Supreme Court Regulatory Reform Proposal-Comment Period Closes July 23, 2020

The Utah Supreme Court requests comments on its regulatory reform efforts. The comment period is open for 90 days, ending on July 23, 2020. Please see https://sandbox.utcourts.gov/ and the press release for more information.

Supreme Court Standing Order

Standing Order 15: This order would establish a pilot legal regulatory sandbox and an Office of Legal Services Innovation to assist the Utah Supreme Court with respect to overseeing and regulating the practice of law by nontraditional legal service providers or by traditional providers offering nontraditional legal services.

Rules of Professional Conduct

Rules Governing the Professional Independence of Lawyer: The Supreme Court proposes repealing current Rule 5.4 of the Rules of Professional Conduct and replacing it with Rules 5.4A and 5.4B.

  • Rule 5.4A: This rule would govern lawyers delivering legal services in the traditional and conventional model. New Rule 5.4A(a) outlines the foremost duties of a lawyer – the duty of independence of judgment, duty of loyalty to the client, and duty of confidentiality – applicable to the rest of the Rule. The preeminence of these professional core values is further explained in new Comments [1] and [2] as they pertain to sharing fees with nonlawyers, with lawyers in a separate firm, and accepting referrals and payments from parties other than the client. In order to loosen the restriction on fee sharing, Rule 5.4A(b) allows a lawyer to share legal fees with a nonlawyer as long as written notice is given at the outset of the representation or before sharing fees from an existing client.
  • Rule 1.5: Paragraph (e) of this rule would be eliminated to allow dividing fees among lawyers who are not in the same firm.
  • Rule 5.4B: This rule would be applicable to lawyers participating in the pilot legal regulatory sandbox. Like proposed Rule 5.4A, the core professional values for lawyers underlying this proposed rule are stated at the outset under subsection (a). Comments [1] and [2] reiterate and clarify the importance of the underlying core values and duties of a lawyer, notwithstanding the novel arrangement with nonlawyers. Proposed Rule 5.4B(b) allows a lawyer to practice law in an organization that is managed or owned, in whole or in part, by nonlawyers, as long as (i) the client is given written notice that nonlawyers have a financial interest in the organization or nonlawyers have managerial authority over the lawyer, and (ii) the client receives in writing the financial or managerial structure of the organization.

Lawyer Advertising Rules: The Supreme Court proposes significantly simplifying the lawyer advertising rules in the Rules of Professional Conduct. Under this proposal, current Rules 7.1, 7.2, 7.3, 7.4, and 7.5 would be repealed and replaced with new Rule 7.1. Notably, this proposal would eliminate the prohibition against in-person solicitation found in current Rule 7.3.

  • Rule 7.1: Would prohibit (i) making false and misleading claims about the lawyer or the lawyer’s services, and (ii) interacting in a way that involves coercion, duress, or harassment.

Drafts for Review

Standing Order 15 (conceptualizing the pilot legal regulatory sandbox and Office of Legal Services Innovation)

Redline Rules 5.4A and 5.4B (showing the changes from current Rule 5.4)

Redline Rule 1.5 (showing the elimination of paragraph (e))

Clean Rules 5.4A and 5.4B (showing the traditional legal services delivery model and the model contemplated in the pilot legal regulatory sandbox)

Redline Rules 7.1 through 7.5 (showing the process of simplifying the lawyer advertising rules)

Clean Rules 7.1 through 7.5 (showing simplified Rule 7.1 and the reservation of Rules 7.2, 7.3, 7.4, and 7.5)

 

Utah Courts

View more posts from this author
119 thoughts on “Supreme Court Regulatory Reform Proposal-Comment Period Closes July 23, 2020
  1. Travis Sorenson

    In regard to Rule 5.4B, it seems like a disaster waiting to happen to have a firm owned or partially owned by anyone who is not a lawyer. Non-lawyers do not understand, nor in many cases do they care, about the ethical duties attorneys have towards their clients. This has the potential to create a lot of downward pressures on attorneys to act unethically to maximize firm profits at the expense of the client’s interest. Should an attorney succumb to this pressure, the attorney could be disciplined or even lose his license, but what does the non-lawyer owner have to lose other than money? I truly hope this Rule does not does not become the new rule. It will not be a good thing for the profession, nor will it be a good thing for individual practicing lawyers.

     
    1. MICHAEL LOVERIDGE

      If non-lawyers “do not understand . . . the ethical duties attorneys have . . . “, what would prevent the attorney from educating them? Couldn’t such an arrangement maintain and include, contractually, the attorney’s exclusive right to independently recommend legal advice and establish a reasonable fee based on current standards?

       
      1. Stan Jensen

        Have you had the chance to explain to your employer who is not an expert in your field (law or othewise) why his priorities will not be met because of certain codes and regulations that you will be complying with in your profession. I doubt that would be a comfortable or productive discussion.

        I have had that discussion when necessary with a client and it was in each case the last discussion I had with that client.

        I would not want to support changes to rules that make such discussions more frequent and more difficult for everyone involved.

         
    2. Robert Jonas

      Agree. I don’t think this is a good idea. There is a reason that all states prohibit non-lawyer ownership. What benefit does the public get by removing this protection and removing the liability protections that clients have? Other than low price (and do we want to make Utah the home of low price legal services where you get what you pay for), I don’t see a benefit. I see an awful lot of negatives

       
    3. Jackie Ball

      I agree, who will hold private persons/non-attorney responsible if there is a breach of ethical duty towards a client? The proposed rule changes leave a high bar for attorneys to meet ethics wise (and rightly so) but also possess a disturbing lack of clarity on the ethical duties a private person has towards that same client. If a non attorney would like to effectively partner with an attorney in providing legal services, he or she should have some corresponding increased ethical responsibility to those same clients.

       
    4. Dan Roberts

      First off, since when have our ethical and professional obligations to our clients been affected by what firm management tells us? Its always been the individual lawyer’s job to provide services in line with ethical obligations, regardless of who owns the firm. I don’t see how these amendments change anything.

      Secondly, I don’t think the downward pressures for a non-attorney owned firm would be much different from those of an attorney-owned firm. Attorney-owned firms are just as likely to be driven by fiscal metrics as non-attorney owned firms. Current law firm organizations almost always judge attorney performance based on billables and collections, so I’d say we are already guilty of upper management putting downward pressure to maximize profits. Regardless of that fact, attorneys are smart enough to self-regulate and make sure they are ethical in providing services no matter what the downward pressures of firm management are.

      Honestly, I don’t see how these amendments would change our obligations to our clients at all. I don’t see this as a relaxation of my duties to my clients, so its not going to change how I practice. I’ve worked in biglaw, mediumlaw, and as a solo-practitioner. Regardless of the firm structure, if I had been told by management to act unethically in order to increase profits, I’d head for the door immediately and never look back.

      As far as I’m concerned, anything that allows for greater innovation in the legal industry will be better for clients in the long run, and we should welcome it. Seeing as this amendment (5.4b) will be initially regulated through an experimental sandbox that is highly scrutinized so that if it does turn out to be worse off for our clients, they can turn it off. Its not permanent. Experimentation is a good thing. We should welcome it.

      Seriously. Are we really scared of an experimental regulatory amendment that will be highly scrutinized by a dedicated regulatory body whose sole goal will be to ensure increased access to justice for those whom we serve?

       
    5. Ms. V. Faye Van Wagoner nee Farnsworth

      Personally as a non-lawyer with a fundamental human concern for the lax and financial discrimintory manner in which I, myself have observed as a “spectator” in my communities respective rooms of feigned justice, as a person who as yet has been without the need to seek or utilize the services of an attorney I am driven to infer that a non-lawyer vestment in this profession may serve as a clear check and balance for best practice versus bottom line implementation of services rendered. Our very own fore-fathers would undoubtedly in my imagination send many an attorney to the corner with a dunce hat upon their crowns. People Matter. PEOPLE matter. The rich, the poor, the elite, the laman, the man, the woman, the child, the sick, the desolate, the famished, the perp the victim(real or percieved), the granny, the gramps, the auntie, the uncle, the nephew, niece, daughter or son, persons with or without disabilities and attorneies alike…PEOPLE MATTER. Ethics are fundamental indeed, so vital that I grow weary of this term and many others being thrown about as if a person truly understands the etimology and foundation of their respective origins and the actions ancient languages and intelects were conotating in the use of them in the first wise. Today every which way I tilt my ear I witness talk full and proud but when i look at the feet of these word flingers action is all to often half-hazard, half-witted and only for a show. Integrity is what we do when no one is looking and truly I’m certain we all fall short but to do so at the expense of another is truly lacking in any sence of the words-ETHICS-LOVE-JUSTICE-MIRACLE-COOTH-EQUALITY ETC ETC A DIEU.

       
  2. Robert Udall

    I strongly advise AGAINST adopting any rule allowing a non-lawyer to be able to share in attorney fees. This would allow non-lawyers to take advantage of clients and the services that ought to only be rendered by attorneys who have gone to law school, passed the bar exam, passed the MPRE and maintain CLE credits. I see this as opening the door to a lot of corruption – situations that may not even be contemplated at this point. There is simply way too much greed that could get in the way of justice. We’ve already seen this in the news with non-lawyers pretending to be lawyers. Utah is a respectable place to practice law, please keep it that way. Thank you.

     
    1. Ms. V. Faye Van Wagoner nee Farnsworth

      Supposing every lawyer who is appointed by the court in service to an american citizen who may have a financial inability to pay is going to recieve rendered services in more than a miniscule and biased manner. hell anyone who doesnt make a 6 figure income and maintain a minimal and modest lifestyle cannot afford legal support without first having to sacrifice even their basic needs of shelter, nutrition or passion an a family scale. This profession as a platform to uphold and truly honor the voice of the people, individually and as a whole should not look or feel like a high stakes craps or black jack table, it should not look or feel like a crashing or rising stock holder’s parade day. Criminal law should not look like who wants to make a deal and the other side of this legal system should not misinterperat or misuse the terminology written into our great and ethical constitution, Law Of The Land, as slight of hand to uphold laws written to protect corporations as persons or entities against the people, or laws that back peddle against a PERSON’S rights ending where another PERSONS begin or to criminalize anything outside those simple parameters. Law of Land is a fail safe to ensure that our basic rights to freedom, liberty and justice for all is the law at its core. Any and all rights restrictions in effect today that go against the core values of our original and brilliant contract to ourselves as the people by the people are thus made null, void and without grounds inside the scope of that big red button-Law of the Land. I ask that you each cease and desist and put the practice of law against the God or Gods you might visit on Sunday’s or special occasions, view of justice, individual worth, works, class division, service to your fellowmen or sinner ranking systems and get right in the standings of the Missions, Visions, and Values with which all ethical and worthwhile business’ create to establish the fair and good basis for having services the people want and/or need. Our justice system should not look like a get rich quick property buying, hoarding and liquidating scam. Strategy as a word should not be allowed as any part of the core foundations of any company as the term literally means; to deceive your enemy.

