In the face of opposition from Responsive Law, the Virginia State Bar (VSB) has backed off from a proposed ethics opinion that would have restricted Virginians’ ability to use affordable fixed-fee legal services.
The proposed opinion would have declared that lawyers were acting unethically by participating in programs where a company advertises their services for discrete tasks—such as creating a will, reviewing a lease, or filing for an uncontested divorce—and charges a fixed flat fee for those services. The opinion was clearly directed at Avvo Legal Services, which has begun to roll out such services in markets nationwide.
In the proposed opinion, the VSB’s Standing Committee on Legal Ethics opined that lawyers could be violating legal ethics rules by paying a marketing fee to a company like Avvo, which it considered a violation of the prohibition on lawyers sharing fees with non-lawyers. It also said that it would be unethical for Avvo to maintain possession of client fees while a client waits for the lawyer to complete the work for which they were hired. Instead, the committee claimed, such money should be held in the lawyer’s client trust account.
Responsive Law submitted comments to the committee opposing the proposed opinion. We noted that clients were likely to be better protected against misappropriation of their fees under Avvo’s model than by a client trust fund. A client trust account, we noted, “is not a subterranean vault guarded by a goblin at Gringotts Wizarding Bank; it’s a paper (or electronic) construct to which the lawyer has complete access.” By contrast, under Avvo’s model, it holds the fees until the client indicates that the lawyer has satisfactorily completed the work.
Our comments also noted that a lawyer’s payment of a marketing fee to Avvo is a reasonable business expense, much like a credit card processing fee, and is also a totally reasonable way for lawyers to advertise that causes no harm to consumers. Rather than looking for technical violations of the ethics rules, the VSB should consider whether the increased access to legal services such services provide outweighs a theoretical harm that has not been demonstrated.
Finally, we pointed out that attempts by the VSB to restrict innovative new business models is a potential violation of the U.S. Supreme Court’s recent ruling in North Carolina State Board of Dental Examiners v. Federal Trade Commission. In that case, the Court held that self-regulating professions cannot hide behind “state action” immunity from antitrust law when the regulators are market participants. Several elements of the proposed opinion relied upon bar rules that are anticompetitive, making antitrust liability a strong possibility for the VSB, the Ethics Committee, and their individual members.
Aside from Avvo and one individual lawyer, Responsive Law was the only entity to submit comments opposing the proposed ethics opinion. In response to those comments, the Ethics Committee voted not to submit the proposed opinion to the Bar Council. VSB Ethics Counsel James McCauley told Virginia Lawyers Weekly (sub. req’d) that the committee now plans to “go back and study the affected rules.”
To read Responsive Law’s comments to the VSB, click here.
Responsive Law recently submitted comments to the American Bar Association regarding proposed rule changes to the Model Rules of Professional Conduct governing lawyer advertising and solicitation. Lawyer advertising is one of the most common ways that people find out about where they can get legal help. Restrictions on truthful advertising not only hinder the lawyer's ability to advertise her services, but also the consumer's ability to find the right lawyer for her legal matter. Lawyers have the right to convey truthful information and consumers have the right to make an informed decision among different options for legal services.
The current rules of professional conduct maintain an antiquated mindset under which advertising is heavily restricted due to being seen as undignified. While a Victorian era gentleman could find a good lawyer through recommendations from family members or friends from the country club, the modern consumer relies on advertising—especially online—to find professional services. Despite repeated court rulings that lawyers are free to advertise like any other profession, the ABA's Model Rules (followed by nearly all states) keep them shackled with unnecessary restrictions that serve to protect this antiquated business model rather than to protect consumers. This view of advertising as some type of "tasteless" activity leads to a society of uninformed consumers. If this type of pressure on lawyers continues, then the legal profession will never see change and consumers will always be left out of the equation.
A recent research study by Rebecca Sandefur (a member of our policy advisory board) concluded that most Americans are unaware when their problems have a legal component and wouldn't know how to find a lawyer even if they thought one would help them. Under the current rules, lawyers end up providing less information to consumers due to fear of punishment for running afoul of overly restrictive and unnecessarily technical restrictions.
Fortunately, the proposed amendments may indicate a shift in the bar's thinking. The amendments would streamline the rules to focus more on the truthfulness of lawyer advertising and solicitation and less on the form that such advertising takes. Responsive Law's comments to the ABA support these proposals in the hope that they will move the legal profession out of the Victorian-era and into the era of technology, where consumers can more easily access information about lawyers at the touch of a button.
