Archives For Unlocking the Law Symposium

Walter Olson on Reform Law Schools, Don’t Sue Them

totmauthor —  20 September 2011

I’ve expressed doubts previously as to whether the simple model of licensure as incumbent protection adequately explains why our legal system (like all others I know of) limits who can be a lawyer, and in particular who can litigate in others’ interest. But if there’s one sector of the legal system that’s genuinely ripe for a critique of cozy cartelization, it’s the legal academy, a topic I tackle at more length in my recent book Schools for Misrule.

Roughly a century ago, following the lead of the medical profession, law moved to a schools as-gatekeepers model in which the clerk/ apprentice route to practice, famous for having trained Abraham Lincoln and many another great lawyer, was made to yield to obligatory schooling, soon standardized at a term of three postgraduate years. Since then accreditors have repeatedly tightened standards to squeeze out a lower-cost model of legal schooling, once common in larger cities, which relied heavily on skilled local practitioners to teach in spare hours. Today, even lower-tier schools face accreditation pressures to go day-only rather than offer night degrees, to drop freestanding status in favor of affiliating with universities, to replace wily practitioners with research-oriented, tenured academics, to maintain large bound library holdings even as law firms themselves go virtual, to refrain from experimentation with supervised third-year externships, and so forth. Everyone is pressed to be more Yale-like — and everyone’s tuition ends up becoming more Yale-like as well.

Can we learn from other advanced countries in which “reading law” and other apprenticeship-like methods form a bigger part of legal training, and classroom lectures a smaller part? Surely we can. Encouragingly, some in the American Bar Association have voiced agreement with the need to re-evaluate accreditation rules to get out of the way of innovation and cost-cutting. More of that, please.

The rapidly rising consensus in favor of law school reform is by no means limited to outsiders, nor is it limited to the proposition that law school is too expensive and too rigidly committed to a prescribed format. Judges from Harry Edwards to Samuel Alito have criticized much legal scholarship as too often academic in the bad sense of being irrelevant to practicing lawyers, jurists or policymakers. BigLaw firms complain that graduates hired even from high-prestige schools — or perhaps especially from them — are innocent of the very basics of practice. Policymakers remain wary of legal academia’s tendency to generate clever ideas for social change, like the movement for slavery reparations, that may stimulate student interest but fail to survive first contact with the realities of American law and politics.

I suppose some lawyers at this moment are toying with the idea of a massive antitrust suit that would demand billions in tuition refunds. But really: let’s not hand all this over to litigators to be thrashed out over a decade and conclude in a settlement decree which would inevitably introduce its own new rigidities and anachronisms. Let’s seize the moment and see how much we can accomplish now.

In Amazon, Legal Profession, Platforms, Unlocking the Law Symposium ,
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Larry Ribstein on The Future of Legal Education

Larry Ribstein —  20 September 2011

What will legal education be like in the significantly deregulated world I’ve predicted in prior posts?

I gave some thought to this question in my recent paper, Practicing Theory. There I pointed out that law schools, and particularly law faculty, have benefited from the same regulation that has benefited lawyers.  Although lawyers now complain that legal education is insufficiently “practical,” they have only themselves to blame for any deficiencies.  The legal profession has established law school accreditation as a costly barrier to entry, and then effectively delegated control over what was taught in law schools behind the regulatory walls.

I also argued in the above paper that the debate over the content of legal education in a deregulated world is not the one that we seem to be having — that is, between “practice” and “theory.”  When deregulation comes the market will control content.  It’s far from clear that the market will demand that lawyers keep doing what they’ve been doing, which is what lawyers mean by “practice.”  It follows that law schools should not necessarily train students to do what lawyers are doing right now.  New lawyers’ roles will require new types of education.

My article outlines some future roles of lawyers, and how law school can help train for these rules.

Lawyers as collaborators:   In the new world of legal services, the more menial tasks will be done by machines or non-professionals, leaving lawyers for the more sophisticated stuff.  This will require collaborations across the physical and social sciences.  For example, lawyers might work with psychologists to incorporate the tools of behavioral psychology into creating and applying consumer, securities, and other regulation. Legal experts also will have to learn to work with (or be) computer engineers to produce the powerful technological tools I’ve discussed in previous posts.

The lawyer as manufacturer: Lawyers will not simply be applying old cases to new fact situations to advise clients what they should do. Rather, they will be designing the products discussed in previous posts such as contracts and compliance devices.  As designers they will need to delve into basic theories of contract production, deterrence and the like.  While automation handles many legal tasks, designing the tools for these tasks will require experts who understand their basic architecture.

The lawyer as lawmaker: Lawyers, freed from simply applying the law, may be increasingly involved in designing it.  This entails an understanding of how and why laws, constitutions and procedural systems work.  The theory taught in law schools, including economics, philosophy, history and comparative law, was often not very relevant to routine law practice.  When software and low-paid workers take over those tasks, the legal experts who remain will need this theory.

The lawyer as information engineer: Lawyers and scholars might be able to use data to predict the future.  But to do that they will need theories from such fields as economics, psychology, sociology, decision theory, and political science to construct the models that make sense out of the raw data.  This work also provides another reason why lawyers will need to learn how to collaborate with (or be) computer scientists.

The lawyer as capitalist: Lawyers can make a lot of money in the capital markets from being able to predict legal outcomes that determine asset values. The demand for this expertise could increase the demand in law schools for training in securities and finance law. It also could refocus the study of such basic areas as contract, property, and tort law from advising and litigating to handicapping the results of litigation.

Global legal education: Legal educators increasingly cater to law students from outside the United States. They therefore need to focus on the basic principles of American common law and system of government.

Private meets public law. The theories legal experts will need to learn to move from applying existing law to creating new legal structures will have to meet market demands rather than educators’ preferences. While legal experts no longer may be able to ignore such fields as constitutional and administrative law, they will have to take with them into these fields the tools and lessons of private ordering and markets.

Educating business lawyers. Many legal experts will move directly into businesses.  But in-house lawyers’ tasks may change from the current model.  Increasing automation of corporate contracting and compliance may help embed legal work into the basic structure of business.  In-house lawyers will move from talking to business people to being business people.  This suggests that legal education and business education may merge for at least a subset of legal experts.

The end of one-size-fits-all:  Licensing, accreditation and bar exams have locked in a single model of three-years of law school with a fairly standardized curriculum.  The developments discussed in my previous posts make this model increasingly untenable.  The new legal expert must be trained for business, law making, technology design and many other tasks that cannot be encompassed by a single course of study.  Moreover, this world will rapidly evolve in uncertain ways once freed of licensing’s constraints.  Legal educators will have to be free to experiment with a variety of different approaches, much as business schools do today. The accreditation standards that survive as part of the new regulation of lawyers will have to provide this freedom.  This argues for the “driver’s license” approach to licensing suggested in a previous post in which lawyers can use their home state license to practice anywhere. Such an approach could allow for different forms of mandatory training for different types of specialties.  These requirements could evolve as states balance the need for some regulation against the clamor by local consumers for access to cheaper services.