       
  3. Ric Heaton

    While I applaud the justices in their search to help provide legal services to the underserved population. I do feel however that this proposal goes too far. From what I understand providers of non-legal services could market for sale their clients in need of representation.

    In a market economy, these providers would be pushing their clients to attorneys willing to pay the provider the largest amount of money. As opposed to searching for the attorney(s) best suited to handle the legal needs of the client.

     
    1. MICHAEL LOVERIDGE

      This presupposes that the non-lawyer firm would promote an attorney based on remuneration, only, without regard to the attorney’s competence. Surely, that firm could be made to understand its shared legal responsibility for any malpractice committed by an incompetent attorney. Surely, that potential shared liability would motivate a non-lawyer firm to foster competent service over financial gain.

       
      1. Alex Leeman

        How does a non-lawyer share malpractice liability? What is the standard of care for a non-lawyer practicing law?

         
  4. James

    Unfortunately, the practice of “selling” clients to the highest bidder has been a problem in the past and is a current problem. The proposed change would open that up. You will instantly see medical providers offer their patients to attorneys who are willing to pay the highest price. Additionally, you will have larger law firms that can simply out spend the smaller firms. Established relationships will crumble because of greed. While I respect the end goal in mind, this is the wrong means to the end.

     
    1. Jackie

      Agreed. The proposed changes to Rule 5.4A allowing law firms to pay referral fees to non-lawyers will effectively create a “pay to play” environment where potential clients can be sold to the highest bidder. It’s hard to see how this arrangement helps provide increased access to high quality legal services.

       
      1. E Lawrence Brock

        this will help more people get good Estate Planning. good attorneys may not be marketers now good attorneys can work with marketers and give more cost effective service.

         
    2. Dan Roberts

      What is the problem with a medical provider offering a “partner law firm” to patients, if that law firm provides qualified legal services that are in line with our ethical duties? How is that any different than a patient who needs legal representation who finds a lawyer because that lawyer was willing to pay for prime Google Ad-Words or billboard location?

      Just because a lawyer is willing to pay for a referral (or advertising) does not mean they are not providing ethical and qualified services. If anything, it is actually better because if it turns out a partner law firm did not provide good advice or services, it would reflect poorly on the medical firm who made the referral, and they would then be incentivized to find a new partner law firm that would not reflect poorly on them. That filtering effect does NOT occur with Google Ad-words or billboards, which is currently allowed under in the rules.

      I do not think these rule amendments increase likelihood of unethical legal representation.

       
  5. Earl Tanner

    I am writing to comment on new Rules 5.4A and 5.4B.

    My perspective is that of a 70 year old, sole practice attorney who is seriously considering ending his career. My clientele over 40+ years of practice have been individuals and small businesses.

    The reason for accepting non-lawyers into the profession’s structure is said to be the need to make legal services more available and less expensive for people of ordinary means. I agree these goals are important and believe that legal insurance and software should be able to do just that. A defense tsunami in debt collection, eviction, divorce and criminal cases is long overdue but will tax the courts’ resources. I think it will be just as important to manage (reduce) attorney fee awards in these cases as it is to provide access to inexpensive legal defense services.

    I doubt the impact of the rule change will be limited to low budget legal services, however. Insurance defense is already tightly run by insurance companies. Higher budget plaintiffs work will probably attract non-lawyers, starting with personal injury and expanding into every other profitable area. Regulatory compliance practices such as tax, human resource, and environmental law will probably be owned and managed by non-lawyers who can provide a wider range of services. In the end, I expect that lawyers will go the way of doctors, dentists and pharmacists. Most will become employees and a non-lawyer owner/manager class will struggle successfully to arise.

    While I appreciate the intent to preserve confidentiality and the attorney’s independent judgment, it seems disingenuous. Management of attorneys includes directly and indirectly influencing attorney behavior and punishing non-compliance. Lawyers are subject to the court’s orders and discipline. Non-lawyers are not. In the end, non-lawyer owners and management will probably have more influence over the lawyer’s career and, therefore, the lawyer’s behavior. It will be interesting to watch whether most insurance companies bring defense attorneys in house or continue to hire outside firms.

     
    1. E Lawrence Brock

      “Lawyers are subject to the court’s orders and discipline. Non-lawyers are not” MAKE THE NON-LAWYER owner subject to court orders and discipline. monetary sanctions and loss of ownership interest

       
  6. Brawnson Rewis

    I feel that opening the state bar exam to allow legal professionals who graduated from a non-aba law school to assist those in civil matters for the first three years and any case thereafter, would greatly help open the doors for more legal professionals to offer cost-effective legal services. You could waive the in-class requirement as the ABA is already allowing more on-line courses for an ABA-Approved schools J.D., and open the door for these great professionals to take the Utah State bar. Currently, the standards and rules here bar many great professionals from practicing in Utah and it’s a shame that we are missing out on obtaining help for those that need it.

     
  7. Danielle Hawkes

    I used to work in the insurance industry. I was a key manager in charge of communicating what the C-level board wanted to the IT department. In that role, we designed a system that automated a program that started earning our company $1,000,000 overnight. That money came from home owners paying their premiums. I was proud of what we had worked hard to do. But I it only took me about a week after turning the system on to realize that we weren’t helping anyone. Within a week of starting the system, I despised what I was doing. I’ve attended the CLEs on these new rules. I am not a fool. I know how to turn this into a $20 million dollar idea. But I left that job to shoot for the stars at law school. I was a first generation kid from a poor single mother with a disability background. I am a woman and have huge dreams of what women are starting to accomplish in professions previously run by men. I did it (and we women are starting to do it!) I became a lawyer. I still don’t make what I could have easily made in the insurance job. But I love it. I work directly with people every day. I help solve impossible problems. I sit across front hem while they cry. I tell them to get into recovery when their drinking is hurting their kids. I get about 80% of my family law cases on their way without ever seeing the courtroom. I feed my family. And my son and daughter will look up to me in a way I never had anyone to. And yes, I spend hours and hours each week teaching people how to use the forms that already exist and telling them they don’t need me for their simple case. The system is a pain, but not because of me, but because of all of the unnecessary forms and steps involved. I spend hours and hours at free legal clinics helping people wade through it. I spend even more reading and briefing caselaw and then sharing those briefs with my colleagues. I spend hours spitballing with my colleagues on professional groups about impossible problems and brainstorming solutions. I am not confused about justice. I have spent so many hours working on social justice issues that I cannot even count them. I get it. But I hope the decision makers will get my story too. My work is not worthless. What I do is important. I have helped many families as well as the court. My career and the path thereto should not be devalued. I did not leave the soulless insurance industry just to end up working for the Walmart of professions. More importantly, I would not have left that job for another soulless behemoth of a career. I would have just stayed out. The law is about people and stories. That is important and I think this and other rules like it are hurting our profession (possibly on purpose to make us cheaper) but will hurt our communities in turn.

    We need to work in access to justice issues. We should start with simplifying the processes. Not with devaluing a profession of helpers.

     
    1. E Lawrence Brock

      Simplify and speed up litigation will increase access to justice and reduce costs.

       
  8. Pingback: Utah – Legal Innovation Regulatory Survey

  9. Jason Velez

    Full disclosure I am a lawyer and a technology developer seeking admission into the sandbox.

    As a practicing lawyer for 20 years I believe this regulatory reform represents an expansion the market for legal services to people who are not using lawyers when they could or should.

    Most people do not know how to interact with the legal system or lawyers for that matter. Their perceptions are often negative towards the profession. Hence a tremendous educational curve is required to inform the public about quality lawyers that are willing to charge a reasonable fees.

    The reality is that education or marketing of legal services is very expensive. Without the access to outside capital and traditional business operations and incentives, we as lawyers, and I speak to my experience as a small firm lawyer, are caught in a bit of an endless loop between getting the work in the door, finishing it on time and making a living. From my own experience these often can be difficult to balance.

    There is a bit of an inherent conflict in the practice of law and the business of law that both technology and additional capital will improve.

    For these reasons I support the proposed regulatory changes.

     
    1. MICHAEL LOVERIDGE

      You wrote: “The reality is that education or marketing of legal services is very expensive. Without the access to outside capital and traditional business operations and incentives, we as lawyers, and I speak to my experience as a small firm lawyer, are caught in a bit of an endless loop between getting the work in the door, finishing it on time and making a living. From my own experience these often can be difficult to balance.”

      I would have thought that only allowing mass advertising (i.e., tv, etc.) to the public, as opposed to direct, person-to-person solicitation by a lawyer, would have motivated a discrimination suit against the Bar. Plaintiff lawyers can afford expensive advertising. Small/solo firms usually cannot.

       
      1. Jason Velez

        I believe we are addressing the same point. Solo and small firms cannot be competitive in the marketing space. At the same time the public doesn’t benefit when the primary messaging is personal injury law. I envision a marketing/education program that highlights the availability of quality free, low-cost and paid services for all areas of the law, not only injury law. Also, important is creating an opportunity for solo/small firms to participate by offering “bite size” pro bono opportunities.

         
    2. Matt Robar

      As a small firm lawyer you should rethink your position. Large companies having control over lawyers and law firms will not help small firms thrive or give access of quality services to low-income people. Large companies will re-sell your work for pennies on the dollar and instead of providing quality service and true legal analysis will shoehorn everything into a template system. Consumers will be taken advantage of in a way we have never seen before and because of arbitration clauses and class action waivers large companies use they won’t even be able to seek redress when they are harmed by low quality services or even outright malpractice. They won’t even be able to file a Bar complaint because the companies aren’t lawyers.

      New lawyers are also going to be eaten alive if these changes are implemented. Their salaries will drop exponentially and many will be forced to commit or play along with unethical practices to assure their corporate masters get the profits they seek. It is naive to believe that non-lawyers will assure their attorney employees act ethically when profits, dividends, and multi-million dollar bonuses are at risk.

       
      1. Dan Roberts

        Regarding your comment: “New lawyers are also going to be eaten alive if these changes are implemented. Their salaries will drop exponentially and many will be forced to commit or play along with unethical practices to assure their corporate masters get the profits they seek. It is naive to believe that non-lawyers will assure their attorney employees act ethically when profits, dividends, and multi-million dollar bonuses are at risk”

        First of all, we should not base our determination of whether a bar rule is good or bad on its affect to lawyer salaries. Bar rules are not there to protect the lawyer’s pocketbook, they are there to protect clients from unethical practitioners. The fact that attorneys are using the bar rules to prevent competitive innovation is the entire reason why states are considering rule changes like those set forth above.

        Secondly, “profits, dividends, and multi-million dollar bonuses” are already driving law firm management policies. Whether a lawyer acts ethically or not should not be determined by who the firm manager is.

        A non-lawyer manager will lose their job just as quickly as a bar-licensed law firm managing partner if they implement a policy that leads to a huge malpractice suit, so saying that it is “naive to believe that a non-lawyer will assure attorney employees act ethically” does not seem correct to me.

