Professor Gillian Hadfield at the University of Southern California, who has produced excellent work on access to justice issues in the past, has just released a brilliant piece that systematically addresses the issues that keep legal costs high and out of reach for so many. She subsequently followed this up with a piece for CNN. This posting is just an overview, we encourage you to read the whole piece.
As Professor Hadfield notes, the problem of legal access in the US is not an issue that only impacts the poor. It is not the result of insufficient government funding or lawyers’ unwillingness to volunteer. Indeed, while boosting legal aid budgets and getting lawyers to do more pro bono work would be positive steps, these solutions are ultimately insufficient to address the problem. Rather, the problem is one of cost. The average hourly rate for an associate attorney is $190 and for a partner it is $285. This makes consultation over even routine legal matters, like signing a rental contract or responding to credit difficulties, prohibitively expensive. These costs mean that attorneys’ expertise is only employed in the most extreme cases, burdening the court system with long and expensive litigation that could have been resolved at an earlier stage. Imagine the incredible burden on the medical system, which Professor Hadfield frequently uses as a point of comparison, if high costs forced consumers to leave their problem unaddressed until it required a trip to the ER.
The reasons that legal costs are so high, Professor Hadfield argues, has nothing to do with supply: there are many competent lawyers out there capable of competing with each other. The problem is structural. Any given legal issue is incredibly complex, with huge sunk costs such as the cost of getting a legal education and certification, as well as the costs in money and time needed to research, investigate and form a response to a given issue. However, the regulatory structure of the industry prevents the innovation and specialization necessary to develop tools to respond to these issues more quickly and cheaply.
One model that Professor Hadfield suggests the legal profession look to is that of medicine. Since the 1970’s the medical profession has moved away from rigid professional requirements, allowing doctors, hospitals, insurance providers, nurse practitioners and specialists to collaborate in a variety of areas. This has allowed innovations in everything from medical research to how patient information is transferred and has reduced costs. But unlike the medical industry, the current codes of professional conduct largely prohibit what Hadfield calls “the corporate practice of law.” Hadfield defines this as the ability of any organization other than a law office, owned and managed by attorneys, to provide legal services. These organizations need not be private corporations, but also include non-profits, charities that provide legal aid themselves, unions that supply attorneys to their members or schools that offer legal advice to students. Although these organizations often employ or consult with competent and licensed attorneys, nearly every state prohibits every form of providing legal services that is not wholly owned and managed by lawyers.
This system forces lawyers to be involved in the business aspects of legal practice like securing office space, hiring staff, collecting bills and marketing their services. This is on top of the costs of paying off their considerable law school debts and securing the loans necessary to finance all of these operations on their own. These costs necessarily cause prices to rise.
Moreover, cost saving innovation is stunted in the critical area of developing products that help deliver legal services. These delivery products do not necessarily impact the substantive law or the legal options that an attorney can actually suggest to the client. Rather, delivery products change the way those underlying legal issues are researched, drafted and ultimately made understandable to the client. In other words, improving access to legal delivery doesn’t change which forms you need to fill out in a divorce, but changes how you would find out which forms you need and how you would get a copy.
If attorneys were allowed to collaborate with other organizations to develop and employ new methods for areas like legal research, client advertising, meeting continuing legal education requirements, and developing an easy to use delivery system to get legal information to clients, the resources necessary to address a given legal matter would decrease and could be deployed more efficiently. But currently, everything must be done by an organization owned and financed by a lawyer. Having lawyers devising advertising strategies to bring in clients instead of focusing on legal analysis is not an efficient use of legal resources. It also places huge burdens on small firms and single practitioners. By changing standards to allow the corporate practice of law, a change Responsive Law supports, other organizations and businesses could work with attorneys to provide and deliver legal services. This would allow cases to be processed more cheaply and quickly, providing the consumer with a better product.
The ABA’s Ethics 20/20 Commission, which Responsive Law has been closely following, has largely neglected reforms in this area. As Professor Hadfield notes, the ABA has largely ignored the scale of the cost problem and focused its attention on traditional remedies like increasing legal aid budgets. If the ABA wants to address the crisis of legal access seriously, it would do well to deeply consider Professor Hadfield’s work and not overlook the issues surrounding the corporate practice of law.
Will Downes, a law student at Georgetown University Law Center, is a Responsive Law intern.