Legal Service Plans Deliver Wider Access to Justice

Much has been written about the access to justice problem in the United States. The primary focus has been access for the truly poor, the indigent, which is a serious problem. As any solo or small law firm attorney knows, however, the access to justice problem does not end there. Those above the poverty line, the middle class and to a great extent the so-called upper middle class, generally find access to an attorney unaffordable. The 2016 ABA study on Access to Justice concludes that 80-85% of legal needs are unrecognized or unmet because of this. This bad for the country’s future. It is often said that the United States has the greatest legal system in the world. Actually, according to the 2017 World Justice Project Report, the United States ranks 19th, between Chile and South Korea. Lawyers must turn this around for the good of the country. Not incidentally, such a turnaround would be great for lawyers; the untapped market is enormous.

The legal profession has tried to increase access. One so-called revolutionary idea was to allow advertising. It turns out that billboards regarding personal injury cases make nothing more affordable. The imposition of flat fees comes to mind. While these fees eliminate the subconscious desire to work slowly, in the end, such fees seem like little more than a rebranding of the same old hourly fee. Despite these attempts to reach a larger client base and lower client costs, access to justice remains problematic.

A solution that is increasingly embraced by lawyers and consumers is the development and use of legal services plans. I describe these plans and their benefits later in this article, but first, let’s look at some other proposed solutions and the problems associated with them.

Today we hear about different options for improving access to justice, including technology and further changes in the rules of professional responsibility. A combination of the two will go a long way to creating wider access to justice. But these options come with their own set of problems.

Technology

Lawyers adapting to technology would quickly change things. In this context, however, technology often means more than the latest practice management software or a strong web strategy. To move the access to justice needle the application of technology must be massive.  The technology should be client facing, mobile and driven by the client’s self-navigation. Client intake, simple forms, client updates, billing, simple research, to name just a few, all handled by technology. “Done for me” technology for lawyer and client alike would have to dominate. Artificial intelligence and predictive analytics should be front and center. The technology should drive client acquisition. Such technology would make legal services more affordable and efficient, driving down the cost to clients and the time a lawyer spends on a matter. Affordability and efficiency will widen access to justice. More people will seek help, and the untapped market will open. Lawyers, however, reject such technology for at least four reasons.

First, all lawyers have been taught that services must be bespoke and hand-crafted, even for routine tasks. Client acquisition is highly individualized and is time-intensive and (especially with widespread advertising) expensive. Lawyers practice according to overly complex laws, rules, and mores, and tend to blame the “other side” and its lawyers for any problems, delays, and costs in a matter. In other words, lawyers are all taught to “think like lawyers” and are proud of it. Lawyers believe there is only one way—their way. The business and ideology of law is not set up to be affordable and efficient and has certainly always discouraged innovative changes such as adaptation to technology. A resistant legal profession, however, will not be able to stop the forward march of technology.

Second, some lawyers believe more affordable and efficient necessarily means lower take-home pay. With law school so expensive, few can conceive supporting something that seems to lower the return on investment.  As the story goes, with massive technology doing often simple tasks that lawyers once did, means the lawyer must bill less. Strong evidence, however, demonstrates small and solo law firms are already suffering financially. The status quo is not working. Unaffordable legal fees leave many lawyers unpaid. Despite the majority of American’s having unmet legal needs, lawyers are driven from the profession or never get started.

Granted, a market driven by technology will change the number of lawyers, what they do, and yes, what they get paid. Skeptical lawyers fear not—many more people accessing services for less money and lawyer time would actually result in more overall revenue. Remember, by one respected estimate, 80% of the market is untapped. Entrepreneurial and competitive lawyers have always had to jockey for income; now they must do so as technology inevitably changes the marketplace.

Third, other lawyers claim to worry such technology will water down the quality of legal services. These are likely lawyers who have assembled profitable business models. Ironically, they are likely even using some limited technology to drive the model and amass a healthy number of paying clients. The bespoke model is still mostly working for them because they are profitable. In fact, they may have a motive to keep the model; it will drive out struggling lawyers, whose few paying clients will then become their clients. They will not care about consumers who are unable to pay until the group grows so large it affects them.

All of this is short-sighted. Technology will improve the quality of all legal services. A byproduct of technology use will be a massive collection of data. Protocols and analytics in all things, from complex legal questions to customer service, will develop. Today, in nearly all instances a client is relying on the experience of one lawyer, who no matter how experienced is still only one person, often relying on intuition. Nearly every industry in the modern era has been broken down into component parts by data. This helps the public receives consistent service. Moreover, lawyers and machines sharing the job can only make the result better for clients. The quality of legal services would improve.

