Tuesday, 16 December 2014 19:00

Guest Post on JustAnswer Blog

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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.

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