A Republic, If You Can Keep It

by Neil Gorsuch

  Neither are challenges of this sort aimed only at for-profit firms. The federal Individuals with Disabilities Education Act (IDEA) affords parents the right to be “accompanied and advised” in agency proceedings by nonlawyers who have special training or knowledge “with respect to the problems of children with disabilities.” Yet even here, where (supreme?) federal law seems clear, state authorities have sought (sometimes successfully) to use unauthorized practice of law rules to forbid lay advocacy by nonprofit firms with expertise in IDEA procedures. To be sure, efforts like these to thwart competition from commercial and nonprofit advocates have proven only partially successful—LegalZoom and companies like it continue to expand. But surely, too, the threat and costs of litigation deter entry by others and raise costs for those who do enter, costs the consumer must ultimately bear.

  It seems well past time to reconsider our sweeping unauthorized practice of law prohibitions. The fact is, nonlawyers already perform—and have long performed—many kinds of work traditionally and simultaneously performed by lawyers. Nonlawyers prepare tax returns and give tax advice. They regularly negotiate with and argue cases before the Internal Revenue Service. They prepare patent applications and otherwise advocate on behalf of inventors before the Patent and Trademark Office. And it is entirely unclear why exceptions should exist to help these sort of niche (and, some might say, financially capable) populations but not be expanded in ways more consciously aimed at serving larger numbers of lower- and middle-class clients.

  Some states are currently experimenting with intriguing possibilities. California now licenses “legal document assistants” who may help consumers before certain tribunals. Colorado permits nonlawyers to represent claimants in proceedings involving unemployment benefits. And Washington allows legal technicians to assist clients in domestic relations cases provided they meet certain requirements—like obtaining an associate’s degree, passing an exam, completing three thousand hours of supervised paralegal work, and taking certain legal courses. The ABA itself recently partnered with one of LegalZoom’s competitors, Rocket Lawyer, to help the association’s members connect with potential clients online, in the process seemingly granting its imprimatur to a company that some argue engages in the unauthorized practice of law.

  Consistent with the law of supply and demand, increasing the supply of legal services can be expected to lower prices, drive efficiency, and improve consumer satisfaction. And, in fact, studies suggest that lay specialists who provide representation in bankruptcy and administrative proceedings often perform as well as or even better than attorneys and generate greater consumer satisfaction. The American Law Institute has noted, too, that “experience in several states with extensive nonlawyer provision of traditional legal services indicates no significant risk of harm to consumers.” And the Federal Trade Commission has observed that it is “not aware of any evidence of consumer harm arising from [the provision of legal services by nonlawyers] that would justify foreclosing competition.” In the United Kingdom, where nonlawyers can win government contracts to provide legal advice and appear before some administrative tribunals, nonlawyers significantly outperform lawyers in terms of results and satisfaction when dealing with low-income clients. Indeed, studies there show that the best predictor of quality appears to be “specialization, not professional status.”

  Of course, the potential for abuse cannot be disregarded. Many thoughtful commentators suggest that unauthorized practice of law restrictions are necessary to protect the public from fraudulent or unqualified practitioners. And surely many laypersons, and perhaps especially the most underserved, are not well equipped to judge legal expertise. But do these entirely valid concerns justify the absolute bans found today in so many states? That seems a hard case to make in light of an increasing amount of evidence suggesting that, at least in specified practice areas, a more nuanced approach might adequately preserve (or even enhance) quality while simultaneously increasing access to competent and affordable legal services.

  CAPITAL INVESTMENT. All else being equal, market participants with greater access to capital can increase output and lower price. So, for example, optometry, dental, and tax preparation services are no doubt cheaper and more ubiquitous today thanks to the infusion of capital from investors outside those professions. Indeed, consumers can often now find all these services (and more) in their local “superstores.” Yet Rule 5.4 of the ABA’s Model Rules of Professional Conduct—adopted by most states—prohibits nonlawyers from obtaining “any interest” in a law firm. So while consumers may obtain basic medical and accounting services cheaply and conveniently in and thanks to (say) Walmart, they can’t secure similar assistance with a will or a landlord-tenant problem. With a restricted capital base (limited to equity and debt of individual partners), the output of legal services is restricted and the price raised above competitive levels, for as Professor Stephen Gillers has put it, “lay investors might be willing to accept a lower return on their money” than lawyers shielded by Rule 5.4.

  Rule 5.4 bears a curious history. After thoroughly studying the issue, the commission that created the first draft of the model rules back in 1982 suggested that lawyers should be allowed to work in firms owned or managed by nonlawyers. But this suggestion was defeated in the ABA House of Delegates and replaced by the present rule effectively preventing nonlawyers from acquiring “any interest” in a law firm. Since then, ABA committees have repeatedly proposed changes to Rule 5.4 but every proposal has, like the first, gone down to defeat in the House of Delegates. Most recently, in 2009 an ABA commission supported serious consideration of three alternatives to the rule. The most modest option would have (1) required a firm to engage only in the practice of law, (2) prohibited nonlawyers from owning more than a certain percentage (e.g., 25 percent) of a firm, and (3) demanded that nonlawyer owners pass a “fit to own” test. Another approach would have allowed lawyers to engage in partnerships of this sort without the cap on nonlawyer ownership or the fit-to-own test. And the third and final option would have done away with all three requirements and permitted firms to offer both legal and nonlegal services.

