Rutgers School of Law, OAL case acp435

104 N.J.L.J. 305
October 4, 1979

ADVISORY COMMITTEE ON PROFESSIONAL ETHICS

Appointed by the New Jersey Supreme Court

OPINION 435

Practicing Law Under Trade Names

    Two inquiries have been presented to this Committee.
    Question I. Is it proper under R. 1:21-lA(3)(c) for a New Jersey attorney practicing in New Jersey who has formed a professional corporation pursuant to N.J.S. 14A:17-1 to practice under a trade name such as:
    (A) The Budget Barrister, a professional corporation
    (B) John Doe, Esq., The Budget Barrister, a professional corporation
    (C) John Doe, Esq., a professional corporation. "The Budget Barrister"
    (D) The Legal Clinic of John Doe, Esq., a professional corporation.
    Question II. Is it proper under DR 2-102(B) as amended for a New Jersey attorney practicing in New Jersey to practice under a trade name such as:
    (A) The Budget Barrister
    (B) John Doe, Esq., "The Budget Barrister"
    (C) The Legal Clinic of John Doe, Esq.
    The answer to the Question I is clearly found in R. 1:21-lA, Professional Corporations for the Practice of Law, subsection (c), which states, in part:
    "c. The corporate name of the professional corporation shall contain only the full or last names of one or more of its shareholders...." Furthermore, DR 2-102(B) requires that "The corporate name of a professional corporation shall confine to the provisions of R. 1:21-lA(c)."
    The trade names listed in Question I do not comply with the rules and may not be used.
    Question II relates to the use of a trade name by an attorney who does not practice as a professional corporation. For reasons stated below, it is our opinion that the use of the designation "The Legal Clinic of John Doe, Esq." is permissible, but the use of the other trade names listed is prohibited. DR 2-102(B) requires that:
        A lawyer shall not practice under a name that is misleading as to the identity, responsibility or status of those practicing thereunder, or is otherwise false, fraudulent, misleading or deceptive within the meaning of DR 2-101(B) or is contrary to law.

The trade name "Budget Banister" contravenes the rule because it would result in practice under a name that is misleading as to the identity, responsibility or status of those practicing thereunder, and is otherwise misleading.
    The trade name John Doe, Esq.,"The Budget Barrister" contravenes DR 2-101 Publicity and Advertising. While advertising by lawyers is permitted by that rule, it contains express limitations that such advertising must not be false, fraudulent, misleading or deceptive. The use of the trade name "The Budget Barrister" is per se both misleading and deceptive. The word "budget" has been variously defined to mean "a plan or schedule of adjusting expenses during a certain period to the estimated or fixed income of the period" or "the cost or estimated cost of living," or "the amount of money needed or allotted for a specific use." The word has also acquired a colloquial meaning which when applied to a product or a service implies that it can be obtained cheaper or at a discount. Thus, the use of the designation "The Budget Barrister" would create in the minds of the public to which it is disseminated the expectation that the attorney in question will provide legal services either at a discount or cheaper than the services can be secured elsewhere when, in fact, his charge may be greater. Similarly, the term "banister" is not commonly used or understood by the public to apply to attorneys-at-law in this country, and it might be viewed by some as designating a legal specialist of some sort. It would therefore be a situation where the use of the trade name would be misleading and deceptive and also likely to create in the minds of the public "an unjustified expectation."
    In this regard, reference should be made to Bates v. Arizona, 433 U.S. 350, 97 S. Ct. 2691, 53 L. Ed. 810 (1977), where the Court
responded to use of the term "legal clinic" in the appellants' advertisement. The advertisement in question described the firm as "Legal Clinic of Bates & O'Steen." The Court held:

        We suspect that the public could readily understand the term 'legal clinic'- if, indeed, it focused on the term at all - to refer to an operation like that of appellants' that is geared to provide standardized and multiple services. And the clinical concept in the sister profession of medicine surely by now is publicly acknowledged and understood. (Emphasis added)

It would seem that Bates court considered the term "legal clinic" as a peripheral issue to the main question of advertisement of prices. It noted (a) the public may not even notice the term, and (b) if the public did notice the term, it would not be misled because of the exposure the term has received in the medical profession. In the inquiry presented, the term "budget barrister" differs from the term "legal clinic in two ways: (a) it is not a peripheral term to the advertisement but is the centerpiece thereof, and (b) it could create an unjustified expectation as stated above.
    Lastly, reference should be made to Rogers v. Friedman, 47 U.S.L.W. 4151 (Feb. 20, 1979), cited by the inquirer. In this case, the petitioner, practicing optometry under the trade name "Texas State Optical" challenged the validity of a statute probating optometrists from practicing under a trade name. A three-judge federal court found the statute unconstitutional on First Amendment grounds, relying primarily on Bates v. Arizona, supra, and Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 748, (1976). The Supreme Court reversed, noting that the lower court's reliance on these two cases was misplaced. It stated that both cases were primarily concerned with the dissemination by advertisement of prices. It further noted that in both cases, it was careful to emphasize that some forms of commercial speech regulation is permissible. Moreover, the Court saw no obstacle in dealing with commercial speech which was not probably false but
merely deceptive or misleading. As to the characteristics and use of trade names, the Court stated, at p. 4154:
        A trade name is, however, a significantly different form of commercial speech from that considered in Virginia Pharmacy and Bates. In those cases, the State had proscribed advertising by pharmacists and lawyers that contained statements about the products or services offered and their prices. These statements were self-contained and self-explanatory. Here, we are concerned with a form of commercial speech that has no intrinsic meaning. A trade name conveys no information about the price and nature of the services offered by an optometrist until it acquires meaning over a period of time by associations formed in the minds of the public between the name and some standard of price or quality. Because these ill-defined associations of trade names with price and quality information can be manipulated by the users of trade names, there is a significant possibility that trade names will be used to mislead the public.

        The possibilities, for deception are numerous. The trade name of an optometrical practice can remain unchanged despite changes in the staff of optometrists upon whose skill and care the public depends when it patronizes the practice. Thus, the public may be attracted 'by a trade name that reflects the reputation of an optometrist no longer associated with the practice. A trade name frees an optometrist from dependence on his personal reputation to attract clients, and even allows him to assume a new trade name if negligence or misconduct casts a shadow over the old one. By using different trade names at shops under his common ownership, an optometrist can give the public the false impression of competition among the shops. The use of a trade name also facilitates the advertising essential to large scale commercial practices with numerous branch offices, conduct the State rationally may wish to discourage while not prohibiting commercial optometrical practice altogether.

The above described characterization of a trade name, coupled with the prohibition on misleading or deceptive communications contained in DR 2-101(B) and DR 2-102(B), would prohibit the inquirer from the use of the trade name he proposes in (A) and (B) of his second inquiry.
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