        In my view, if a technology company is now able to “revenue share” with lawyers, which leads to greater technological innovation, which then leads to more efficient legal services, which then means that someone is more likely to use an actual lawyer rather than trying to DIY through LegalZoom (*shudders*) because the lawyer is more efficient and thus not as expensive, then this is a huge win for the Bar because it allows more people to get access to better legal advice.

        Full Disclosure: I am a technology-minded practicing corporate attorney who is excited about the prospect of partnering with non-lawyers. I am excited about being able to create a technology platform that could streamline legal processes in a scale-able way that makes my legal services less costly to clients. And I am excited about potential new revenue streams that these rule amendments may open up for partnering with non-lawyers. I am excited that my practice can become more scale-able because I can make more by working less (though that shouldn’t factor into whether a Bar rule is good or not)… I apologize to future generations of lawyers if these amendments reduce your first year salaries out of law school.

         
  10. Marc Randazza

    The changes to rule 5.4 are a terrible idea. This will not lead to greater access to justice, but rather a consolidation of legal services just like you’ve seen silicon valley destroy every other thing it has touched. Now, losing retail to Amazon is not the worst thing for justice, but can you imagine when 90% of lawyers must practice on Amazon, or not practice at all?

    If you want access to justice to be improved, there is a better way to do that — stop requiring law school and implement an apprenticeship program. Lawyers without debt and 3 years of lost income are able to charge less. You can create more innovation by lowering barriers to entry for would-be lawyers.

     
    1. Dan Roberts

      But Amazon did create greater access to retail for more people. It also seems like “Amazon”-izing legal services might increase access to those legal services as well, wouldn’t it? These rules aren’t decreasing our ethical obligations to our clients, so why are we opposing them? If the amendments are allowing for more innovative ways to provide legal services, is that a bad thing? It seems like a good thing.

       
  11. Marc Randazza

    Your proposed changes to 7.1, in contrast to your proposals on 5.4 are very good. The current rules are byzantine and vague and used in a selective and technophobic manner. the new rule is much better, but still lacks a bit of precision. Therefore, I would suggest that you have a process whereby cases of first impression can only be subject to a counseling letter, which would be posted somewhere, creating a body of guidance for lawyers. Otherwise, I can see these rules being still selectively enforced in a way that takes advantage of the vagueness.

    But, all in all, the new rule would be far better than the old one.

     
  12. MICHAEL R. LOVERIDGE

    I write from my experience as an estate planning attorney. Almost everyone needs a comprehensive estate plan (i.e., trust, will, power of attorney, proper titling of assets, etc.), and that includes clients of every net worth, including young married/single parents. Yes, I am willing to defend that view! However, despite the barrage of information about estate planning available, most clients do not know how to determine which documents or procedures are appropriate for their situation. Nor do they know which attorneys are qualified to help them or what constitutes a reasonable fee. Many opt for a simple will (which is, generally speaking, useless) or resort to self-help or misleading non-lawyer sources, such as LegalZoom. Or, they are left to pay (in my opinion) extremely high fees. For example, I have seen fees for basic, simple living trusts range from $1500 to $5000. This confusion and the high fees are a major deterrent to people (especially the less affluent) wanting to protect their assets and loved ones. Perhaps this partially explains why most Americans die without a will.

    I remain convinced that if attorneys were allowed to approach prospective clients directly, without coercion , and present reasons why those clients should plan their estates, more people could be helped. To those who oppose this method of solicitation, what is a better method? Small firms/solo practitioners usually cannot afford mass advertising; large firms may not need any marketing. I believe that relaxing the prohibition against direct solicitation could be regulated in some manner akin to the way insurance agents and financial service providers are regulated by the Insurance Commissioner, the SEC, etc. Surely the Bar is intelligent enough to provide a similar way to protect the public rather than maintaining a system that leaves those we are sworn to help “in the dark.”

     
    1. E Lawrence Brock

      I also practice estate planning. I have more than 50 years experience in the profession and I agree with these comments.

       
  13. Dennis Ferguson

    I believe this changes are unwise. We have already experienced the commercialization of our profession. We have had to defend against the legislative attempt to tax our services as a commodity. Now we must defend ourselves from our own Supreme Court? This will lead to further erosion of our profession and any modicum of differentiation between lawyers and those who have not endured the rigors of law school and who are not held to legal ethical standards.

     
  14. T. Felt

    SUPPORTER. As a member of the public without a professional interest in the legal services market and as a consumer who has repeatedly experienced the access-to-justice gap, I support these drafts and applaud the effort to improve access to justice in Utah. It is long overdue.

    Standing Order 15: To ensure public confidence and diverse perspectives, I urge the Supreme Court to appoint public membership to the Innovation Office that is independent of services providers and the legal profession, and capable to provide expertise and represent the perspective of consumers of legal services.

     
  15. Laurie Harris

    I am a paralegal and applaud Utah in being at the forefront of legal reform. Many friends/neighbors/friends of friends have come to me for legal advice, which I am unable to provide, not because I don’t know the answers or have guidance for them, but because I am not licensed to practice law. These people simply can’t afford an attorney, and are left floundering in our society. I am a believer in the philosophy that when help is provided to one, all benefit.

    I believe ethical standards are in place for many business partnerships to work within the framework provided in these reforms. Attorneys have ethical standards that are strictly regulated, it is true, but I do not believe there is a “Wild West” of corruption just waiting to happen should these reforms be enacted.

    I would also support the institution of lawyer “apprenticeships,” or alternate law school opportunities (in addition to the LPP program), such as online, or evening law school programs, to decrease legal-education costs and increase opportunities for obtaining a J.D.

     
  16. Pingback: Yes, I’d Like to Think Utah is Taking My Advice – Socially Awkward

  17. Stephen Gillers

    I applaud the effort of the Utah Supreme Court to amend Rule 5.4. Apropos Rule 5.4B, I suggest adding a few additional conditions when a nonlawyer practices with a lawyer as described. These are taken from Washington, D,C. Rule 5.4:

    (b) A lawyer may practice law in a partnership or other form of organization in which a financial interest is held or managerial authority is exercised by an individual nonlawyer[ [DELETED] if:
    (1)DELETED;
    (2) All persons having such managerial authority or holding a financial interest undertake to abide by these Rules of Professional Conduct;
    (3) The lawyers who have a financial interest or managerial authority in the partnership or organization undertake to be responsible for the nonlawyer participants to the same extent as if nonlawyer participants were lawyers under Rule 5.1;
    (4) The foregoing conditions are set forth in writing.

    STEPHEN GILLERS
    ELIHU ROOT PROFESSOR OF LAW
    NEW YORK UNIVERSITY SCHOOL OF LAW

     
  18. Pingback: Utah Supreme Court proposals would permit non-lawyers to own law firms and share fees with lawyers | Lawyer Ethics Alert Blogs

  19. Pingback: Utah Supreme Court proposals would permit non-lawyers to own law firms and share fees with lawyers | joe corsmeier

  20. John W. Holt

    I do not see how these changes will address the access to justice issues the proposed changes are designed to address. These changes create an opportunity for creative non-lawyers to find ways to profit from legal services. For example, accounting firms will hire attorneys so that clients can have a one-stop shop for their estate planning/financial planning needs; personal injury attorneys can partner-up with physicians, with both professions profit sharing from medical services and judgments/settlements, etc. The under-served will continue to be under-served because these changes do not create any incentive to reach down to help tenants of slumlords, lower income individuals involved in domestic disputes, etc.

    Also, the proposed changes require attorneys to continue to abide by the rules of professional conduct, but what if an attorney is working for a non-lawyer who is not bound by these rules? The non-attorney businesses who hire attorneys will be focused on profits, not on respecting professional rules that can sometimes get in the way of profits. Avoiding conflicts of interests in these hybrid models that will be permitted under the proposed rules will be very difficult.

    Finally, I fail to see the benefit of loosening up lawyer advertising rules. It allows for puffery, exaggeration, loss of dignity, and even misrepresentation. If anything, it makes potential clients who are vulnerable even more so. A noble profession is at risk of being turned into a common service. The reputation of attorneys will not improve under these proposed rules, but will likely erode.

    In short, I don’t see that the proposed changes to the rules will solve the access to justice problems that have been identified. Other less disruptive means should be considered. Perhaps revisit pro bono requirements, offer tuition forgiveness if new attorneys focus on certain under-served areas for a period of time following graduation, bolster/support those services like Legal Aid and Legal Services, etc.

     
  21. Thomas Scribner

    I support the efforts to get the legal system in the same “sandbox” as the rest of businesses in the information age. We as lawyers need to remain relevant and accessible in an age that changes very quickly. We are already behind the curve due to the overly restrictive and stodgy rules. When I started practicing law we could not advertise. That benefitted and harmed different classes of lawyers. Having advertising be allowed instantly turned attorneys into the most lucrative yellow pages market, and it benefitted and harmed different classes of lawyers, but it opened up the public’s ability to find a lawyer in a manner similar to all the other services they needed. Now yellow pages are irrelevant. Same with fax machines. Computers and their apps change so quickly and now perform and simplify much of our work, turning spending the afternoon at the law library, to a few minutes online. The information age has taken a great deal of specialized information and knowledge lawyers were taught in law school and made them easily accessible. We currently live in a nearly “real time” world and we need to be able to meet the changes without hobbles. Or we will continue to lose more and more of our market without the ability to compete on an equal footing.

     
  22. Alex Leeman

    Shared malpractice? How do you sue a non-lawyer for malpractice? What is the standard of care for a non-lawyer practicing law? The most likely result of this practice model is you’ll have a non-lawyer looking to make a buck hire a bunch of brand new law school grads who don’t know any better and don’t have the clout to stand up to them. After all, these newly-minted lawyers are the lowest-cost provider of crappy legal services. Clients will get screwed. The newbie lawyers will get sued. The non-lawyer businessman who made big money of both will skate.

     
  23. Nelson Abbott

    Rule 5.4B should not be adopted. We have recently seen this same trend play out in chiropractic offices across the State. The results have not been good for the profession or the consumer. Under the current regulatory scheme, the chiropractors association bans payment to third parties for referrals. DOPL does not regulate non-chiropractors. As a result, non-chiropractors start chiropractic offices, hire chiropractors to provide services and pay third parties for referrals. I currently do legal work for an insurance agent because he thinks I am a good attorney. I’ve handled his personal automobile accident case because he wanted a good attorney on his case. At the same time, when one of his clients is in a car crash he sells those referrals to a chiropractic office owned by a non-chiropractor who turns around and sells those referrals to an attorney (this part of the transaction is illegal but continues unabated. In reality, it is the attorney paying for the referral since the chiropractic office takes some of the money from the attorney as profit and passes the rest on to the agent). I’ve asked the insurance agent to refer to me because he thinks I am a better attorney and this would be in the best interest of his clients. He expresses sympathy but concludes that it is in his personal best interest to refer clients to the highest bidder. I disagree. I think referrals should be made based upon who will provide the most benefit to the consumer. Unfortunately, paying for referrals is a powerful motivator and ends up victimizing the consumer.

