Future of Legal Services papers prompt comments but little consensus
If the plan of the ABA Commission on the Future of Legal Services earlier this year was to get people talking about two of the most controversial issues relating to how legal services are regulated in the United States, it worked out just as intended.
Citing studies showing that the civil legal needs of nearly 80 percent of poor people and 60 percent of moderate-income people in the United States are going unmet, the commission released two issues papers in the span of nine days that re-ignited an impassioned debate over the best ways to close that gap in access to legal services and what types of providers should be part of that effort. On March 31, the commission announced it was gathering information and comments relating to legal services providers that are not covered by the rules governing traditional law firms to determine whether developing a regulatory structure for these entities would benefit the public.
Then on April 8, the commission took on an even more contentious matter, releasing an issues paper requesting comments on the merits of alternative business structures, including the question of whether nonlawyers should be allowed to have an ownership interest in law firms. This was the ABA’s second try in the past five years at coming to terms with the ABS issue. The Commission on Ethics 20/20 took a hard look at the issue before deciding in 2012 against making any policy recommendations.
But if the plan also envisioned the possibility that enough consensus would develop on those issues to support policy proposals unveiled at the 2016 ABA Annual Meeting in San Francisco, that part didn’t quite work out. The commission did not submit any resolutions for consideration by the House of Delegates, but its final report (PDF) was released and can be viewed online.
Predictably, the future commission’s ABS paper got the most attention from commenters—and some of the most vehement opposition. “On behalf of the Section of Family Law, we pose the following question: What part of ‘No!’ do you not understand?” wrote Marshall J. Wolf of Cleveland, one of the ABA section’s delegates to the House. Michael W. Drumke of Chicago, who chairs the Section Officers Conference, wondered why the ABA seemed willing to consider “adopting practices and policies that its members oppose or have opposed in the past” and predicted that these polices would “inevitably dictate cuts in service to our members, which will cause us to continue to bleed members.”
Others were no less resolute in their opposition to ABS. The Association of Defense Trial Attorneys, for instance, blamed nonlawyers looking to make a profit while the Solo, Small Firm and General Practice Division argued that it was “insulting” to assume that the legal services currently being provided by small firms and sole practitioners were inadequate. Many also contended that the comment period, which closed May 2, didn’t give them enough time to prepare appropriate responses to the questions posed by the commission in its paper.
CLOSE THE GAP
Advocates of ABS, including legal services providers such as Avvo and LegalZoom, did not share those concerns. LegalZoom, for instance, pointed to its purchase in December of Beaumont Legal in the United Kingdom and maintained that accepting alternative business structures would allow lawyers to fully realize the benefits of technology and close the gap in access to legal services. Zuckerman Spaeder, based in Washington, D.C., the only large firm to weigh in, noted that the possible harm to the legal profession was “overstated” and that the evidence “does not support” the idea that more lawyers will engage in unethical behavior with an ABS model in place.
With so much attention being given to the ABS issues paper, the commission’s request for comments concerning regulation of legal services providers resulted in a relative dearth of responses. But some legal services providers voiced concerns that the issues paper was overly broad and could be interpreted to apply to the entire legal tech industry. A few days before the comment period ended on April 28, the commission sought to clear the air. Andrew M. Perlman, the dean at Suffolk University Law School in Boston who serves as vice-chair of the commission, offered assurances that it has no intention of regulating the entire legal tech field. The issues paper “was not intended to address, and we never even discussed regulating, the entire legal technology industry,” said Perlman in an interview with legal journalist Bob Ambrogi. “That’s much broader than anything that’s ever been discussed.”
The issues paper on legal services providers did produce one piece of common ground. People and entities on all sides of the issue seem to agree that the current definition of what constitutes “the practice of law” is inadequate. Even the commission stated in its paper that defining the practice of law, and by extension, what constitutes the unauthorized practice of law, is “extremely difficult” and that individual state definitions are “notoriously vague and circular.”
But there were differences in how to approach a new definition of the practice of law. The New York State Bar Association argued for a more inclusive definition that would focus more on what tasks were being performed so that courts would have a better idea of which activities of LSPs need to be regulated. The New Jersey State Bar Association took a more absolutist approach, saying “it would be a danger to the public and a disservice to the profession to allow nonlawyers to provide legal services” and calling for the commission to address the “underlying question of whether nonlawyer legal service providers should be permitted at all.”
The tech companies argued for a different approach. Avvo suggested that the ABA should take another stab at defining the practice of law, but that rather than trying to cover more ground, it should do what the British have done and only regulate a core set of legal functions. Meanwhile, Responsive Law in Washington, D.C., an organization that represents the interests of individuals in the legal system, recommended that a definition of “unauthorized practice of law” be limited to people who hold themselves out to be lawyers, but are not. “Any broader definition of unauthorized practice is beyond the proper authority of the bar,” said Responsive, who, along with Avvo, noted that regulation of LSPs by bar associations could run afoul of antitrust laws.
SEARCH FOR A SAFE HARBOR
Several commenters urged the commission to follow the example of the State Bar of Texas as a means of resolving this impasse. Texas has a “safe harbor” provision in its code that excludes from its UPL rule any products that “clearly and conspicuously state that the products are not a substitute for the advice of an attorney.” William T. Hogan III of Boston, who chairs the ABA Standing Committee on the Delivery of Legal Services; Richard Granat, founder of Granat Legal Services and CEO of DirectLaw Inc.; and Carolyn Elefant, an attorney in Washington, D.C., say the ABA should adopt a similar safe harbor provision so that tech companies and even law offices can still be innovative without being afraid of running afoul of the law. “Many solos and smalls won’t dare innovate because the consequences can be draconian,” said Elefant in her comments to the commission. “Let’s give solos and smalls a safe harbor to innovate, and if firms can demonstrate a good faith effort for undertaking an action, give them a pass if it infringes on ethics and doesn’t substantially harm consumers.”
The commission stressed in both issues papers that it has not reached any final conclusions on either regulating legal services providers or whether to recommend permitting alternative business structures. “I think what the ABA does best is act as an information aggregator and network facilitator,” says Laurel S. Terry, a professor at Pennsylvania State University’s Dickinson School of Law in Carlisle. “The ABA brings together people with very diverse perspectives and has the ability to convene more lawyers in the U.S. than any other organization.” She suggests setting up a webpage to which interested parties may continue to post documents, to debate the issues and stay informed on new developments. “I think it would be very useful if the commission created a place where these conversations could be ongoing,” Terry says.
This article originally appeared in the September 2016 issue of the ABA Journal with this headline: “Talk to me: Issues papers seeking feedback on how legal services are regulated prompt lots of comments but little consensus.”