Lessons for today’s law schools:  What should law school faculty and administrators do now?  The top six or so can probably keep plugging away at what they have done:  teaching high end theory to top law students.  These students likely will be the legal architects of the future.  When the new era comes, the top six schools will have the resources and reputation to turn on a dime and embrace the future.

But for the Harvard wannabes that think they can ignore the changes shaking the profession and party like it’s 1899:  you are ill-serving your students and will be fighting for your lives in a few years.  The time to think about the future is right now.

In Administrative Law, Economic Theory, Legal Profession, Regulation, Unlocking the Law Symposium , ,
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Eric Rasmusen on Unauthorized Practice of Law — The Case of Free Advice

totmauthor —  20 September 2011

It is questionable whether states should have unauthorized practiced of law statutes and bar admission standards based on credentials rather than examinations. A first step, however, is to attack statutes that forbid a non-lawyer from giving free legal advice, whether to friend, family, or just someone who can’t afford all the legal help he needs. Should such charity be a crime?

Consider, for example. South Carolina, where the leading case is State v. McClaren, 349 S.C. 488 (2002):

“We rule that South Carolina does not allow `jailhouse lawyers’ to practice law under the guise of an inmate giving advice or preparing legal documents for another inmate. The evidence is overwhelming in this case that the defendant practiced law in violation of § 40-5-310.  We conclude that the express language of § 40-5-80 requires that leave of court be obtained before representation of another by a person not licensed to practice law is allowed without compensation. The court must exercise sound discretion whether to allow such representation. An open-ended, unfettered application of § 40-5-80 by courts would essentially emasculate § 40-5-310.”

It would seem to violate the 1st Amendment to forbid someone from telling a friend his opinion about what a law says. Indeed, this seems a far easier 1st Amendment case than most. Do we really think the government should be able to jail someone for talking about laws, when we use the same Amendment to defend pornographic movies and flag burning? Constitutional law is often bizarre, but would even such poor interpreters as Supreme Court justices go this far?

It shocks the conscience that it be criminalized for someone to tell their friend that the friend’s lawyer has given them unfounded legal advice. Yet to do that, especially if it be done carefully in writing with cites to the appropriate statutes and cases that the lawyer missed, is more the practice of law than the bad lawyer’s bare assertions.

I’d be interested in hearing from defenders of the status quo.

In Constitutional Law, Google, Legal Profession, Platforms, Unlocking the Law Symposium
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Gillian Hadfield on Evidence-based Regulation for Law

totmauthor —  20 September 2011

There is a Missouri statute that makes it a misdemeanor, punishable by $100 fine, for anyone who is not licensed by the Missouri bar to “engage in the practice of law or do law business.”  If convicted, violators can be sued by anyone that paid them for their services or by the state of Missouri; successful plaintiffs can recover three times the fees paid to the violator for their services.

In February 2010, three individuals used this statute to file a class action against LegalZoom.com Inc., an online provider of legal documents.  (Disclosure: I joined the Legal Advisory Board for LegalZoom two months ago.)  Last December, the federal district court where the case was transferred certified a class of Missourians who had “paid fees to LegalZoom for the preparation of legal documents.”

LegalZoom recently settled the case, after losing last month on summary judgment.  Summary judgment was appropriate, the court held, because there was no dispute about the facts of LegalZoom’s business model.  People or small businesses come to the site for help preparing documents to incorporate a business, form a partnership, create a trust, file an uncontested divorce, and so on.  They can download the blank forms from LegalZoom and fill them in themselves or they can answer some questions and have LegalZoom enter the information in the correct form, review it for completeness, spelling, consistency etc., and then send the completed document to the purchaser to sign and use.  The plaintiffs in the Missouri case had used the system to generate wills and articles of organization for a business. None of the plaintiffs alleged they were unhappy with the documents they received or that they had understood themselves to be purchasing legal advice.

The court held that the only question in the case was the legal one of whether LegalZoom’s business model constituted the unauthorized practice of law.  The Missouri statute offers a definition of “the practice of law” and the “law business.”  The LegalZoom court quoted those definitions, but also made it very clear that the legislature’s definitions don’t matter much.  For the General Assembly of Missouri “may only assist the judiciary by providing penalties for the unauthorized practice of law, the ultimate definition of which is always within the province of this [Missouri Supreme] Court.”  And, as the Court saw it, “it is impossible to lay down an exhaustive definition of ‘the practice of law.’”  So whether LegalZoom’s business is a “law business” and constitutes unauthorized practice law is ultimately something for the state’s Supreme Court to judge in its regulatory capacity, not a matter of statutory interpretation.

This means that even if the Missouri General Assembly decided that the availability of low-cost online services like LegalZoom would be a great boon to boost the Missouri economy by reducing the cost of starting and operating a small business, it can’t make that happen.  It’s up to the judiciary, “exclusively,” to decide what the “law business” is and who can participate in that business.

Here’s how it went with LegalZoom.  The Court held that LegalZoom’s business model constituted the unauthorized practice of law because it went beyond providing people with blank forms and transcribing what they wrote in the blanks. LegalZoom’s software instead converted questionnaire answers into document entries.  To do this, they required human beings:  to program the computer and to review the final documents for things like spelling errors and inconsistencies (but not for poor choices about what answer to give, what form to request, or what alternatives to consider.)   Because those human beings providing the LegalZoom service “are not authorized to practice law in Missouri,” the court decreed, “there is a clear risk of the public being served in legal matters by incompetent or unreliable persons.”

Remember:  this was on summary judgment, so the question before the court was supposed to be a purely legal one, not requiring evidentiary hearing.  But the court is basing its decision on a whopper of a factual finding.  Does LegalZoom’s business present a risk of incompetence or unreliability?  Does the Missouri bar’s licensing regime present a lower risk?   Does the court, by making this decision, reasonably carry out its “duty to strike a workable balance between the public’s protection and the public’s convenience?” We don’t know the quality of those findings because there is no evidence presented.  LegalZoom wasn’t given any opportunity to challenge those factual assertions.  And given the strange way in which Courts make this regulatory policy, it’s hard to see when these factual assertions might ever be challenged, by anyone.