    If the Supreme Court allows non-attorneys to be involved in the practice of law, the Court begs the Utah legislature to begin regulating the practice of law. Right now, the Supreme Court claims to have exclusive jurisdiction over the practice of law. However, the Utah Supreme Court has no authority to regulate non-lawyers. When non-lawyers are integrated into the practice of law, the only way to ensure consistent regulation is to have the legislature step in.

     
  24. Matt Robar

    The Supreme Court and the Utah State Bar should be protecting attorneys and their ability to practice law, not destroying or hindering them with this kind of sweeping change. These changes will not allow low-income people better access to legal services. They will allow companies to prey on low-income people by providing them with low-quality services that push real attorneys out of their own profession.

    These proposed changes will allow large companies to manipulate people into thinking they are getting true legal analysis and representation when they are actually getting cookie-cutter robot-driven services without any meaningful attorney involvement on a case-by-case basis. The changes also create a system where companies are going to water-down attorney salaries because they can hire for low wages while putting many small firms and solos out of business. Instead of protecting consumers and attorneys, these changes will hurt them.

     
    1. Rasmussen

      I agree 100 percent with the reasons for opposing the Supreme Court’s ill advised and reckless proposals!!! What on earth is the Supreme Court thinking?! These proposed “reforms” are the worst possible idea and will only serve to harm the profession and the public; not to mention attorneys themselves who have put in the time, resources and hard work to complete law school, take the bar exam and build their practices. Exploitation, incompetence and prostitution of the legal profession will result. The legal profession is an honorable institution which should be preserved and maintained, not sold to the highest bidder. Attorneys and the public are being harmed and sold out by the Supreme Court, who is completely misguided in their misadventures. I strongly oppose these proposed “reforms”—they should not be adopted.

       
  25. Bruce Nelson

    Rule 5.4B is a horrible idea for all the well stated reasons provided above. However, adoption of the rule change should be conditional. Using a similar argument, attorneys should then be able to practice medicine. They would be able to offer much better pricing on prescriptions and other lower risk procedures such as child birth. On the other hand, procedures such as brain surgery and organ transplants would be deemed too risky. Further, there would be no malpractice nor the high expense of medical malpractice insurance since the attorneys are not governed or controlled by the AMA.

    Regrettably, Utah’s Supreme Court is now acting like the government, trying to offer low cost services to everyone, while neglecting the attorneys and the steep sacrifice required to become such. If adopted, the law of unintended consequences, such as the Amazon effect, will prove this rule change to be a huge boondoggle.

     
  26. Chris

    Before making such a broad change, why are’t we full utilizing the low cost service we have already? Is there something wrong with the modest means program?

    Also, if this is about access to justice, why can’t these non lawyers provide services that allow lawyers to practice inexpensively, thus, lowering the overall cost to practice which can be passed on to the client.

    I see this as a slippery slope that will spill over to other areas in Utah. Next we will have tattoo artists doing surgery, Google doing real estate transactions using Google Maps, and Facebook doing estate planning.

     
  27. Bradley Wm. Bowen

    In my 33 years of practice I have seen many instances where elderly individuals have been placed in nursing homes against their will; where children have taken their parents assets so that the parents will qualify for Medicaid; and where a child, or some of the children, have persuaded an elderly surviving parent to deed real estate to that child or a couple of children, or to sign other documents that thwarts prior estate planning.

    Although the Legislature has enacted statutes to attempt to address some of these issues, the elderly are still being exploited, or not being allowed to live where they desire.

    Non-lawyers are inexperienced with the MYRIAD of means used to exploit the elderly, and are VERY UNLIKELY to even key in on “red flags”; actions they are being asked to take that are prejudicial to the elderly; evaluation of the competency of the elderly; or evaluation of whether undue influence is being exerted.

    Allowing non-lawyers to perform estate planning services will exacerbate the existing problems. It will further enable unscrupulous individuals to obtain inexpensive document preparation to take advantage of the vulnerable. In nearly all of these situations the elderly person FEARS offending those who are intent on obtaining their assets (before death or after death) for many and varying reasons – which include the fear that the person will stop “helping” them, or caring for them. Often the elderly person later realizes what has happened due to regaining a lucid mind; the “helper” no longer helping after they’ve gotten what they wanted; or another child learning of the “bad acts”. They feel helpless and feel they have no recourse or ability to reverse what has happened. Reversing the bad acts usually requires expensive litigation, is emotionally draining, and is difficult even when documents were not prepared by licensed estate planners. Reversing such “bad acts” will become even more difficult when documents are tacitly legitimized by having been prepared by a company or individual licensed in the “sand box”.

    Small estates can often be administered through collection of the estate via Affidavit pursuant to UCA 75-3-1201, and/or a simple probate proceeding – even where the individual dies intestate. (Remember, a Will is only a blue print for a probate proceeding, and our intestate succession statutes generally achieve what most people with small estates desire – namely, “whatever is left goes equally to the children”.) However, because the estate is small there is motive for unscrupulous individuals to obtain the entire estate – most often through a deed before death. Further, it has been my experience that clients who desire a simple will can find a competent attorney to prepare one at reasonable cost. I have prepared many such wills “pro bono”.

    Medium sized and large estates involve a multitude of complex tax, step up in basis, trust, retirement plan tax issues, and numerous related issues that require years of training, annual continuing education, and years of experience to properly address. Clients with such estates reap many times the cost of legal services from the tax and planning benefits provided by experienced lawyers. Allowing non-lawyers to provide services to individuals with medium and large estates likely will lead to MANY BENEFITS BEING LOST that could have been secured if the client had been provided services by an experienced estate planning lawyer – all because the client wasn’t aware of the benefits that could have been provided by a licensed attorney. The axiom, “You get what you pay for” always holds true. Unfortunately, in my 33 years as a licensed attorney I have seen many clients who wished they hadn’t tried to “save a buck” – because they missed out on hundreds of thousands of dollars in tax savings, or other benefits that they would have obtained if they had simply hired an experienced attorney instead of “using forms I found on the internet”. If non-attorneys are allowed to provide estate planning services, members of the public will miss out on benefits valued at many times the cost of competent legal advice because they wanted to “just save a few bucks” – and the public will never know.

    In light of the foregoing, I see no justification whatsoever for allowing non-professionals to prepare estate planning documents.

    Allowing non-lawyers to provide estate planning services will exacerbate the existing problems; lead to more litigation; tacitly legitimize exploitation of the elderly; and HARM the public.

     
  28. Bradley E. Morris

    The FAQ section states: “Currently, 33% of attorney time is spent on business development and 48% is spent on administrative tasks. That leaves only 2.2 hours of billable time per 8 hour work day.” That statement is so grossly incorrect that it raises serious concerns about other assumptions on which the proposed changes are made.

    The way medicine is practiced is used as a justification for these proposed changes. The practice of law and the practice of medicine are very different, and the comparison is facile

    Family law and debt collection matters are given as examples of matters that are so routine that they do not require the skills of a lawyer. That is only true of some such matters. Many of such matters not only require the skills of lawyer, but require the skills of a specialized lawyer.

    There are aspects of the proposed changes that may give non-lawyers who only have a profit motive too much influence on lawyers.

     
  29. Nathan Searcy

    I am against the changes to Rule 5.4B for a couple of reasons.

    Firstly: Ownership by non-lawyers will almost certainly result in ongoing ethical issues. Most baffling to me is the comparison in the FAQ to non-doctor-run medicine as a positive example of this dynamic (see p. 1). Doctors in non-doctor-owned businesses settings are consistently pressured by their business’ owners to do things quickly and cheaply — and stories of how these pressures can (and do) conflict with the doctor’s ethical responsibilities to their patients abound for anyone curious enough to look. I fail to see how this dynamic would not immediately become a constant problem for attorneys working under business leaders who do not themselves have (and therefore will feel no personal need to in respect) a lawyer’s ethical duties.

    Further, I would hardly say that current price tags and forward-looking trends on medical services are some shining example of how involvement by folks outside the medical professions has serendipitously led to lower costs for the least fortunate.

    Secondly: The suggested disclosures at the end of the draft rule will be meaningless information to anyone who isn’t educated in corporate structuring, and will likely be buried in some paperwork for signature that no one reads anyhow.

    I am sympathetic to the fact that legal services are expensive. It seems to me that the cure suggested here is much worse than the disease.

     
  30. Mark B. Rasmuson (not licensed in Utah)

    5.4A. I have a hunch the average person already assumes lawyers aren’t restricted as to sharing fees, so I think the notice requirement would primarily serve to build confidence in the profession (as do most efforts toward transparency).

    As to deregulation, this is a more risky because although clients are given notice, the Bar and other attorneys are not.

    Bad things happen in the dark, which is the reason for this type of arrangement in the first place. I think such partnerships must be explicit and listed on an attorney’s Bar profile page under “professional affiliations,” or something similar.

    Rule 1.5. I think a notice requirement to the public is more important here (even than 5.4A &B), since lawyers of different firms are by default in direct competition with each other. (Notice at the Bar level would be less important.)

    Rule 5.4B. Same comments as 5.4B and for the same reasons.

    Rule 7.1 is a no-brainer “yes” in my opinion, except that I think attorneys should be required to present or send an image of their valid Bar ID card with a QR code or other similar scannable code that gives a user direct access to the independently-maintained Bar website profile. This could be easily facilitated by the Bar, which could provide a transmittable vCard or viewable/printable QR code to the attorney through their private profile.

    This would both (a) deter non-attorneys/suspended attorneys/unlicensed attorneys from holding themselves out as licensed to practice law in Utah, and (b) deter the behavior already prohibited by the profession and (redundantly) prohibited in the proposed language.

     
  31. Rebecca Long Okura

    In addition to reviewing all of the various materials and FAQs, I listened to a podcast with Justice Himonas and John Lund, the two individuals spearheading this movement.

    Overall, the message of providing increased access to justice is laudable and no one can deny the problem. Perhaps deregulation of lawyers such as referral fees and fee sharing, or as related to advertising, solicitation, and public communication could help open up innovation and allow attorneys to provide more services to low income clients.

    My concern is with the clear drive by the Supreme Court to allow non-lawyer companies to either partner with law firms, or go it alone, in providing legal services. While the Court repeatedly states how these types of innovations in the U.K. and Australia have not hurt the consumer, when I asked the question of whether or not any study had been done to see if this innovation would hurt small to medium sized law firms, I was told by the moderator that there was no data. The moderator declined to put my question to Justice Himonas or Mr. Lund.

    I feel that the rules of professional conduct have prevented lawyer innovation, such as easily providing online legal advice. Or the Courts themselves have made it difficult to control client costs, such as not allowing attorneys to withdraw from a case despite having only entered a limited appearance (this has happened to lawyers in my firm several times).

    Without deregulating lawyers and allowing us to try to solve the access to justice problem, the Supreme Court proposes to leap-frog lawyers and basically states that we need outside companies to solve the problem.

