Despite the support of forward-thinking, recently inaugurated Bar President Ramon Abadin, the Florida Bar has voted down a proposal to allow greater reciprocity with lawyers from other states. Abadin proposed reciprocity in his inaugural speech in June, and the Florida Bar’s three year Vision 2016 study featured a proposal that the state adopt a form of reciprocity or admission by motion. Abadin, who made a progressive attempt to thwart Florida’s blatant economic protectionism of its legal industry, rightfully questioned critics’ assertion that Florida has “too many” lawyers when seventy percent of people in the state cannot get legal services. Abadin, who has been traveling the state since his inauguration to discuss the Vision 2016 study, pointed out that Florida’s approach to the issue of reciprocity is antiquated and does not conform with the changing landscape of the legal industry, which now has to contend with internet companies such as Avvo, LegalZoom and Rocket Lawyer whose services are not confined by state lines.
However, despite his forward-looking efforts, Abadin admitted that reciprocity is unlikely to pass in Florida, even though the debate will continue. Many members of the legal profession spoke out against Abadin’s proposal, but no legitimate concerns were brought. A self-described young attorney who sat for three bar exams in an attempt to do things “the right way” was arguing against reciprocity, only to be told by Abadin that, “What happened yesterday doesn’t affect today.” Along similar lines, the Florida Board of Bar Examiners issued a letter against reciprocity, reasoning that individuals who are admitted to practice in Florida should establish at least a minimal knowledge of Florida law. However, while a bar exam may force attorneys to cram large amounts of material in a short amount of time—not a method of learning that cultivates long-term retention—it does not absolve a practicing attorney from conducting thorough legal research into applicable law. Legal education teaches lawyers how to think and how to find information, and an attorney who has these basic skills would not need to frantically memorize Florida—or any other state’s—law just to regurgitate it on an exam. In order to be a good advocate, the attorney would simply need to be sufficiently competent to effectively research and apply the law that is relevant to the case that he is handling.
During a September forum on the issue, Florida attorneys working in small firms and solo practices expressed a concern that reciprocity would cause Florida to be flooded with attorneys working for “mega law firms” who will complete for business. However, the ostensible purpose of restrictions on practice is to protect consumers, not to protect lawyers. Complaints from lawyers about competition expose the real reason for these and other unlicensed practice of law restrictions: to protect lawyers from competition, both within and outside the profession. Abadin’s response to critics who fear that Florida would be inundated with out of state attorneys should reciprocity pass was that there is no empirical evidence to support this contention. Abadin has been making commendable attempts to align Florida with more progressive approaches to reciprocity, as his state and the U.S. as a whole are clearly lagging on the issue. Both should look to Canada, a country that allows multijurisdictional practice. This in turn harvests greater competition in the legal services industry and allows more lawyers and law firms to reach economies of scale. A similar approach would help alleviate Florida’s justice gap that was pointed out by Abadin—a problem that is in fact all too pervasive throughout the United States.
Elena Kravtsoff is a Responsive Law volunteer
In November 2014, the California State Bar Board of Trustees approved the creation and appointment of the Civil Justice Strategies Task Force. The charge of the task force was to analyze the reasons for the state’s justice gap: the conundrum of how there are so many lawyers yet so many Americans have unmet legal needs and cannot afford or access legal help. Specifically, the task force intended to study creative solutions and innovative strategies in use by other states and other countries that have the potential to greatly improve access to justice in California.
Responsive Law sent an array of innovative and creative solutions to the Civil Justice Strategies Task Force. We advised the task force to allow for alternative business structures to address the justice gap. Alternative business structures entail permitting outside investors to provide capital to legal service companies or allowing non-legal companies to partner and share fees with a legal organization. Both the United Kingdom and Australia have allowed legal entities to accept outside investment from non-lawyers; yet no state in the U.S has done so due to unfounded concerns that outside investment will lead to an increase in unethical violations by lawyers.
We specifically recommended that California allow outside investments in the growing number of legal startups that already exist in their state. We highlighted the fact that pro-bono services and legal aid literally do not have the capacity to provide even half of the unmet need for legal services. Thus, California needs to invest in creating a larger array of affordable legal services via outside investment in legal startups.
