California Lawmakers Ignore Data in Calls to Restrict the Expansion of Legal Services
The California State Bar is no stranger to controversy, and its recent work in legal regulatory reform has garnered its fair share. While the bar has been exploring solutions to the monumental crisis in access to quality, affordable legal services (related to restrictions on the unauthorized practice of law, non-attorney ownership/investment, and other regulatory matters) in earnest since 2018, recent movements from the bar implementation committees seem to be getting a growing amount of attention—much of it negative.
Earlier this week, two California lawmakers spoke up about these issues. Cheryl Miller, writing for Law.com’s The Recorder, reports: “The chairs of California’s two legislative judiciary committees this week accused the state bar of ‘divert[ing] its attention from its core mission of protecting the public’ by pursuing proposals to allow nonlawyers to offer a limited range of legal services.”
California Supreme Court Justice Tani Cantil-Sakauye called the criticism “not surprising,” and we would agree. After all, it is the same message we’ve heard time and again from opponents to any real, impactful change within the legal profession. And the assumptions underlying that message have been discredited by our organization and many other scholars, researchers, and even regulators in other countries. So it is frustrating just how widespread and misleading opponent claims can be.
Let us dive into the full picture.
The Starfish Problem
In one of the more succinct summaries to date of the party line in opposition to regulatory reform, Assemblyman Mark Stone and Senator Tom Umberg wrote the following: “We reiterate our call for the State Bar to redouble its efforts to focus on the core mission of policing attorney misconduct and supporting proven programs offering access to justice and legal services such as legal aid, court‐sponsored self‐help, and pro‐bono assistance, as well as innovative approaches to increasing the number of attorneys who are licensed in California.”
But there is a perennial problem with limiting legal innovation to solutions like these. We call it the Starfish Problem.
Nearly everyone knows the starfish thrower story (adapted from Loren Eiseley’s essay “The Star Thrower”). It goes something like this:
A young boy is walking along the beach, throwing starfish into the ocean. As the boy makes his way down the beach, stopping at each starfish he comes to, a man notices him and walks over.
“What are you doing here, young man?”
“Well, these starfish are stuck. I want to get them back to their home in the water.”
The man nods, and then scans the length of the beach in both directions. “That sure is sweet. But gosh, there are a lot out here. I don’t think you can save them all, son.”
The young boy walks a foot forward, picks up another starfish, and throws it into the water. “At least I saved that one,” he said and smiled. He moves another few feet and does the same. “I saved that one, too,” he beamed.
There is a lot to take out of this story, but in our context it perfectly illustrates both the opportunities and limitations of solutions like pro bono and legal aid. For each individual and family served by these programs, the impact can be life changing—hands down worth the investment. But the access to legal services crisis is now so large that there is no way these solutions alone can scale to the level needed to meet the legal needs of all Californians. Making the point in a recent public comment on regulatory reform to the Oregon State Bar, IAALS noted that in the long and rich traditions of legal aid and pro bono, these subsidized legal services have yet to come close to solving the justice crisis. The harsh reality is that we cannot volunteer ourselves out of this crisis. Nor can we stand by while waiting for unprecedented legal aid funding, the likes of which we have never before seen.
Don’t believe us?
At a national level, economist and law professor Gillian Hadfield estimates the following with respect to the viability of pro bono and legal aid as the primary responses to access to justice:(1)
- On the conservative end, it would cost $46.5 billion to provide just one hour of legal help to all the households in America currently facing legal problems. (By contrast, the 2021-22 budget for the entire California Judicial Branch includes total funding of $4.6 billion).(2)
- If every single one of the 1.3 million licensed lawyers in the U.S. (not just those actively practicing law) were to take on all these problems, they’d each have to put in 180 pro bono hours. (The current average amount of pro bono hours provided by the 52% of lawyers who provide such services is around 55.)
And while the lawmakers’ suggestions about modifications to the state’s licensure process bear some merit, this “solution” suffers from the Starfish Problem, too. The solution is small scale. But the problem is systemic.
Consumers of legal services are increasingly like the starfish in this story, more and more are stranded out on the beach with every passing year. These people have been abandoned by a self-regulated profession that routinely advances monopolistic and protectionist policies under the guise of protecting consumers.
The need is growing exponentially faster than what traditional solutions can address. The reality is that the answer will never just be “more attorneys.” The answer must be attorneys—and more.
Innovation & Access to Justice
We can no longer separate legal innovation from access to justice. And legal services innovation has the potential to reach great heights in this country—if only we let it.
Technology and innovative business models make it possible to serve legal consumers far beyond what the traditional one-to-one model—pro bono, legal aid, and traditional representation—allows. Technology solutions that empower this kind of scale already exist, but attorneys are restricted from forming the valuable partnerships that are necessary to build these tools. And when built, the solution’s potential is constrained.
In addition to exploring new pathways through which to provide legal services, innovation in this space also requires a new cadre of providers. The medical community grappled with this need some time ago, and what resulted were new tiers of authorized, trained, and regulated providers. Dear reader, did you even think twice the last time you saw a registered nurse or a physician’s assistant instead of your doctor? Were you put off when your surgeon couldn’t see you to treat your cold or draw a blood sample? And can you imagine, under our current pandemic, if only doctors were allowed to provide vaccinations, medical advice, or other treatment? The analogy has uncanny parallels.
Opponents of these new pathways and new providers will point to the dangers these innovations could bring and the potential for harm to the public—notwithstanding the fact that the current system is offering no protection to those currently stranded such as the 90% of defendants who face eviction or debt collection without any legal assistance.
Assemblyman Stone and Senator Umberg assert that allowing lawyers to partner with others would be “to the detriment of Californians in need of legal assistance.”
