Responsive Law Executive Director Tom Gordon was recently invited to write a guest post at the blog of JustAnswer, which provides online expert answers across a number of fields, including law. Tom's post discussed Responsive Law's work to make the legal system more user-friendly, and how better regulations governing the delivery of legal services can help consumers have a better experience with innovative service providers like JustAnswer. You can read the blog here.
The Washington State Supreme Court is considering rules that would move the state one step closer to licensing non-lawyers to help consumers with certain legal matters. The court is reviewing proposed rules regarding limited license legal practitioners (LLLTs). These trained and licensed service providers would be able to provide certain forms of assistance to people needing assistance with family law matters. We wrote previously about LLLTs, describing what services they will and won't be able to provide consumers. Essentially, LLLTs will have training roughly equivalent to a paralegal and will be allowed to guide customers through legal processes, but will not be allowed to represent them in court.
The first class of LLLTs is currently finishing its training, so the court is finalizing ethics rules that would govern this new profession. Responsive Law submitted testimony to the court reemphasizing the need for this new profession, and urging the court to loosen proposed restrictions on the form that LLLT businesses can take. These restrictions would make it more difficult for LLLTs to work independently from lawyers and to form the type of creative business structures that could allow them to best serve their customers. You can read our testimony to the court here.
Responsive Law, along with a coalition of law professors and alternative legal service providers has filed an amicus curiae brief in the U.S. Supreme Court case of North Carolina State Board of Dental Examiners v. FTC. The case concerns whether dentists on the state licensing board are exempt from antitrust law for their behavior in banning non-dentists from providing teeth-whitening services.
While dentistry is not part of Responsive Law’s mission, the case has important implications for the regulation of the legal profession and whether anyone besides lawyers will be allowed to provide legal services. The position of dental examiners in this case is directly analogous to that of lawyers who regulate the legal profession through state bar associations. In both cases, a group of professionals that has a financial self-interest in excluding outsiders has been given the power to regulate the profession. Unsurprisingly, in the case of both dentists and lawyers, the professionals have used this power to exclude outsiders. In both cases, it is the public who suffers, by being forced to pay cartel prices for services.
The damage caused by a self-regulating cartel is even greater in the case of lawyers than it is for dentists. The cost of the legal cartel is the denial of access to justice for the vast majority of the American population. When lawyer prices start at $200 per hour, only the richest people can afford to pay lawyers for everyday legal needs, such as simple estate planning, arranging child custody, landlord-tenant disputes, or addressing consumer debt matters. As a result, over 80 percent of Americans are unrepresented when such matters go to trial. And that number reflects the lack of legal help for crisis-level legal problems—those that are headed to court. An even greater percentage of people are priced out of legal help when facing these matters at an early stage, when basic legal help could prevent smaller issues from erupting into a crisis. Given these conditions, it’s no wonder that a recent study found that the US was tied with Kyrgyzstan, Mongolia, and Uganda in the affordability and accessibility of its legal system.
In the face of this access to justice crisis, state bars, many of which claim to be committed to equal access to the legal system, are concerned primarily with their own wallets. State bars have acted aggressively to shut down any attempt by non-lawyers to provide legal assistance to the large number of Americans who need help. State bars use their power to regulate who may practice law (and expansive definitions of the practice of law that they have created) to protect itself from non-lawyer competition. This type of cartel is exactly the type of danger that antitrust laws are designed to protect consumers from.
State bars argue that their behavior is exempt from antitrust regulation because they are given their power by the state government. However, private actors acting to restrict competition have not been viewed as exempt from antitrust enforcement merely because they are part of a state board. In fact, the ability of the bar to use state-granted power to enforce its monopoly makes its behavior even more harmful to consumers.
The self-regulatory nature of lawyer regulation is at the root of our access to justice crisis. If lawyers did not have the ability to use government power to protect themselves from competition, we’d see more innovation and lower prices in the legal services market, both from the innovative non-lawyer services that would be permitted to flourish, and from the innovation and lower prices that lawyers would be forced to provide to remain competitive in an open market. We hope the Supreme Court will agree when it hears the case on October 14.