We also recommended allowing more non-lawyers to provide legal help to consumers. We cited the launch of limited license legal technicians (a regulated profession of non-lawyers who provide document preparation and other legal assistance) in Washington state. We also recommended the proven strategy of limiting the breadth of unauthorized practice of law claims (UPL). Research has shown that UPL cases are brought mostly by lawyers, for anti-competitive reasons, as opposed to a dissatisfied customer. As Responsive Law has noted before, such aggressive UPL enforcement chills legal innovation. Specifically we proposed that the task force create a safe harbor provision for document preparation similar to the one in Texas that has helped to provide many Texans with access to self-help tools. We also encouraged the task force to again look to the United Kingdom where non-lawyers referred to as McKenzie friends have operated for the past 50 years providing court navigation help, moral support, case paper management and advice on courtroom conduct for free or for a small fee.
Lastly, we encouraged the task force to take the lead (as opposed to waiting for other states) by launching a compact with other states to allow for multi-jurisdictional practice similar to what exists in Canada. In Canada, a lawyer can practice in any province; allowing multi-jurisdictional practice allows for greater competition in the provision legal services and more lawyers and law firms to reach economies of scale. Thus the strategy of multi-jurisdictional practice could provide Californians with unprecedented access to lawyers. We believe California is off to a good start of addressing their growing access to justice gap; the strategies and solutions we have recommended will supercharge California’s potential to actually close the justice gap.
You can read our comments to the California Bar here.
As we reported previously, Responsive Law joined in an amicus brief in the U.S. Supreme Court case of North Carolina Board of Dental Examiners v. Federal Trade Commission (hereinafter referred to as the Dental Examiners case). In the amicus brief, we brought to the Supreme Court’s attention the access to justice gap in America that is caused by over-regulation of the legal market and high barriers to entry that benefit lawyers at the expense of the public interest. We encouraged the Court to rule in favor of the FTC to ensure that regulations protect consumers, not market participants. The decision, handed down on Feb 25th, 2015, did just that
In the Dental Examiners decision, the Supreme Court opinion that state regulatory agencies, if controlled by members of the professions they oversee and operating without any active supervision by the state, violate antitrust laws. The defendants in the Dental Examiners case were not lawyers. They were dentists. The Supreme Court recognized that allowing any body of professionals to regulate themselves creates a tangible threat of antitrust violations by acting in ways that further their own interests. In the realm of the law we have seen that state bars’ enforcement of unauthorized practice of law restrictions increases prices to the detriment of consumers while decreasing consumer choice.
State supreme court oversight is an improvement over no oversight at all, but for the oversight to be most effective, it needs to come from the elected branches of government. The legislative and executive branches are best positioned to provide oversight over these agencies so that they are not policing themselves. Nevertheless, the decision, as we hoped, is already having broader ramifications on the legal profession.
As reported in the Michigan Law Journal, a number of state bars are currently working with their legislatures and state attorneys to analyze if they are in compliance with the Dental Examiners decision. Currently, the North Carolina legislature is considering a bill that would further define the practice of law and establish a method of active supervision. The bill would additionally establish the attorney general, as opposed to the state bar, as the body that must first respond to unauthorized practice of law claims. Other states have plans to create an “umbrella authority” over their regulatory and licensing boards as a mechanism to comply specifically with the “active supervision” requirement.
In contrast, the State Bar of Michigan believes that it already has safeguards in place to avoid an antitrust claim; specifically they claim that their regulations are drastically different from the regulation described in the Dental Examiners decision. The Michigan bar argues that, for starters, it has limited statutory authority to investigate and prosecute unauthorized practice of law allegations. Additionally, its limited investigation and prosecution power are currently supervised by the Michigan Supreme Court. Lastly, Michigan claims that their enforcement of unauthorized practice of law claims only happen through the judicial process where those who are accused of violating the UPL have due process rights afforded to them. But not everyone in Michigan believes that the State Bar is in compliance with the Dental Examiners decision. Some note that Michigan does not currently have in place the “active supervision” necessary to comply with the Dental Examiners decision. Additionally, Michigan also lacks a formal definition that clearly articulates what the practice of law is. Neither the Supreme Court of Michigan nor the Michigan legislature has provided a clear definition of the practice of law.