    Justice Himonas went so far as to state that places like WalMart could have legal offices next to McDonalds and the in-house nail salon. The idea seems to be that sole practitioners and small firms who cannot compete with Big Tech money (or Big Tech partnered with Big Financial or Big Law Firms) will be able to find work within larger corporate structures such as tech companies and WalMart. What these jobs would pay a new graduate who has $250,000 in student loans is considered irrelevant. Justice Himonas said this is the law schools’ problem and not part of this discussion.

    Justice Himonas also was the initiator behind removing the bar exam requirement for this year’s graduates. Despite opposition by many practicing attorneys in the State, this order went through. He is also the creator of the Paralegal Practice rule. Himonas has stated that he would like to remove the bar exam entirely. I could never say for certain, but one suspects that he generally finds lawyers to be overhyped, overpaid, and overvalued.

    It is easy to follow the dollars on this one. Small and mediation firms and practitioners simply cannot compete with big money. Sole, small, and medium firms tend to be the ones who currently provide services to the lowest income members of our community. Small firms currently try unbundled services and flat fees and other structures to help low-income clients, but meet with resistance because of the legal rules and structure.

    I truly do wish to see greater access to justice, but have serious concerns that the legal community is not being listened to or valued in this conversation. It seems that deregulation of some of the restrictions on attorneys advertising, communication with the public, referral fees, and fee sharing could all go into place without opening the door to non-legal practitioners.

    P.S. The Court quotes dubious stats that say that lawyers only have 2.2 hours per day to bill and that the rest is consumed by administrative tasks and business development. I don’t see how increased competition decreases the amount of time and energy lawyers need to expend on those tasks, rather it would seem to increase the business development time. I can assure the court that we are all working hard to bill more than 2.2 hours per day and so the math they quote seems inane.

     
    1. Victoria

      Agree, listening to the webcast and reading the provided materials does nothing to demonstrate how this will increase access to justice. The data does not support this and this is an extreme change to the practice of law to just push through during a time when we cannot hold bar conferences, Q&A’s, etc. This should be held off until there is stronger data to support a change like this.

       
    2. Deborah Bulkeley

      I agree with this comment. I would add that unless there are serious teeth in enforcement for bad actors and malpractice liability for the non-lawyers who participate (which I don’t see), this will harm the people who need quality legal services but can’t afford them. A race to the bottom is not the answer.

      It seems as though we should be able to figure out ways to create better access to justice without threatening the livelihood of small firm and solo attorneys. Deregulating attorneys somewhat to allow them to be more competitive would be a good start. Another idea would be public funding for nonprofit legal services to make those more available.

      As it stands, this appears to put 100% of the risk on the lawyers who work for these big companies as it is the lawyer who will be facing sanction and malpractice litigation for the company’s bad actions. At the CLE, I attended, the answer was that the lawyer should just quit if their employer requires an action that would violate the rules of professional conduct. That is not an answer that makes me feel any better about this, particularly where the lawyer has a duty to the client in such situation, and could face threats of litigation from the employer for protecting the client. The other answer that I am not comfortable with, is that shutting down bad actors would be the sanction. I don’t think that merely shutting down bad actors (who actually get caught) from participating is sanction enough, especially since the unauthorized practice of law is not adequately enforced now.

       
  32. Leonor Perretta

    I am concerned about non-lawyers providing legal services specifically in the area of Immigration Law which is already regulated by federal law. For decades, non lawyers have been “practicing” immigration law without a license and harming consumers. Many consumers cannot complain because they have been removed from the country. The harm they suffer from unscrupulous immigration service providers is often removal to a country where they have not been in years and where they fear persecution. I ask that you be wary and cognizant of federal law when approving innovations in the immigration law area. There are already many online platforms, assisting with the preparation of immigration forms. What they often fail to understand is that each question on that form, may trigger a ground for denial, so assisting someone to fill out immigration forms is tantamount to giving immigration advice when the consequence for inaccurate immigration advice may be deportation. Immigration law is extremely complex and as I have noted, the consequences of doing it wrong are grave. In many cases, it is difficult enough for an experienced immigration lawyer to analyze some cases, let alone someone who is not a lawyer. Immigration is not a subject that can be simplified and innovated in the way you are seeking. I am not concerned about competition as I am as busy as I can handle (at least prior to COVID-19), but I am concerned about the people who could be harmed by a state endorsed non-lawyer practice of immigration law.

     
  33. J. Bogart

    I do not see the point of the requirement of disclosure of the corporate form and roles of non-lawyers. What is the information to be used for? Why would it affect a decision to retain a firm or lawyer?
    In general, like Mr. Roberts above, I support the changes. Providing financial resources is essential for expanding access to legal services in the US. That entails enabling lawyers to join with other professionals.
    I doubt that OPC is up to policing these operations, however.

     
  34. Mark Woodbury

    I find myself torn on the proposed rule. On one hand, it does seem like there are interesting possibilities that would be opened up by partnering with non-lawyers. Working with an accountant or investment adviser to establish a “one stop shop” for estate planning, business formation, or tax services could be good for everyone involved, both the professionals and the clients. I know that I could charge less for an estate plan if I didn’t have so much advertising overhead to get the client in the door in the first place, and pooling resources with those other professionals could accomplish that.

    On the other hand, I wonder if this is moving to fast to be able to evaluate the problem properly. According to the FAQ, for example, 93% of family and civil cases involved at least one unrepresented party. This number sounds big, obviously, but how big of a problem is it, really? Why is it important that every litigant have an attorney appear on their behalf? In how many of those cases did a suboptimal or unjust outcome result? Why is “was unrepresented for the litigation” the same as “denied access to justice?” Would having both parties represented in all those cases have made any difference in the outcomes? I am sure that in some cases a party was disadvantaged because they didn’t have a lawyer, but was it in enough of them to justify such a radical change? What kinds of cases are included in “family and civil” cases? When I was doing divorces, I got a lot of default judgments, which resulted in child support being set by statute and statutory visitation. I don’t really think the ultimate outcome would have been different if the other party had hired an attorney and answered the petition. If probate cases are included in that, I can say that almost all uncontested, simple, run-of-the mill probate cases involved a party who is not represented. The PR hires me, I file a petition, the court sends out notice, nobody objects, and the matter is probated. Often multiple parties in such cases are unrepresented, but it’s not an “access to justice” issue. Everyone just already agrees on how to probate the estate. Same with many divorces: they get on OCAP, fill out the paperwork, get their divorce, and it’s fine. Are there horror stories about people doing their own divorces? Absolutely. I know because I’ve had to fix some of them. But is that common, or are those isolated instances? I don’t know, but I’d like to know before we forge ahead with such a drastic change in the name of “access to justice.”

    It’s also possible that in many of those cases, the people how are unrepresented have already consulted with an attorney. How many? I don’t know. I do know that I talk with a lot of people who end up not hiring me. I’m sure that for some of them it’s the cost, but for some of them it’s just that there’s not much for an attorney to do. Either their case is too far gone, or it just was a terrible case to begin with, or something else. Going back to family law, on more than one occasion I looked over a petition, asked the potential client if they thought that sounded fair, and then told them that it seemed very reasonable and that if they were ok with it, they should just sign a stipulation and enter it. Child support is set by statute, you’re getting 40% of the overnights, and she’s going to sell the house and divide the money. Sounds about right. I never entered an appearance or collected a fee, but those people were not “denied access to justice.” They just didn’t really need a lawyer.

    I’m not opposed to measures to expand access to good legal advice, but this seems like a drastic change that doesn’t have an obvious causal link to the problem. Is the primary driver of this problem cost, and is the primary driver those costs that non-lawyers don’t own firms? The answer to the first question, in my mind, is “probably, but maybe not.” The answer to the second question, I think, is “probably not.” My best guess is that the cost of legal services is driven by two things: the supply of lawyers and the complexity of the legal system. I don’t see how allowing non-lawyers to split fees solves either problem. It seems to me that expanding on existing reforms would be a more direct way to address the problem. Things like expanding the LPP program. Frankly, I think it’s a little early to be evaluating the effect of that program. It takes time to establish a whole new profession, and maybe, if we are patient, that program can solve a lot of the problem. Maybe not, but it’s only been like a year; I think we should give it a chance to work.

    Furthermore, if having a lawyer is so important that not having one counts as denying a person “access to justice,” maybe our legal system is to complex, and we ought to be looking at more fundamental reforms, ones that simplify the legal system to that “access to an attorney” is not synonymous with “access to justice.” I don’t have any ideas, but if the system is so complicated that an attorney absolutely needs to be involved in every case, then maybe it’s just too complicated. In that case, we’re kind of just hacking at the leaves instead of the root.

    I can see the argument for this sort of reform, but I just am not seeing how this particular change (allowing non-lawyers to own firms) addresses what we think the problem is. It does not add more lawyers to the system (increase the supply), and it doesn’t reduce complexity (reduce demand), so how does it solve the problem? More importantly, how is it a better solution than other, less disruptive possible solutions, like expanding the LPP program? What if we made it easier for attorneys to get liens on property? More security about getting paid generally leads to lower costs. I think that some of the smaller proposed reforms (allowing in person solicitation, allowing referral fees) are a step in the right direction. What if we just went with those slightly more modest items, and see if that gets us where we want? This seems like a very large, very disruptive change, which will have a lot of unforeseen consequences, and it is not entirely clear to me how it addresses the “justice gap” problem.

    I don’t want to dismiss it out of hand. Maybe it actually is a very good reform. But I don’t see the case for it yet.

     
  35. MICHAEL LOVERIDGE

    With a few reservations, I support the proposed changes. I am not a litigator, and do not represent clients in court. My area of practice is strictly estate planning and, after practicing for 46 years, I think I well understand the need of almost everyone to have a comprehensive estate plan. That includes the old, the young, the affluent and those with modest means. Very few people would be well-served by only having a basic will, without the addition of a financial power of attorney, health care directive, proper titling of assets, and even a basic trust to control the proper disposition of insurance, retirement, and other assets.

    Of particular concern to me is the exorbitant (in my opinion) fees charged by large and small firms for basic estate planning. I appreciate the struggle firms have, especially solo practitioners with large school debt, to pay for overhead, earn a decent living, and still provide quality, low-cost services. Despite the reduced cost of computers and software, many attorneys have no choice but to price their services beyond the comfortable reach of people of modest means. Frankly, I blame the current, archaic ethics which prohibit direct solicitation because of some misguided belief that to directly approach a prospective client equates with “ambulance chasing,” or that professionalism is at odds with the very solicitation allowed by financial and insurance advisors.