David Feldman, a New York City lawyer, has a post in his blog today that concisely addresses many of the issues surrounding LegalZoom and other online legal service providers facing prosecution for the unauthorized practice of law (UPL). His post is worth reading, and gives me the opportunity to raise a few points that I've raised in other places about how the legal profession has responded to both competition and technology.
LegalZoom's product, other than automation, is not fundamentally different from books with accompanying forms that publishers like Nolo have been selling for decades. Decisions to prosecute LegalZoom and other online self-help services are driven by fear of technology and fear of competition—both of which are things that lawyers should embrace, rather than fear.
Rather than fearing technology, lawyers should make their services more available online, so that they can capture some of the market that LegalZoom has so successfully captured. And lawyers should better market the expertise that differentiates them from legal form providers. A lawyer can give you advice about whether to incorporate your business, rather than just the forms to do so, or advice about how to plan your estate, rather than the form for a will. If the public understood this, then lawyers would be better able to either compete with or work in conjunction with self-help services, rather than trying to eliminate them by using the bar's government-granted monopoly to make such services illegal.
The U.S. Army’s Fort Drum, in upstate New York, is home to about 13,000 soldiers and their families. Derek Distenfield is a soldier stationed at Fort Drum. After eleven years of service, Distenfield will be leaving the Army in September. Distenfield noticed that Fort Drum had a higher divorce rate than most military bases and decided that in his post-military career he would do something to help his fellow soldiers with divorce and other legal problems they face.
In 2012, Distenfield founded Legal Docs By Me, a legal document preparation service. The company uses non-lawyers to help people complete legal documents for matters such as uncontested divorces, wills, and incorporations. The company opened an office in Watertown, near Fort Drum, in May. It offers document preparation for divorce and several other services for a flat rate of $399.
Since most people can’t afford a lawyer at $200 to $300 per hour, the company helps fill a gap in access to justice for people with simple legal needs that don’t require the expertise of a lawyer. Without document preparation services, people who can’t afford to hire a lawyer are left to identify appropriate forms to create a legal document on their own. Books from companies like Nolo and online services such as LegalZoom have helped fill some of these unmet legal needs, but many people prefer to work with somebody face-to-face on these matters, as shown by the large number of satisfied customers visiting the recently-opened Watertown office.
However, businesses that give people access to the legal system without a lawyer are a threat to lawyers’ monopoly, and recently New York Attorney General Eric Schneiderman has been on a mission to shut down Legal Docs by Me. Schneiderman is claiming that the business engaged in the unauthorized practice of law (UPL), and he ran an undercover sting operation to try to find evidence that paralegals at the business were providing legal advice.
Running a sting operation shows the desperation of a prosecutor trying to generate evidence of a crime with no victims. If consumers were being harmed by the alleged UPL at Legal Docs by Me, then the attorney general would have no trouble producing testimony from the victimized consumers. Instead, customers continue to flock to the business, and not a single UPL “victim” has come forward.
Even if a paralegal at Legal Docs by Me accidentally crossed the blurry line between permissible help and practicing law, it’s a misuse of prosecutorial resources to try to shut down the company. Undoubtedly, at law firms across the state, paralegals have crossed this line on multiple occasions. However, the attorney general is not sending undercover investigators into Manhattan law firms to ferret out paralegals who accidentally step into the forbidden territory of legal advice. This is clearly a case of the state’s chief lawyer using his prosecutorial power to protect his professional brethren. The attorney general should focus his office’s resources on real crime rather than trying to shut down a business that is helping to bridge the access to justice gap.
The Connecticut Bar Association Task Force on the Future of Legal Education and Standards of Admission has recommended that state regulators allow persons other than licensed lawyers to practice law under certain restrictive guidelines. In evaluating various procedures and practices in Connecticut, the task force has suggested, among other things, that court rules be modified so as to permit non-lawyers to provide basic legal services to legal consumers. While proposals for lowering the cost of a JD and shortening the law school curriculum from a three-year program to a two-year one were rejected, the task force recognized that “much legal work is already being performed by individuals with credentials less than fully licensed attorneys” and that there is and would still be a demand for these sorts of professionals.
