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Rethinking Lawyer Regulation

June 01, 2021

Jim Sandman L’76, Senior Consultant, Future of the Profession Initiative

The National Center for State Courts estimates that in 76 percent of civil cases in state courts, at least one party is unrepresented. That figure does not include family law cases. If it did, the percentage would be even higher. It is common for more than 90 percent of tenants facing eviction in the United States to be without counsel, even though more than 90 percent of landlords have lawyers. It is common for more than 80 percent of domestic violence victims seeking protection orders to be without counsel.

Rethinking Lawyer Regulation

The model on which our adversary system of justice is based – with each party represented by counsel who present evidence and arguments on behalf of their clients – is a fiction in the majority of civil cases in the United States today. Unrepresented litigants fend for themselves in tens of millions of cases every year involving the most basic of human needs: shelter (evictions and foreclosures), family stability (child custody child support, adoptions, and guardianships), personal safety (protection orders against abusers), and economic subsistence (access to unemployment insurance, health care, food, and other benefits programs). The lack of access to counsel affects not just low-income people, but the middle class and small businesses, too.

Our civil justice system has traditionally relied on two tools to provide legal assistance to those who can’t afford a lawyer: legal aid and pro bono legal services. These supports are essential but not nearly sufficient to address the unmet need for help. Legal aid is available only to people with very low incomes, and the resources to serve that population are grossly inadequate. A 2017 study funded by the Legal Services Corporation (LSC) found that 86 percent of the civil legal problems of Americans qualified for legal aid receive no or inadequate legal assistance. Current federal funding for LSC – the nation’s largest funder of civil legal aid – is far below what it was in 1980 in inflation-adjusted dollars, despite a much larger eligible population today. In fact, LSC’s annual appropriation from Congress amounts to less than what Americans spend every year on Halloween costumes – for their pets. And Professor Gillian Hadfield of the University of Toronto Faculty of Law has estimated that every licensed lawyer in America would have to do 180 hours of pro bono work every year to give just one hour of help to every household with an unmet civil legal need.

I believe that our system of lawyer regulation contributes to the inability of so many people to get the legal assistance they need. The system is constricting both the supply of helpers and the nature of the problem-solving assistance available to consumers.

Restrictions on the unauthorized practice of law prevent anyone who is not a member of the bar from providing legal advice to those who need help. In many states, the unauthorized practice of law is a crime. The consequence of these restrictions is to consign those who need legal advice but cannot afford a lawyer to getting no help from anyone. We have let the perfect become the enemy of the good. Our preference for a lawyer for everyone has left millions on their own to navigate a legal system that is complex, confusing, and arcane. The consequences are unjust.

Restrictions on fee-sharing and on nonlawyer participation in legal services enterprises deter investment in innovative solutions to the crisis in access to justice, including through the creative use of technology, and inhibit the kind of holistic, integrated, multi-disciplinary approach to client service that is most helpful to the many consumers whose legal problems implicate non-legal problems as well.

Our current system of regulation has resulted in a dysfunctional market. Those to whom the regulatory scheme has granted a monopoly to serve the market for legal services – lawyers – are leaving tens of millions of people without any service at all. That is bad regulation. Our nation is defaulting on its foundational promise of justice for all. We need solutions commensurate with the magnitude and the urgency of the problem, and those solutions must include regulatory reform.

It is time to rethink antiquated restrictions on the unauthorized practice of law. We need to permit licensed, regulated, trained professionals to expand the ranks of legal services providers in the way the healthcare profession has expanded beyond just doctors. Nurse practitioners, physician assistants, licensed practical nurses, registered nurses, and pharmacists all provide valuable health care services subject to an effective system of regulation and ethical requirements. A similar expansion and differentiation of service providers in law would expand the supply of helpers and reduce costs to consumers, and appropriate regulation can protect consumers from incompetent or unscrupulous actors.

We also need to rethink Rule 5.4 of the Model Rules of Professional Conduct, which prohibits fee-sharing with nonlawyers and nonlawyer ownership of legal services enterprises. We need to enable much-needed investment in innovation and allow more creativity in fashioning service-delivery models that incorporate the talents of other professionals who are not lawyers.

Regulatory changes to improve access to justice are gaining steam. Arizona and Utah are leading the nation. Both states now permit licensed paraprofessionals to provide legal services in some areas of practice. Both states have amended (Utah) or repealed (Arizona) Rule 5.4 to permit fee-sharing and nonlawyer ownership of organizations that provide legal services, subject to approval by their states’ Supreme Courts. (Arizona Legal Services Reforms; Utah Legal Regulatory Reform: Basic Facts; and Utah Courts Site). Other states are considering changes, including California, Connecticut, Michigan, New York, North Carolina, and the District of Columbia.

Regulatory reform of the legal profession must include a meaningful opportunity for the public to participate in the process. The legal system belongs to the public, not lawyers. For too long, lawyer regulation has been conducted in the private councils of the bar, in meetings and hearings the public cannot find, with “public comment” solicited on court and bar websites that few members of the public are ever likely to access. Not surprisingly, lawyers overwhelmingly dominate proceedings to consider reforms to regulation of the profession. Also not surprisingly, lawyers tend to oppose relaxing restrictions on the unauthorized practice of law and amending Rule 5.4 – by supermajorities. They almost always couch their opposition in terms of protecting the public. But when the public has an opportunity to comment on the very same proposals, they favor them – by supermajorities. We need to engage with and hear from the public directly and in large numbers if we are to serve them as we should.

Rohan Pavuluri, the cofounder and CEO of Upsolve, an online self-help tool for people who want to file bankruptcy petitions, analogizes our regulatory system to the poll taxes and literacy tests that once prohibited Black Americans from voting. The high cost of lawyers imposes a barrier to people who need help exercising their legal rights, just as poll taxes made it impossible for low-income people to vote. And the complexity of our legal system, with its esoteric language and byzantine procedures, requires a level of professional fluency that is unrealistic for the self-represented, just as literacy tests’ requirement of a college professor’s knowledge of civics prevented ordinary citizens from voting. We lawyers created these problems. We need to reform our regulatory system to correct them.

About the Author

Jim Sandman Jim has had a long and varied career in private practice with a big law firm, in government service, and as a public interest lawyer. Jim is President Emeritus of the Legal Services Corporation, the largest funder of civil legal aid in the United States. He is a member of the District of Columbia Public Charter School Board, the District of Columbia Bar Pro Bono Committee, the the American Law Institute, the Advisory Council of the American Bar Association’s Center for Innovation, the Board of Advisors of the University of Pennsylvania Law School’s Center on the Future of the Profession, and the boards of Albany Law School and the Pro Bono Institute. He currently serves as Chair of the American Bar Association’s Task Force on Legal Needs Arising Out of the 2020 Pandemic.


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