    Having said that, I am hesitant to support any legal advice or preparation of documents by non-lawyers, even if reviewed by a lawyer. I do support, however, the valuable assistance a non-lawyer could provide in gathering basic personal and financial information from a prospective client to help a lawyer make recommendations directly to the client. Non-lawyers also could reduce time spent by an attorney in educating clients about the estate planning techniques and documents a lawyer might recommend, based on the client’s needs. In short, data gathering and education, normally offered solely by the attorney, could help the attorney reduce his or her time spent and justify lowering the fee usually charged. I also see nothing wrong with the non-lawyer charging a separate fee for his or her services, with the attorney independently charging a separate fee. I sincerely believe that this shared planning approach between lawyers and non-lawyers , coupled with relaxing the prohibition on direct lawyer solicitation could result in estate lawyers obtaining more clients and the clients paying lower, more affordable fees.

     
  36. Stan Jensen

    I am completely against these proposed changes to Rule 5.4A and 5.4B allowing non lawyers to own and control law firms or other businesses providing legal advice. (which seems to be permitted as long as someone, apparently the lawyer who works for the non lawyers, can conclude he is not being influenced in his decisions, professional judgment etc. by the owners he works for, and provided there is some disclosure to the client of the fact non-lawyers are getting a portion of all legal fees and payments.)

    Allowing non-lawyers to own law firms and other businesses that provide legal services, is a bad idea and inherently undermines the provision of independent, professional legal advice which is why most jurisdictions have this prohibition.

    The addition of some prophylactic lip service to independence of the lawyer as determined in his own judgment is unpersuasive and seems circular. Asking someone to conclude he is not working and providing services and legal decisions generally in a way that complies with the requests of the person who owns his firm and signs his checks seems to be asking someone to lie, or asking him to expect his need to support himself and his family to be irrelevant to his decisions and work. That is not in my experience how business in the real world works.
    Additionally, if she (the lawyer), were to agree to such an arrangement and then be pushed by her employer and improperly influenced now the lawyer is the one guilty of an additional breach and is punished for breaking the rules because she is being controlled and manipulated by the person making her livelihood possible.

    Furthermore, there has been no explanation in the related press release or otherwise to my knowledge of why or how this type of ownership structure with all of its faults and risks would ever be helpful or needed or otherwise meets any goals that were supposed to be the stated purpose of these changes, namely providing legal services for free or low cost to low income persons.

    The changes to Section 1.5 allowing more flexibility to share legal fees between firms seems like an appropriate modification and I see no harm in it.

    The change to 7.1 7.2 advertising rules seems reasonable, I don’t have a strong opinion on it.

    None of these changes seems materially connected to the proposed access to free or low cost legal fees.

     
  37. susan strauss

    I think this is truly a terrible idea for all reasons previously stated. As an attorney we get very highly specialized training which allows us to adjust according to the nuance of every particular situation and still abide by the rules of professional conduct to allow non lawyers to practice law goes against evry fiber of my being. and then begs the question who will police them we cant even police our own now.

     
  38. Eric Stephenson

    The “reform” measures you are proposing are anti-capitalist, will harm consumers rather than help them, will irrevocably harm the practice of law as we know it, and is based on a demonstrable lie. Proponents of this plan claim the goal is to help low-income people with legal services but that is intentionally false. There are at least a dozen ways to actually help lower the cost of legal services that will also preserve the rights of those clients. This plan does neither.

    My practice is focused on helping consumers against the banks, credit card companies, and other large companies. By implementing these proposed changes you will destroy consumer protection jurisprudence. The whole point of consumer protection laws (and one of the stated goals of your so-called “reform”) is because banks, credit card companies, etc., take advantage of consumers and consumers cannot afford legal assistance. Instead of helping consumers, however, this plan will effectively be giving control of consumer protection to the companies that are already egregiously harming consumers. Rather than improving access to legal outcomes you will be depriving consumers of access to legal services. Legal services provided by these companies will be subject to jury waivers, arbitration clauses, and class-action waivers which are all 100% anti-consumer but inevitable under your plan.

    The so-called “reform” will allow large firms and corporations to push out small firm and solo practitioners from being competitive because the small firms and solos will not be able to charge high enough prices to stay in business and compete with the marketing budgets of large companies with multiple streams of revenue. Utah lawyers are already notoriously low on their hourly rates but the only lawyers who will survive the aftermath of your plan will be the large firms handling the corporate work of the companies that will be taking over the practice of law. The only jobs for the rest of the attorneys will be at $20.00 per hour working in cubicles on mindless repetitive tasks for their corporate masters. Instead of helping low-income consumers obtain legal services you are creating low-income attorneys. True, a few entrepreneurs will emerge but their business models and ideas will be ultimately be taken and exploited by the non-attorney corporations to harm consumers with arbitration, class-action waivers, and jury waiver requirements in their contracts.

    Indeed, with this model in place, all attorneys will actually serve the companies they work for rather than the actual clients. Ethical requirements like diligence, communications, and control of a client’s case will all be supplanted by company marching orders and profit margins. Diligent quality legal service will give way to template-based services that can be handled by uneducated drones. Individual clients will be hard-pressed to get anything even resembling competent legal work.

    Your proposal is also unnecessary. Low-income consumers are not disproportionately served. There are legal aid clinics, low-profit and non-profit law firms, and other attorneys serving these clients. If you want real reform, equalize the budgets for legal defenders with the prosecution budget in criminal cases. Paying the two sides equally in that arena would be true and effective reform if you actually want to help low-income individuals.

    Most attorneys in the solo and small firm sphere handle pro bono cases. We won’t anymore if you allow non-attorney ownership or control of law firms and legal services.

    With corporations taking over, legal services will be turned into cookie-cutter template-based trash because corporations will open firms or add services to their existing business that degrade and dehumanize the practice of law. Clients’ will be enrolled by the thousands without concern whether they actually need the services or not. Rather than being able to work with an actual attorney they will be handed off to low-level customer service agents, chat-bots, automated help menu systems, and automated phone systems that keep clients on hold for hours. If you doubt me, try to talk to an actual person at ADP. They intentionally prevent you from ever speaking with someone in customer service. If you think we have an ethical problem with communicating with clients now, wait until you put large banks and other corporations in charge. There is absolutely no way a large company can or will communicate with clients as effectively and personally as we can now. Cookie-cutter email responses and programmed chat-bots will not cut it but that is exactly what we will get. Even when clients actually speak with real people those people will be mostly customer service agents constrained by checklists and telephone scripts. They won’t be trained or allowed to provide individual advice as attorneys are now.

    Your sandbox will not catch these problems, and many others, for at least two reasons. First, it won’t be designed to catch actual problems. It will be designed to conceal these issues so the proposal will succeed. Second, these problems will be concealed on the corporate end as well.

    This reform is akin to socializing the practice of law and it will destroy the free market as I am sure the proponents (who are all big firms and corporate shills) intend. You are shifting billions of dollars a year worth of legal services from individuals to large corporations. That will not better serve the poor but will instead give the banks, credit card companies, insurance companies, etc., (the proponent’s clients) control over the poor and allow them to exploit the poor for additional profit.

    I will also point out that allowing comments on this proposal is a total sham. Nothing anyone says will stop it. The proponents are simply going through the motions. I attended a CLE on this last year and it was obvious the proponents were ramming this down our throats. They didn’t care about any opposing viewpoints and that opposition was futile because the foundations for this plan are already in place. This so-called “reform” is a foregone conclusion.

     
  39. Dean Collinwood

    I have read the regulatory reform plan carefully. While I appreciate the effort being made to improve access, I believe it is very unlikely than any of these proposed reforms will achieve that goal. When I was working on a PhD at the University of Chicago, I wrote my dissertation on white collar labor unions, specifically labor unions in higher education. I was puzzled as to why professors with advanced degrees and high status in the community would spend their time picketing around campuses. Didn’t they already have a lot of “faculty governance” authority? Against whom were they complaining if they had considerable decision-making authority themselves? Turns out, the colleges that were unionizing were those where the administration of the college had been drawn from the business world, rather than from academe: MBAs and people with other kinds of administrative training, but not academics, not people who understood the life of the mind and its attendant culture.

    Those executives did not understand the spirit of academia; they tried to run things like businesses instead of places of learning. They so violated the culture of academics, that the faculty took to the streets to protest.

    I believe something like that would be the result were non-lawyers allowed to meddle in the legal profession. Law offices need to be owned and run by licensed attorneys, not business people.

    The other proposed reforms also lack merit. People do need access to high quality legal representation. But rather than dilute quality e.g., allowing paralegals to practice law (an earlier unfortunate and misguided change), the Court should improve access so that everyone, rich or poor, can get the best. The proposals coming out of the Court of late have the potential of creating two classes of lawyering: one of high quality for people with money, and one of low quality for the poor. That is not equal access to justice.

    I urge the Court to abandon all the proposed reforms.

     
  40. Greg Anjewierden

    I am a Utah-licensed attorney and I fully support the proposed changes. I have had too many people (mostly debt collection defendants) come to me with a need for legal help with no ability to pay. I take as many pro bono cases as I can, but pro bono work alone has proven an unsustainable solution to this problem. There are innovative software-based solutions that can improve access to justice, and these rules will help such solutions. A regulatory sandbox is an excellent method of monitoring any potential problems that may arise.

    I’ve read all of the comments above. It seems to me that many lawyers are worried about losing their jobs or their salaries. In response I would say that innovation always has the potential to put some people out of business, but also the potential to create new and more jobs, very possibly for those same attorneys whose current firm may go under. And lawyers have proven so far to not be able to solve the access to justice problem under the current rules.

    As for the ethical issues, what is stopping attorneys now from doing the unethical things they fear will happen under the new rules? I suspect it isn’t that all lawyers are inherently ethical. For many attorneys it’s fear of losing their license. These rule changes don’t allow unauthorized practice law. This means there is always a lawyer involved, even in cases where a non-lawyer is providing services. That lawyer’s license is on the hook for any unethical conduct. And there always remains the ability to sue a non-lawyer. Many comments above suggest that lawyers will feel pressure to act unethically at the request of a non-lawyer. If there aren’t any lawyers willing to violate ethical rules, those non-lawyers will have no one to work/share fees with. If non-lawyers engage in the unauthorized practice of law, there are still protections for that.

     
  41. Richard Green

    I am generally in favor of fostering innovation to increase access to legal services. One thing about the sandbox gives me some pause. I note that in the Standing Order creating the sandbox there is a deliberate disdain for theoretical considerations of consumer risk in favor of “actual” risks “supported by evidence”. However, the creation of new legal services models will likely create new risks for which there is little to no historical evidence of harm–the only potential evidence would be harm suffered in “real time” by consumers being served by sandbox applicants. I find it ironic and a little disquieting that the only recourse offered for harm suffered in the sandbox–civil litigation or criminal prosecution–is one to which the target population has limited access outside the sandbox.

     
  42. J. Bogart

    I wonder if the Committee has looked at the statutory limits on corporate form for professional services by lawyers. It is not clear they permit (or if they bar) the sort of arrangements being contemplated.