Fourth, lawyers generally view technology as too expensive and not a good investment for their businesses. Indeed, current lawyers as a group are certainly not technologists. While the coming generations of lawyers will be far more acclimated to technology, lawyers will never have the knowledge and capital to deploy technology in the best and right way. As noted above, some firms have and will mostly tinker with technology to create a small competitive advantage. The technology needed to open the latent market is far too expensive. Lawyers have little ability to reinvest in their businesses. The profit that can be squeezed out of law firms has to pay mortgages and college tuition. Partnerships blow out profit at the end of every year. Next year might not be as good. Unlike many industries, there is seldom any assurance, and mostly no data, that business will be steady next year.

New Professional Responsibility Rules

The proposals to change various rules of ethics and codes of conduct are well-known by now—non-lawyer investors in law firms, para-professionals, revised rules on fee splitting, solicitation/ advertising, and a meaningful definition of the unauthorized practice of law (UPL). A rule change that has occurred in many jurisdictions is approval of unbundled limited scope services. The debate about these changes is intense, but change is inevitable. Just look to the trends of the world’s other common-law countries. American lawyers may be arrogant but are not immune to logic. The changes are designed to improve access to justice. Every citizen should have access to justice; not held to the preconceived notions of how the business of law must operate.

Like it or not, these changes will destroy the lawyer’s monopoly. Like it or not, venture capital (non-lawyer partners) will come to law firms and change the marketplace in many ways, including the use of massive technology, revised advertising/solicitation practices, and widespread use of para-professionals.

Lawyers fight against these proposals claiming these rules endanger the public. There may be danger. Fundamental client and public rights must be protected—confidences must be kept, lawyers must retain independent professional judgment and duty to and advocacy for the client must be maintained. However, do not underestimate the motivation for lawyers to protect their monopoly. Eventually, American lawyers, as in other countries, will belay the dangers and deliver a wider access to justice for the benefit of consumers and ironically for themselves, as rule changes would tap the latent market. It may take generations for the rules to change.

What Others Do While Lawyers Reject and Debate

Consumers are not waiting for the legal profession to adapt. Law is now open source. “Do it yourself” legal technology is literally everywhere on the web. Supposedly, no lawyer is necessary. Artificial intelligence and predictive analytics are emerging quickly. Companies that are not law firms, look and act but do not charge like law firms. Consumers wanting more affordable, efficient, and approachable solutions to their legal problems are finding them online.  Lawyers watch helplessly as the newly emerging internet market siphons off clients. This includes fees from today’s paying clients and the wider swath of society; nearly everyone will pick more affordable, efficient, and approachable solutions.

So the venture capitalists are storming the lawyer monopoly. Venture capital has always disrupted large decentralized industries by finding high volume low-cost solutions that actually improve customer experience. It took a long time for venture capital to find law, as lawyers protected their castle through self-regulation. However, technology is the weapon traditionalists cannot beat back. This technology has first affected the marketplace’s low hanging fruit, for example, simple forms but will expand into ever more complicated areas as technology exponentially improves.

Even collectively, as bar associations, lawyers do not have the resources to provide large-scale technology solutions. One notion is to fight those who provide it under the vague banner of UPL. Such efforts will ultimately prove fruitless and politically unpopular. Lawyers cannot continue to claim they are helping the public by denying it efficient, more affordable, and approachable access to law. The internet competition makes the public far too savvy. A profession in existence to help everyone should be ashamed to even think it should deny such access.

But let us not forget about the potential danger if fundamental rights go unprotected. Access to justice through technology being forged by capitalists and soaked up by the public on the internet is happening right now and with little lawyer oversight. The market is opening, but rights are compromised. The legal profession’s solution seems to be to debate as if in a vacuum. If there is danger to the public, it is happening now. Solo and small law firm lawyers and the rights they protect are being marginalized in the modern, emerging and expanding the marketplace. Lawyers should find a solution now. Fortunately, we have one in technology-enabled prepaid legal plans.

A Solution Under the Lawyers’ Noses

Lawyers must come to accept that technology in the legal marketplace is here to stay. But remember, generally solo and small firm lawyers cannot deploy the technology necessary to capture the emerging market, and, helpful rule changes may be years away. So lawyers can watch the market for legal services simultaneously shift away and expand without them, or find a way to embrace the technology today.

