A Fork in the Road for Our Profession

September 24, 2020

By Bob Glaves | CBF Executive Director

The 1980’s called and they want their Rules of Professional Conduct back. And they can have them.

As the world around us has changed dramatically since those heady days when seeing a music video on MTV was mind-blowing, we have seen only modest changes in the Rules governing the business of law. The result is our profession has gradually priced the everyday person out of the market for legal services even though we have more lawyers practicing than ever before.

Something is clearly wrong, and we now face a clear choice: continue down the same unsustainable path, or set a new course where we empower the middle class to access the quality, affordable legal services they need and enable lawyers to sustainably provide those services to them.

The problem in a nutshell

At a time when we have more lawyers practicing than ever, more people than ever before are not getting legal help when they face legal issues. This is most apparent in the record number of people coming to court on their own, with at least one party unrepresented in three out of four civil cases in the latest national survey.

At the same time, lawyers trying to serve the middle market are increasingly struggling to sustainably do so, even though a high percentage of the people proceeding without lawyers are in the middle class, would prefer to be represented, and could afford to pay something for the services.

In Economics 101, this is the classic definition of a market failure, and it affects all of us even if we don’t see it in our own day-to-day practices. When the middle market failure is combined with the long-term underinvestment in pro bono and legal aid services for low-income and disadvantaged people, we are left with the reality that a sizable majority of our community has little or no access to legal services. That is simply unsustainable, and the pandemic and our overdue reckoning with racial injustice in the justice system have only underscored the urgency to take action.

How the #@*& did this happen?

This market failure happened gradually over decades. There was a time not long ago when middle class people had affordable and accessible options when they needed legal help, and lawyers serving this market could make a good living doing so. It is no coincidence that the trouble started in the 1970’s when the billable hour became the prevalent mode of pricing in the market for consumer legal services. Whatever the billable hour’s merits may be in the corporate legal services market, people living on a budget do not buy services of uncertain cost and value unless they feel there is no other choice.  

The squeeze on middle class incomes and exploding law school costs over this time are also factors, but other businesses and professions have innovated and adapted to similar new realities in a way we have not.

Why Isn’t the Market Fixing This on Its Own?

Returning to Economics 101, the invisible hand of the market normally steps in to fix a mismatch between consumer need and business capacity, but that has not happened in law.

The overarching reason is that our current Rules of Professional Conduct are artificially restraining the market by unduly restricting the flow of information and unjustly limiting the business models that are necessary to succeed in today’s world.

As a result, solo and small firm lawyers not only need to be good lawyers, they need to be good business, finance, marketing, and technology professionals as well. Very few lawyers can do that, and it is no wonder that so many lawyers are struggling to try to sustainably serve this market at the same time so many potential clients are going without legal services.

Meanwhile, Other Professions Have Long Passed Us By

As law has stuck to the one-size-fits-all law firm business model, other professions long ago opened the door to innovative new business models, giving both the professionals and their clients a range of options to connect to the services they need and creating better functioning consumer markets.

The Next Time Someone Tells You…

  • We are protecting the public by preserving the current regulatory structure. Unless the idea is to protect the public from getting the legal help they need, this one is hard to take seriously, and there is absolutely zero proof that regulatory reform has led to increased harm to the public.
  • We are protecting the professional independence of lawyers. A laudable goal we all share, but really? The Rules already acknowledge lawyers can and do manage a host of challenges to their independent judgment when they are retained by insurance companies to represent other clients, are employed as in-house counsel for corporations, or have litigation financed by others, to name just a few common situations. It takes a dim view of lawyer ethics to suggest that lawyers can handle all of that but somehow can’t collaborate with other business entities to serve the consumer market without checking their professional independence at the door.
  • There is no proof that regulatory reform improves access to justice. My favorite of them all. There is actually lots of proof that opening up the market leads to more innovation and access when it has been permitted. We can’t prove something that has not been allowed to happen, but in those jurisdictions that have enabled new approaches to take flight, those approaches are showing real results.

Theoretical Concerns v. Increasingly Painful Reality

The above examples are just some of the concerns that opponents of progress raise for what theoretically could go wrong, despite the fact there is zero evidence any of these dystopian scenarios have ever played out in jurisdictions that have pursued similar regulatory reforms. As the doubters raise these theoretical concerns about what could but never has happened, the reality of what actually is happening for legal consumers and the lawyers trying to serve them gets tougher by the day.

The Incremental Approach Won’t Fly Anymore

The reflexive opponents of change often find comfort in the traditional process for amending the Rules of Professional Conduct, which, to put it charitably, is slow and incremental. When we are talking about long settled core principles of our profession, like conflicts of interest, there is something to be said for this approach. However, when we are talking about regulating the business of law for a whole different era, incremental change won’t cut it. We need to step up and try a new approach.

Regulating for the Real World Around Us

Instead of regulating for the 1980’s with incremental changes, what the world needs now is a fresh look at the Rules of Professional Conduct that regulates for the reality of the 2020’s through the lens of the Court’s published Regulatory Objectives.

Instead of leaving consumers to find their own way in a confusing legal world, let’s start by freeing up lawyers to better connect to the communities they serve and to use proven business practices to give people affordable access to a range of legal solutions.

Instead of limiting lawyers to the one-size-fits-all law firm model, let’s join our fellow professions by allowing lawyers to use a range of business models to meet their and their clients’ needs.

Instead of trying to shut out technology-based products that consumers clearly want and already are using without going through lawyers, let’s ensure these tools are quality legal solutions and empower lawyers to get involved in providing technology based services as part of their practice. 

Instead of drawing bright yet inconsistent lines on issues like splitting fees, let’s have one set of guidelines for lawyers to work with other entities that applies across the board so that lawyers can access the other business and technology services they need to succeed in today’s world.

This is what a reality-based approach looks like. We can do all this and more while fulfilling our core regulatory objectives, but it requires a new way of looking at regulating the business of law. The CBA/CBF Task Force on the Sustainable Practice of Law & Innovation has done just that, providing a comprehensive roadmap and series of recommendations.

An Integral Part of the Larger Solution

To be clear, improving the sorry state of access to justice for the public is a multi-tiered problem, and regulatory reform is just one part of the solution. It is not a replacement for pro bono and proper funding for legal aid services. Nor is it a replacement for the major court reform necessary to modernize and streamline access to the court process. However, regulatory reform is absolutely essential to closing the huge gap in the middle of the legal market.

Who Do We Want to Be?

A small but vocal minority in our profession fights these changes at every step and claims to speak for all of us. Don’t let them.

Do we want to be the lawyers who fight to protect a failed status quo? To just sit on the sidelines because our practices are not directly impacted as access to legal help gets more out of reach for everyone else?

Or do we want to be the lawyers who take our responsibilities as trustees of the system to heart, own the growing market failure in the system, and lead the way towards real solutions?

Thankfully, the lawyers and judges I know fall squarely into the latter category, and I could not be more proud of the work of the Task Force and the ongoing leadership of the CBA and CBF on these issues.

We have a real opportunity right now to make law better for all concerned, and we have no time to waste. I hope you will join in supporting the efforts to make that case while we still can.