Texas Ethics Opinion Approves Competitive Keyword Ads By Lawyers

The Texas State Bar’s Professional Ethics Committee has issued Ethics Opinion #661 approving lawyers’ use of competitive keyword advertising. The opinion concludes:

A lawyer does not violate the Texas Disciplinary Rules of Professional Conduct by simply using the name of a competing lawyer or law firm as a keyword in the implementation of an advertising service offered by a major search-engine company.

This is the result that my co-author Angel Reyes and I advocated in our recent (uncited) article, Regulation of Lawyers’ Use of Competitive Keyword Advertising. While the conclusion may seem to non-lawyers like common-sense, this issue has bedeviled lawyers and I did not expect such a clear and decisive ruling. Going forward, I expect this ruling influence other states evaluating their own ethics rules about competitive keyword advertising.

Background

Competitive keyword advertising occurs when a company buys its competitors’ trademarks to display keyword advertising. Although it’s not a universally lauded practice, most industries have embraced–or least acquiesced to–its legitimacy. In parallel, courts routinely find competitive keyword advertising permissible under IP (e.g., trademark and publicity rights) laws. Nowadays, plaintiffs rarely win lawsuits over competitive keyword advertising, even when the advertiser displays the competitor’s trademark in the ad copy.

Unlike most other industries, the legal industry has not yet embraced competitive keyword advertising. That’s due in part to the legal industry’s traditional role as a late adopter; plus the legal industry must consider how its ethics rules overlay the IP rules. As a result, the legal industry is still working towards a catharsis over competitive keyword advertising. The three main legal precedents in the field:

* Habush v. Cannon, holding that publicity rights didn’t restrict competitive keyword advertising by lawyers
* The Florida Bar initially proposed banning competitive keyword ads by lawyers. After a group of academics (including me) intervened, the bar reversed that ban into a tacit acquiescence.
* In an under-the-radar move, the North Carolina bar banned competitive keyword advertising by lawyers in 2012, and it has disciplined one lawyer pursuant to that interpretation.

The Texas Opinion

The opinion analyzes three Texas Rules of Professional Conduct. The opinion discusses Rule 7.01(d), which restricts creating a false impression that lawyers are associated, and Rule 7.02(a), which restricts material misrepresentations in lawyer advertising:

[competitive keyword advertising] would not in normal circumstances violate either Rule 7.01(d) or Rule 7.02(a). The advertisement that results from the use of Lawyer B’s name does not state that Lawyer A and Lawyer B are partners, shareholders, or associates of each other. Moreover, since a person familiar enough with the internet to use a search engine to seek a lawyer should be aware that there are advertisements presented on web pages showing search results, it appears highly unlikely that a reasonable person using an internet search engine would be misled into thinking that every search result indicates that a lawyer shown in the list of search results has some type of relationship with the lawyer whose name was used in the search.

My article with Angel Reyes gets into more detail about consumer expectations towards keyword advertising.

The opinion also discusses Rule 8.04(a)(3), which prohibits conduct “involving dishonesty, fraud, deceit or misrepresentation”:

given the general use by all sorts of businesses of names of competing businesses as keywords in search-engine advertising, such use by Texas lawyers in their advertising is neither dishonest nor fraudulent nor deceitful and does not involve misrepresentation.

The opinion then expressly rejects the North Carolina opinion:

this Committee has considered but does not concur with 2010 Formal Ethics Opinion 14 of the Ethics Committee of the North Carolina State Bar (April 27, 2012) (ruling that a lawyer’s use of a competitor’s name as a keyword in a search-engine advertising program violates the equivalent of Texas Disciplinary Rule 8.04(a)(3) because such use constitutes “conduct involving dishonesty” in that the conduct shows “a lack of fairness or straightforwardness”).

The opinion does not expressly discuss what happens if the competing lawyer’s name shows up in the ad copy. So long as the ad doesn’t create a false or misleading impression about the relationship between the advertiser and competitor, the opinion does not seem to restrict that practice.

Implications

Texas has the third most lawyers in the country (and Florida is 4th), so this opinion should get a lot of attention from other states when they confront competitive keyword advertising. The opinion is clean, decisive and unambiguous (in contrast to Florida’s marble-mouthed expression of the same conclusion), and it also has logic and common sense on its side. For these reasons, I anticipate other states will similarly reject North Carolina’s outlier, anachronistic and poorly reasoned opinion. If so, the Texas opinion should accelerate the end of debates over the legitimacy of competitive keyword advertising by lawyers.