State bars are not the only entities responding to the Dental Examiners case. Public interest organizations are also jumping into action to put pressure on states to comply with the decision. Three public interest consumer organizations have called on all 50 state attorneys general to enforce the high court’s ruling. These organizations have even specifically referenced enforcement within the legal profession by stating the following in their letter:
“[S]tate bars, now comprise majorities — even supermajorities — of licensed professionals in the very economic tribal grouping with an economic interest in restraints of trade benefiting them… State bars controlled by attorneys rarely discipline for excessive billing or intellectual dishonesty…Few require any demonstration whatever of competence in the actual practice area of law relied upon by clients. Few require malpractice insurance, or in any way ameliorate the harm from attorney incompetence. The point is, each of the many agencies within your state is empowered to carve out momentous exceptions from federal antitrust law, and those decisions in particular require a level of independence from the implicit focus of current practitioners.”
Responsive Law is very excited about the developments made so far; we will continue to monitor these developments and push for real oversight of the legal industry that makes it responsive to the people, not only to itself.
The World Justice Project has released its 2015 Rule of Law Index, a comprehensive ranking of countries based on how their public experiences the rule of law. We've reported on the Rule of Law Index before, and sadly the story remains the same for the United States. While we rank among the world's leaders in most areas, we continue to bring up the rear among our peers in accessiblity and affordability of civil justice.
The WJP rated countries on 44 factors across eight categories, including open government, absence of corruption, civil justice, and criminal justice. The U.S. was ranked 19th of 102 countries overall, and was in the middle of the pack overall among its geographic and income-level peers. However, the story is very different when it comes to the Civil Justice category of "Accessiblity and affordability." Here, the U.S. was in a tie for 65th with countries including Pakistan, Tanzania, and Uzbekistan.
When compared to its peer countries for accessibility an affordability, the U.S. is even more dismal. We were next to last among 31 high income countries, narrowly edging out the United Arab Emirates to avoid a dead-last raniking. Even among upper-middle income countries, only four of 31 scored lower than the U.S. in this category. And our score in this category was far below any other country in North America and Western Europe.
What's most disappointing about the U.S.'s low ranking is that it comes despite our relative prosperity. For Americans of average means, legal help is less available than it is for those of average means in far poorer countries. This isn't due to a shortage of lawyers, but due to the inability of the American system to match people who need help with those who can provide it, brought on by the economic protectionism of bar associations. Eliminating antiquated rules that prevent mass-market consumer legal services—doing for legal help what H&R Block does for taxes—is one way to fix this problem. Rolling back restrictions on the unauthorized practice of law—allowing competent non-lawyers to provide basic legal assistance—is another. Reforming these areas is a must if the U.S. wants a justice system more accesible than that of an impoverished nation.
Currently, California is one of the many states in this country that has issues providing access to adequate and affordable legal services. Legal document assistants, or “LDAs”, assist self-representing parties in preparing legal documents. They help to reduce the issue of expensive or inaccessible legal representation, as they can act to provide limited legal assistance to parties that either do not need to hire an attorney or cannot afford to do so.
The problem remains, however, that LDAs are encumbered by regulations that burden their work: specifically, LDAs must register in each separate county they provide services in. The process of registering in each county becomes expensive, and the consumer ultimately winds up subsidizing the incurred costs. This regulation is also problematic in that it deters LDAs from offering their services in multiple counties, which restricts consumers’ access to this service. Moreover, these regulations are purposeless; they do not serve to protect the consumer.
Responsive Law’s recently submitted testimony in support of California Assembly Bill 285, which would eliminate this burden, thus facilitating greater consumer choice among LDAs. The provision of AB 285 that will be most helpful to consumers provides for statewide—as opposed to county-by-county—registration for LDAs. Not only would AB 285 eliminate this costly and time-consuming limitation on LDAs, but it would also enable them to branch out and provide services throughout the state. In short, AB 285 would benefit the consumer in the long term by allowing greater access to a legitimate, cost-effective legal service.
On May 26th, AB 285 passed the California Assembly and is awaiting consideration by the Senate.
Emily Iannucci is a Responsive Law intern.
A District of Columbia bar committee has proposed several rule changes that will facilitate the provision of limited scope legal representation. Limited scope representation makes legal services more affordable to low- and moderate-income individuals, by allowing them to use a lawyer for smaller tasks such a one-time consultation or help with preparing a document. For example, you could agree with a lawyer to pay a flat rate amount simply for review of a contract. Or you could pay another flat rate amount to have an experienced attorney represent you in court on one or several dates (as opposed to throughout your entire case).