Connecticut Superior Court Judge Kenneth Shluger, who chaired the task force commented that, “[t]here is an unmet need for legal representation”. Opponents of expanding the practice of law to non-lawyers have questioned non-lawyers’ ability to provide safe and reliable legal assistance to consumers. However, Judge Shluger has laid that concern to rest in noting that these non-lawyers would be “highly educated and trained in specific practice areas.” The task force’s recommendation requires that the non-lawyers undergo post-bachelor’s degree training somewhere between that of a paralegal and a lawyer. This has been likened to the middle ground a nurse practitioner occupies between a nurse and a doctor.
According to the task force, these “super paralegals” would be most useful, initially, in areas of practice where there are a high volume of individuals representing themselves—simple divorces, small claims, and landlord-tenant disputes. Under the nurse practitioner model, legal consumers who do not have the funds to hire an attorney and would otherwise be forced to handle the matter themselves would now have the option to have a super paralegal assist with their claim or dispute.
Last summer, in a precursor to the recommendation of the Connecticut task force, the American Bar Association’s Task Force on the Future of Legal Education recommended that state regulators license non-lawyers to provide specific legal services to advise and assist consumers in specific areas of law. The states of Washington and California have begun down this path already. Washington is about to begin licensing Limited License Legal Technicians (LLLTs). The state’s LLLT board approved family law as the first area in which these trained non-lawyers will be allowed to provide assistance, and is set to begin licensing these professionals by Spring 2015.
In California, licensing non-lawyers has been heavily debated with points of contention lying around how changes will affect job security for lawyers. However, in a state where 80% of state divorce litigants are self-represented, LLLTs could bring a great deal of relief and efficiency. The State Bar of California held public debates on this issue. After testimony largely supportive of LLLTs, The Limited License Working Group endorsed taking further steps towards licensing LLLTs.
Elisheva Aneke is a Responsive Law intern.
Responsive Law has long supported the use of competent non-lawyers to assist people who are unable to afford a lawyer. Allan Rodgers, a guest contributor to Richard Zorza’s Access to Justice Blog, has called attention to a possible solution to this problem in his most recent post. Rodgers suggests the implementation of programs to train lay advocates who could represent clients in certain court proceedings. He praises the efforts by some states to start up programs that would train these lay advocates, but he still sees some hesitation and urges the states to make more radical changes. The current high cost of lawyers may force people to attend court hearings without any representation and without full understanding of the legal system. Lay advocates could be a step in the right direction towards fixing this problem without triggering the unauthorized practice of law.
In his blog post, Rodgers suggests that the implementation of lay advocate programs is moving slowly due to two primary concerns. First, some lawyers fear that having trained non-lawyers would threaten the legal industry. Second, some argue that lay advocates would not be able to represent their clients in court as well as a lawyer. However, Rodgers believes that neither of these concerns is well founded. In fact, he suggests that training non-lawyers could help both the legal industry and struggling clients. If more people were represented in hearings, by lay advocates or otherwise, more lawyers might need to be hired to oppose them in court. This would increase the use of lawyers, as well as non-lawyers, in the legal system. As for proper representation of clients, people represented by lay advocates have consistently fared better than those without any representation at all.
To put his ideas into action, Rodgers proposes a temporary experimental system, using volunteers who would be trained by lawyers. As this system gets rolling, a review process could also ensure that these lay advocates are representing their clients well and that everything is running smoothly. A potential group of candidates for lay advocacy work could be college graduates or law students who are looking for valuable work experience, creating a win-win scenario for both the clients and the lay advocates. New York has already taken a step in this direction with its Court Navigator program, which trains lay people to help provide legal information to unrepresented litigants in Housing Court. Other states should follow this lead and implement programs of the type that Rodgers recommends.
Mika Bray is a Responsive Law intern.
Michael Zuckerman, writing for The Atlantic, has written an excellent article, asking “Is There Such a Thing as an Affordable Lawyer?” The answer is, in short, is no. Not today, at least. Zuckerman cites the case of Ned Henry, who was priced out of an Attorney’s services in a dispute with a landlord. Zuckerman traces the source of the high prices associated with legal assistance – and he winds up circling the Bar’s monopolistic control of the legal services market. Two alternative models for legal services get the spotlight in the article: The first is the DIY model, based on the “legal equivalent of TurboTax.” The second is a model centered around limited-scope representation, where an attorney would focus on quick (and cheap) advice and expertise, offloading much of the actual labor onto their clients.