What’s wrong with that?  Well think about how this policy would be made if it were up to a legislature or administrative agency.  The drafting of legislation and regulations would be informed by some policy analysis and data, as well as the input of various industry participants, consumers and other experts, on questions such as: What is the current average cost of obtaining document services?  How much of the demand for services is being met?  How often are these documents not completed and filed, or completed or filed incorrectly, because of cost or supply constraints?  How likely is it that an online service—provided by a corporation located in another state and serving a national market—generates documents that have higher error rates?  How much of the demand could these services reach and at what price?  Is a lower price and broader accessibility worth any increase, if it can be shown, in error rates or other quality effects?

None of this standard policy process take place in this important regulatory area.  Courts don’t put out their definition of the practice of law for public notice and comment; they don’t conduct public hearings; they don’t commission studies, collect data, or consult experts.  And they don’t subject their regulation to the kind of judicial review to which regulation is usually subject.  Instead, they rely on an empirical assertion that is treated as unassailable:  that by not allowing people or businesses other than state-licensed attorneys to do anything that constitutes the “impossible to define” practice of law, the court’s regulation will “protect the public from being advised or represented in legal matters by incompetent or unreliable persons.”

Those are empirical claims that should be the subject of empirical testing and reasoned policy analysis.  Other advanced market economies—like the U.K.—don’t find these empirical claims to be true and they don’t restrict the supply of legal advice to bar-licensed lawyers, all to good effect.  It’s time the U.S. started treating its legal system as deserving of sound evidence-based policymaking, and not leaving it up to lawyers and judges alone.

In International, Legal Profession, United Kingdom, Unlocking the Law Symposium
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George Leef on Licensure in the Legal Profession

totmauthor —  20 September 2011

When Americans think about governmental regulations meant to protect them against harm, they are prone to making two mistakes in judgment: first, they tend to overestimate the benefits that are supposed to result from regulation (including mandatory licensing) and second, they tend to underestimate (and usually to completely overlook) the costs and problems created by it.

I believe that governmental regulation of the legal profession is a good example of that. We see both mistakes in that people think that the system of licensing lawyers ensures competence (which it does not) and fail to see that leads to higher than necessary fees, as well as considerable waste of resources.

Licensure is neither a necessary nor a sufficient condition for competence in the legal profession. It is quite possible for an individual who has not gone to law school and not passed a bar exam to render competent legal assistance. Indeed, the legal profession is occasionally embarrassed by instances where someone who had been doing exactly that is “found out” and exposed as an illegal (or “unauthorized”) practitioner. On the other hand, there are also plenty of cases of incompetence by licensed attorneys. In such cases, the aggrieved consumers usually find out that the bar’s system for handling complaints does them little or no good.

And what about the hidden costs?

Prospective lawyers are required to graduate from a law school in almost every state. That demands three years of course-taking at high expense, but very little of that information will be retained or ever put to any use. What is clearly of benefit – learning legal research and writing – could easily be learned elsewhere.  As a result, lawyers have so much invested in their degrees that few can afford to handle cases with small values. Many Americans therefore cannot afford or find legal representation when they need it.

We also waste resources by keeping too many law professors employed, but that’s a minor matter.

Under a laissez-faire approach to professional services, the natural free-market incentives and disincentives produce generally good results for consumers. Practitioners want to satisfy customers and build good reputations; they want to avoid the reverse. That leads them to undertake the optimal degree of learning and training for the kinds of work they intend to do and to limit themselves to work that is within their capabilities.

The fact that licensed attorneys sometimes foul up cases for clients shows that those incentives don’t work perfectly, but it also shows that licensure does not work as advertised. I doubt that attorney licensing adds anything in the way of consumer protection over and above free-market incentives and disincentives. All that it adds is cost.

Laissez-faire does an excellent job of regulation in many other services fields, ranging from florists and interior decorators to accountants and tax preparers. There is no reason from the standpoint of consumer welfare why it would not be just as beneficial in the market for legal services.

In Legal Profession, Regulation, Unlocking the Law Symposium
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Thom Lambert on Alternatives to Lawyer Licensing

Thom Lambert —  20 September 2011

Let’s start at the very beginning.  When analyzing the merits of any regulation — i.e., any rule that disrupts private ordering by threat of force — one should first ask what problem the regulation aims to avert.  When it comes to the rules banning sales (and thereby preventing purchases) of legal services by unlicensed individuals, most of the familiar market failures pose no concern.  There’s no technological externality (one not mitigated by the price mechanism).  There’s no monopoly problem.  There’s no public good.

The only widely recognized market failure that could exist in this context is information asymmetry — one party to a potential transaction (the provider of legal services) has significantly better information about the subject matter of the transaction (the quality of those services) than does the other (the client).  Not only may some poorly informed clients find themselves “ripped off,” but the market for legal services as a whole may be degraded by a version of George Akerlof’s famous lemons problem.

Akerlof illustrated the systematic adverse effects of asymmetric information by hypothesizing a used car market in which cars vary in value, which is known to the sellers but not to buyers.  Hoping to avoid overpaying for a “lemon,” rational used car buyers will pay no more than the average value of a used car.  This limitation on buyers’ willingness-to-pay causes sellers of above-average cars to withdraw their cars from the market, so that only lemons are available.  And if buyers are rational, they should anticipate that sellers of high-value cars will pull their cars from the market, which should cause them to lower their bid prices even further (to the average value of the non-withdrawn lemons).  Pretty soon, the market will unravel even though there are plenty of high-value cars that could have been sold to purchasers who would have paid a high price had they possessed better information about car quality.

Assuming providers of legal services have better information about service quality than do consumers, mandatory licensing of lawyers may boost consumer confidence and thereby help ensure that high-quality legal services remain available in the market.

Of course, there are downsides to mandatory licensing.  Requiring providers of legal services to attend a three-year accredited law school and to pass a bar exam that tests all sorts of subjects many lawyers never need to know (commercial paper?!) raises barriers to entry into the market for legal services.  Existing attorneys can charge high rates for routine, nearly ministerial tasks because they can avoid competition from individuals who are qualified to perform such tasks but have not jumped through all the hoops required for licensing.  And because licensing requirements raise the fixed cost of becoming a lawyer by mandating an expensive degree, an inordinate amount of class time, and mastery of all sorts of subjects that are, for many lawyers, irrelevant, such requirements tend to raise the rates for legal services even where there is significant competition among lawyers.  In short, any attempt to ensure quality and avoid a lemons problem via licensing will drive up prices and, to put it in terms more appealing to those who don’t like all this econ-talk, “reduce access to justice.”

So a third step in the regulatory analysis (after considering the problem to be averted and the potential adverse effects of regulating to avoid that problem) should be to consider less restrictive alternatives.  In this context, there are some attractive options.