Responsive Law sent two recommendations to the DC Bar in response to its proposal. We advised the committee that they should offer an exception to the written requirement for telephone consultations and online consultations. There are a slew of online Q&A sites and legal aid hotlines that offer quick and easy access to any legal inquires you may have. We believe it is impractical for a lawyer to acquire a written agreement if you are speaking on the phone with them or are asking your questions via an online site. We also recommended that the DC Bar set, as a default, that important court documents should be served on the client and not the attorney. The concern here is that if someone pays an attorney to review a document or attend one case only, the attorney, rather than the client, may end up receiving important documents from opposing counsel. To decrease the possibility of clients not receiving important documents, the DC Bar should require that opposing counsel serve documents on the client unless specifically told otherwise.
You can read our comments to the D.C. Bar here.
Supreme Court Agrees with Responsive Law Brief; Anti-Competitive Polices Crafted By Bar Associations May be Subject to Antitrust LawWritten by Tom Gordon
Yesterday, the U.S. Supreme Court ruled that anti-competitive policies created by state professional are not exempt from scrutiny when the regulatory body is not actively supervised by the state.
This decision, in addition to removing the antitrust exemption enjoyed by many bar associations, could have profound implications for the ability of lawyers to continue to prohibit their nonlawyer competitors from operating and exclude nonlawyers from the legal services market.
Responsive Law filed a brief in the case, North Carolina Board of Dental Examiners v. FTC, urging the Supreme Court to consider the negative effect that continuing to grant an antitrust exemption to these unsupervised professional boards would have on the expanding market of affordable and accessible legal services offered by nonlawyers.
Like the North Carolina Board of Dental Examiners, state bar associations, as a result of pressure from their members, have used cease and desist letters to put their unlicensed competitors out of business, which has allowed for the high monopoly rates lawyers currently have. As a result, over 80 percent of Americans have received no assistance with everyday legal needs, such as simple estate planning, arranging child custody, landlord-tenant disputes, or addressing consumer debt matters.
In this case, the Court held that a state dental board consisting primarily of dentists who were elected by other dentists and which was not supervised by the state was not exempt from antitrust action, despite its claims that it was exempt as a “state actor.” The Court noted that “[e]ntities purporting to act under state authority might diverge from the State’s considered definition of the public good. The resulting asymmetry between a state policy and its implementation can invite private self-dealing.” The Court explicitly suggests that State agencies who are both controlled by active market participants and who possess “singularly strong” private interests pose a very high risk of self dealing/promoting policies that will benefit their own private interests.
State bars, when they function in a regulatory capacity, act exactly as the dentists did in this case. State bar associations and their regulatory arms consist entirely or almost entirely of lawyers, and are elected or appointed by a membership consisting of lawyers. In the case of the bar, the use of its enforcement power over UPL has devolved from furthering the state’s policy interest in protecting consumers to furthering the bar’s interest in protecting itself from competition.
In ruling as we had urged, the Court held that a state agency “controlled by active market participants” must be subject to active supervision by the state in order to be immune from an antitrust claim. This active supervision must include an actual, non-rubber-stamp review of the agency’s actions and the supervisor’s ability to overrule or modify those actions.
In the case of the North Carolina dentists, the Court indicated that their unsupervised anticompetitive actions were not carrying out the will of the government. The Court states:
By statute, North Carolina delegates control over the practice of dentistry to the Board. The Act, however, says nothing about teeth whitening, a practice that did not exist when it was passed. After receiving complaints from other dentists about the nondentists’ cheaper services, the Board’s dentist members—some of whom offered whitening services—acted to expel the dentists’ competitors from the market. In so doing the Board relied upon cease-and desist letters threatening criminal liability, rather than any of the powers at its disposal that would invoke oversight by a politically accountable official. With no active supervision by the State, North Carolina officials may well have been unaware that the Board had decided teeth whitening constitutes “the practice of dentistry” and sought to prohibit those who competed against dentists from participating in the teeth whitening market. Whether or not the Board exceeded its powers under North Carolina law, there is no evidence here of any decision by the State to initiate or concur with the Board’s actions against the nondentists. (Majority opinion, p. 17, internal citations omitted.)