The article provides an excellent overview of many of the problems preventing people from having access to affordable legal services. However, Zuckerman touches only briefly on two of the biggest systemic obstacles to affordable legal help.
First, the bar gets its monopoly over providing legal services from statutes and regulations prohibiting the unauthorized practice of law (UPL). These UPL laws, enacted under the pretense of consumer protection, declare a wide range of activity to be the "practice of law," making a lawyer the only legal service provider available, no matter how competent other services may be. Thus, the LegalZooms and Rocket Lawyers face legal challenges to the right of their business to exist in multiple states, and hundreds of less-capitalized innovators fold in the face of overwhelming regulation. Bar associations have brought legal actions against innovative service providers even in the absence of any public complaint. In England, professionals other than lawyers are allowed to perform a wide range of legal services, and consumers have been overwhelmingly satisfied with their performance. American UPL restrictions need to be reformed to allow competent non-lawyer professionals to serve customers and to require a showing of harm to a customer before a case can be brought.
Second, law is unique among American industries in forbidding outside investment in legal practices. Law firms serving average Americans (rather than large corporate clients) typically employ at most a dozen lawyers, making it impossible to create the economies of scale that would allow them to affordably serve customers. In contrast, if outside investment were allowed, a national company could develop training and supervision protocols for thousands of lawyers, teaching them how to provide legal services to their clients and providing not only the legal expertise they need, but also letting those lawyers focus on their core competency of practicing law, while letting a corporate office handle the business side of practice. This isn't merely a hypothetical idea. In Australia and England, outside investment is permitted. As a result, customers are already seeing more affordable lawyer help, both from existing firms taking advantage of additional capital to improve their operations, and from companies outside the legal sector bringing their business and customer-service expertise to bear in a new market. Unfortunately, the American Bar Association has strongly opposed even modest changes to the outside investment prohibition.
These twin restrictions are a drag on innovation, and impede the advancement of the many innovations the article describes. Until they are reformed, American consumers will be left far behind their overseas counterparts in access to the legal system.
A recent article by Stanford law professor Deborah Rhode outlines the results of the most comprehensive study of unauthorized practice of law (UPL) enforcement in many years; since her own study in the early 1980s, in fact. The entire article is worth reading. However, I’d like to call particular attention to a few points that illustrate that while the bar has grown more rhetorically adept at making the argument for wide prosecution of UPL cases, the facts underlying that argument remain as unpersuasive as they’ve been for decades.
The bar frequently argues that prosecuting UPL cases is necessary to protect legal consumers from fraud. Yet a 1981 study by Rhode showed that over half of bar respondents didn’t even take consumer complaints on UPL issues, and only a tiny percentage of UPL cases were based on consumer concerns. According to those results, the bar’s argument that UPL was aimed at helping the legal customer fell entirely flat.
Although Rhode’s new study appears to show that UPL authorities are now more likely to consider consumer harm, it actually only demonstrates that the bar has gotten better at saying what it thinks the public wants to hear. In Rhode’s new survey, almost all of the respondents claim to have taken at least a quarter of their UPL complaints from legal customers. However, when Rhode continued her interviews, she found that over two-thirds of the respondents could not name a situation during the past year where a UPL issue had caused serious public harm. Even though they were apparently taking at least 25% of all UPL complaints directly from ordinary consumers, the bar respondents did not know how UPL had hurt those legal customers. Either those surveyed had very bad memories, or consumer harm was not their true motivation for UPL prosecution.
The bar often uses the fear of “notario fraud” to build support for broader UPL laws. In Spanish, the meaning of the word ‘notario’ varies from country to country—in some countries it means ‘notary’ and in some it means ‘lawyer’. People emigrating from countries where ‘notario’ means ‘lawyer’ can be misled into believing that someone who is a notary is actually a lawyer through essentially false advertising. These scam artists can also use other misinformation to defraud immigrants with little knowledge of English or the American legal system. Without UPL restrictions, the argument goes, these people would be even more vulnerable to legal fraud.