You can find Responsive Law's testimony here
Angel Gutierrez is a Responsive Law intern
The ability to sign electronically is a convenient process allowing people to sign documents or confirm purchases from the comfort of their homes. However, the use of electronic signatures has not yet been applied to the process of estate planning. The 2016 Gallup Poll determined that the percentage of Americans with a will was only 45%, leaving the other 55% of the U.S. population with no record of their wishes upon their death. Responsive Law recently released a statement stating its support for laws that would allow for greater use of electronic signatures in estate planning.
In its statement, Responsive Law noted that “there is undoubtedly a segment of this population that is inhibited from preparing a will because of the need to have a physical signature on the document.” Responsive Law’s statement also recognizes that electronic signatures would increase the ability to create wills due to the process becoming more accessible and affordable to the public. In addition, cutting traveling and mailing costs out of estate planning could further simplify the process of getting a will, making it more likely that Americans would do so.
Several state legislatures are considering bills that would permit electronic signatures in estate planning. Florida’s SB 206, New Hampshire’s SB 40, Arizona’s SB 1298, and Indiana’s HB 1107 would all provide guidance on allowing the convenience of e-signatures while ensuring their validity.
Planning for the future after death can be harrowing for most, but it is also an important step. Responsive Law advocates for any process that can make this step easier for those who partake in it. E-signatures can greatly benefit the 55% of Americans who do not yet have a will, and Responsive Law believes that it is time to make that change a reality.
Angel Gutierrez is a Responsive Law intern.
Laura Snyder's new book, "Democratizing Legal Services: Obstacles and Opportunities," provides a comprehensive analysis of international trends and developments in the regulation of legal service providers.
Aided by dozens of detailed interviews with both traditional and nontraditional providers of legal and quasi-legal services, Snyder explores a developing market through lenses that are both specific enough to create a multi-dimensional story and broad enough to give readers a sense of the issue's global scope.
Her refreshingly frank and pragmatic tone leaves one laughing aloud at the absurdity of some obsolete regulatory schemes while simultaneously cringing at the same. Similarly, her inclusion of personal stories and the experiences of individuals—both consumers and providers of legal services—presents the implications of the changing market in an accessible manner that never loses sight of the immediate and essential impact that legal regulatory regimes have on human lives.
In an era when innovation and technology allow a constantly shifting legal environment, Snyder examines the arguments both against and in favor of the growing trend toward relaxed regulation of legal service providers. Organized primarily as a collation of the experiences and impressions of providers and consumers in Australia, Canada, the United Kingdom, and the United States, Democratizing Legal Services artfully treads the thin line between presenting a collection of interviews and offering a fact-based analysis of various regulatory regimes.
You can find the online directory of supplemental materials for Snyder's book here.
Lynn Bechtol is a Responsive Law Legal Fellow.
In a disappointing move for proponents of public oversight of the bar, on November 17 the California Supreme Court authorized its State Bar Association to collect interim dues from its members for 2017. Responsive Law testified on this issue to the California Supreme Court, urging it to tie any such authorization to a requirement that the State Bar pursue reform of its governance structures.
The California Supreme Court itself had earlier mandated that the State Bar of California act to segregate its attorney discipline and trade organization functions, reacting to a recent US Supreme Court case holding that professional organizations may not use their regulatory functions to stifle marketplace competition. Despite this mandate, the Special Regulatory Assessment requested by the Bar made no effort to address shortcomings in the Bar's current governance system.
"The California Supreme Court's decision to authorize the assessment even in the absence of reform is an unfortunate defeat for consumers of legal services, who need reform to make the judicial system more responsive and accountable to the interests of the public," stated Responsive Law Executive Director Tom Gordon. "In California and across the nation, state bars need to adapt their practices both to serve the public and to conform with the US Supreme Court's standards for professional regulatory organizations."
Lynn Bechtol is a Responsive Law Legal Fellow.
Responsive Law testified this week at a District of Columbia Council hearing regarding a proposed bill to expand funds for legal service providers representing low-income DC tenants in housing matters. Responsive Law supports the bill's spirit and objectives, but we expressed concerns that the limits imposed in the bill's text will stifle innovation in the provision of types of legal services available to the public.
The bill's aspirational goals are noble and sorely needed – studies indicate that only 3% of tenants in DC Housing Courts have access to counsel, and this shortcoming has extreme and far-reaching consequences for tens of thousands of Washingtonians. Responsive Law wholeheartedly supports any legislative attempt to increase the accessibility of legal assistance and representation, particularly for low-income individuals and families.
