A Closer Look: Three Common Arguments Against Regulatory Reform

June 13, 2023

"magnifying glass looking at small cogs"There is a lack of consensus among the legal community when it comes to regulatory reform. Some lawyers are for it, some lawyers are against it, and many lawyers are completely unaware of the conversation altogether (and thus have yet to participate in it). As lawyers, law students, and other legal professionals begin to explore regulatory reform issues, they will likely hear several common arguments put forth by opponents. Below are three of the most common ones—and data and insights from other industries that challenge them.

Belief #1: The access to justice problem only includes people who qualify for free legal aid.

Opponents of regulatory reform will often shoot down proposals that include a focus on helping people who fall above the income eligibility line for free legal aid (i.e., individuals who make more than $14,580 annually and families of four who make more than $37,500 annually) because, in their minds, such proposals do not increase access to justice. This argument stems from the belief that the access to justice problem is limited to just these people who make near-poverty-level income. But this belief is not supported by the data. In fact, the data shows the opposite: most people who fall within the middle-income markets—which is most Americans—don’t obtain enough or any legal help to solve the legal problems they are experiencing. Helping average income earners does indeed increase access to justice on a large scale.

Both the 2021 HiiL and IAALS US Justice Needs report and the 2022 Legal Services Corporation Justice Gap study support this finding. According to the US Justice Needs study, 66% of the population experienced at least one legal issue in the past four years, with just 49% of those problems having been completely resolved. According to the Justice Gap report, 90% of legal problems experienced by people across all income levels in the past year did not receive any or enough legal help—even when the problem would have a substantial impact on their life.

Even without the data, it’s easy to understand how someone making just $14,581 a year or someone making $60,000 a year but who has substantial student loans or medical debt would likely have a hard time affording legal help. But it is now well documented that the access to justice crises is not limited to low-income people. It extends well beyond low income into the middle market and negatively impacts most Americans.

Because the access to justice problem extends well beyond low-income folks, we cannot solve this crisis simply by funding more of the same legal aid or doing more pro bono work. Yes, we need to find more funding for legal aid and, as a profession, we could do more pro bono. But even if we did both of these things, an access to justice gap would remain. People who make more than 125% of the federal poverty line would still not be getting the legal help they need.

Belief #2: For-profit companies cannot contribute to solving the access to justice problem.

Another common argument shared by opponents of regulatory innovation is that for-profit companies, especially those partially or wholly owned by people who are not lawyers, are solely focused on earning a profit and, therefore, cannot also be focused on a higher purpose—helping people access affordable legal help. In detractors’ minds, doing well and doing good are two mutually exclusive concepts and business goals. Companies must make a choice between the two—either earn a profit or exist to fulfill a higher purpose. 

We do not have to look far to understand why this argument doesn't hold water. All law firms are businesses, and unless set up as a 501(c)(3) nonprofit organization, law firms are for-profit entities. This means that at least one of the business goals most law firms have is to earn a profit. If we were to apply the opposition’s belief that earning a profit and helping people access affordable legal help are two mutually exclusive goals, then most law firms would exist solely to earn a profit. We know that is not the case.

Many lawyers went to law school because they had a desire to help people. That’s why when many lawyers go on to eventually open their own law firm, they also have a second business goal—to help people access affordable legal help. The ABA Model Rules of Professional Conduct also impose this second goal on all lawyers.

A dual-purpose company is not a new phenomenon. Companies in other industries, such as Patagonia and Ben & Jerry’s, have been operating this way for decades. Why? Because research shows that companies that exist to earn a profit and to serve a higher purpose build deeper relationships with customers and achieve greater financial growth. So having a dual-purpose is not only acceptable, but also a good business decision.

Many companies operating in Utah’s sandbox and alternative business structures operating in Arizona are dual-purpose companies. Examples include Rasa, Hello Divorce, Singular Law, and ZAF. Instead of being suspect of their dual business goals of earning a profit and providing affordable legal help to consumers, we should instead applaud them for making a sound business decision that will enable them to have financial stability while also contributing to solving the access to justice problem.

