Responsive Law has issued comments to the DC Committee on the Unauthorized Practice of Law recommending improvements to the District of Columbia's rules on the unauthorized practice of law, or UPL. Responsive Law urged the committee to recommend revising the UPL law so non-lawyers would be able to offer legal services to the many low- and moderate-income people who can't afford to use a lawyer.
Responsive Law pointed out that UPL laws exist on top of consumer protection laws, so the broad scope of UPL restrictions is redundant with respect to protecting consumers, and exists primarily to protect lawyers. To make sure the UPL laws are serving consumers, not lawyers, Responsive Law specifically recommended changing the UPL law so that no UPL action may be taken when legal services are provided for free, and so that any UPL lawsuit requires a consumer complaint and proof of consumer hrm.
Responsive Law also urged the commission to consider allowing non-lawyer staff at non-profits to provide legal services. Nonprofits are the perfect avenue to provide low cost legal services, as they usually specialize in offering community services in one area, making them experts on it. These nonprofits operate in the areas where there is the most unmet legal need, such as housing and domestic issues, and could provide their clients with understanding of the law as it pertains to these specific issues. The large range of expert nonprofit organizations in DC could provide assistance with their extensive knowledge of how the law pertains to these areas, giving advice to the people they already serve without cost or for very cheap. Furthermore, there is very low risk of consumer harm when nonprofits offer legal assistance in an area that is consistent with their missions. Nonprofits are not focused on making a profit; they are specifically focused on the interests of their constituencies, which would provide much of the consumer protection that UPL laws are ostensibly meant to provide. The current UPL laws keep knowledgeable people from being able to give free assistance to members of their community. Keeping nonprofits from being able to share their expert knowledge with the people they already serve only maintains the access to justice gap.
Responsive Law also highlighted several other types of legal help beyond lawyers that would help incress access to justice. One service Responsive Law asked the commission to consider is a version of the U.K.'s McKenzie friends, who are volunteer or low cost non-lawyers who provide guidance to unrepresented litigants in court. They provide moral support, help with case papers, give advice on courtroom conduct, and sit with the consumer while in front of the judge, giving litigants the confidence and assistance they need to navigate the complex court system. Responsive Law also suggested licensing new types of legal professionals that provide limited legal services, similar to the Washington State LLLT program. However, Responsive Law recognizes that the high barriers to becoming an LLLT in Washington State keep that program from providing the fullest potential of consumer help, and recommended a model with a lower licensing bar that would allow more people to be able to offer this kind of legal service.
Our comments to the commission can be read here.
Bridgette Harrison is a Responsive Law intern.
Last week, Responsive Law issued comments to the American Bar Association asking it to support new categories of legal service providers (LSPs) that could expand the types of services non-lawyers may offer consumers. In October the ABA’s Commission on the Future of Legal Services sought advice on alternative LSPs in an effort to expand access to justice. Responsive Law provided insight on how to offer more affordable legal services by cutting down on regulation that limits the types of services non-lawyers can provide.
Responsive Law urged the Bar to push for the creation of more non-lawyer LSPs as the most effective way to close the access to justice gap. Response Law highlighted the fact that pro bono work and legal aid—often the bar’s tools of choice in providing legal assistance to those with unmet legal needs—are insufficient to remedy the problem. Only a greater variety of non-lawyer LSPs can create a sustainable solution. Although the creation of non-lawyer LSP programs in states such as Washington, California, and New York are a step in the right direction, the limitations on how these LSPs can offer assistance keep them from being able to meet a significant portion of the unmet need. Responsive Law recommended loosening unauthorized practice of law (UPL) restrictions and more narrowly defining what qualifies as practicing law in order to expand the kind of services that non-lawyer LSPs are able to provide, including offering assistance in court and giving legal advice.