However, both the bill itself and the other testifying witnesses failed to address the reality that legal needs come in a wide range of forms, only some of which necessitate full and formal representation by a Bar-certified attorney. The bill's text limits groups eligible to receive funding to particular types of nonprofits and law school clinics – eliminating the possibility of funding for novel approaches by other organizations.
Of the 29 witnesses who testified before the Council, only Responsive Law addressed the importance of innovation in the legal services market. Every other witness—most of whom represented nonprofits and clinics that would see increased funding if the bill is passed—focused their testimony on the scope of the problem and the good works done by their organizations, specifically by lawyers. Without doubt, lawyers provide invaluable assistance in legal housing matters. However, a number of jurisdictions across the country now offer alternatives to traditional representation, including New York City's Navigator Program and Washington State's LLLT Program.
Furthermore, as Responsive Law Board Member Fritz Mulhauser testified, in even the most halcyon vision of the future legal services market, "lawyers will remain a scarce good." He raised the uncontroverted fact that, if the proposed bill is given a (wildly optimistic) budget of "$1-2 million per year," such a budget could "sustain at most a few dozen new attorneys." Given the scope of the problem, this will certainly be insufficient. It is therefore imperative that legislation addressing this issue both encourage creativity by service providers and leave room for previously unimagined approaches.
You can read the full text of Responsive Law's testimony to the DC City Council on this proposed legislation here.
UPDATED, 11/03/16: In response to the bill's lackluster approach to innovation in the provision of legal services, on November 3, 2016 Responsive Law submitted supplementary testimony regarding the bill. This summplementary testimony suggests specific proposed amendments that will address the bill's shortcomings through two types of significant revisions.
First, the amendments proposed by Responsive Law will expand the class of providers eligible for funding to allow innovative approaches by any group or provider capable of offering "effective assistance" - not just by lawyers and law school clinics. By opening the the door to a wider range of applicants representing a wider range of approaches, the amended bill would be better suited to meet the needs of a wider range of individuals.
Second, the amendments would increase the program's capacity and obligation to learn from the variations on effective assistance permitted under the bill. Given the extreme and ongoing shortage of legal aid available to indigent communities, only continued study and innovation will enable the bill to fulfill its goal of improving access to justice among low-income Washingtonians.
You can read the supplemental testimony submitted by Responsive Law here.
Lynn Bechtol is a Responsive Law Legal Fellow.
Responsive Law has submitted an amicus curiae letter urging the Supreme Court of California to require the State Bar of California (SBC) to reform its governance structure to address insufficient public oversight of the bar.
The current structure of the SBC is inadequate to meet its titular primary mission of public protection. Currently, the State Bar Board of Governors consists of 13 attorneys and only six public members. When an industry's regulatory body is composed predominantly of industry members, inherent conflicts of interest arise. Lawyers, for example, have incentive to exclude competition (from both non-lawyers and out-of-state lawyers), restrict innovation (in the structure of law firms or new forms of advertising), maintain the status quo, and minimize the need to adapt their business models to a changing marketplace.
The California Legislature adjourned its most recent session without authorizing the SBC to collect annual dues from its more than a quarter million members. In directing the SBC to request a funding assessment, the California Supreme Court instructed the SBC to also formulate a policy addressing "proposed Board actions that implicate antitrust concerns." However, the SBC's recent request for a Special Regulatory Assessment failed to acknowledge this directive.
Responsive Law advocates structural change that will vest the ultimate authority to determine whether particular regulations are in the public interest in representatives of the public, not in members of the legal industry. "Although the Special Regulatory Assessment requested by the SBC cites public protection rationales," noted Responsive Law Executive Director Tom Gordon, "it tellingly ignores the Court's request for a proposal addressing the shortcomings of its current governance structure and neglects U.S. Supreme Court precedent and Federal Trade Commission antitrust guidelines that make clear a need for public oversight over legal services' regulation.
For this reason, Responsive Law urged the Court to tie the requested Special Regulatory Assessment to a requirement that the SBC propose structural reform aimed at imposing active state supervision over potentially anticompetitive actions taken by the SBC.
You can read the full text of Responsive Law's comment to the California Supreme Court here.
Lynn Bechtol is a Responsive Law Legal Fellow.
The Florida Supreme Court is considering amendments to its rule regulating lawyer referral services which could drastically restrict consumer access to justice.