     
  43. JT

    There is little detail as to how this would look like in practice. It sounds fine on paper, but practical day-to-day issues that would arise seem to be overlooked. The sandbox approach does not seem to provide sufficient safeguards to the consumers and ultimately those that need representation. Similarly, the information associated with the grant funding is limited. Who is going to pay for the oversight and what are the risks/rewards to an attorney who tries a new method and fails? Or, what recourse would a represented person have against “sandbox” idea and program? What will this do to malpractice insurance costs for practicing attorneys?

     
  44. Wesley Felix

    The consequences of the proposed changes to the rules cannot be predicted, because no serious empirical research has been done. This is especially true with respect to a minuscule market like Utah operating under the unique circumstances of the American legal system. We’re just knocking down blocks.
    But there are several developing themes that the proposed changes make clear: 1) the Supreme Court neither respects nor cares about the opinion of the Utah Bar. More than 70% of the litigation section, for instance, disagrees with the proposed changes. The Supreme Court has indicated that it simply doesn’t care; the changes will be implemented regardless of any input from the Bar. 2) Consistent with diminished respect for practicing attorneys, it appears that there will be a more general assault on all regulations implemented to insure the quality of practicing attorneys. It appears inevitable, for instance, that the Supreme Court will eliminate the bar exam and make the practice of law open not only to non-attorneys, but to any attorney who graduates from any law school. 3) this whole-scale assault on the profession is premised on the belief that market barriers to entry inflate the incomes of Utah lawyers above those that would be attained in a free market. This belief is transparently false. The average income of a Utah lawyer is around $74,000 or less. Unlike physicians, there are no real barriers to entry — we cannot and do not control the number of newly admitted lawyers. In fact, the only objective evidence as to the legal labor market indicates that there are more lawyers minted each year than there are jobs for lawyers. See, the U.S Bureau of Labor Statistics for 2019. Because the reforms are based on a demonstrably false premise, achieving the stated goal, increased access to justice, is entirely unlikely. There is an oversupply of lawyers. Increasing the supply, ceteris paribus, is unlikely to decrease the cost of legal services. This is especially true when the cost of legal services is tied more to access to clients with large legal expense budgets than to any meaningful competition on price. In this respect, the legal labor market is more like the market for real estate agents, than the market for physicians or even accountants.
    This relatively basic fact is simply ignored by the reformers. Willful ignorance of this fact leads proponents to claim that a bar card is somehow a golden ticket to wealth, or more perniciously, to assert that any opposition to the proposed changes must be protectionist or narrowly self-interested. This blindness masks an implicit agenda: to diminish the political power of the bar and the legal profession. From a conservative perspective this agenda is comic — the only likely outcome of the reforms is chaos and corruption. From a liberal perspective the agenda is tragic — because liberals join the “reform” effort in an attempt to advance social justice and instead become fellow travelers in an alt-right goose step. 4) Finally, the proposed changes are like much of what has passed for gender and racial progressivism over the last 20 years. They create a pretend problem in order to avoid actually dealing with the systemic issues that make the current legal system a kind of farce in which justice plays very little role. This trend — whenever possible avoiding the obvious — is consistent with trends across the current political landscape.
    On the positive side, the proposed changes will inevitably happen, but they won’t create anything more than confusion. And we’re pretty confused already — so why not a random toss of the salad?

     
  45. John Smith

    California is currently studying this same concept for their state. Why not let them go down the road first?

    There is no prize for who does it first. No gold stars. Maybe an ego boost for those suggesting it, but with the huge potential for the legal system to turn into the medical system as it relates to party finances, we should remember that there is no legal medicaid.

    They tout their suggested changes as a way to help give access to low income individuals, however the last page of their report calls into question whether their “reform” will actually help those low income individuals. Without a definite answer in the positive, it makes little sense to push this reform this hard and this fast.

    This is not a sandbox, but Pandora’s box.

    Why not hold off for now, let California take the leap of the cliff and wait to see if they land on a ledge below or plummet to their demise. If it works, then great and let’s get on board.

    Perhaps Utah won’t be seen as innovators or get a fancy write up in the ABA Journal, but that’s okay. There’s no prize for being first anyway.

     
  46. Lucas Adams

    This is a bad idea. I have family that work in Dentistry and they have told me that Dentists, by a strong majority, dislike this same amendment which has already occurred in Dentistry.

    This will lead to the destruction of the small firm or solo practicing attorney. As a solo attorney my job and livelihood is at stake. I have worked for firms and for companies, and based upon the needs of my family, I elected to start my own practice. Before you rule or provide your opinion, think about how this will affect those people, friends, and attorneys you know.

    We can learn from the mistakes of dentistry. Why not do it? Please don’t support the proposition.

     
  47. Jessica Andrew

    COMMENTS OF THE UTAH ASSOCIATION FOR JUSTICE ON THE PROPOSED REGULATORY REFORMS CONCERNING THE PRACTICE LAW

    The Utah Association for Justice believes in access to justice. There is more that our organization, our state bar, and our State can and must do to increase access to justice in areas where legal needs are being met only inadequately. We stand behind the efforts of the Utah Work Group on Regulatory Reform (“UWG”), the findings outlined in the UWG’s report, and the UWG’s efforts to deliberately, carefully and thoughtfully open the door to new and innovative ways to narrow the access to justice gap.

    The proposed regulations represent some significant changes to the way legal services have historically been provided. Understandably, these changes can make some lawyers wary. UAJ leadership has encouraged UAJ members to submit individual comments to the UWG’s proposals. The UAJ has also solicited input from members to form the UAJ’s formal comments on the proposals. Those comments are submitted here.

    We here identify a few areas of concern, together with suggested clarifications or remedies to the stated concerns.

    Law Firm Ownership by Non-lawyers

    The main area of concern our members expressed was proposed Rule 5.4B, which would authorize non-lawyers to hold an ownership interest in law firms. The proposed amendments and Standing Order 15 do include some excellent protections, such as requiring at least notification to the Innovation Office, and possibly also application, should the non-lawyer ownership be more than a minimal change. The proposed amendments also require that non-lawyer ownership not affect the lawyer’s professional independence of judgment, loyalty to the client, and confidentiality, and that written notice be given to the client of the non-lawyer’s financial interest in the firm. We suggest two clarifications to strengthen these protections, and one specific addition relative to owners who may also be case witnesses.

    First, we suggest clarification of the language of Rule 5.4B(b)(1) and (2) to require “specific” disclosure of the non-lawyers with financial interest or managerial authority, not just a “generic” disclosure. The currently proposed language can be read as allowing for a generic disclosure that is nothing more than a recitation of the rule, such as “one or more nonlawyers hold a financial interest in this law firm and exercise managerial authority of the lawyer.” A generic disclosure, which does not identify the non-lawyer owners or managers, does not materially aid the clients in determining whether it is in their best interests to retain the law firm or lawyer, where the identity of non-lawyer owners or managers may matter very much to the client. The client may have a legal, business or social conflict with the non-lawyer owner, or may disagree with its business objectives or stated political or moral positions. In short, there are any number of reasons the client may not wish to retain the services of an organization owned or managed by that specific non-lawyer. A “specific” disclosure which names the non-lawyer owner or manager would give the client the information necessary to make this determination.

    Second, we suggest requiring that organizations with non-lawyer owners or managers conspicuously publish the identity and nature of interest of their non-lawyer owners or managers. This suggestion first arises from our extensive experience with initial client meetings. A client meeting with a lawyer to determine whether to retain the lawyer must necessarily disclose information to that lawyer to allow the lawyer to evaluate the client and his or her case. Just as important, though, is the client’s opportunity to evaluate the lawyer to determine whether to retain him or her. A lawyer in an organization with non-lawyer owners may comply with Rule 5.4B, as drafted, by going through the entire initial meeting, and then, before the client puts pen to paper to formally retain the lawyer/organization, handing the client the disclosures contemplated by Rule 5.4B(b). If, at this last minute, the client identifies a non-lawyer owner or manager that renders the anticipated attorney-client relationship inappropriate for the client, the client has already disclosed to the lawyer details concerning his or her case, and has perhaps incurred a fee for the initial meeting. Such an experience can be an uncomfortable, and even traumatic situation for a client seeking legal help. Requiring a legal organization with non-lawyer owners or managers to publicly publish the identity and nature of the interest of any non-lawyer owners and managers in a conspicuous place (such as on its website in a conspicuous place, and/or on a database attached to the State Bar website) will protect clients from getting down the road with a lawyer or law firm whose organization is not going to be appropriate for the client.

    There is a second consideration to public disclosure of non-lawyer owners or managers. Non-lawyer ownership or management of a legal organization must be disclosed to more than just potential clients. For example, if a law firm is partially owned by a medical device company heavily involved in lobbying for laws protecting medical device companies from lawsuits, and the law firm represents one party in a wrongful death lawsuit involving a different medical device company, surely the opposing counsel is entitled to know and make the jury aware that the law firm is owned by a medical device company actively working to eliminate this very kind of lawsuit. This principle would apply whether the non-lawyer-owned law firm represented the wrongful death plaintiff or the medical device company defendant. If lawyers choose to enter business associations with non-lawyers in order to improve access to justice, those relationships should be made known to the public. If the purpose truly is to increase access to justice, then there should be no hesitation to disclose those relationships.

    Third, we suggest that the regulations disallow law firm ownership by a person or business who is likely to be a witness in the cases of clients the firm represents. This concern arises out of the not unlikely situation where a physician or other medical provider who will testify as an expert witness on behalf of a law firm’s clients is also an owner of that law firm. While it is true that such relationships could be elicited in cross-examination to argue that the witness/owner is not objective or is biased in one party’s favor, it seems unnecessary to invite that argument, and the presumably more exaggerated expert opinions that would be presented. This would not forward the interests of justice, but instead would compromise the integrity of a system that should be bound by objectivity and professionalism, not by who is business partners with whom.

    Innovation for Innovation’s Sake v. Narrowing the Access to Justice Gap

    It is clear that the proposed regulatory reforms are not intended to introduce innovation for innovation’s sake, but to narrow an actual access to justice gap. This goal is evidenced by the UWG’s laser focus on objectives-based regulation, and by a Sandbox structure that requires that proponents of a given innovation articulate how their innovation will meet the policy objective, which is to increase access to and affordability of legal services. The raison d’etre, then, of these regulatory reforms is the fact that some legal services are either inaccessible or unaffordable. Specifically, the UWG’s report identified an access to justice gap in the legal fields of: (1) debt collection (2) landlord-tenant, (3) small claims cases (disputes valued at $12,000 or less), and (4) family law.

    The UWG did not conclude that all legal services are inaccessible or unaffordable. It follows, then, that many legal services are both accessible and affordable. Consistent with the UWG’s findings and the stated goal of the UWG, we suggest requiring, as a precondition to Sandbox approval, that applicants demonstrate an access to justice need their proposal will meet, not just an innovation for an area that does not have an access to justice problem.

