Renee Newman Knake on Corporations, the Delivery of Legal Services, and the First Amendment Part II

Cite this Article
Renee Knake Jefferson, Renee Newman Knake on Corporations, the Delivery of Legal Services, and the First Amendment Part II, Truth on the Market (September 20, 2011),

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

In Part I of this post, I identified a jurisprudential thread of cases that suggest corporations have a First Amendment right to own and invest in law practices for the delivery legal services.  These decisions include NAACP v. Button, the union trilogy, and Bates v. State Bar of Arizona.  Two recent cases shed light on how the Supreme Court might view my collective reading of NAACP v. Button and its progeny: Citizens United v. Federal Election Commission and Sorrell v. IMS Health.

Citizens United accomplished at least two tasks related to understanding the free speech interests bound up in access to the law and the delivery of legal services via a corporation:  (1) the majority made clear that for-profit and nonprofit corporations alike enjoy the same protections as individuals under the First Amendment and (2) the holding broadened prior decisions related to the need for speech to further economic competition.  Writing for the majority, Justice Kennedy observed: “The identity of the speaker is not decisive in determining whether speech is protected.  Corporations and other associations, like individuals, contribute to the discussion, debate, and the dissemination of information and ideas that the First Amendment seeks to foster.”   If the majority’s opinion means what it says, Rule 5.4’s blanket ban against outside investment and ownership of law practices unconstitutionally interferes with the corporation’s ability to disseminate legal services.

In Sorrell, the Court struck down a Vermont statute restricting the sale and use of pharmacy records to so-called data miners.  Writing the 6-3 majority opinion, Justice Kennedy quoted from the Bates case, observing that the “consumer’s concern for the free flow of commercial speech often may be far keener than his concern for urgent political dialogue.”  The Sorrell decision recognizes that dissemination of information is essential to the First Amendment. The corporation is uniquely situated to engage in wide-scale distribution of legal services in a way that currently does not occur largely due to cost restraints associated with economies of scale.  It simply isn’t economically feasible for a traditional law firm to market and deliver en masse representation to the general public for routine wills, child custody, divorce, mortgage foreclosure, standard contracts, small business needs, immigration, bankruptcy, housing disputes, and other basic matters.

Let me return for a moment to the NYT editorial on America’s justice gap that I mentioned in Part I of this post.  The remedies proposed in that piece have not succeeded to date and are unlikely to come to fruition.  Funding for the Legal Services Corporation is on the decline, as it has been since established in 1974.  It is unclear how required pro bono reporting would make any meaningful difference in offering legal services to the untapped market of consumers that could be reached by corporations like Wal-Mart or Google.  As law schools struggle to control tuition and manage their budgets, expanding loan forgiveness programs seems unrealistic.  At best, permitting nonlawyers to engage in limited categories of simple legal representation might offer some relief but that, alone, is not enough.  Missing from this list of solutions, as I noted in my previous post, is the reform most likely to result in the dissemination of legal representation for those in need and to create jobs for unemployed lawyers:  corporate ownership of law practices.

We need a novel resource to facilitate competition, fuel innovation, and increase access to quality legal services.  Corporations have the potential to provide this resource.  Not only do economic realties and global competition demand this, but it is a matter of First Amendment concern as well.