Why Lawyers Should be Allowed to Advertise: A Market Analysis of Legal Services

Abstract

Last August, the American Bar Association adopted the Model Rules of Professional Conduct. which significantly altered the ABA' position on lawyer advertising. It is still unclear how the states will respond to the ABA's new position, and the debate about the propriety of lawyer advertising continue. In the authors' view, both sides of the debate have overlooked an impurtant point: For purposes of analyzing the advertising problem, legal services are of two types, and the effect of advertising on the legal services market will vary with the type of service involved. "Individualized" services involve legal matters that pose a significant risk of loss for clients and require close personal attention from an attorney. For lawyers who provide this type of service, the authors argue, advertising is of little use since their clients are likely to rely on personal knowledge and reputation in selecting an attorney. "Standardizable" services, however, involve low risk matters and can be provided by means of routinized production systems. The authors believe that these services can be mass produced at low cost without logs of quality. They argue that advertising is necessary to generate the mass demand and economics of scale required to make mass production profitable. The authors conclude that lawyer advertising will likely result in more affordable legal services of the standardizable type and in improved product information about these services, thus benefiting low and middle income consumers as well as the attorneys who specialize in providing standardizable services.