Legal Services Plans (LSPs) exist under the current Model Rules of Professional Conduct. The plans are “designed to inform potential plan members generally of another means of affordable legal services” Rule 7.3 Comment 9. (Emphasis added.) Meanwhile, today’s Model Rule 7.3 states; “a lawyer may participate with a prepaid or group legal service plan operated by an organization not owned or directed by the lawyer that uses in-person or telephone contact to solicit memberships or subscriptions for the plan…” Emphasis added. Also, a lawyer’s participation with an LSP is not a fee split.  For instance, Ohio’s Rules for Government of the Bar XVI Section 4 states: “A plan of prepaid legal services insurance authorized to operate in Ohio or a group or prepaid legal plan,…that provides unlimited or a specified amount of telephone advice or personal communications at no charge, other than a periodic membership or beneficiary fee, to the members or beneficiaries and furnishes to or pays for legal services for its members or beneficiaries” is permitted. (Emphasis added.) Very importantly, the LSP may not interfere with the independent professional judgment of the attorney. See Ohio Rules for Government of the Bar XVI Section 4 (D) and (G).

Instead of individual consumers finding unregulated access to justice online, they can find an LSP. These LSPs offer what consumers are seeking—more affordable, efficient and approachable online solutions to their legal problems. Such subscription-based plans give the public tremendous collective buying power and resources. In fact, LSPs can be operated for profit, so those too can attract venture capital and hence even more buying power. Strangely, lawyers, perhaps with a selfish motive, have forbidden themselves from pooling resources in partnership with other professions that would improve services and lower client costs. However, consumers can pool their own resources to improve the service they receive and reduce their costs by purchasing an LSP. Large LSPs are now operating using technology to attract and keep subscribers. Those LSPs have the resources to improve on that model every day.

Unlike those technology solutions that operate without a lawyer, LSPs are part of the traditional bar. In a properly administered LSP, consumers will always find an independent lawyer. Some may say this is again lawyers merely looking out for themselves. But in a marketplace where the monopoly is crumbling, there is a legitimate reason. With LSPs, consumers find a lawyer they know and trust, overseeing the entire process. This gives the LSPs an enormous competitive advantage over the technology solutions that operate without lawyers. Those ventures claim to deliver everything a customer needs. However, technology alone cannot deliver what lawyers deliver: trust, context, advocacy, independent judgment, and duty. The protection of these fundamental rights is the true value of the lawyers’ services.

Because of the buying power, LSPs can demand lower fixed fees from lawyers, and when appropriate, limited-scope services for its subscribers. Participating lawyers must charge more affordable fees. What is in it for participating lawyers?  First, remember how many small and solo firms are already suffering. Second, LSPs can deliver a high-volume piece of the emerging market that would be otherwise beyond the reach of their current business models. Lawyers gain a steadier income with more profitability because of decreased client acquisition and administrative costs. As noted, more work is done by technology and less by the lawyer, but in much higher volume, resulting in more revenue for participating lawyers.  As the internet opens the enormous untapped market, there should be room for many participating lawyers. This is much more effective than seeking clients one at a time at the next Rotary meeting.

This will not make practicing law easier. Participating lawyers will be charged with the hard task of being efficient in a higher-volume workplace, while still fully protecting clients. However, that beats the alternative of being marginalized. Lawyers must concentrate on: in-court advocacy, client relationships, reinvesting based upon steady income, consistent highest quality, and innovating procedures, in everything from practice models to social media presence. While not easy, it is refreshing to know, such a lawyer will be practicing at the top of her law license, instead of drowning in administrative tasks. Some of the risk, effort, and capital for matters collateral to the practice of law, such as solicitation/advertising, and all the administrative tasks massive technology can handle, can be borne by the collective buying power of the LSP. In addition, lawyers participating can learn from the massive data and enjoy the shared protocols of the LSP’s branding, customer service, and pricing models. Less ‘mom and pop’ and more sophisticated backing will serve everyone and will include, because of true protocols, an even fuller protection of client rights, even while serving a higher volume.

Conclusion

LSPs are poised to connect with consumers as they seek access to justice in the wild west of the internet. LSPs deliver what consumers are seeking—more affordable, efficient, and approachable online solutions to their legal problems. Importantly LSPs keep lawyers in the game. Lawyers and consumers benefit alike. Lawyers make fees from a larger marketplace and clients’ fundamental rights are protected. Lawyers, clients and wider access to justice win and the dangers of a powerful unregulated market are diminished. Properly administered LSPs do all of this within the current rules construct. Why would lawyers wait for rule changes or nibble at their own technology solutions?  Wider ranging access to justice for clients, and business for lawyers is here today if lawyers as a profession embrace LSPs. As an aside, if you are interested in learning more about prepaid legal plans, particularly as employee benefits, download the white paper here.

About the Author

Wayne Hassay is managing partner of Maguire Schneider Hassay (MSH) a law firm in Columbus, Ohio. He works closely with the group legal services plan LegalShield.

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