimate ways to seek publicity. The lawyer may respond to a reporter's questions and share information with the news media, issue a press release, or engage a public relations firm to bring the activities or accomplishments of lawyers to the attention of the news media in the hope that a favorable story follows.23 Each of these remains subject to the other limits in the rules, such as the duty to protect confidential client information and the restrictions on extrajudicial statements by a lawyer involved in pending litigation, so a lawyer discussing a verdict with a reporter must still keep client confidences.24 These activities are acceptable because of who makes the decision that matters. The lawyer supplies information and a publicist supplies effort, but the reporter decides whether the information is newsworthy and what the story will say, so any favorable article reflects the reporter's own judgment. The fee to a public relations firm buys that firm's labor in carrying the information to the press, just as the fee to a publicist or business-development employee in the previous subsection buys labor, and nobody has paid the reporter anything.
The analysis changes when the money goes to the press for the story. A genuine news story carries an implicit message that someone with no stake in the lawyer's success judged the lawyer's work worth reporting, and readers give that message more weight than they give an advertisement. Paying for the story borrows that credibility for the lawyer's own promotion, so the public is misled about the source of what it is reading. That is why a lawyer should be wary of paying members of the press for publicity in a news story: presenting what appears to be an impartial news report that is in fact a paid infomercial is a deceptive practice that violates Rule 7.1.25 A communication that falsely purports to come from a news organization while actually being advertising also conflicts with the requirement that a lawyer or firm take responsibility for its advertising.26 The medium raises no objection, since Rule 7.2(a) opens print and broadcast channels to the lawyer and the lawyer may pay the reasonable cost of a communication openly presented as the lawyer's own advertisement.27 What makes the disguised version improper is that it hides who is speaking.
The same dollar can therefore land on either side of the line, depending on who receives it and what it buys. A retainer to a publicist buys effort in pitching a story, and an independent reporter still decides what to write. A payment to the station or the writer buys the story itself and removes the editorial judgment that gave the story its value. None of this prevents a lawyer from being the subject of a positive news article, even one involving the provision of legal services, so long as the article is the product of the reporter's own work.28
Newsletters raise a related question about whether the advertising rules apply at all. A lawyer or firm may prepare an in-house newsletter or other notices about professional developments, provided the publication is candidly acknowledged to be produced by the lawyer or firm.29 If the newsletter goes only to other lawyers or to clients, it likely falls outside the advertising and solicitation rules, and if it is distributed to the general public or to others, the distribution counts as advertising subject to the general provisions of Rule 7.2.30 The line follows the audience. A current client or a fellow lawyer is not a member of the public shopping for legal help from the sender, while a mailing to the general public is the kind of communication to prospective clients that the advertising rules exist to regulate. Because Rule 7.2(a) opens every medium, a newsletter sent to the general public is a permitted advertisement, but it must still avoid false or misleading content under Rule 7.1, and its candid statement of who produced it avoids the source problem that a paid news story creates.
On an exam, ask who receives the money and whether the audience would know that a lawyer stands behind the message. A fact pattern that pairs a publicist, a press release, or a reporter's independent story with an ordinary fee passes. One that pays the station or the writer for what looks like a news story fails, and the rule to name is Rule 7.1, not the advertising-cost exception. Students err in two directions. Some reason that because Rule 7.2(b)(1) lets a lawyer pay for communications, any payment tied to media exposure is permitted, and others treat every publicity effort as forbidden because it brings in clients.