Responsive Law pointed to the Limited License Legal Technician (LLLT) program in Washington State as a step in the right direction which may be unnecessarily limited in its reach. The program has only been in existence for roughly six months, but the strict requirements to become a LLLT appear to be a large barrier to the program. The combination of education, experience, and exams required to become a LLLT rival those that lawyers themselves face. Responsive Law recognizes the necessity of stringent requirements to maintain a high level of standard for all LSPs, but quality assurance should come from primarily from existing consumer protectionism laws. More regulation from the bar, however well intended, only serves to keep barriers to affordable legal help in place and protect lawyer profits.
Responsive Law turned to European countries to provide examples of successful non-lawyer LSP programs that face low regulation and have more freedom in the types of services they may provide. In the Netherlands, England, and Wales, there are a variety of LSPs, including non-lawyer legal professionals, who may give advice to those navigating the legal system. A study of England and Wales indicated no difference in the quality of legal services between these alternative LSPs and lawyers.
Responsive Law lastly asserted that the Commission should recommend right-sizing regulation of LSPs to remove barriers that keep the cost of legal services high and unattainable for many. We also called for shifting the authority to create and monitor new LSPs from judiciaries to legislative and executive branches in each state. There are antitrust concerns when an industry is controlled by members of its own profession instead of objective state supervision, as the U.S. Supreme Court made clear in its recent decision in North Carolina State Board of Dental Examiners v. FTC. Industry members may act in ways that further their own interests, leading to limited consumer choices and increased prices.
Our full comments to the Commission can be read here.
Bridgette Harrison is a Responsive Law intern.
Responsive Law has just released its Report Card on Barriers to Affordable Legal Help. The report card grades all 50 states and the District of Columbia on how their regulations regarding the practice of law restrict consumer access to the legal system. Unfortunately, the news is not good, with no state receiving a grade higher than a C.
The report card graded three areas:
- barriers to affordable help from lawyers (45% of total grade),
- barriers to affordable help from non-lawyers (40%), and
- support for self-represented litigants (15%).
Barriers to Affordable Lawyer Help
The first area the report card graded was Barriers to Affordable Lawyer Help.
Non-Lawyer Ownership of Law Firms
Most of this grade was determined by whether the state allows non-lawyer ownership. Non-lawyer ownership of law practices would allow innovation and economies of scale that don't exist in the current law firm model. Nearly all consumer law firms—those that offer services in areas such as estate planning, family law, housing, employment, and consumer disputes—consist of fewer than ten lawyers. At this scale, legal services are still very individualized. Furthermore, lawyers in such a small firm have to spend much of their time on marketing and management, rather than on the practice of law.
Allowing non-lawyer ownership would permit the creation of mass-market consumer law firms that could use their scale to mechanize much of the most common legal work. They could also keep lawyers out of both rote legal matters and management and marketing, reserving their high-cost labor for legal oversight and review and for thornier legal questions. All of this would significantly reduce the price of a lawyer.
Unfortunately, with only a couple of very minor exceptions, non-lawyers are not allowed to have an ownership interest in a law firm in the U.S. On the other hand, in England and Australia, non-lawyer ownership is permitted and regulated to protect consumers from any potentially adverse impact on clients. As a result, people in those countries have access to a wider range of reasonably-priced consumer legal services, on Main Street or in the mall.
Other Regulations Affecting Affordable Lawyer Help
The other areas making up the Barriers to Affordable Lawyer Help grade were what type of advertising restrictions are placed on lawyers, whether consumers can hire lawyers from other states, and whether consumers are allowed to use "unbundled" legal services (hiring a lawyer for just part of their legal matter).
Restrictions on lawyer advertising often leave consumers with limited ways to find out about lawyer services. In a Yelp economy, they leave consumers stuck with an archaic model where the bar's recommended way to find a lawyer was to ask for a referral from a friend at the country club.