In this passage, one could substitute “lawyers” for “dentists,” “law” for “dentistry,” and “document preparation,” “self-help assistance,” or any number of other services for “teeth whitening” and the Court’s reasoning would still hold. There is no evidence that state bars are carrying out the will of the government when they act to expel their non-lawyer competition from the market through UPL actions. If dentists are not allowed to define the practice of dentistry without state supervision, then lawyers should also not be allowed to define the practice of law without state supervision.
So what will the ultimate impact of this ruling be? In the short term, it means that the 22 state bars that are currently acting without state oversight will need to refrain from UPL enforcement actions lest they be liable for antitrust violations.
In the long term, it’s likely that bars will get state supreme courts to fulfill the oversight function with regard to UPL enforcement. This would be better for consumers than no oversight at all, but not by much. State supreme courts are, of course, made up entirely of lawyers. While judges are not “active market participants” in the legal market, they are still more likely to view regulation from the bar’s perspective than a non-lawyer would be. They are also insulated from electoral accountability in a way that the executive branch isn’t. At a minimum, if the bar is to be involved in UPL regulation, it should be subject to the more popularly accountable oversight of the executive branch.
A better solution would be for state legislatures to take responsibility both for clearly defining UPL and for placing enforcement power in the hands of executive branch prosecutors. (The judicial branch may assert that separation of powers gives it exclusive power to regulate the practice of law, but it makes little sense for the judicial branch to have sole authority over areas of law that don’t involve appearing in court, such as transactional law or out-of-court advice.) Removing UPL enforcement from those who benefit from aggressive and anticompetitive enforcement actions is the only way to end the antitrust abuse and ensure that the public has access to affordable legal help in a competitive marketplace.
Yesterday, the Wall Street Journal featured an op-ed from Responsive Law executive director Tom Gordon. (If you don’t have a Wall Street Journal subscription, you may be able to access the article through our Facebook page.)
As many of you may know, a large majority of the American public cannot afford legal services. As this op-ed notes, there has been a rise in nonlawyers creating innovative models to offer affordable legal services. I am extremely enthusiastic about this trend; more affordable services means that more Americans will be able to find protection in the law and redress in the courts. However, as this op-ed also points out, there has also been an unfortunate trend wherein bar associations and lawyers have used unauthorized practice of law regulations to push out or shut down nonlawyer legal service providers.
The op-ed tells the story of a nonlawyer who started a business, who seemingly was able to provide satisfactory services to his growing customer base but was nevertheless investigated by the attorney general for violating the unauthorized practice of law statutes of New York. There is also a brief overview on UPL statutes, their purpose, and how they are currently being used and by whom. As a recent law school graduate, I believe that it is vital for the legal profession to find a healthy balance between protecting the professionalism of our field and making sure that our services are accessible to Americans of all income backgrounds. This is the balance that the UPL statute should strike. If UPL laws do not strike that balance, then reform of those laws, as the op-ed suggests, should become a priority for all of us who do care sincerely about access to justice.
Josh King, general counsel and vice-president at Avvo, has called for a gutting of the current attorney advertising rules, both in Avvo's testimony to the ABA Future of Legal Services Commission and on his blog. He asserts (and we agree) that most of what is contained in lawyer advertising rules "is the crusty accretion of over-regulation." He also points out that "there is absolutely nothing in this dog’s breakfast of regulations that actually buys us any greater consumer protection. Anything egregious and harmful in attorney communication can be enforced via the general prohibition on false and misleading advertising."
Responsive Law has addressed the issue of anti-consumer restrictions on lawyer advertising several times and will continue to advocate for streamlining these byzantine and anachronistic regulations when they're considered by the ABA Commission.
The American Bar Association has convened a Commission on the Future of Legal Services to study ways in which innovation and new regulatory models can help meet the public’s needs for legal assistance.
Responsive Law has submitted the first in what it expects will be a series of comments to this commission. We told the commission that one of the main things the legal profession needs to do is to roll back many of the regulations that it has imposed to maintain the lawyer cartel over legal services. Restrictions on who may provide legal services are one of the largest obstacles to wider access to legal help. A lack of innovation in the business model of law is another obstacle. The latter is caused by regulations banning outside investment in law firms, which could allow them to serve everyday legal needs the way that H&R Block serves everyday tax filing needs.
You can read our comments to the commission here. As the commission continues its work, we'll be continuing to make sure it hears the voice of legal consumers, so stay tuned for further developments.