The Kosher Model.  One obvious response would be for the government to do nothing.  All sorts of service transactions involve asymmetric information and yet commonly occur despite government inaction to fix the “problem.”  Housepainters, mechanics, landscapers, plumbers, general contractors, etc. all have better information about service quality than do their clients, but we still have thriving markets for their services.  All sorts of private certifiers – e.g., Better Business Bureaus, Angie’s List, etc. – have emerged to provide consumers with good information about service quality.  Such certifiers compete with each other on quality and often innovate to differentiate themselves from rivals, thereby providing more precise information to consumers.  There are, for example, more than 200 kosher certifying agencies in the United States, enabling observant Jews (who would otherwise be victims of asymmetric information!) to select a certifying symbol that corresponds to their own preferred level of kosher stringency.  It’s easy to imagine a similar certifying system for attorneys.  Some agencies could certify high-quality will drafters, others good DUI lawyers, etc.

The Organic Model.  A more “protective” (paternalistic?) approach would be for the government merely to prescribe a standard for what constitutes a competent lawyer.  The state would, in short, act as a certifier, conferring its seal of approval – the label “licensed lawyer,” or something similar – on individuals who had jumped through certain hoops.  Consumers could then choose to hire one of those individuals or, if their needs were more limited or they knew (perhaps from a private certifier) that a non-accredited individual was nonetheless quite good, could hire someone lacking the state’s endorsement.  This is the tack the government has taken with organic food:  The government has prescribed what the term “organic” means so that consumers will know what they’re getting when they buy an organic product.  But sellers of “nearly organic” foods can still sell their wares and advertise how their offerings differ from conventionally produced products as long as they don’t use the term “organic.”

The state could implement this sort of certification model on either an opt-in or opt-out basis.  Under the former approach, the state would permit providers of legal services to opt in to the lawyer licensing system—and perhaps thereby charge higher rates—if they met the prescribed requirements.  Under an opt-out approach, an unlicensed legal service provider could sell her services only if she first notified her client of her lack of certification and attained the client’s informed consent.

The Status Quo:  Enforce a Non-Waiveable, One-Size-Fits-All Standard.  The crudest possible approach to the legal services market’s information asymmetry problem is the status quo:  prescribe a set of prerequisites that anyone who sells legal services must satisfy.  Of all the approaches considered, this one thwarts the greatest number of mutually beneficial transactions.  While it is the most “protective” of the uninformed consumers who manage to purchase legal services, that protection comes at a cost.  The higher prices occasioned by the status quo render basic legal services beyond the reach of large number of consumers.  Licensed lawyers, of course, benefit from the system, as do the politicians that favor them.

We end up, then, with a spectrum of policy options that proceeds from most to least liberal, as follows:

  • Kosher (rely on private certification) –>
  • Opt-in Organic (define a label and allow service providers to use it if they meet criteria) –>
  • Opt-out Organic (require service providers who do not meet the state’s standards to attain informed consent) –>
  • Status Quo (preclude all sales by providers who don’t meet the state’s standards).

As someone who makes his living providing one of the prerequisites to a lucrative licensed lawyer career, I have a personal financial interest in maintaining the status quo.  But as someone who genuinely cares about access to justice and economic expansion, I find the current regulatory approach appalling.  In the end, I would much prefer something akin to the kosher (or maybe the “opt-in organic”) model.

I suppose we’re not all rational, self-interest maximizers after all.

In Antitrust & Competition, Barriers to Entry, Legal Profession, Truth on the Market, Unlocking the Law Symposium ,
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Hans Bader on Abolish Law School Requirement, Keep the Bar Exam?

totmauthor —  20 September 2011

Lawyer licensing should not be completely abolished, but it should be made radically easier and cheaper by abolishing the requirement that lawyers attend law school to sit for the bar exam, and by only requiring passage of the bar exam for those who handle court cases.  Legal redress should also be made easier by allowing more cases to be brought in small-claims courts.

As Clifford Winston and Robert Crandall recently noted in the Wall Street Journal, law students commonly accumulate “as much $150,000 in law school debt” to get the degree required to practice law, even though many “services by lawyers do not require three years of law school” to perform, since they are simple enough to be performed by a non-lawyer.  As they point out, “every other U.S. industry that has been deregulated, from trucking to telephones, has lowered prices for consumers without sacrificing quality.”

As a lawyer, I agree that attending law school should not be required to practice law.  I learned little about the law at Harvard Law School.  This was partly due to my own laziness, and partly due to professors whose teaching pointlessly focused on ideologically-trendy but atypical situations, or hide-the-ball Socratic dialogue. (For example, my property instructor was obsessed with sexual harassment of lesbians by tenants).

I did not have to learn much to pass my classes in law school.  I somehow got a “B” in Contracts despite not knowing which body of law – the common law or the Uniform Commercial Code – applied to most of my exam.  I graduated easily despite having frittered away much of my time in law school watching the sitcom “Married With Children,” drinking, or arguing about politics.

But my knowledge rapidly improved after graduation, when I had to sit for the bar exam. I learned more law in two months of studying for the bar exam than I did in three years of law school, including basic principles of law (in real estate and family law) that I was never even taught in law school. To prepare for the bar exam, I took a class offered by a private company, Barbri.   It provided well-organized, concise summaries of the law that were easy to understand, unlike many law school textbooks.  Barbri and the New York Bar Exam ended up teaching me what Harvard failed to teach.

The requirement that people attend law school before being allowed to practice law is unnecessary and wasteful. Many prominent lawyers in American history, like Abraham Lincoln, never attended law school, or even college. They prepared to become lawyers by reading the law on their own, or apprenticing in a lawyer’s office.

Requiring law school graduation as a prerequisite for practicing law just drives up lawyers’ bills by increasing the cost of becoming a lawyer, driving away from the legal profession people of modest means who would make fine lawyers, but are daunted by the high tuition.  The resulting increase in lawyers’ bills makes it harder for people to afford a lawyer when they are ripped off in breach of contract cases, since the amount they recover even if they win may be less than what they would have to pay a lawyer to represent them.   It also makes it harder for people to afford a lawyer when they are sued over meritless claims.  (Some lawsuits are not impeded by rising hourly rates. Certain legally-favored kinds of lawsuits, like employment discrimination claims, can be brought even when lawyers’ hourly rates rise, thanks to one-way attorney-fee-shifting statutes that force employers to pay the entire bill – like state laws that require employers to pay a multiplier of a discrimination plaintiff’s legal bills (see Rendine v. Pantzer), or the federal Christiansburg Garment rule that requires employers to pay the plaintiff’s attorney fees when the plaintiff wins, but does not require plaintiffs to pay the employer’s fees when the employer wins.  For example, a Kansas civil-rights plaintiff received thousands in attorneys fees over $1 in damages.  The explosion in those kinds of lawsuits over the last generation has masked the growing difficulty of affording a lawyer to bring other, more traditional kinds of cases, like individual breach-of-contract cases, for people of modest means.)