  Notably, the United Kingdom has permitted multidisciplinary firms and nonlawyer investment since 2007. In the first two years of the program, 386 so-called “alternative business structures” (ABSs) were established. Six years into the experiment, the Solicitors Regulation Authority analyzed ABSs and found that while these entities accounted for only 3 percent of all law firms, they had captured 20 percent of consumer and mental health work and nearly 33 percent of the personal injury market—suggesting that ABSs were indeed serving the needs of the poor and middle class, not just or even primarily the wealthy. Notably, too, almost one-third of ABSs were new participants in the legal services market, thus increasing supply and presumably decreasing price. ABSs also reached customers online at far greater rates than traditional firms—more than 90 percent of ABSs were found to possess an online presence versus roughly 50 percent of traditional firms, again suggesting an increased focus on reaching individual consumers. Given the success of this program, it’s no surprise that some U.S. jurisdictions have appointed committees to study reforms along just these lines.

  To be sure, supporters of the current ABA ban contend that allowing nonlawyers to participate in firms with lawyers might allow nonlawyers to influence adversely the decisions of their attorney colleagues, inducing them to act in ways inconsistent with the rules of professional ethics. But it is again worth asking whether these entirely legitimate concerns justify a total ban on associations between lawyers and nonlawyers. After all, we routinely address similar independence concerns in the model rules without resort to total bans. So, for example, we permit third parties (e.g., insurance companies) to pay for an insured’s legal services but restrict their ability to interfere with the attorney-client relationship. We allow in-house counsel to work for corporations where they must answer to executives but require t
hem sometimes to make noisy withdrawals. And we increasingly permit law firms to manage client and personal financial conflicts by screening affected lawyers rather than by banning the firm from representing a client. Of course, in each of these cases lawyers stand to benefit from rules that permit an engagement that might otherwise be forbidden while here, by contrast, they may stand to lose financially. But surely it shouldn’t be the case that we will forgo or lift outright bans in favor of more carefully tailored rules only when it’s in our financial interest.

  CIVIL PROCEDURE REFORMS

  The Federal Rules of Civil Procedure aim to shepherd parties toward “the just, speedy, and inexpensive determination of every action and proceeding.” But it seems the rules sometimes yield more nearly the opposite: expensive and painfully slow litigation that is itself a form of injustice. After years of study, the federal rules committees advanced a package of amendments (the “Duke Package”) seeking to address the problem. The Duke Package made three important changes. It emphasized proportionality as the governing principle for discovery. It tightened discovery deadlines and so shortened the opportunities for delay. And it sought to reduce costs by increasing certainty about parties’ obligations to preserve electronically stored information.

  While these changes are no doubt a start, it’s hard to imagine they’ll finish the job of realizing the promise of just, speedy, and inexpensive civil proceedings. After all, our so-called “modern” rules of civil procedure are now almost eighty years old, written for an age in which discovery involved the exchange of mimeographs, not metadata. Neither do you have to look far to see promising models of change. In recent years, at least thirty states and federal district courts have implemented pilot projects testing various amendments to our long-in-the-tooth rules, all with an eye on increasing the efficiency and fairness of civil justice administration. Not every project has proven a resounding success, but the results suggest at least two other possible avenues for reform, and the federal rules committees are contemplating pilot projects to test both in the federal system.

  EARLY AND FIRM TRIAL DATES. A study of the federal judicial system in the 1990s found (perhaps to no litigator’s surprise) that setting a firm and early trial date is the single “most important” thing a court can do to reduce time to disposition. A more recent study found the same thing: a strong positive correlation between time to resolution and the elapsed time between the filing of a case and the court’s setting of a trial date. Studies of recent experiments in Oregon, Colorado, and other state court systems have shown, as well, that firm and early trial dates contribute to reducing litigation costs and increasing client and lawyer satisfaction. And in light of so much data like this, many groups have endorsed the setting of an early and firm trial date as a best practice in civil litigation. Yet, despite this mounting evidence, and while some federal districts today adhere to the practice of setting a firm and early trial date in every case (e.g., the Eastern District of Virginia), system-wide in our federal courts more than 92 percent of motions to continue trial dates are granted and fewer than 45 percent of cases that go to trial do so on the date originally set by the court.

  Naturally, the possibility of mandating the practice of setting early and firm trial dates will raise some legitimate concerns. Like the worry that reducing time for trial preparation may not afford complicated cases the time and attention they require. Or the worry that deadlines set early in a case may prove too rigid to account for developments that arise only later. No doubt concerns like these suggest the importance of accounting for a case’s complexity when setting a trial date (perhaps examining empirical data regarding how long certain classes of cases take to prepare would be helpful here, data the federal courts now collect and share with judges routinely). Concerns like these may suggest as well the need to preserve a measure of flexibility to respond to new developments—perhaps by permitting continuances in “extraordinary circumstances.” But just as important is what concerns like these don’t suggest: reason to ignore the proven empirical benefits of setting an (appropriately) early and (normally quite) firm trial date in every single case.

