Within the Washington State Bar Association, some have argued that ABSs (alternative business structures) will decrease the cost of legal services and thereby increase access to justice. Indeed, access to justice is the primary reason for the Washington Supreme Court’s order enacting the Limited License Legal Technician (LLLT) program, in which non-lawyers can practice law in limited circumstances. “Access to justice” is the justification utilized time and time again by the Court and bar leadership to sell the LLLT program and other proposed regulatory liberalization.
Having talked with those involved with the LLLT program, I consider this assumption, at best, purely speculative and certainly more about PR than reality. The smoke and mirrors could be intentional or it could be simply born out of naiveté; in the end it really doesn’t matter. The reality is that in a capitalist society, people in the for-profit sector seek to profit from their endeavors, lawyers and LLLTs alike. There is nothing within the rule that requires newly minted LLLTs to charge lower rates or only service those with low incomes. I recently overheard a non-profit stakeholder lament that none of the LLLTs in queue have indicated an interest in focusing their practices on the unserved or underserved, which is the polite way of saying, “people without money.” In fact, I am aware of new lawyers that charge lower hourly rates than those proposed by some prospective LLLTs who have both less education and a limited license.
Now recent research out of Canada supports my skepticism. Professor Jasminka Kalajdzic of the University of Windsor’s law school in Ontario researched ABSs in the UK and Australia and found no evidence that ABSs reduced legal fees or increased access to justice. (ABSs are just another type of regulatory liberalization that permits new players to participate in the business of legal services delivery, and is, therefore, no different than programs like the LLLT program.) The study was commissioned by the Ontario Trial Lawyers Association. “Based on my research, and as confirmed by Nick Robinson’s Harvard study as well as by two leading access to justice scholars in Canada, there is no empirical data to support the argument that NLO [non-lawyer ownership] has improved access to justice in either of these two jurisdictions on any of the metrics that would be important to Ontarians.”
Kalajdzic addresses three questions in her research. First, how is access to justice defined? Second, what are the access to justice needs specific to Ontario? Third, how have ABSs in the UK and Australia impacted access to justice in those countries? She defines access to justice as broader than just access to lawyers and courts. “‘Improving’ access to justice, therefore, may mean tackling systemic and institutional barriers to justice, as much as changing billing structures or offering new technologies for disseminating legal information.”
Kalajdzic’s research includes an analysis of the access to justice issues specific to Ontario. She notes that “it should also be borne in mind that the decision not to seek legal advice does not always equate with diminished access to justice.” A recent report determined that income was not actually the determining factor in seeking legal assistance. In fact, the type of legal matter was the predictor of procuring legal advice. “[T]he most prevalent and acute access to civil justice needs of Ontarians, those for which legal advice and representation are most in demand, fall in the areas of family law, employment law, debt and consumer issues.” Only 3% of justiciable problems were related to personal injury.
When studying the impact of ABSs on access to justice in the UK and Australia, Kalajdzic used five metrics:
- Reduced Cost of legal services
- Increased number of represented litigants
- Greater availability of legal services in smaller cities
- Fewer unmet legal needs
- Better quality of work performed
Non-lawyer ownership in law firms has been permissible in Australia since 1994 and since 2009 in the UK. Kalajdzic asserts that access to justice was not a motivating reason for either country to permit ABSs. “[I]t was ‘competition policy and a desire to promote commercial entrepreneurialism in the legal profession that prompted the deregulation of the structure of legal practices in Australia in the first place.’” “In the UK, reform was similarly driven by the desire to address what was perceived as anti-competitive behavior.” Never wanting to waste a good crisis, “consumer interests eventually entered the lexicon among those who supported the reforms.”
“It is for these reasons, perhaps, that access to justice data is not readily available – such outcomes are not measured because they are not intended.” Kalajdzic finds that the all too common argument in favor of ABS, “that access to new sources of capital will allow lawyers to bring in technological innovations and adopt new business structures; firms using ABS will have a competitive advantage and will thus be able to achieve economies of scale; with economies of scale firms can lower prices and provide better quality of service,” is not supported by the available data.
Slater & Gordon is one firm used as an example of increased technological innovation. However, Kalajdzic points out that technological innovation is occurring within the industry absent ABSs and that “such technology can at best be described as providing limited improvements to access to justice,” as it is not a replacement for face-to-face legal services provided by an attorney. When it comes to economies of scale, Slater & Gordon can again be referenced as an example. It has grown primarily by acquiring smaller law firms. “This does not necessarily translate into a greater number of clients being served, however, since the company has taken over business previously offered by smaller firms (so that work may merely have changed hands).”
This work is also limited to personal injury. In 2014, over 80% of Slater & Gordon’s revenue came from personal injury cases. “In the UK, regulatory liberalization has had only one documented access to justice benefit; motor personal injury claims more than doubled between 2005-2013.” These are very low cost cases with a high probability of success, making them more attractive to firms. “In effect, there is now greater access to justice for motor injury cases to the detriment of other types of claims.” Access to justice is not generally a problem in personal injury cases, because of the prevalence of contingency fees.
Kalajdzic concludes that “[w]hatever economies of scale can be generated by large consumer firms as a result of alternative sources of capital, new technology, operational design and branding, the evidence to date shows that they are far more likely to occur in areas of practice that [sic] can be easily commoditized.” She also found no evidence that ABSs, even if profitable, decreased the cost of legal services. Lastly, she found no relationship between the ownership structure of a law firm and the quality of the services offered, as evidenced by ethical complaints.
While I personally advocate for sensible regulatory reform and the introduction of appropriate authority for and regulation of ABSs in the US, I am weary of any claim that asserts regulatory reform will miraculously fix long standing access to justice issues. “There is a dearth of empirical evidence to support any of the contentions made by proponents that NLO [non-lawyer ownership] leads, directly or indirectly, to an increase in access to justice.” “[T]here is no data documenting a decrease in the cost of legal services or the rate of self-representation.”