Eliminating the requirement that students attend law school to become lawyers would force law schools to cut their exorbitant tuition (which has risen nearly 1,000 percent in inflation-adjusted terms since 1960) and streamline instruction. As Winston and Crandall note, “law schools would face pressure to reduce tuition and shorten the time to obtain a degree, which would substantially reduce the debt incurred by those who choose to go to those schools.” Law schools as we know them would mostly disappear, replaced by a shorter, more compact course of studies either folded into undergraduate studies, or lasting just one or two years.  (In many other countries, “law is an undergraduate degree,” showing that you don’t need three years of law school to learn basic legal skills.)  Law schools would have less time left over to waste on ideological fads, and would be forced to concentrate on teaching practical legal skills and black letter law.

Law school graduation requirements weed out few bad lawyers. Even students who seldom studied, and reputedly were on drugs, managed to graduate from my alma mater.  A tenured law professor recently wrote that law school is a “scam,” and that some of his faculty colleagues were “inadequate teachers” who taught the same outdated material, year after year.  My professors in law school were smart, but many were better at publishing or promoting themselves than at teaching (one of them, a leading scholar, used an ancient textbook, and was so lifeless in the classroom that he was like death-warmed-over).  Attending law school doesn’t guarantee a job: two law schools are being sued for fraudulent placement data in class-action lawsuits.

States should discard law-school attendance requirements and only require lawyers who wish to practice in court to (1) demonstrate that they have no record of crime, ethics violations, or cheating, and (2) pass the state’s own bar exam, or the Multistate Bar Exam.  (People who handle in-house legal tasks, especially at insurance companies and other legally-sophisticated entities, should not have to pass any bar exam at all.  Most such people handle only a limited variety of legal tasks, not the entire field of law tested by the bar exam.  They can easily be trained by their employer to handle those tasks.  Their employer knows better than the courts or the bar what knowledge they need to do their jobs.)

Why require even lawyers who practice in court to pass a bar exam and show moral fitness, when many other occupations don’t have licensing requirements?  Because of the power they wield.  Those who bring lawsuits impose huge burdens and externalities on other people, like making time-consuming demands for documents or discovery, forcing attendance at depositions, and threatening people with ruinously large judgments. Lawsuits involve the unstated threat of coercion, such as having your property seized to pay for a judgment against you. Requiring some type of licensing for lawyers helps weed obviously crazy, incompetent, and abusive people out of the legal profession and keeps them from wreaking havoc on the innocent. Passing the bar exam doesn’t guarantee you’ll be a good lawyer, but given how easy it is to pass most bar exams, failure means you would probably make a bad one.

States also need to repeal barriers to people suing on their own in small-claims court – barriers that make it impossible for ordinary people to seek redress in some cases that aren’t big enough to justify hiring a lawyer, leaving cheated people with little redress when they are ripped off to the tune of $5,000 to $10,000. People can represent themselves in small-claims courts, which have simplified procedures, but in many states, such courts can hear only the tiniest legal claims, like those seeking less than $5,000. When Maryland’s legislature passed a bill to increase the maximum amount to $5,000 from a ridiculously-low $2,500, then-Governor Parris Glendening vetoed it, citing opposition from trial lawyers.  (Liberal politicians are indebted to trial lawyers, who would lose income if more people represented themselves in small-claims court rather than hiring a lawyer.  But lawyers’ fear  of lost business may be exaggerated, since if people can’t sue in small claims court, they may simply forego suing, rather than hire a lawyer, who can charge $5,000 just to draft a detailed complaint – more than a plaintiff might recover on a small claim.)

Unlike small-claims courts, which operate under fairly simple rules, the courts that hear larger cases have a bewildering array of court rules dealing with format and procedure that vary from state to state, and sometimes from county to county.  One court may insist that case filings be blue-backed on 14-inch paper, while another may forbid that. Only a practicing lawyer will be familiar with such details, and overlooking them can have ruinous consequences. For example, the Georgia Court of Appeals dismissed an appeal in a $2.7 million case because the appellant used Times New Roman typeface rather than Courier.

In Google, Legal Profession, Platforms, Regulation, Unlocking the Law Symposium
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Larry Ribstein on After the Fall (Of Regulation)

Larry Ribstein —  19 September 2011

My previous post in this symposium argued that deregulation is upon us.  Here I’ll discuss what that could entail.

The legal information expert:  I summoned up the specter of computers practicing law.  There is in fact no doubt that computers can practice law as that term is defined by some courts and regulators: giving personalized legal advice.  Clearly computers already can process a lot of data and come to fairly accurate determinations of many types of legal questions.

This does not, however, mean that computers can replace lawyers.  It means that lawyers will have to learn to work with technology.  The “legal information experts” of the future will have to provide the human insights about the world of law that computers must have to do their jobs.  They must also make the choices that computers can’t. For example, what types of contractual structures work best with the new types of arrangements that arise in a constantly changing business world?  What choices should individual clients make among the alternatives that a computer provides?

This is good news for lawyers.  Lawyers can focus on the more sophisticated tasks that require human ingenuity as computers take over the routine.

The policy architect. Freed by technology from routine, lawyers can increase their involvement in designing laws and other legal structures.  Computers may be great historians but they are not yet equipped to make judgments about what the future should look like.  Lawyers need not leave lawmaking to legislators, but can participate in a private market for law. Kobayashi and I discuss in a recent paper the potential for such private lawmaking and the changes in the law that could make it happen.

The death of the law firm.  Although I’ve written the obituary for Big Law, regulation continues to sustain a semblance of the big law structure.  These firms are sustained by rules restricting referral fees and non-lawyer financing of firms engaged in the practice of law.  At a more basic level, law firms address clients’ costs of obtaining information about lawyer quality.  Law firms presumably can help by monitoring, mentoring and screening lawyers, so that the client just needs to choose a firm with a good reputation.  But as big law weakens, so does its ability to provide these services.  More importantly, the markets and technologies discussed in my previous post can step in and solve clients’ information asymmetry better than can today’s law firms.

The future of licensing.  It’s unlikely that lawyer licensing will completely die.  It will be hard to reconcile complete deregulation of law practice with continued licensing of doctors, tour guides and horse dentists.   But there’s an important difference between lawyers and these other professions:  the prodigiously powerful lawyer interest group has managed to restrict access to the extremely broad field of human activity called the “practice of law.”  This regulatory monolith is bound to fracture.

It’s not clear what will remain.  Certain types of services to consumers may require a license, on the theory that ordinary consumers can’t fully protect themselves from lemons. Also, courts may insist that licensed lawyers conserve public courts’ scarce resources.  Licensing may reflect something like the traditional British distinction between barristers and solicitors.

