Advertising Of Services By Professionals On The Cards

The traditional word-of-mouth method of engaging the services of professionals like chartered accountants, doctors and lawyers could soon become outdated. The governments acceptance of the Institute of Company Secretaries of Indias (ICSI) recommendation to permit regulated advertising by its members may open the floodgates for other professionals to advertise their services.

The Company Secretaries Act will shortly be amended to permit advertising by company secretaries. The proposed amendments have already been sent to the law ministry for vetting.

The code governing advertisement by company secretaries will be laid down in the Act and implemented by the ICSI. The code is likely to be based on the US code for advertising by professionals, which permits professionals to advertise their services, provided this is not done in a manner that is detrimental to the ethics of the profession.

 

Kicking off a debate on the issue last November, the ICSI had argued that advertising by professionals should be permitted to enable them to combat the aggressive marketing strategies of the ``US big six.

In a letter to the Department of Company Affairs (DCA), ICSI had argued that the entry of Ernst & Young, Arthur Andersen, Deloitte & Touche, KPMG Peat Marwick, Coopers & Lybrand and Price Waterhouse into the Indian market made it essential for Indian professional bodies to be permitted to compete on a equal footing. This could be done by allowing them to advertise their services.

The ICSI had quoted US legislations and court rulings to emphasise that American multinationals are permitted to aggressively solicit new business through a wide variety of promotional aids, including brochures, one-to-one meetings, telephonic conversations and media advertisements. The only check imposed on these advertisements is that these professionals should subscribe to the code of ethics of the profession, which is enforceable by the professional organisations.

However, this avenue is not open to Indian professionals who are restricted from advertising their services in any manner. These restrictions extend to advertising in the `yellow pages of a telephone directory (although many professionals now violate this norm, as can be seen by thumbing through the yellow pages of any telephone directory).

The logic against permitting advertisements by professionals was that it was unnecessary since the neighbourhood lawyer, doctor or chartered accountant were known by reputation.