Lawyer referral services collect legal information and resources in a single forum and play a vital role in making community members aware of the legal aspects of their problems. These agencies describe lawyers’ qualifications and experience, provide cost comparisons between lawyers offering similar services, and guide consumers toward lawyers specializing in specific services, such as assistance with consumer debt or child custody issues. Such recommendations are invaluable to ordinary consumers, who are generally inexperienced with the legal system and have considerable difficulty determining which lawyer will best serve their needs.
Despite a continually growing need, particularly among first time consumers, such services remain out of reach for most low and middle income individuals, organizations, and families. Many individuals fail to recognize the legal components of their problems. For example, a tenant facing eviction may view her issue as purely financial even though she has a legal right to challenge the eviction. Even when a consumer recognizes that she has a legal need, she may be unable to determine what sort of aid is needed and how it can be located. A 2013 study found that two-thirds of random adults in a mid-sized American city experienced at least one significant legal issue within an 18-month period, but only one-fifth of those sought formal help. Consumers often find the legal system confusing and inefficient. They fail to seek formal assistance because they believe such help would be ineffective, too difficult to locate, or too costly.
In response to the increased availability of online referral services, the Florida Supreme Court asked the Florida Bar to propose amendments to Florida Bar Rule 4-7.22, regulating lawyer referral services. If approved by the Florida Supreme Court, the Bar’s proposed amendments would merge referral services into a larger category of “qualifying providers,” including not only traditional referral services but also directories, online matching systems, grouped or pooled advertising, and tips or lead systems. Underlying the amendments is a concern that such services, particularly when operated for profit, encourage agencies to favor certain attorneys and firms over the consumers that the services are meant to aid.
Responsive Law opposes this change because it will make legal services less available to consumers. This definition will fail to address the consumer harms feared by theBar, and it will also significantly and negatively affect such agencies’ ability to provide high-quality, affordable legal services to consumers. Responsive Law submitted an official comment encouraging the Florida Supreme Court to reject the expanded definition the amended rules propose.
If you would like to read Responsive Law’s full comment to the Florida Supreme Court, click here.
Lynn Bechtol is a Responsive Law Legal Fellow
The American Bar Association’s Commission on the Future of Legal Services has just released its final report and recommendations. Responsive Law will have a lot to say about this report over the coming weeks and months, but we’d like to make a few important points upon its release.
Responsive Law testified to the Commission numerous times. The Commission, which had among its membership a number of legitimate advocates for a more open, innovative, and accessible legal system. We had great hopes that it would issue recommendations that would make legal help available to the millions of Americans who cannot afford a lawyer.
The first part of the Commission’s report, in which it outlined its findings, lived up to this promise. Unfortunately, the second part of the report, consisting of the Commission’s recommendations, was a disappointment in which the Commission let down the millions of Americans whose problems it had so thoroughly described.
The Commission’s findings run several pages. Among them are the following, perhaps most relevant to a more accessible legal system:
“Most people living in poverty, and the majority of moderate-income individuals, do not receive the legal help they need.“
“The public often does not obtain effective assistance with legal problems, either because of insufficient financial resources or a lack of knowledge about when legal problems exist that require resolution through legal representation.”
“New providers of legal services are proliferating and creating additional choices for consumers and lawyers.”
“Many lawyers, especially recent law graduates, are unemployed or underemployed despite the significant unmet need for legal services.”
“The traditional law practice business model constrains innovations that would provide greater access to, and enhance the delivery of, legal services.”
“The legal profession’s resistance to change hinders additional innovations.”
To summarize, the Commission identified the following premises:
1) People aren’t getting legal help and don’t know where to find it.
2) There are many innovative legal service providers—both lawyers and non-lawyers—who would be able to help the public if they weren’t constrained by traditional business models and the legal profession’s resistance to change.
The obvious conclusion from these premises is that the ABA should act to remove the barriers that prevent innovative service providers from helping the public. However, the Commission failed to do so.
Where the commission could have made strong recommendation that the ABA remove regulatory barriers, it instead bowed to bar pressure and made a series of milquetoast pronouncements urging further study and consideration.
Rather than saying, “Lawyer-regulators, tear down these walls!” the Commission has engaged in a policy of appeasement toward the ABA, leaving consumers to face the profession’s continued indifference toward their exclusion from the legal system.
The Commission Calls For Further Study of the Issues It Has Spent Two Years Studying
The Commission’s overarching recommendation regarding regulation is that “Courts should consider regulatory innovations in the area of legal services delivery.” After spending two years considering regulatory innovations itself, the Commission needed to do better than telling courts to merely consider them.