Another approach to licensing may be to change how it is done.  Lawyers now must be licensed in every state where they practice law.  This enables states to erect regulatory walls that impede national law practice.  It also forces professional rules to be uniform in order to accommodate our mobile and global society.

A better option, similar to a system I’ve suggested for law firm regulation, is a “driver’s license” approach, where lawyers get a license in the state of their principal residence which they can use to practice anywhere in the country. Unlike the internal affairs doctrine for corporations, states could issue licenses only to their residents.  Because lawyers are likely to practice mainly where they live, this helps ensure that the licensing jurisdictions will have a stake in good regulation and prevent a potential race to the bottom.  At the same time, the drivers’ license approach would enable more jurisdictional competition for lawyer regulation than we have today, and thus help pave the way for the developments discussed in my previous post.

In Jurisdictional Competition, Legal Profession, Regulation, Unlocking the Law Symposium
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Eric Rasmusen on Everyday Versus Fancy Law

totmauthor —  19 September 2011

Let me start with a couple of stories.

Story 1.  I’m an economist, but I got a chance to be like a real lawyer in filing an amicus brief recently (Barnes v. Indiana– here’s our brief).  We had only two weeks to organize, write, and file because of an oddity of the case (a petitition for the Indiana Supreme Case to rehear after an opinion that surprised everyone with its breadth). We had legal counsel, but pro bono, without paralegal help, and by email. It came down to the wire in writing and getting final approval from amici, so he suggested that I do the physical filing. I took the brief to Kinko’s around 9 p.m., but discovered they couldn’t do the binding by 11, and I needed to drive an hour get to the Indianapolis Statehouse and file by midnight. I went to my office instead, and did simple staple binding with green cardstock, which ran out so I used white cardstock for the back covers and made it to the Rotunda at 11:50. Alas, our counsel shortly got a notice that the back covers needed to be green too. But the Court Clerk was merciful, and allowed us to slip in replacement briefs without a formal motion.

Story 2.  The company MDCO hired the law firm WilmerHale to handle its patents. WilmerHale filed for a patent extension 62 days after a key date, missing the statutory deadline of 60 days. This was perhaps because of confusion over whether the days started being counted from the Friday night of a previous filing’s approval of the following Monday morning. The uproar that began then is still in progress (litigation and a special statutory amendment known as the “The Dog Ate My Homework Bill”), but MDCO and WilmerHale settled for $214 million malpractice damages if their efforts fail to win back the patent extension.

I tell these two stories as examples of the importance in everyday lawyering of following arbitrary rules. Experience counts in this, and care, and even wisdom (don’t wait till the last minute or something bad might turn up unexpectedly) but not IQ.

To be sure, other defects can be fixed up by IQ. That’s what MDCO is doing with its litigation, where it hired Peter Keisler and Sidley Austin. (Medicines v. Kappos, 731 F.Supp.2d 470 (2010), brief here ).  But everyday lawyering is not rocket science. It demands trustworthiness, experience, and wisdom, but not intelligence. That’s why big national firms hire local counsel— the big firms are wise enough to know that experience counts.

Training for everyday lawyering is different from training for appellate work or for helping on fancy deals. Everyday lawyering is best learned by serving as an apprentice.  There is a place for both kinds of lawyering. Fancy practice benfits from law school training. Everyday lawyering doesn’t. A lot of legal work falls in between— trial work, for example.

The current system of requiring lawyers to first go to law school, then to pass a bar exam, and then to stay out of big enough trouble to force disbarment proceedings doesn’t have much effect on fancy lawyering. For something complicated, you probably want someone who went to law school anyway. Or, if you happen to come across some self-tutored legal genius, you’ll find a way to make sure of his talents, perhaps by having him serve as “assistant” to your team of licensed lawyers. It’s like requiring a PhD to be a physics professor— pretty much every good candidate will have a PhD, but it’s not a binding constraint.

The current system does have an effect on everyday lawyering, but not a good one. First, it forces all the lawyers to go to law school. Thus, as often brings complaint, three years after starting their legal training, lawyers still aren’t ready to practice everyday law. To be sure, after a month’s supplemental training many of them have acquired all the book-learning they need to practice in a particular jurisdiction. But imagine the comparison between someone aged 21 who spent three years in law school and someone who had spent three years working in a law office. Who would you rather have file your amicus brief or your patent extension?

And, of course, teaching Marbury v. Madison, Chevron, and Hadley v. Baxendale to prepare someone for everyday lawyering is a waste of time. It’s part of their heritage, and part of a liberal education in the law, but it won’t help you do divorce cases.

A bar exam might be a good idea. I would certainly like to know whether a lawyer I find in the yellow pages has passed a bar exam somewhere in the world or not, though I’m not sure I’d insist on the Indiana exam. More important than that, I’d like to know his score— truly useful information. If he passed the Indiana exam 20 years ago, what he learned may well be obsolete, but if he was in the 8th percentile of those passing, that’s still relevant.

And having disbarment be the penalty for bad conduct is definitely a good idea. Just as someone who has been convicted of child molesting shouldn’t be allowed to start a daycare center, so someone who has been convicted of embezzlement shouldn’t be allowed to practice law. And, ideally, this shouldn’t be left up to judges. It takes a long time to obtain a criminal conviction and “beyond a reasonable doubt” is a tough standard to meet. I’d prefer a speedy tribunal with a preponderance of evidence standard, with the possibility of the guilty lawyer appealing to the courts afterwards for reversal.

Going back to Story 2, let’s also have more public information about incompetence in everyday lawyering. Mistakes there are easy to verify, unlike mistakes in appellate argument. So let’s have a bulletin board with official publication of bloopers. In teaching Story 2 to my undergrads, I’d like to know the names of the WilmerHale lawyers who blew it, and the story of what happened to them. I haven’t found that yet, but with a bulletin board, it would be easy. And how can they complain if all it does is tell the truth?

Thus, let’s get rid of the law school requirement but keep the bar exam and disbarment. Let’s even make the bar exam and disbarment more important, by disclosing more information to the public and by speeding up how they work.

In Intellectual Property, Legal Profession, Patent, Unlocking the Law Symposium , , ,
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Walter Olson on Careful What You Unleash

totmauthor —  19 September 2011

As a libertarian, I mostly concur in the critique of occupational licensure made famous by (among others) Milton Friedman. For the most part, licensure is a consumer-unfriendly affair that protects incumbent practitioners from competition, locks out promising new methods of service provision, and interferes with voluntary dealings between professional and client. It is dubious enough as applied to occupational groups such as doctors and plumbers, and downright ridiculous (as the Institute for Justice keeps reminding us) as applied to groups like cosmetologists, florists and interior designers.