Restrictions on multijurisdictional practice unnecessarily restrict consumers' options based on an outdated notion that being admitted to the bar in a state has a high correlation with knowledge of that state's law. In a national economy where much of the law is identical from state to state—and where lawyers' skill is as much in finding the law as in knowing it off the top of their heads—it's irrational to prevent a Tennessee lawyer from handling a legal matter in New Jersey, particularly if the Tennessee lawyer is an expert in the particular area of law at issue. Canada has taken a much more progressive approach to multijurisdictional practice by adopting a National Mobility Compact, which allows a lawyer admitted to practice in one province to practice fairly easily in another province.
One area that most states do fairly well in is in allowing limited scope, or "unbundled" legal services. For example, in most states, a person can prepare their own documents for a court appearance while hiring a lawyer just to represent them in court. Our report card analyzed whether states provided enough assurance to lawyers that they could offer these unbundled services without getting dragged into representing the client on a wider basis. Fear of getting dragged beyond the agreed-upon scope of representation is one of the reasons lawyers don't offer unbundled services more frequently.
Because of the great weight given to whether states allow non-lawyer ownership of law firms, almost every jurisdiction received a grade of D. (The lone exception was the District of Columbia, which allows non-lawyer ownership under extremely limited circumstances, and which received a C.) If England and Australia were states, they would have received grades of A due to their more progressive approach to non-lawyer ownership.
Barriers to Affordable Non-Lawyer Help
The second area the report card graded was Barriers to Affordable Non-Lawyer Help. In other words, does the state allow consumers to use service providers other than lawyers to help them with matters that may be considered legal in nature?
Laws Restricting Non-Lawyer Help and Enforcement of Those Laws
First, we analyzed what the state's law says about the types of services that require a lawyer. Specifically, we looked at various ways in which competent non-lawyers could provide help (such as document preparation, financial advice, real estate closings, contract negotiations, and free advice from friends and family) and researched whether state law allowed or prohibited people from getting non-lawyer help for such activities. State laws range from draconian prohibitions to ambiguity, with few laws specifically allowing non-lawyer activity. The ambiguity in these laws is almost as bad as a prohibition, as a service provider is unlikely to offer a service that exists in a legal gray area.
Second, we analyzed the level of enforcement of unauthorized practice of law (UPL) restrictions. In other words, how often does the state prosecute this offense, what resources do they put towards prosecutions, and who is doing the prosecuting? States in which the attorney general has sole responsibility for prosecuting UPL were graded more harshly than those in which the state bar plays a significant role. In the former situation, UPL prosecutions are more likely to be undertaken in the public interest; in the latter they are more likely to be undertaken for anticompetitive reasons.
Grades in this area ranged from a B for Washington and 16 other states to an F for Florida, North Carolina, and Ohio. Washington is noteworthy in that it has just issued the first licenses for limited license legal technicians, or LLLTs. LLLTs are individuals with paralegal training who are licensed by the state to provide information and advice in family law matters, akin to the role of a nurse practitioner in medicine.
The states with the lowest grades earned them on the basis of overly aggressive UPL enforcement by the bar. For example, Florida has a $1.8 million budget for UPL enforcement that it has used for activities such as pursuing charges against a senior citizen who helped a fellow parishioner complete workers compensation forms.
Again, the low grades that most states received stand in stark comparison to more consumer-friendly countries. England, which licenses a wide range of non-lawyer service providers, would have received an A in this category. Australia would have ranked behind only Washington.
Treatment of Self-Represented Litigants
The third area the report card graded was court treatment of self-represented litigants. In other words, we wanted to know how easy it was for people to resolve disputes without a lawyer. We based grades in this area on the Justice Index, published by the National Center for Access to Justice at Cardozo Law School.
This grade took into account whether court forms and procedures are understandable to the average person, whether judges and court staff are trained to assist self-represented litigants, and whether courts have internal processes to monitor and review their treatment of such litigants. Hawaii was first in this category with an A grade; Mississippi was last with an F.