The Commission is just as passive in how it addresses specific areas of regulation. Recommendation 2.1 states “Courts should consider adopting the ABA Model Regulatory Objectives for the Provision of Legal Services.”
Here the Commission encourages multiple layers of bureaucracy between its recommendation and any actual regulatory change. The Model Regulatory Objectives, while important, are not themselves new regulations, but merely a framework to use when adopting regulations. And the Commission doesn’t even recommend that courts adopt the Model Regulatory Objectives, only that they consider doing so!
The next recommendation from the Commission is equally obsequious. Recommendation 2.2 states: “Courts should examine, and if they deem appropriate and beneficial to providing greater access to competent legal services, adopt rules and procedures for judicially-authorized-and-regulated legal services providers.”
Putting aside whether non-lawyer legal service providers (LSPs) should be regulated by the courts, this recommendation asks the courts only to examine such regulation, not necessarily to adopt it. In fact, the Commission makes clear that (after two years of study) it “does not endorse the authorization of LSPs in any particular situation or any particular category of these LSPs.”
The Commission is at its most timid in addressing alternative business structures (ABS), which would allow non-lawyer ownership and investment in law firms. As we’ve emphasized in comments to the Committee and elsewhere, ABS could foster the creation of mass consumer law firms, which could provide consumers with access to an affordable lawyer for everyday legal matters such as family law, wills, housing, and employment, in the same way that H&R Block provides affordable tax help.
The Commission’s Recommendation 2.4 reads, “Continued exploration of alternative business structures (ABS) will be useful, and where ABS is allowed, evidence and data regarding the risks and benefits associated with these entities should be developed and assessed.”
The Commission notes that it “undertook a robust examination” of ABS. It released an Issues Paper on the subject, which included reference to eight major studies of actual and prospective ABS models published in the last two years. The Issues Paper generated comments from 33 organizations and dozens of individuals. Yet, after all of this, the Commission can only conclude that “continued exploration…will be useful”!
The Commission has already undertaken this useful exploration, and the evidence it has gathered weighed heavily in favor of allowing ABS. Furthermore, recommending repeal of the ABA position against ABS would not have mandated that any state allow ABS, let alone that any firm become one. Unfortunately, though, the Commission was unable to take even that small step.
Giving credit where it is due, the Commission did actually make a wise recommendation with regard to regulation of online service providers. Recommendation 2.3 urges states to use caution in regulating these new service providers, lest they stifle innovation that is bringing legal access to millions of Americans. This is a situation where the generally applicable consumer fraud laws provide adequate protection to the public, and additional regulation could stifle an industry that is just beginning to realize its potential in bridging the access to justice gap.
In most cases, though, the extreme caution exercised by the Commission is not indicative of considered restraint, but of deference to the prevailing wishes of the most hidebound parts of the bar, as embodied by the ABA. What makes this particularly disappointing is that the Commission has many members who are passionate about innovation in the delivery of legal services and who realize the necessity of moving away from the status quo if legal services are ever to be within reach of the average American. In fact, the Commission’s finding of fact make this point exceptionally well.
Why Was The Commission So Deferential To The Bar’s Status Quo?
Why, then, did the Commission act so timidly in failing to make what it had to know were the logical policy recommendations based on its findings? I have no inside knowledge of the Commission’s thoughts or processes, but I have a couple of theories to share.
One possibility is that the Commission, fully aware of the difficulty that any reform proposal faces from the ABA House of Delegates, decided that it would be more prudent to push for incremental reform. Every reform movement has to make the decision between the ideal and the possible. However, if the Commission purposely decided to advocate only incremental reform, then it wasted an opportunity.
The Commission’s recommendations are not legislative proposals to be voted up or down, but the results of the collective wisdom of two years of study. It’s not important in this case whether the recommendations would be approved; it’s important that they solve the problems the Commission was charged with studying. Rather than pulling its punches, the Commission could have played a role as the ABA’s conscience by reminding it of the real access to justice concerns that the bar has created by supporting lawyer-focused, rather than consumer-focused, regulation.
A second possibility is that the Commission was unduly influenced by the lawyer establishment. I don’t mean to suggest any sort of corruption, but rather that the overwhelming majority of voices that the Commission heard were from lawyers and bar groups. Of the hundreds of comments received by the Commission, nearly all were from ABA entities, state courts, state bar associations, lawyers, and businesses providing legal services. At the Commission’s invitation-only National Summit on Innovation in Legal Services, Responsive Law was the only consumer group in attendance. And, the members of the Commission, while often dedicated to reforming the legal system and increasing access to legal services, are all lawyers themselves.