But lawyers are different. No, seriously — they are. Most other professional groups deal with a clientele that, even if unsophisticated, is at least participating voluntarily and exercising a choice of providers. This is true of lawyers as well for the majority of the services they provide — advising on the state of the law, drafting contracts, negotiating business deals, devising estate plans. But lawyers also are given a litigator’s hunting license to initiate compulsory civil process against unwilling (often wholly innocent) opponents and third parties, and deregulating that power is a good bit more problematic.

The coercive powers wielded by private lawyers are more akin to the powers wielded by prosecutors and other government officials than to the powers wielded by, say, optometrists or dentists. They include the power not only to initiate a lawsuit — something that, even if disposed of at an early stage, can inflict hundreds of thousands of dollars of financial cost (plus reputational damage and distraction) on an adversary — but also the power to pursue discovery under our remarkably broad American rules, an extraordinarily coercive and invasive process by which opponents are compelled to hand over private emails, memos and doodles for hostile scrutiny, attend and endure hostile depositions in person, undertake vast file searches at an unreimbursed cost that can exceed the value in controversy in the suit, and more. I am not convinced that deregulating the power to commence this sort of civil process and demand money from an opponent for calling it off — in effect, to widen the existing pro se exemption so as to allow anyone to proceed pro se on behalf of anyone else they can get to sign up — would reduce the amount of unjustified legal aggression in a system that already has plenty of it and to spare.

It will not do to say that abuse of the power to litigate can be sorted out after the fact as it allegedly was in the cases of Scruggs and Lerach, years after the ethical lapses began. Much experience suggests that sanctions, disbarments, countersuits and prosecutions are typically belated and spotty as it is (for many examples, check my website Overlawyered). True, abusive lawyering would be far better checked if we had loser-pays, a strong Rule 11, serious constraints on the use of discovery for cost infliction, and so forth. But we don’t — and the Law Lobby will not let us win those remedies any time soon.

The way forward might be to split the tasks of a lawyer in two, moving to deregulate the advisory and document-preparation functions (which could indeed be a way of saving consumers large sums) while continuing to apply appropriate scrutiny to those in the profession who presume to wield coercive litigation powers. Although the British separation of highly regulated barristers from less highly regulated solicitors does not precisely track this distinction, it is worth keeping in mind as a possible model for a division between an “outer” legal profession whose operation might be entrusted to general business principles and an “inner” group of professionals of whom more is expected, as we expect more ethically and legally from judges themselves, public prosecutors, and others cloaked in public authority.

In Legal Profession, Regulation, Unlocking the Law Symposium , , ,
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Richard Painter on Litigation Financing and Insurance

totmauthor —  19 September 2011

Fifteen years ago I published an article urging that non-lawyers be allowed to finance the cost of legal representation in return for a percentage of a judgment or settlement if the plaintiff is successful.    Common law prohibitions on champerty were widely believed at the time to prohibit third parties from buying an interest in litigation.  Few such litigation funding arrangements were available for plaintiffs, and lawyers perhaps predictably looked upon them with disfavor.   See Litigating on a Contingency:  A Monopoly of Champions or a Market for Champerty?, 70 Chicago-Kent Law Review 625-697 (1995) (Symposium on Fee Shifting).

Most other countries have enforced this prohibition against champerty evenhandedly against all market participants including lawyers.  Risk averse or impecunious plaintiffs in those countries have few options if they cannot afford lawyers (legal services programs in a few countries sometimes cover plaintiffs’ expenses, and some countries allow lawyers to charge a “conditional fee” payable only if a client’s case has a predetermined level of success).   In the United States, however, there is a wide open exception to the champerty prohibition:  the contingent fee.   The contingent fee bundles legal services with two other products:  financing that postpones payment until the client receives proceeds from the litigation and an insurance arrangement whereby the lawyer absorbs all or part of the cost of the legal representation if it is unsuccessful (at a 33% contingent fee, the judgment or settlement amount must be at least three times the value of legal services for the lawyer to recover the full value of those services).  The insurance premium is not a fixed amount, but is a percentage of the value of the plaintiffs’ case – the interest in litigation that the champerty doctrine otherwise prohibits.   Id.

As perhaps predictable in a market where only one group of providers (lawyers) is allowed to sell  products (litigation financing and insurance) and then bundle those products together with another product (legal services), there is concern about the competitiveness of pricing.  Do lawyers compete against each other in pricing contingent fees, or is informational asymmetry between lawyers and plaintiffs too great for there to be effective price competition?   Is it difficult for a plaintiff to discern whether a contingent fee is high because it is excessive or instead because the lawyer is a better lawyer (and the value of the legal services being financed and insured is therefore higher)?  Why do so many contingent fees amount to 33% of recovery regardless of the potential damages in the case or its likely success, or the amount of work likely to be required, factors which presumably would price the percentage differently for different cases in a fully competitive market?

One solution is to regulate contingent fees, an intrusive approach that assumes the regulator can do a better job of ascertaining and fixing a fair fee than a client can do demanding a fair fee, because the client has limited options or limited information.   A more market oriented approach, urged in my 1995 article, is to allow non-lawyers to sell the litigation financing and insurance unbundled from legal services so plaintiffs can themselves pay a lawyer at an hourly rate and then repay the financier/insurer a share of proceeds from the litigation.  The market for the bundled product — a lawyers’ contingent fee — would function in the shadow of a market for unbundled products in which lawyers practice law and litigation financiers/insurers do the rest.  Both markets might be more competitive.

Now, fifteen years later, litigation financing and insurance arrangements are gaining in popularity.  Many of these arrangements are designed for plaintiffs’ lawyers who still charge contingent fees to their clients but who then borrow against the future fee from lenders willing to condition repayment on the success of the case.    These lenders are repaid either a percentage of legal fees earned in the case or an agreed upon amount (considerably in excess of the loan amount) provided the case achieves a certain measure of success.  Other litigation financing and insurance arrangements are sold to plaintiffs, allowing them to obtain cash payment for a portion of the value of their case, often after a favorable trial verdict but pending an appeal.   Many of these plaintiffs still pay their lawyers a contingent fee, and if they eventually win must both pay their lawyer a flat percentage (usually 33%) and also repay the litigation financier the advance plus a considerable surcharge.  To date, very few litigation financiers advance money to pay a plaintiffs’ lawyer an hourly rate to litigate the case.  In sum, plaintiffs’ lawyers still sell the bundled product of legal services, litigation financing and insurance, and their rates do not appear to be coming down.  Litigation financiers have sold their product either to the lawyers or to plaintiffs in need of extra cash for something other than paying lawyers.

The ABA is beginning to address the many conflicts of interest that can arise when plaintiffs’ lawyers work with litigation insurers and sometimes recommend them to clients.  See ABA 20/20 Commission, Issues Paper Concerning Lawyers Involvement in Alternative Litigation Financing (November 23, 2010).    The market I envisioned in 1995, in which litigation financiers/insurers compete head on with plaintiffs’ lawyers has not come to pass.

