News Release: For immediate release
UK AND EUROPEAN LAW FIRMS RISK BEING CAUGHT BY PROPOSED NEW YORK STATE BAR RULES ON LAWYER ADVERTISING AND CLIENT SOLICITATION
Consultation on proposed new rules ends 15 September 2006 and final rules are intended to become effective on 1 November 2006.
Proposals put forward by the New York State Courts for the New York State Bar Association (NYSBA) on lawyer advertising and client solicitation risk capturing UK and other country law firms and international legal networks in its regulatory net according to the Professional Services Marketing Group (PSMG). The PSMG is the UK's only not-for-profit professional services marketing association.
The proposed rules define advertising as meaning: "any public communication made by or on behalf of a lawyer or law firm about a lawyer or law firm, or about a lawyer's or law firm's services." According to the PSMG that would include most law firm marketing materials including websites, brochures, newsletters, emails, magazines, seminar invitations and press releases as well as traditional paid-for advertising.
The NYSBA is proposing to amend its rules regarding the scope of its authority so that, alongside lawyers admitted to practice in the state of New York, "a lawyer not admitted in this jurisdiction is also subject to the disciplinary authority of this state if the lawyer provides or solicits any legal services in this state."
According to the PSMG this means that the NYSBA could easily include a law firm that sells its services to a New York client, even if the law firm didn't have a presence in the United States. The rule could also catch independent law firm networks such as Lex Mundi. New York qualified lawyers in UK law firms are already subject to regulation by the NYSBA although the proposed rules would potentially extend the reach of the Bar to cover the whole firm.
The proposed rules aim to force law firms to adopt a number of detailed measures including prohibiting under certain circumstances statements that:
* describe or characterise the quality of a lawyer's services
* compare a lawyer's services with the services of other lawyers
* are reasonably likely to create an expectation about results the lawyer can achieve
* include testimonials or endorsements of former clients
The proposed rules also state that any packaging used to transmit an advertisement or solicitation should be labelled as "Attorney Advertising" in red ink. Any email should contain the same wording in the subject line and websites should also be similarly marked.
Commenting on the proposals, Chris Hinze, chairman of the PSMG, said: "We do not dispute the right of the State Bar to make rules that govern lawyers admitted to practice in New York State. However, the language used to define who the proposed rules cover is very sweeping in nature and raises serious concerns over extra-territoriality. The New York market is of global importance and it is right that the scope of these proposed rules is questioned and clarified. If the intent of the Bar is to just cover attorneys who are qualified somewhere in the United States then that should be made clear in the language of the rules, otherwise the net is potentially global in nature.
"Looking at the detail of the rule changes themselves, it is easily recognised that they are designed to rein in some of the perceived faults of the personal injury market. However, in doing so, they also restrict the sophisticated commercial legal market. Clients should be allowed to make an informed choice regarding their legal advisers and they have a legitimate expectation that law firms can demonstrate their quality and say what makes them different from their competitors. Branding marketing material and the envelope or email it travels in as "attorney advertising" in red ink when it is aimed at a sophisticated senior general counsel of a Fortune 500 multinational is simply unnecessary at best and insulting at worst.
"Some of the prohibitions could easily capture statements including how a law firm performs against its competitors in M&A deal rankings or how it is rated against its competitors in a legal directory such as Chambers & Partners or Legal 500 series. Such information can help clients make an informed choice and promotes a transparent and competitive market. If you can't describe the quality of a lawyer's service then it is very unclear as to how you can differentiate one firm from another.
"While it might be difficult for the rules to be enforced against a foreign firm with no physical presence in New York there is nothing to prevent the Bar from 'naming and shaming' or similar measures. In addition, the rules might be used to block fair and legitimate competition.
"Firms that might be covered by the rules should make the appropriate representations to the NYSBA. The consultation process finishes on 15 September 2006 and are set to come into effect on 1 November 2006."
The proposed rules may be found at www.nycourts.gov/rules/proposedamendments.shtml. Comments should be addressed to Michael Colodner, Esq., Office of Court Administration, 25 Beaver Street, New York, New York 10004. Comments should also be addressed to Bernice K. Leber, Esq., chair of the NYSBA Task Force on Lawyer Advertising, Arent Fox, 1675 Broadway, New York, NY 10019¬5820.
The PSMG is the UK's only not-for-profit professional services marketing association.
* Membership is drawn from across the professions including law, accountancy, real estate, banking, architecture, actuarial, insurance, management consultancy, marketing communications, engineering and construction as well as those with an interest in professional services marketing.
* It is a national organisation with active groups in key commercial centres in the UK and international links in the United States, Canada, Continental Europe and Australasia. In the United States the PSMG is associated with the Legal Marketing Association.
* It is a not-for-profit group for all those with an interest in marketing within professional services organisations, including practitioners, recognised consultants, suppliers and those who have an interest in this sector. Members include: PricewaterhouseCoopers, Linklaters, Addleshaw Goddard, Deloitte, Grant Thornton, Mazars, Gensler, Baker & McKenzie, AYH, Denton Wilde Sapte, Berwin Leighton Paisner, Lewis Silkin, Enviros, Carter Jonas, DTZ Debenham Tie Leung and GVA Grimley.
For further information, please contact:
Tel: 07802 784611
Tel: 0207 269 1430