ABA Adopts Regulatory Objectives Resolution

Back in December I reported that the ABA Commission on the Future of Legal Services had issued its final Resolution and Report on Regulatory Objectives and that I found it essentially bland and neither innovative nor controversial.

Yet, something happened between then and now,  and two days ago the ABA House of Delegates adopted a revised and amended version of the Regulatory Objectives Resolution which is more interesting.  You can find it here.

But first a bit of background.  As I have said many times recently, the big buzzword in Professional Responsibility these days is "innovation."   Although the word has been used to refer to many different things, they all have in common the notion that we should be open to the idea of fundamentally changing the way we think about the legal services marketplace.  This also ties in with the idea that we should think of how to change the existing regulatory schemes to allow for the innovation in the marketplace of legal services.

Some of this type of thinking has been traced back to the events that resulted in the adoption of the 2007 Legal Services Act, which fundamentally changed the legal marketplace in the UK.  Since then, many in the US have been discussing whether it would be a good idea to follow their example.  And one big first step in that direction is to reflect on why it is that we regulate, how we regulate and whether our regulatory system works well to uphold the goals we meant to achieve by enacting the regulation in the first place.

It is never a bad thing to reflect on how we do our jobs and on ways we could do it better etc.  I do it all the time as it relates to my teaching.  But, obviously, there is more to it that that at issue here.

The underlying issue is the question of whether it would be a good idea to open the legal services market to non-lawyers, to change the rules that ban non-lawyers from owning law firms or sharing fees with non-lawyers, among other things.  In other words, all the types of things we usually refer to under the umbrella of "innovation."

We know some states are already moving in that direction by allowing non lawyers to provide limited legal services; we know non lawyers want states to open the legal services market so they can share in the profits, etc.

Yet, it wasn't clear whether the ABA would welcome this type of change.  And, interestingly, the resolution approved last Monday does not provide a clear answer.

In one paragraph it states that "the American Bar Association urges that [all jurisdictions] be guided by the ABA Model Regulatory Objectives for the Provision of Legal Services when they assess the ... existing regulatory framework and any other regulations they may choose to develop concerning non-traditional legal service providers."

But in the next paragraph, the Resolution makes clear that it does not endorse that much innovation by stating that "nothing contained in this Resolution abrogates in any manner existing ABA policy prohibiting non lawyer ownership of law firms or the core values adopted by the House of Delegates."

So, if the idea was to open the door to the type of innovation that resulted in fundamental changes in the UK, the exercise failed.

On the other hand, if it was just an exercise in reiterating the core values of the profession and the public policies upon which its regulation are based, then the Resolution is useful.

It seems the ABA is accepting the fact that some innovative change is coming (in fact, some of it is already in place), but it is urging that this change be regulated and that it be regulated according to the traditional principles upon which we have always based the regulation of the profession.

The irony is that some of those principles are, precisely, what may prevent the most innovative ideas from getting implemented.  ...  So, the debate continues.

For more on the adoption of the resolution go to the Legal Ethics Forum, Lawyer's Ethics Alert Blog, Professional Responsibility, A Contemporary Approach, Lawyerist.

For a critical view of the notion of innovation in general and the ABA's approach in particular go to Simple Justice.