Have plaintiffs’ lawyers captured the market for litigation financing and insurance and turned it to their own ends?   Are providers of these products so dependent upon lawyers to recommend their services to clients that they will not compete with lawyers?    Is the contingent fee a pricing mechanism for plaintiffs’ lawyers with advantages for clients (including incentivizing the lawyer) that may outweigh disadvantages from less than competitive pricing?

And what happened to the common law champerty doctrine which recently has stood in the way of litigation financing less often than I initially believed it would?  Some litigation financing arrangements are characterized as high interest loans, perhaps to avoid the champerty doctrine, but this approach can run into difficulty under usury laws.   In most instances, litigation financiers acknowledge that they are buying a share of the lawsuit and they are presumably confident they can get away with it.  And perhaps they are right because American courts have been letting lawyers get away with the same thing for so long that strictly applying the doctrine of champerty against new market entrants is a hypocrisy that few judges are willing to accommodate.

These are a few of the many questions that I intend to pursue when I revisit this topic in the near future.

In Legal Profession, Unlocking the Law Symposium
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Renee Newman Knake on Corporations, the Delivery of Legal Services, and the First Amendment Part I

totmauthor —  19 September 2011

Last month the New York Times ran an editorial with the headline “Addressing the Justice Gap,” observing that “the poor need representation and thousands of law graduates need work.”  The piece proposed several solutions, but notably absent was the reform most likely to deliver legal services to those in need and to create jobs for unemployed lawyers:  corporations should be able to own law practices and provide legal representation.  It’s not only a matter of managing the justice gap in America in the face of an enduring economic recession and increased global competition; it’s also a matter of First Amendment concern.

Corporations like Google and Wal-Mart are expert in the delivery of goods, information, and services to the public.  They have the capacity to make significant financial outlays into innovative mechanisms for legal representation and await a delayed return on that investment.  Wal-Mart already offers financial and medical services to its customers. It is not difficult to imagine other alternative law delivery processes or tools that might be developed if a company like Google could take the next step to directly own a law practice, or if Wal-Mart could add a legal assistance window next to the bank or health care provider in its stores.  (Indeed, in the wake of deregulation through the Legal Services Act, London-based WHSmith stores will host legal access points through a partnership with QualitySolicitors, a British legal services provider.)

Attorney professional conduct rules should be reformed to permit corporations to own law practices and deliver legal services.   This deregulation has the potential to increase competition, drive down prices, encourage inventive methods for providing legal representation to those who cannot access or afford it, and create new jobs for lawyers.

The American Bar Association historically opposed nonlawyer ownership citing concerns of professionalism and client protection, though the Ethics 20/20 Commission recently approved the drafting of a proposed change to ABA Model Rule 5.4 allowing minority nonlawyer ownership (see here).  But corporations still would be banned from owning the entire law practice.  Minority nonlawyer ownership is unlikely to generate the revolutionary change necessary for providing meaningful legal representation on a mass scale.

This summer, the law firm Jacoby & Meyers (J&M) filed litigation challenging Rule 5.4.   J&M raised a number of constitutional challenges, but most intriguing is the First Amendment claim.  Admittedly, I’m especially interested in this aspect because the regulation of lawyer speech is a scholarly interest of mine, especially free speech protection for advice from an attorney to her client (for my thoughts on this topic see here and here).  But if one looks at recent decisions from the Roberts Court, it appears that a majority might be receptive to the idea that the First Amendment protects the delivery of legal services by a corporation, a subject I’ve written about in Democratizing the Delivery of Legal Services:  On the First Amendment Rights of Corporations and Individuals.

I see the corporation’s right to own a law practice and deliver legal representation as stemming from NAACP v. Button, a 1963 decision in which the Supreme Court held that states cannot ban the delivery of legal services by the NAACP (a nonprofit corporation) because of the First Amendment interests involved.  The Court extended Button to situations beyond civil rights in a series of cases from the 1960s and 1970s: Brotherhood of Railroad Trainmen v. Virginia State Bar (the First Amendment protects the rights of union members to “maintain and carry out their plan for advising workers who are injured to obtain legal advice”); United Mine Workers of America, Dist. 12 v. Illinois State Bar Association (the First Amendment “give[s] . . . the right to hire attorneys . . . to assist . . . in the assertion of . . . legal rights” for union members’ workers compensation claims); and United Transportation Union v. State Bar of Michigan (“collective activity undertaken to obtain meaningful access to the courts is a fundamental right within the protection of the First Amendment”).  The union cases build upon Button in two important ways.  One, the First Amendment is now understood to protect legal advice and advocacy not only about political and civil rights but also other matters.  Two, it is clear that the First Amendment protects collective activity by a corporate entity undertaken to deliver legal services.

Another relevant line of First Amendment decisions are the advertising and solicitation cases from the 1970s.  In Bates v. State Bar of Arizona, the Court held that Arizona’s ban on lawyer advertising violated the First Amendment.  The Bates majority rejected the very same arguments levied against corporate ownership of law practices.  For example, the Court found the Arizona State Bar’s “postulated connection between advertising and the erosion of true professionalism to be severely constrained,” and similarly rejected the Bar’s concern about the “adverse effect on the administration of justice.”  The Court also noted that the advertising ban (much like the corporate ownership ban) “likely has served to burden access to legal services, particularly for the not-quite-poor and the unknowledgeable.”

Two other lawyer solicitation cases deserve mention.  In 1978, the Court decided Ohralik v. Ohio State Bar and In re Primus on the same day.  In Ohralik, the Court determined that the state could ban an ambulance chaser from in-person solicitation but in Primus the Court held that the state could not ban an ACLU lawyer from informing potential litigants about their constitutional rights.  One might reconcile these decisions by looking to the fact that Ohralik solicited for pecuniary gain, whereas the ACLU lawyer offered services free of charge (though still received salary from the ACLU).  And, so the argument might go, it follows that corporations, in seeking a profit when offering legal services, should be treated more like an ambulance chaser than an ACLU lawyer.  I disagree.  A Wal-Mart law type delivery mechanism, for all practical purposes, need not be anything like the proverbial ambulance chaser.  Rather than rushing in to prey on the vulnerable accident victim, we instead would have access to a de-mystified legal services provider, where customers could learn about services in a neutral atmosphere as they conduct everyday shopping.

In Part II, I’ll discuss two recent decisions from the Roberts Court that offer insight about the First Amendment interests of corporations in the delivery of legal representation.

In Constitutional Law, First Amendment, Google, Legal Profession, Platforms, Unlocking the Law Symposium , ,
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