Last November I
reported that the ABA’s Center for Innovation and four standing committees adopted a resolution seeking to advance the discussion of proposals that would open the provision of legal services to non-lawyers and that the draft would be brought up for discussion at the ABA House of Delegates' meeting in February. You can download the
resolution and the report here.
As I reported back then, the report is essentially based on the proposition that “traditional solutions” (such as increased funding for civil legal aid, more pro bono work, and the creation of the equivalent of a public defenders system for civil cases) have not come close to fixing the problem of lack of adequate access to affordable legal services and that the existing regulatory structure for the legal profession acts as a barrier to innovative alternatives like allowing involvement of other professionals, both within and outside of law firms.
Given this, the report suggests that states should concentrate efforts in three broad areas of regulatory reform: (1) authorizing and regulating new categories of legal services providers, including non-lawyers; (2) modifying the rules that ban lawyers from partnering and sharing fees with non-lawyers; and, (3) developing more permissive approaches to the notion of unauthorized practice of law to allow lawyers more freedom to practice across state borders.
These ideas have not gone unchallenged, though. Just a few days ago, for example, I commented on a short column in which the author, although not opposing the resolution, argues there are other options to consider (see
here). And then there are those who actually do oppose the resolution, or at least some of its suggestions or premises.
In a published statement directed at the members of the ABA House of Delegates by individual members of the delegations from New York, New Jersey, Illinios, Iowa, Pennsylvania, and Nevada, for example, the authors argue as follows:
We ask you to join us in opposing Resolution 115.
Resolution 115 and its underlying report call for states to consider sweeping changes to fundamental principles of legal independence and ethics. This proposal by the ABA’s “Center for Innovation” would allow non-lawyers to provide legal services and would encourage the repeal of professional conduct regulations that prohibit lawyers from partnering and sharing fees with those who are not lawyers.
On its face, Resolution 115 could appear to be a salutary effort to promote consideration of “regulatory innovations” that are aimed at improving access to justice. However, the only such innovation covered by the report is the authorization of new forms of legal services providers to be achieved by revising Model Rule 5.4 (entitled “Professional Independence of a Lawyer”) and unauthorized practice laws in order to allow nonlawyers to practice law and to allow nonlawyer ownership of law firms. The report is misleading as it fails to disclose that this House for at least three decades has opposed any such eradication of the prohibition on nonlawyer ownership of law firms because doing so would be inconsistent with our profession’s core values. Moreover, nowhere does the report identify any evidence that the adoption of nonlawyer ownership in other jurisdictions has done anything to ameliorate access to justice concerns.
Back in 1999, this House roundly rejected a proposed multi-disciplinary practice regime under which lawyers would have been permitted to form business relations with nonlawyers or entities owned by nonlawyers for the purpose of practicing law. The House chose to preserve the independence of our profession by opposing this change.
Again in 2011, the ABA’s Ethics 20/20 Commission released a discussion draft which sought comment on a limited form of nonlawyer ownership of law firms. In response, the Illinois and New Jersey bars passed resolutions opposing this measure. New York formed a Task Force that studied the nonlawyer ownership issue extensively and issued a comprehensive report on the subject. ... This detailed report is nowhere mentioned in the report that was submitted in support of Resolution 115. Included in the Task Force report was a survey of New York lawyers who (across all walks of the profession) overwhelmingly opposed nonlawyer ownership. While the New York Task Force’s work was ongoing, the ABA Ethics 20/20 Commission withdrew its nonlawyer ownership proposal, concluding that there was not a sufficient basis for recommending any change in the ABA’s policy against nonlawyer ownership.
Although the report in support of Resolution 115 cites a 2016 report by the ABA’s Commission on the Future of Legal Services, which supported gathering evidence on alternative law firm structures, that quotation is seriously misleading as it was never adopted by this House as ABA policy. In fact (and not mentioned in the 115 Report), the Commission’s proposed resolution was expressly amended by this House, which resolved to add language to the resolution making clear that nothing in the resolution abrogated ABA policy against nonlawyer ownership of law firms or other core values of our profession.
Thus, this House’s steadfast opposition to nonlawyer ownership and its commitment to our profession’s core value of protecting the independence of lawyer judgments has been repeatedly recognized by this body, but is consistently ignored by the report.
