Tuesday, 25 October 2011 10:14

NYT Op-Ed: Lower Barriers to Legal System

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http://responsivelaw.org/index.php/news/blog/item/86-new-book-first-thing-we-do-let-s-deregulate-all-the-lawyersYesterday's New York Times features an op-ed by Clifford Winston, an economist and senior fellow at the Brookings Institution, and co-author of First Thing We Do, Let's Deregulate All the Lawyers. Winston focuses on reducing barriers to entry for those who wish to provide legal services, including the elimination of legal licensing and allowing non-lawyers to invest in law firms. These changes, Winston argues, would promote innovation and lower the price of legal services. We commented on these proposals in an earlier post.

Winston is absolutely right: Licensing laws must be adjusted to allow greater competition in the provision of legal services across the spectrum of legal needs and ability to pay. Responsive Law has commented at length to the American Bar Association about the need to promote innovation by allowing outside investment in law firms. Consumers are not well-served by the current one-size-fits-all system that assumes that every legal need must be met by someone who has attended law school, passed the bar exam, and practices law in a solo practice or partnership.

Monday, 03 October 2011 20:00

Georgia Requires Lawyers for Answering Garnishments

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The Georgia Supreme Court has ratified a decision by the state bar's Standing Committee on the Unauthorized Practice of Law that bans non-lawyers from answering garnishments, unless they are doing so for themselves. Since most garnishments are made against corporations (such as employers and banks) rather than against individuals, this effectively requires hiring a lawyer to answer a garnishment.

Answering a garnishment in Georgia is a fairly simple task, requiring the garnishee (in most cases, the business that is required to withhold wages from a worker) to state how much the worker gets paid, how often he is paid, and what part of the wages, if any, are exempt from garnishment. These are numbers that any bookkeeper or sole proprietor for a small business would have readily available. All a lawyer will do in these cases is fill out a form like the one provided by a Georgia court here (on the second page).

Actually, lawyers will do a second thing for garnishees: send them a bill for their "services." The Georgia garnishment statute allows a garnishee to withhold up to $50 to pay for legal services related to the garnishment, but $50 doesn't cover a lawyer's bill the way it used to in the 1920s. The statute allows garnishees to have a court hearing to ask for higher lawyer's fees, but of course that hearing would also require hiring a lawyer. Whoever pays for the lawyer, it's a waste of resources to pay someone else to fill out such a simple form. However, since engaging in UPL in Georgia is a misdemeanor, any business owner attempting to respond to a garnishment without a lawyer could face a fine of $1,000 or imprisonment for up to a year.

The Georgia Supreme Court and the UPL Committee are ultimately only doing what they are supposed to do in this situation, which is to apply the law as written to facts before them. However, in this case, the law is one that imposes unnecessary costs on small businesses that are already threatened by the economic downturn. The Georgia legislature should change the state's definition of UPL to allow the answering of garnishments without a lawyer.

Friday, 02 September 2011 10:09

ABA List of Legal Rebels Not Very Rebellious

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In the 1990's, Canon aired a series of commercials for its Rebel line of cameras featuring Andre Agassi. The implication was that Agassi was a rebel since he had (at the time) long hair and occasionally wore a splash of color on traditionally white tennis apparel. After viewing these commercials, I coined the term "tennis rebel" to describe someone who is completely mainstream, but who is deemed a rebel for ever-so-slightly pushing the boundaries of a staid subculture.

The American Bar Association's annual list of Legal Rebels perfectly fits the tennis rebel definition. This year's list focuses on large law firms. The acts of "rebellion" include asking legal hypotheticals in hiring interviews, engineering a law firm merger and expansion, creating a wiki to guide paralegals' work, and sending lawyers to Harvard for training. There are also "rebels" whose acts of rebellion are non-specific, but seem to involve social media and the use of technology.

