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Monday, December 17 , 2018, 4:32 am | Overcast 55º


Harris Sherline: Evolving Ethics and Professional Advertising

Some ambulance-chasing TV commercials toe — and maybe even cross — the line

Talking recently with another certified public accountant who is about 55, she was quite surprised to learn that when I started working in public accounting in the 1960s, it was illegal for accountants and lawyers to advertise and, needless to say, it was considered unethical. Advertising by attorneys was considered a form of ambulance chasing.

As time progressed, it became legal for professionals to advertise, but it was still considered unethical by many practitioners. Fast forward to today and, of course, it’s no holds barred. Professionals can advertise as much as they want, and they can say just about anything they like about their services.

One of the more glaring examples of advertising by professionals is the TV campaign of a law firm that prospects for clients who have mesothelioma, a rare type of cancer that afflicts people who work with asbestos, in shipyards and on construction jobs, etc. The television commercials note that 3,000 new cases of this deadly disease are reported every year.

The commercials invite viewers to contact the law firm if they or anyone in their family is suffering with this form of cancer. Seeing these commercials repeatedly on television eventually started me wondering about the size of the potential market that’s available to be mined by lawyers. The scope of the advertising campaign appears to be national, which would make it quite costly.

National TV advertising campaigns generally cost $50,000 to $750,000 for design and production, plus media costs of $35,000 to $2 million per 30-second spot.

So, given that 3,000 new cases of mesothelioma occur annually, coupled with the high cost of advertising to attract clients, the average potential recovery must be pretty big. For example, assuming that the average case is worth about $1 million, the size of the market would be about $3 billion, which makes it worth going after. The Maune Raichle Law Firm notes on its website a schedule of settlements that its clients have received, ranging from $1.8 million to $6 million.

We have now arrived at the point where lawyers are free to aggressively tout their skills and the financial gains that hapless consumers can realize by hiring them. Television commercials soliciting clients who may have been harmed in some way by various medications are now part of the daily fare on television. We also see aggressive advertising by tax professionals, such as H&R Block.

When I started practicing public accounting in the 1960s, we were generally clear about what was and was not ethical professional conduct. However, today the issues that routinely confront practitioners have become so involved and complex that the profession has concluded it is necessary to require CPAs to pass an ethics exam every two years as part of an 80-hour semi-annual continuing education requirement.

The president of the California Board of Accountancy, which regulates more than 81,000 licensees, said “the regulation changes are part of an increased focus by the CBA on ethics and education, both as a way to increase consumer protection and restore public confidence.”

The continuing education requirement for California attorneys is 25 hours every three years, which must include four hours of legal ethics training.

In addition, the nearly 100,000 doctors in California must renew their licenses every two years and are required to complete 50 hours of continuing medical education. The Medical Board of California website notes that all CME must include “courses that directly relate to one of the following: patient care, community or public health, preventive medicine, quality assurance or improvement, risk management, health facility standards, the legal aspects of clinical medicine, bioethics, professional ethics, or improvement of the physician-patient relationship.”

The continuing education requirements for these three professions clearly reflect how much more complex life in general is today than it was 50 years ago. That said, my own take is that ambulance chasing is still ambulance chasing. Professionals may now be free to advertise and solicit for clients, but they don’t have to do it in a way that is excessively aggressive or misleading.

— Harris R. Sherline is a retired CPA and former chairman and CEO of Santa Ynez Valley Hospital who as lived in Santa Barbara County for more than 30 years. He stays active writing opinion columns and his blog, Opinionfest.com.

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