Thomas Morgan on Realistic Questions About Modern Lawyer Regulation

Cite this Article
Thomas D. Morgan, Thomas Morgan on Realistic Questions About Modern Lawyer Regulation, Truth on the Market (September 19, 2011),

This article is a part of the Unlocking the Law Symposium symposium.

If this symposium is asking the single question whether U.S. jurisdictions should deregulate the practice of law, my answer has to be no.  My problem is that the question itself conflates at least three questions, and the answers to each should be different.

The first question is whether people other than licensed lawyers should be allowed to provide all or many traditional legal services.  The right answer to that question is yes.  First Thing We Do, Let’s Deregulate All the Lawyers, gives that correct answer, but it is far from a new insight.  The proposal is essentially to eliminate prohibition of the unauthorized practice of law.  I called for it in the Harvard Law Review in 1977, Deborah Rhode wrote a much more extensive argument in the Stanford Law Review in 1981, and dozens have made the same points since.  Almost everyone acknowledges that law firms have made extensive use of paralegal staff for many years, and even the ABA Commission on Professionalism admitted in 1986 that many services now delivered only by licensed lawyers could be handled as well by trained paralegals.

Indeed, while the organized bar in many states continues to press for enforcement of unauthorized practice restrictions, and while Constitutional requirements of the right to counsel in criminal cases might prevent complete freedom of choice, a great deal of deregulation in this first sense is taking place already.  About two-thirds of all legal services today are performed for corporate clients.  Many of those clients employ in-house counsel.  Such counsel may employ non-lawyers just as law firms employ paralegals, and the non-lawyers need not work on-site.  Thus, if a company legal department wants to outsource required discovery responses to a group of non-U.S.-licensed lawyers or non-lawyers, or even non-lawyers located in states that have unauthorized practice, it may do so, limited only by how averse it is to the risk the work will not be performed adequately.

In recent years, firms have brought this kind of practical deregulation to the broader public.  LegalZoom, for example, sells documents over the internet that are personalized with the client’s name, designated beneficiaries, other parties, etc., all based on information that the client supplies online.  Quicken also sells CD-ROMs that can produce multiple documents of different kinds for different situations.  Lawyer organizations continue to assert that unauthorized-practice restrictions provide them protection, and some challenges to these consumer-friendly sources of legal assistance are now pending, but the barrier to unauthorized practice is rapidly breaking down.  I join in advocating that this form of deregulation be celebrated and made official as soon as possible.

The second way states regulate the legal profession, however, is not nearly as appropriate for deregulation.  The rules of professional conduct – of which the ABA Model Rules are best known – regulate how lawyers are to operate in a number of specific situations.  They describe the duty of confidentiality, for example, and the limits of that duty.  They require lawyers to avoid conflicts of interest.  More narrowly but similarly important, they prescribe how lawyers are to respond when they receive a message or document that someone obviously did not mean to make available to them and how lawyers are to respond when a client lies on the witness stand.

Some of these regulatory rules are certainly protectionist, e.g., the rule against sharing a legal fee with a non-lawyer.  Others are most properly default rules, i.e., subject to informed waiver.  In fact, many of these rules would be required by general principles of contract, tort and agency law even without being expressed in regulatory terms.  But most of these kinds of rules standardize expectations and reduce transaction costs in lawyer-client and lawyer-lawyer interaction.  Many of the rules could be improved and some should be eliminated, but general deregulation of this aspect of the law governing lawyers’ work would be counterproductive.  Instead, the better course would be to take the course adopted by the U.S. Patent & Trademark Office and also make the rules applicable to non-lawyers doing work that formerly had been reserved only to lawyers.

The third way we regulate delivery of legal services is by limiting use of the title “lawyer” to persons with a given level of training and demonstrated knowledge.  The issue here is whether, once many people with quite different kinds of training and experience may deliver legal services, all of them should be allowed to call themselves a “lawyer.”  I believe not.  I believe that clients should be entitled to accurate information about the training and experience of persons purporting to provide legal services.

Indeed, in the future, this kind of regulation may be more important than ever.  As part of its effort to remain authorized by the U.S. Department of Education to accredit U.S. law schools, the ABA Section on Legal Education and Admission to the Bar has proposed new standards that would significantly reduce the educational requirements required to become a lawyer.  Required subjects of training would largely be limited to courses in ethics and professionalism.  Beyond that, a law school could define almost any other course as preparation for law practice and the school’s graduates could call themselves lawyers, provided only that they can pass a bar exam and have paid their law school for a three year education.

In one sense, of course, this development could be seen as the ultimate deregulation.  If anyone, with almost any kind of training, can call themself a lawyer, then no offering of legal services could be seen as unauthorized.  We are far from that point, however, and for at least a transition period, I believe formally-defining service providers based on basic categories of training and experience would be appropriate.  Specialities should also be easier to create and to claim, and lawyers should be allowed to communicate length of experience in a given area of practice.  Corporate counsel might be able to create alternative information sources with which to decide what outside counsel to retain, but the point of this third kind of regulation would be to provide individual legal service consumers with basic information necessary to make informed choices from among possible service providers.

This symposium’s title is “unlocking the law.”  All should agree with that objective.  I simply believe that some targeted regulation will continue to be needed as we continue to move toward that ultimate goal.