To be sure, all of those are worthy accomplishments. But, of this year's crop of rebels, only two are doing anything that matter to the average person. Paul Sweeney, of Foley Hoag, has marketed his firm's services on the online deal site LevelUp. The firm offered a $250 incorporation package to startup businesses, which qualified buyers for additional discounted services from the firm. The other true rebel, David Perla, founded Pangea3, a business that facilitates outsourcing of legal services to India. Perla's project would have been impossible to implement through a law firm because it relied on venture capital and the legal industry's rules prohibit firms from having outside investors. Now, if a lawyer were to work to challenge those rules, that lawyer would be a true legal rebel.

Monday, 29 August 2011 20:00

Americans Don't Like Lawyers, Gallup Finds

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In other news, the sun rose in the east today.

The results of this year's Gallup poll of Americans' views of various industries shouldn't surprise anyone, at least with regard to people's opinions of lawyers. Only 29 percent had a favorable view of lawyers, placing the legal field 20th out of 25 industries surveyed. Lawyers have had the same low approval rating fairly consistently over the ten years of the survey's existence.

Although the poll doesn't address people's reasons for their opinions, anecdotal evidence suggests people dislike the legal profession for the wrong reasons. Most people I've heard voicing complaints about lawyers make claims that there are too many of them or that they are greedy, dishonest, or untrustworthy. In fact, as we've discussed on this blog before, there aren't enough lawyers to handle everyone's legal problems. Moreover, lawyers are not inherently any more or less ethical than the members of any other profession. However, self-regulation, when combined with a monopoly over legal services, gives lawyers fewer incentives not to behave badly.

So, America, although we agree with your dissatisfaction with the legal profession, we wish you were dissatisfied for the right reasons.

A new book published by the Brookings Institution is calling for massive deregulation of the legal system. The book, First Thing We Do, Let's Deregulate All the Lawyers, uses statistical analysis to prove that the cost of legal services is made artificially high by monopolistic practices. These practices include restrictions on who may practice law (and the broad definition of the practice of law), unnecessary restrictions on the number of graduates from accredited law schools, and a legal system that is often impossible to navigate without professional help.

The authors spend a good portion of the book providing the statistical proof for what many of us would take as a given: The lawyer monopoly allows lawyers to charge more for their services than they would in a free market. Their proposed policy solutions include eliminating mandatory licensing of lawyers, and allowing non-lawyers to own or invest in law firms. Responsive Law has advocated steps toward both of these solutions.

While it's not clear that completely eliminating mandatory licensing would provide consumers sufficient protection against unqualified service providers, it is clear that the current level of licensing requirements exist only to protect lawyers, not consumers. The oft-cited parallel to medical licensure applies here. It's certainly reasonable to require neurosurgeons to go through several years of education and training and to pass a test before they are allowed to cut you open. On the other hand, the cashier at Walgreen's doesn't need any medical training to sell you a bottle of aspirin. Other medical service providers—such as nurse-practitioners, physician's assistants, pharmacists, and physical therapists—have licensing requirements that are less burdensome than those of doctors. In law, the licensing structure treats every legal issue as if it's brain surgery. As a result, consumers have minimal access to the "in-between" levels of service that they do in medical services. Anyone wishing to obtain an uncontested divorce or a simple will must either go to a full-service lawyer or fill out legal forms without personal assistance. As we've pointed out numerous times, the legal profession needs to loosen its restrictions on who can provide legal services so that people can obtain affordable legal assistance at a level of expertise appropriate to their needs.

Permitting outside investment in law firms is also necessary to facilitate the innovation required to create new models for delivery of legal services which will benefit consumers. Currently, with only minor exceptions, US law firms may not have non-lawyer ownership. The American Bar Association is considering this issue right now in its Ethics 20/20 Commission. However, the Commission has already said that it will consider only active outside investment in firms. Responsive Law's comments to the Commission made it clear that if consumers want to benefit from the innovation that has occurred in other industries, then lawyers will need access to capital beyond their own pockets.

The authors of this book provide important statistical support for arguments that Responsive Law and other advocates for greater legal access have been making for decades. We hope that this book will shine greater light on this important issue and create greater awareness of how the lawyer monopoly cripples access to justice.

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