State Bars Have Yet To Comply with the Supreme Court's Dental Examiners Decision
Most of the obstacles to better access to the legal system stem from the fact that state bars frequently create rules governing the delivery of legal services without adequate oversight from the elected branches of government. When any group of professionals sets its own governing rules for the profession, its tendency is to favor itself at the expense of outsiders. Thus, established lawyers are likely to set rules that favor lawyers operating according to the status quo over outsider lawyers who may have revolutionary ideas about how to innovate the profession. And lawyers are likely to set rules that block competition from non-lawyers, no matter how competent their services and how much the public needs them.
The U.S. Supreme Court ruled earlier this year in North Carolina State Board of Dental Examiners v. FTC that professionals are not exempt from antitrust laws when they act without adequate oversight to limit competition. We hope that our report card will shine some light on state bars' continued reluctance to adhere to this principle. We also hope that it will demonstrate the desperate need of most Americans for affordable legal help and the failure of the organized bar to allow them to receive it.
Friday, November 6 is Love Your Lawyer Day. On this day, according to the American Lawyer Public Image Association (ALPIA), we should refrain from telling lawyer jokes and from “lawyer bashing.”
Responsive Law has never told lawyer jokes (although, speaking as a lawyer myself, the profession could certainly have a thicker skin about them), but we’ve probably been accused of lawyer bashing a few times. However, our disdain is not for lawyers as a profession, but for the system of unchecked self-regulation that allows lawyers to prevent competition and innovation that could benefit consumers.
So, on Love Your Lawyer Day, if you’ve used a lawyer and were happy with their services, feel free (as ALPIA suggests) to send your lawyer flowers, or make a donation to charity in their name. (Responsive Law would be an appropriate recipient!) But also ask your lawyer a couple of questions:
- Do you feel that you, as a lawyer, are the only professional who is competent to help me with legal matters?
- Do you believe that lawyers should only work under the supervision of other lawyers, and should not provide services to the public through a company with non-lawyer ownership.
If the answer to the first question is yes, you may want to hold off on that floral arrangement. Your lawyer wants to prevent you from using paralegals, financial planners, and a host of other less expensive professionals to address problems that the bar considers the exclusive domain of lawyers.
And if the answer to the second question is yes, you may want to make that charitable donation in someone else’s name. Your lawyer is standing in the way of innovation that could allow companies like Walgreens, Costco, or Sam’s Club (not to mention startups that are currently a glimmer in someone’s eye) to use economies of scale and better business practices to provide you a lawyer at a fraction of the $200/hour it costs you now.
After taking back your flowers and rededicating your charitable gift, ask your lawyer what he thinks of the Supreme Court’s February 2015 decision in North Carolina Board of Dental Examiners v. FTC. In this case, the Court held that a profession may not use its regulatory power to prevent competition unless the profession is adequately supervised by the state. Responsive Law field a brief in this case telling the court about how state bar associations do exactly this, filing complaints against non-lawyer competitors for the unauthorized practice of law.
Some would call our Supreme Court brief lawyer bashing. But we’d prefer to think of it as supporting consumers. Lawyers are no worse (and no better) in their ethics than any other profession. But they participate in a system that allows them to set their own rules, without public input.
So, on this Love Your Lawyer Day, ask your lawyer one more question:
3. Will you tell your state bar to abolish rules that solely protect lawyers’ interests, and to instead make rules that increase public access to legal help?
To be fair, some of the lawyers out there already are doing this. We’d like to send virtual bouquets to all the lawyers who have spoken out against the lawyer monopoly and in favor of innovation in the delivery of legal services. Thank you for being part of the solution, not part of the problem!
Unfortunately, many state bar associations are dominated by old-school lawyers who don’t want to change a system that has benefited them for decades, even if it’s at the expense of the public. Not only are those lawyers not going to get flowers from us, but we will continue to fight them until the public gets the affordable, accessible legal system it deserves.
If that’s lawyer-bashing, then Responsive Law is certainly guilty of it. But removing an entrenched monopoly from its anti-consumer perch is more important than the hurt feelings of a few lawyers.
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.
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.
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.
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.
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.