To this, we have two responses.
Lawyers love evidence. Facts are the bedrock on which our profession thrives. “Could” and “potentially” are not compelling arguments in this context. They are abstract and by definition undefined. We need arguments rooted in fact. Our justice system requires that people’s claims be tethered to evidence—not imagination. We should hold the legal profession to the same standard. Yet neither these lawmakers nor the organized opposition by attorneys can achieve this. They have yet to offer much more than assumption, conjuring the specter of harm out of thin air. Conspicuous by its absence is even a single, concrete example in the real world—in places where reforms have taken hold—of the harms these lawmakers imagine. But here lies the rub—to prove the harm of these suggested reforms, a structure like the regulatory sandbox must exist. There is no other way to ascertain the validity of opponent’s statements. The same is true, of course, with claims from advocates of regulatory reform. We are in search of proof, too. In this sense, we are all working toward the same goal: let’s collect evidence instead of anecdotes.
Our second response—there is already data in support of consumer-safe innovation of legal services.
We have evidence that, when regulated and monitored appropriately, new service providers like independent paralegals and alternative business structures face no more consumer complaints or disciplinary action than do lawyers in traditional law firms. That has been true in places like Ontario, Canada, where independent paraprofessionals have been regulated for over a decade, and in England and Wales, where professionals have been able to partner with lawyers to invest in new businesses and service delivery models since the passage of the Legal Services Act in 2007.
Even in the U.S., where these ideas are relatively new, we have data.
In a recent update, IAALS reported on the data collected in the Utah regulatory sandbox for legal services as of mid-September. Since then, the Utah Office of Legal Services Innovation, the regulator that oversees the sandbox, published additional updates. All told, we know since the introduction of these new services in Utah that:
- The Utah Supreme Court has approved 31 entities after assessing whether these proposed new services would stay within the limits of a threshold risk to consumers.
- These innovative providers are meeting a spectrum of needs. The legal categories addressed by services received so far include military/veterans benefits (30.4%), accident/injury (18.8 %), business-related matters such as intellectual property, contracts and warranties, and entity incorporation (15.5%); end-of-life planning (10.1%); and marriage and family (6.8%); and individual bankruptcy and collections practices (4.3%). Other types of legal services currently available via the sandbox include education, real estate, domestic violence, and immigration.
- The services being provided are in high demand—with 8,475 legal services sought from just over 7,000 unduplicated clients. The ability to utilize technology, too, is making a substantial impact, with 611 legal services delivered by professionals who are not lawyers/software (with lawyer involvement).
But most notably, there have been only five complaints in total made to the Office of Legal Services Innovation since the sandbox opened over a year ago, with four of those being harm-related. At the current rate of legal needs being met, there has been one complaint per 1,695 services delivered; one harm-related complaint for every 2,119 services delivered. The Utah Office of Legal Services Innovation report tells us that “entity response to harm-related complaints has been adequate and acceptable as related to harm mitigation and prevention.”
The Reality Behind the Rhetoric
Finally, and unfortunately, the details and design of the proposed regulatory sandbox evade many in the legal field, including Assemblyman Stone and Senator Umberg. These are fairly new mechanisms and can be complicated in the abstract.
The truth is that a regulatory sandbox is really just another version of a pilot project, but designed for innovation. It establishes a controlled and carefully regulated ecosystem in which regulatory experimentation can occur—safely. The sandbox is nothing but a structure with defined goals, rules of operation, and reporting requirements for data collection. Standing alone, it can neither hurt nor help consumers. Opponents to the sandbox conflate this ecosystem with the individual providers that operate within it. But they are not one and the same.
Assemblyman Stone and Senator Umberg threaten heavy scrutiny of the sandbox proposal should it come before California’s two legislative judiciary committees. This is an odd point to emphasize, given that real regulatory scrutiny, of course, is the stated goal of the sandbox proposal. Indeed, the Utah model requires far more oversight and regulatory intervention over the participants in the sandbox than what any lawyer in California has to face. By parroting the discredited arguments of lawyers organized in opposition to exploring new solutions, without acknowledging any of the evidence that belies those same arguments, these lawmakers seem to be more concerned about scrutinizing any possible competition to a segment of the profession that contributes to their campaigns.
Starfish keep getting cast upon our shores, and there are precious few of us allowed to help. The rest of us must stand behind artificial barriers created by the legal profession as we watch the tragedy unfold. We can no longer keep our focus narrowed on just the percentage of problems that attorneys can solve. Unfortunately, attorneys alone have not, and cannot, scale to meet the needs that exist. We need innovation to solve this problem.
As Chief Justice Tani Cantil-Sakauye said in response to Assemblyman Stone and Senator Umberg, “Well, what’s the alternative then? What are we going to do? Just throw up our hands and say nothing?”
If consumer protection truly is the concern of these lawmakers, the evidence we have so far is lopsided in favor of new ideas and against more of the same solutions that have done little to stem the tide. Evidence favors the solutions currently being explored by the state bar’s working groups. More broadly, what these lawyers and everyone involved in this effort should be most concerned about is the heavy scrutiny they are already receiving from the public that they are sworn to project.
Who, exactly, are we protecting if, as these lawmakers suggest, we give up on even just the idea of testing new solutions now?
1. Director, Schwartz Reisman Institute for Technology and Society & Professor of Law and Strategic Management, University of Toronto.
2. https://www.ebudget.ca.gov/2021-22/pdf/Enacted/BudgetSummary/JudicialBranch.pdf accessible via https://www.ebudget.ca.gov/budget/2021-22EN/#/BudgetSummary