In its findings of fact, the Commission noted,
“The legal profession continues to resist change, not only to the public’s detriment but also its own. During the Commission’s public hearings and the ABA House of Delegates floor debate on Model Regulatory Objectives for the Provision of Legal Services, as well as breakout sessions at the National Summit on Innovation in Legal Services and grassroots legal futures meetings across the country, the Commission repeatedly heard similar remarks about the profession’s delayed adoption of, if not outright resistance to, innovations in technology, systems process improvement, and other developments that could benefit consumers of legal service but would affect traditional ways of delivering legal services.”
It is unfortunate that the Commission may have succumbed to the same resistance to change that it lamented in the rest of the profession. However, such a result may have been inevitable. After all, when a Commission publicizes its activity through the ABA website, holds its hearings at ABA meetings, and gives over 70 presentations with nearly all taking place at bench or bar meetings, it’s not surprising that the process will be dominated by lawyers. Given the predominance of lawyers in this process, it’s a credit to the Commission that its findings of fact were not slanted toward the bar’s status quo.
A Clear Sign That Lawyer Self-Regulation Cannot Work
If this second theory about undue influence is correct, then it provides strong support for Responsive Law’s position (as recently articulated in our testimony to the California Task Force on Governance in the Public Interest and the California Assembly) that ultimate regulatory oversight of the legal profession needs to be vested in a publicly responsive body that does not consist predominantly of members of the profession. In making the rules governing the legal profession, state bars and supreme courts follow much the same process as the Commission did, only on a smaller scale. They issue proposals for public comment that appear where only lawyers are likely to see them, and then hold hearings where they hear only from lawyers about how lawyers should be regulated.
If a commission consisting largely of people sympathetic to the access to justice problems faced by people in this country spent two years studying those problems only to issue recommendations consisting largely of platitudes, aspirations, and calls for further study, then there’s no chance that bar associations or state supreme courts, no matter how noble their motives, can fairly assess regulation of the their own profession. Regulation of the lawyers, by the lawyers, inevitably becomes regulation for the lawyers. The American public, whose interests the bar claims to be protecting, deserves better.
The American Bar Association (ABA) Commission on the Future of Legal Services recently published an issue paper addressing whether alternative business structures (ABS) would benefit consumers in the United States. ABS allows non-lawyers to own and invest in law firms. Currently, practically every U.S. jurisdiction restricts non-lawyers from investing in law firms. The Commission requested responses and data on the benefits and risks of ABS.
Responsive Law has repeatedly urged the bar to permit the broadest possible range of outside investment in law practices. In our recent testimony to the Commission, we take the same position. Utilizing investments from non-lawyers would allow greater access to legal services for consumers. ABS could close the justice gap between the number of people in need of legal help and the small subset who can afford it.
Current restrictions on outside ownership are preventing the creation of mass-market lawyer services. However, mass-market lawyer services would be comparable with tax services through companies like H&R Block. That company offers standardized national services to help navigate the tax system while remaining affordable and accessible throughout the entire U.S. Similarly, a legal version of H&R Block could provide standardized services nationwide on common legal matters such as wills, landlord-tenant disputes, divorces, and employment matters. However, the prohibition on outside investment means that lawyers can’t raise the capital to start such a firm, and a businessperson cannot create such a firm.
The Commission’s description of potential risks associated with ABS is overstated. The risk that outside investment might threaten lawyers’ core values is a frequent argument made by the bar, but is not supported by evidence. Lawyers, the argument goes, would face pressure from non-lawyer owners and investors to prioritize profits over their clients’ needs. Pressures placed on lawyers to make money is hardly a new concept, though. This argument ignores the fact that lawyers already face pressures from firm partners to prioritize firm profits, as any associate required to bill 2300 hours a year would confirm.
The Commission gave several examples of other countries with their own ABS programs, including the U.K. and Australia. The ABS programs set up in both countries have been overwhelmingly successful and consumers are being helped at an amazing rate. The ABS program was so successful in New South Wales that all other Australian jurisdictions have developed a program for their consumers.
Despite what we expect to be strong opposition from the ABA House of Delegates, we urged the Commission to recommend that the U.S. allow a wide-range of ABS. You can read our full comments to the Commission here.
Morgan Newell is a Responsive Law intern.