In reality, the bar is using the fear of notario fraud as the camel’s nose under the tent to enact sweeping UPL laws that encompass all sorts of services that are helpful to consumers, rather than the small minority that are fraudulent and harmful. In Rhode’s study, only about 3% of the total UPL cases litigated dealt with immigration. Of course, those engaging in this sort of fraud can—and should—be prosecuted under existing consumer fraud laws. In fact, Rhode speculates that prosecution of notario fraud “when it occurs, happens under fraud and theft statutes rather than UPL statutes.” Essentially, the consumers whom the bar uses as a prime example of the need for UPL make up just a tiny percentage of the actual cases prosecuted. So who exactly is protected by the remaining 97% of UPL cases? If there are consumers being protected by these cases, one would think the bar would mention them more often, rather than focusing its arguments on notario fraud.
Courts are also complicit in the pro-lawyer, anti-consumer bias found in UPL cases. Rhode’s article shows that courts adjudicating UPL cases rarely considered whether people were hurt by alleged UPL, much less how they were hurt. Only about a quarter of reported cases discussed public harm when litigated, despite the bar’s continued statements that UPL exists to protect the consumer. In the court cases where it was mentioned, public harm was used only to aid in determining a penalty, rather than to discuss how UPL harmed the consumer in question. Thus, even if UPL restrictions are intended to protect consumers, courts are not applying them for that purpose.
Cases that are litigated under UPL restrictions can also include legal services rendered which were actually helpful to consumers. Regardless of whether or not the person offering legal services provided a useful or even desperately needed service, he/she can be penalized under UPL restrictions. If these rules existed to protect and aid legal customers, as the bar states, a legal service that was helpful to the person receiving it should not be litigated under UPL. Yet Rhode found evidence supporting the lack of interest in interpreting UPL cases from a consumer point of view—only 11 percent of the UPL cases discussed whether or not the violation in question had met an important public need. The UPL services in question may have actually benefited legal consumers, but the bar and the courts chose to ignore the interests of the public.
One of Rhode’s conclusions is that “[a] more consumer-oriented approach would also vest enforcement authority in a more disinterested body than the organized bar.” The bar may state that UPL litigation is aimed at protecting the consumer, but Rhode’s article proves that this is a tired statement without much substance. While the bar may have become more adept at selling this argument, it’s no more true than it was when Rhode first studied the topic three decades ago.
Last year, the California legislature passed an atrocious UPL bill, Assembly Bill 888. You can read the details here and here, but the gist of it is that AB 888 would have greatly increased the autonomy and power of the State Bar in initiating UPL proceedings. It would have fed the Bar attorneys’ fees and fines, and was a blatant attempt to smother the nascent non-lawyer legal services industry with the threat of a barrage of UPL suits.
Fortunately, Governor Brown vetoed the bill, noting that existing consumer protection mechanisms in California are adequate to address the ills caused by UPL. We would have added that AB 888 was cynically waving the flag of consumer interest to support a bar-centric power and cash grab, but it’s hard to fault the governor for being diplomatic about his opposition.
Now AB 888 is back. Assembly Bill 852, from the makers of AB 888, is the same bill with a new paint job. The bill’s supporters have repeatedly misrepresented the contents and implications of AB 852. Supporters have falsely claimed that AB 852 has removed the provision awarding attorneys’ fees to the bar; it has not. Supporters claim that the governor’s objections have been taken into account; they have been sidestepped and ignored. Supporters of AB 852 claim that the bill is intended to protect the most vulnerable consumers in California’s legal services marketplace; in reality, AB 852 would stifle less expensive alternative sources of legal services, giving the bar increased power and financial incentive to enforce their stranglehold on the industry.
AB 852 is still in California’s legislature, but given the passage of AB 888, Responsive Law was not about to stand idly by. We wrote to California Governor Jerry Brown, urging him to veto AB 852 should it cross his desk. The California Bar and its allies in the legislature have attempted to pull a fast one on the Governor and on the people of California, apparently under the mistaken impression that no one will check their statements against the actual contents of the bill. We hope that the Governor, who was so astute in vetoing AB 888, will take a close look at AB 852 and veto it as well. Perhaps this time, the bill will stay dead.
You can read our letter to Governor Jerry Brown here.
Danny Foster is a Responsive Law intern.