The report gives the back of the hand to the principal concern that is raised by nonlawyer ownership – i.e., interference with lawyers’ independent professional judgments. This approach is at odds with the resolution passed by this House in 2016 in response to the prior initiative proposed by the Commission on the Future of Legal Services. As indicated above, that resolution specifically re-affirmed the need to protect this core value of our profession. Nor does the report address what could happen if nonlawyers who control these sorts of alternative entities place their own business goals or personal interests ahead of the interests of clients. Being a member of our noble profession is unique in that we often must put our clients’ interests ahead of our own. Our highest priority ought to be advancing the profession’s duty to preserve uncompromised loyalty to our clients’ interests. Outside ownership of legal providers would present a minefield for the profession by creating a dangerous tension between maintaining legal ethics and satisfying outside interests that are often motivated purely by profit. A similar concern is raised by allowing nonlawyers who are not trained in legal ethics to provide legal services. The report fails to grapple with this risk of eroding our profession’s critical values.
Noticeably absent from the report is any evidence that the embrace of nonlawyer ownership in the U.K. and Australia (or in the District of Columbia which has had a relaxed version of Rule 5.4 for many years) has had any impact whatsoever on the access to justice crisis. Indeed, the typical alternative business structure in the U.K. competes with the same types of law firms that had been servicing the fee-paying public long before the U.K. recognized nonlawyer ownership, as opposed to providing services to the indigent. Notably, a recent study concluded that the use of alternative business structures in the U.K. and Australia had been accompanied by no measurable improvement of those countries’ access to justice needs. Robinson, Nick, When Lawyers Don't Get All the Profits: Non-Lawyer Ownership, Access, and Professionalism, 29 Georgetown Journal of Legal Ethics, 1, 1 (2016). We should expect some concrete proof that this proposed change would actually help address the country’s access to justice needs before encouraging something that could jeopardize lawyer independence.
The report states that there has been “no evidence of public harm” in the few countries that have adopted nonlawyer ownership. But that misses the point. The burden is on the proponents of this fundamental change to demonstrate the benefit that their proposal would achieve, something they have failed to do. Moreover, the report does not cite any study that has scrutinized the question of potential public harm comprehensively. Nor does the report confront the critical issue of how disciplinary authorities can police persons and entities that do not even hold a law license and thus have no duty to abide by ethical codes.
The report puts the cart before the horse by encouraging states to consider embracing these alternative structures and only then to collect data on the impact that their adoption will have. The report cites recent recommendations made in a few states to ease restrictions on nonlawyer ownership. However, those recommendations only came out last year and no experience is yet available as to whether such contemplated changes will prove to be beneficial or harmful.
To be sure, we are not opposed to innovation and particularly in ways that can address our country’s access to justice crisis. However, innovation should not come at the expense of our profession’s core values.
Our Rules of Professional Conduct reflect these core values of our profession and they are designed to protect the public whom we are all privileged and licensed to serve. As attorneys, we are sworn to serve as key members of a legal system on whom our society relies for justice and fairness. Lawyers must complete a rigorous program of education just to be permitted to sit for a bar examination. Our bar admission system is designed to test knowledge and competency, determine character and fitness to practice law, and assess adherence to a prescribed set of rules of professional conduct throughout an attorney’s tenure. This licensing system not only serves to protect the public from untrained and unscrupulous would-be practitioners, but also far surpasses what is required for a typical business. Fundamental change to our profession should not compromise our core values and enable profit-seeking by entrepreneurs who are unencumbered by our rules of ethical responsibility.
Since then, members of the Association of Professional Responsibility Lawyers (of which I am a member myself) have also had a chance to debate the resolution. Some expressed skepticism about the resolution because it is not clear that there is evidence that the suggested reforms would actually increase access to justice for the disadvantaged or the middle class, while others seem to say that until those opposing the types of reforms suggested in the resolution come up with a better alternative, we should be open to try something new. And then there are those who don't seem to give the ABA a lot of credibility because, according to their position, regardless of the occasional lip service to this or that novel idea, the ABA has traditionally been a leading sponsor of the status quo.
Finally, there is the argument that the proposal is unfocused, or confusing, because while claiming to be about "access to justice," several items on the agenda do not seem to have much to do with access to justice. Those making this argument ask, for example "how does allowing non-lawyers to become partners with lawyers translate into more access to legal services for the poor?"
On that last question, by the way, I can totally see how allowing non-lawyer investors may or may not have any effect whatsoever on the access to legal services because it all depends on how the firms use the newly acquired capital. For that reason, the key question is how can new regulations be shaped so the changes do result in achieving the desired result. That is what needs to be addressed.
For this reason, I am skeptical of some of the proposals, but I also agree with those who say that the effort to stifle all debate, study and discussion is not a good idea.
