A Philadelphia personal injury law firm has sued an out-of-state competitor in Pennsylvania federal court, claiming that its TV, billboard and on-line ads reaching the Philadelphia area are false and misleading, violating the Lanham Act and constituting unfair competition.

The case is a reminder that the ethics rules and disciplinary action aren’t the only exposure lawyers might have to a claimed violation of the limits on advertising legal services.

A widespread practice?

The complaint against the Orlando-based firm, Morgan & Morgan, says that its ads “mislead the consumer that [Morgan & Morgan and its lawyers] actively litigate claims in Pennsylvania when in fact their representation of personal injury claims is nonexistent or minimal.”

The complaint claims that the lawyers in the ads are not licensed in Pennsylvania, and it is alleged that Morgan actually refers all or substantially all the cases generated from its Philadelphia-area ads to other lawyers and firms.

The plaintiff, Rosenbaum & Associates, alleges that Morgan’s ads contain statements like “We’re all here for you,” and “Our family is here for your family,” falsely leading Philadelphia-area consumers to believe that Morgan will handle their claims.

Morgan has not yet answered the complaint.

Plaintiff-side personal injury firms with a national footprint often seek clients beyond their home turf via ad campaigns, referring the leads they get to lawyers and firms licensed to handle them, in return for part of the contingent fee.

However, as cited in the complaint, Pennsylvania ethics Rule 7.2, unlike the analogous Model Rule, prohibits advertising that is “a pretext to refer cases obtained from advertising to other lawyers.” (My home state of Ohio, similarly prohibits the practice of soliciting clients solely for the purpose of referring them elsewhere. A handful of jurisdictions require disclosure when an advertising lawyer intends to forward cases to another lawyer to handle.)

The times they may be a-changing

The rules governing lawyer advertising are potentially in a state of flux. Online service- and referral-providers like Avvo and LegalZoom are working on several fronts to alter the landscape, including by seeking to change ethics rules that might limit their ability to market and carry out their operations.

The Association of Professional Responsibility Lawyers has two proposals on the table (2015 and 2016) that would streamline the ABA’s Model Rules on advertising and, if adopted by states, would reduce regulations that some see as unwarranted interference in marketing legal services to consumers.

The APRL proposal is working its way through the ABA vetting process. But at least one jurisdiction, Virginia, is not waiting; effective July 1, it slimmed down its lawyer advertising rules, patterning them after the APRL proposals. And as we have noted, North Carolina is considering changes to its rules to make it easier for on-line service- and referral-providers to operate.

But in the meantime, just to add to the mix, be aware that regulatory or disciplinary action is not the only way that potential violations of the advertising rules might be addressed.

Indeed, although the complaint against Morgan cites Rule 7.2 of the Pennsylvania Rules of Professional Conduct, the claims for relief are solely based on alleged violations of the federal Lanham Act’s prohibition against false advertising, and the parallel state common-law ban against unfair competition.

That’s worth remembering as you navigate the legal advertising landscape.