Belief #3: The choice the average legal consumer makes is between full-scope representation and limited-scope representation.

Many regulatory reform challengers oppose proposals that allow lawyers and other legal professionals to build companies and deliver legal services in new ways—ways that do not include full-scope representation, lawyer ownership, and/or lawyer involvement. Examples of new delivery methods include using technology tools to help people complete forms, identify whether they have a legal issue or understand if they qualify for relief, and training people who are not lawyers to offer legal advice in limited areas. 

Opposition to these proposals is rooted in the belief that the average legal consumer is choosing between full-scope representation and limited-scope representation when seeking help to solve their legal problems. In detractors’ minds, allowing other legal professionals to own law firms and/or deliver legal services in new ways will not only take work away from lawyers, it will also lower the quality of legal services and result in “second class justice.”

There are two fallacies to debunk here. The first fallacy has to do with the choice the average legal consumer is making. The decision is not between full-scope representation and limited-scope representation, unfortunately. It is between some legal help (limited-scope representation, also known as unbundled legal services), and no legal help at all. According to the 2015 National Center for State Courts’ Civil Justice Initiative: The Landscape of Civil Litigation in State Courts study, at least one party was self-represented in 76% of civil cases in state courts. And according to the 2018 IAALS, National Center for State Courts, and National Council of Juvenile and Family Court Judges’ Family Justice Initiative: The Landscape of Domestic Relations Cases in State Court study, at least one party was self-represented in 72% of domestic relations cases in state courts. This means the average legal consumer is not actually hiring a lawyer for legal help, and, therefore, other legal professionals owning law firms and delivering legal services in new ways will not be taking business away from lawyers.

The second fallacy is that legal services delivered by a company that is not wholly owned by lawyers or through people who are not lawyers will automatically be of lesser quality than if delivered by a lawyer or through a law firm completely owned by lawyers. There is no data to support this theory, however; in fact, we have examples demonstrating the opposite outcome. Accredited representatives—people who are not lawyers and who have received training on how to offer legal help in immigration court—have been recognized and accredited by the Department of Justice and used within the immigration legal community for decades. Additionally, allied legal professional and licensed legal advocate programs are popping up across the country, and initial outcomes are promising. To date, five states have implemented allied legal professional programs and at least three states have implemented community-based justice models where community advocates are trained and certified to offer legal advice in limited situations. Thousands of low to middle-income Americans have benefited from these services and the number of associated complaints filed has been miniscule.

Takeaway: Examine underlying beliefs closely

Getting up to speed on the arguments put forth in the regulatory reform conversation can be time-consuming and challenging. When considering arguments, examine the beliefs underpinning them and ask yourself these questions:

•    Is the belief supported by data?
•    Is there data that contradicts the belief?
•    How, if at all, does this belief align with how business is done in other industries?

Increasing access to justice means increasing access for the middle class, not just poverty-level folks. The studies cited earlier demonstrate that the approaches taken by the legal profession thus far to address the justice crises have proven ineffective or unscalable to meet the need. We need new ideas, new solutions. Businesses can make a profit and do good. And most people aren’t hiring lawyers to take on their cases now—so helping those people couldn’t possibly affect lawyers’ business; and the justice outcomes they are getting from other trained and certified providers are just as highly rated as services by lawyers. 

Regulatory innovation is about laying the foundation for a new, consumer-centered regulatory system—one that ensures a more robust market for high-quality legal services and that is competitive, broadly accessible, and better meets the needs of people across all income levels. IAALS encourages all lawyers, law students, and other legal professions to learn more about these important issues and get involved in the regulatory reform conversation so that we can move closer to realizing the system change that is needed to solve the access to justice crises.

In the fall of 2023, IAALS will release an interim evaluation of Utah’s sandbox. If you would like IAALS to send this update and other regulatory reform updates directly to your inbox, please subscribe to our Unlocking Legal Regulation Newsletter here.

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