  MANDATORY DISCLOSURES. In 1993, the federal rules committees experimented with a rule requiring parties to disclose evidence and documents both helpful and harmful to their respective causes at the outset of discovery. As the committees reasoned, lawyers and parties are rightly expected to fight over the merits but that doesn’t necessarily mean they should be permitted to fight (sometimes seemingly endless) collateral battles over what facts they must share with the other side. Just as a prosecutor must reveal exculpatory Brady material before proceeding to a vigorous fight on the merits, so too civil parties should have to disclose the good and the bad of their evidence before proceeding to litigate its significance.

  The proposal met with swift criticism. Some argued that requiring lawyers to produce discovery harmful to their clients asks them to violate their clients’ trust. Others questioned whether a lawyer for one side is well positioned to know what might be helpful to the other. In response to criticisms like these, the rules committees permitted districts to opt out of the initial disclosure requirement, and a number did so, resulting in a patchwork of practices nationwide. And then, responding to complaints about this development, the committees in 2000 narrowed the mandatory-disclosure rule to require only the production of evidence helpful to the producing party.

  That might have seemed the end of it. Except that since 2000 a number of states have returned to the idea of mandating early and broad disclosures. And in that time a good deal of evidence has emerged suggesting these disclosures allow parties to focus more quickly and cheaply on the merits of their litigation. For example, Arizona requires parties to disclose all documents they believe to be “relevant to the subject matter of the action” within forty days after a responsive pleading is filed. In 2009, a survey found Arizona litigators preferred state to federal court practice on this score by a 2-to-1 margin. Respondents confirmed that Arizona’s rule “reveal[s] the pertinent facts early in the case” (76 percent), “help[s] narrow the issues early” on (70 percent), and facilitates agreement on the scope and timing of discovery (54 percent). Similarly, respondents disagreed with the notion that the disclosure rule either adds to the cost of litigation (58 percent) or unduly front-loads investment in a case (71 percent). Important, too, counsel for plaintiffs and defendants responded in largely the same way on all these issues.

  Other states and even an experiment in the federal system have reported similar results. A pilot project in Colorado requiring robust early disclosures in business disputes appears to have resulted in cases with fewer discovery motions and costs more proportionate to case type and the amount in controversy. Meanwhile in Utah, broad initial disclosure rules have seemingly led to quicker case dispositions, fewer discovery disputes in most types of cases, and, according to most attorneys, lower costs. Now decades removed from the backlash against the 1993 amendments, many federal district courts have begun experimenting with requiring parties in certain employment disputes to provide certain disclosures automatically and early. And a study by the Federal Judicial Center shows that motions practice in these cases has fallen by more than 40 percent.

  Given all this evidence, it’s hard not to wonder if the real problem with the 1993 experiment was simply that it was ahead of its time. Maybe we just needed to wallow a little longer in collateral discovery disputes and watch them become ever more complicated and exasperating with the exponential growth of electronically stored information before we could appreciate this potential lifeline. At the least, it would seem churlish to ignore all that’s happened since 1993 and not bother with a pilot project to test in the federal system more broadly what seems to be working so well in so many states and in a discrete set of cases in federal court.

  LEGAL EDUCATION

  The skyrocketing costs of legal education are no secret. Since the 1980s, private l
aw school tuition in the United States has increased by 155.8 percent and public law school tuition by 428.2 percent (yes, in real, inflation-adjusted terms). And with rising tuition costs come other costs too. Increased debt loads reduce students’ incentives and ability to take on lower-paying public service or “main street” legal jobs. No doubt, as well, some of these increased costs are ultimately borne by consumers, as lawyers pass along as much of their “overhead” expenses (student loans) as they can. Which raises the question: Why is a legal education so expensive?

  It’s hard to ignore the possibility that our legal education accreditation requirements are at least partly to blame. Take California’s suggestive experience. In deference to the ABA, most states require anyone sitting for the bar to graduate first from an ABA-accredited law school. But in California it’s possible for graduates of state-accredited or unaccredited law schools to take the bar exam. And the cost differential is notable: Average tuition runs $7,230 at unaccredited schools, $19,779 at California-accredited schools, and $44,170 at ABA-accredited schools in the state. No doubt the increased marketability of an ABA-accredited degree is responsible for some of the difference here. But isn’t it worth asking whether at least some of our often well-intended accreditation requirements are actually worth the costs they impose?

  Consider first and perhaps most ambitiously the mandate that most everyone must attend three years of law school after the completion of a college degree. We’ve come a long way from Abraham Lincoln’s insistence that “[i]f you wish to be a lawyer, attach no consequence to the place you are in, or the person you are with; but get books, sit down anywhere, and go to reading for yourself. That will make a lawyer of you quicker than any other way.” For much of our nation’s history, President Lincoln’s advice held true: The only requirement to become a lawyer in most states was to pass the bar exam. Even some of the law’s luminaries as late as the mid-twentieth century didn’t attend three years of law school, greats like Justices Robert Jackson and Benjamin Cardozo and Harvard Law School dean Roscoe Pound.