    UAJ is uniquely situated to comment on this point, because personal injury legal services, which most of our membership provide (including automobile crashes, products liability, medical malpractice, workers compensation and others), are an area with no identified access to justice issues. The Work Group did not identify, and we have not found, issues of accessibility or affordability for personal injury cases. That is primarily because these legal needs are provided on a contingency-fee basis, wherein the lawyer takes on all the financial risk and provides competent, full-service representation to the client. Indeed, there are few legal fee arrangements as beneficial to a client as contingent fees. The lawyer is financially incentivized to do the best work possible for the client. Where a case has merit, a lawyer can be found to take the case on a contingent fee, and the client’s legal needs are met competently and affordably.

    In light of these facts, opening the legal field of personal injury work to non-lawyers does not meet the raison d’etre of the proposed regulatory reforms. Simply, there is no access to justice gap in the personal injury field. As such, there is no justification for regulatory reform in this particular legal field.

    That we believe regulatory reform is unnecessary in this area, is not to say that innovation should not be welcome. The nature of contingent attorneys fees is such that attorneys are incentivized to be expeditious, cost-conscious, and successful for the client. Indeed, if there is a more efficient or cost-effective way of handling a PI case, PI lawyers find it and incorporate it. It comes as no surprise, then, that PI lawyers seek out and embrace innovation all the time, precisely because it increases the bottom line for both their clients and their own practices. Companies that collect and summarize medical records, or case funding lenders, or expert witness finding services, or technology for reconstructing car wrecks, abound and are used frequently to reduce costs and increase efficiency. If an innovation makes the case better for the client, PI lawyers find it. The incentives inherent in contingent fee practices already operate to the client’s best interest, and the innovations PI lawyers use, create, and seek do not need to go through the regulatory Sandbox; they are already authorized under the current regulatory scheme.

    Where the proponent cannot articulate a problem, we should not be introducing a regulatory “solution” that will do nothing but risk poor legal services for clients, or raise more issues or problems than they solve. Each application for Sandbox approval should require that the applicant identify how its proposal will meet one of the four access to justice needs identified by the UWG.

    Small Claims Matters

    The UWG has identified “small” civil disputes as a specific area of access-to-justice needs. The UAJ agrees with this finding and believes innovation in this area could be useful in closing the access-to-justice gap. Generally speaking, small claims litigants are pro se. To its credit, though, the Utah Small Claims Court system works well and provides good instruction and guidance to aid small claims litigants as they navigate the small claims process. It usually does not make economic sense for a small claims litigant, particularly an individual, to retain legal counsel at current hourly rates. A contingent fee arrangement is difficult, as well. Where damages are capped at $11,000, contingent fees would eat up much of the recovery, and hourly fees of even a lawyer who charges lower fees would often do the same; which is precisely why the process has been simplified for pro se litigants.

    However, there are those instances where small claims litigants are disadvantaged if they have to appear pro se; for example, when the adverse party is represented by an attorney. We wholeheartedly recommend that the Innovation Office actively seek innovations to aid pro se small claims litigants. These could be in the form of a lawyer or non-lawyer trained in the rules and procedures of small claims court and typical small claims matters, or technology innovations to offer further services online to small claims litigants, or educational resources. We would hope to collaborate with such initiatives to continue to help serve the needs of this population.

    Review of Sandbox Submissions

    We suggest that the Innovation Office maintain a list of lawyers specializing in areas of law, and that it solicit input from those lawyers when it evaluates Sandbox applications.

    One concern of our membership was the transparency of the Innovation Office. It will clearly be staffed by bright people, but no one is an expert at everything, and the matters the Innovation Office will be deciding could have significant and far-reaching consequences for clients and entire areas of the law. We are also cognizant of the fact that innovators may be disinclined to submit applications to the Sandbox if their innovations will be revealed broadly for comment.

    We recommend that the Innovation Office maintain a list of lawyers specializing in different areas of law, and call upon the specialists in a given area for comment when an innovator submits an application to the Sandbox. This will achieve the dual purpose of keeping innovations protected from more public dissemination prematurely, and obtaining the input from specialists on how a given innovation will affect clients in their area of legal specialty.

    Client Protections for Non-lawyer Representation

    We suggest that non-lawyers practicing law be required to maintain malpractice insurance and be disallowed from introducing mandatory arbitration clauses or negligence waivers.

    We further suggest that non-lawyers practicing law be required to receive extensive and ongoing training concerning the legal services they are providing, and concerning fiduciary duty, confidentiality and ethics.

    One salient problem arises when non-lawyers represent clients under retainer agreements that mandate arbitration in the case of disputes, or that include waivers or other devices to deprive the client of a remedy if the non-lawyer negligently provides incompetent representation. For example, one such agreement from another state stated: “Client agrees and understands that [non-lawyer] is not a lawyer, and is not providing legal advice. Client agrees and understands that client may at any time consult with a lawyer for legal advice.” Another stated: “Client agrees to hold [non-lawyer] harmless for any errors in legal advice provided by [non-lawyer] to Client.” If non-lawyers are going to enter the practice of law, we would propose that they be required to have protections in place for clients they represent, including malpractice insurance, and excluding contractual clauses that leave clients no remedy for malpractice.

    We look forward to collaborating with the Bar, the Utah Supreme Court and innovators to help narrow the access to justice gap in Utah.

     
  48. E Lawrence Brock

    Comment on amended rule 1.5 fees.
    I am an attorney been licensed to practice law since 1980 in California and since 1987 here in Utah. All during my law school and undergraduate years I worked in the legal community in Los Angeles and was very aware of these ethical issues than are now considering changing.
    I support the elimination of section 7 of rule 1.5. Elimination will allow attorneys to divide a fee between the procuring attorney or referring attorney, and the attorney who is going to handle the matter.
    It is an expensive proposition to obtain a new client, and when you have done the work to obtain a new client, you should be able to receive some benefit.
    It is also better for the client if case is referred to counsel who is more familiar and qualified to handle the matter. Over the years, I have seen a number of incidents when the attorney kept a case that they were not qualified to handle. Generally, in that situation the client suffers. Had that attorney referred it out and received a referral fee, the client and, therefore, the public would have been better served.
    The new rule 7.1 appears straightforward and very reasonable, comment number six, and this rule appears to change the rule that prohibited direct one-on-one conversation with a non-client and soliciting business from them. This may lead to the situation that I remember was called capping.
    When I did personal injury work back in the 1980s in California I had a number of tow truck operators, or people working in an emergency room that came to me and said, “We will bring you cases if you pay us for the case.”
    At that time, I felt that was inappropriate and it was a violation of the rules. This note, comment six appears to allow face-to-face solicitation.
    I believe it’s about time that rule 5.4A subsection B is approved. This change will help to minimize the trust mills that take advantage of elderly people. Everyone needs an estate plan and attorneys who are expert at delivering legal services are not always expert at marketing.
    This will allow an attorney to work with a marketing person and pay them based on their production of new clients. I think this is a positive change and will result in better estate planning for many, many people.
    Rule of 5.4B will allow attorneys to work with technical individuals and share fees and, therefore, be able to deliver a product that is of higher quality and a lower cost by combining the expertise of the attorney and the expertise of the technical individuals. This is a very positive step.

     
  49. Bruce Pritchett

    I am very much opposed to the proposed amendments. As some have noted, “Innovation for Innovation’s Sake” is not a sufficient reason for changing the law. Many of the proposed changes are bad policy for the legal profession and for the clients we represent.

    1. Non-lawyer ownership of law firms. This is a terrible idea. It is suggested that this will open up the “financial services industry,” which is like saying of the movie Jaws that Quint “opened up” the fishing industry to the giant shark. The hunter got devoured by the hunted in the end. The “financial services industry” includes the insurance industry, which already employs vast numbers of attorneys–for example, State Farm, Allstate, and a myriad of others. I worked in insurance defense early in my career, and found that even under current standards, the professional independence of the attorneys was always compromised, because the insurance companies are the source of recurring revenue (and hence, the largest source of the law firm’s revenues), while the individual clients were innocent bystanders. CAMPBELL V. STATE FARM illustrates the disregard State Farm has for its individual insureds, and the pressure it puts on attorneys to disregard individual clients. This situation will only get worse if insurance companies are allowed to own law firms outright. They already have “captive” law firms, which are notorious in the industry, and allowing further insurance industry encroachment will only further erode attorney independence.

    A few incantatory words saying “our independence is not compromised” does nothing to alter the real world financial pressures that would exist if law firms are owned by the financial services sector.

    Moreover, the financial crisis of 2009 illustrates the wisdom of having the legal industry independent of the financial industry–if the financial industry suffers another major collapse, the law industry will not go down with it. Good fences make good neighbors, and good law practice.

    The rule would also allow law firms to be owned by accounting firms, and there are really only 3-4 major accounting firms left in the US. Accounting firm ownership of the legal profession would inevitably consolidate legal services among so few major accounting firms that conflicts of interest would be impossible to avoid. Independence would exist in name only. Just follow the money. It is too powerful an influence to be kept at bay by mere incantatory phrases of independence. There must be structural independence as well.

    The other amendments are basically adjuncts to facilitate advertising and ownership and fee-splitting by non-lawyers, or by lawyers who are already captive to the financial services industry, which has not exactly had a great track record over the last couple of decades. We should stay away from that tornado of destruction, not invite it into the sandbox. There won’t be anything of the profession left.

     
  50. Bruce Pritchett

    These amendments allowing non-lawyer ownership will jeopardize the judiciary as well. The Supreme Court may want to consider the very real possibility that non-lawyer ownership of law firms could very well mean non-lawyer members of the Supreme Court and other judicial positions. What would stop that from happening? It would basically seal the end of the legal profession.

     
  51. National Center for Access to Justice

    The National Center for Access to Justice (NCAJ) is an independent, non-profit organization dedicated to making the justice system fairer and more accessible to everyone. We use research and data to identify and promote effective policy solutions to access to justice problems.

    We stand in emphatic support of proposed Standing Order 15, which would establish a “regulatory sandbox” in which to test and evaluate innovative models for the delivery of legal services. We also support the proposed repeal of Rule 5.4 and its replacement with draft Rules 5.4A and 5.4B, as changes that are necessary to implement the Standing Order. These reforms will put Utah at the forefront of efforts to find new solutions to this country’s access to justice crisis, at a moment when this kind of national leadership is more urgently needed than ever.

    Lawyers and legislators have made serious efforts over the years to expand access to legal representation, but the dismal reality is that most Americans still don’t get the help they need to confront their legal problems. Legal aid is a drop in the bucket next to the scale of unmet need in poor communities. Many people don’t understand that their problems are legal in nature or amenable to favorable judicial intervention. Even people who might scrape together the money to hire a lawyer often choose not to, because the financial costs can be every bit as onerous as a bad day in court. The result is that people either end up going it alone, disarmed and disadvantaged, when confronting legal problems, or they simply don’t go at all, missing out on chances to vindicate their rights in court. People then lose their homes, their paychecks, their children and even their freedom—and all too often those outcomes could have been avoided with good legal advice and other assistance.

    At NCAJ, we understand the value and importance of legal representation to individuals and communities facing legal problems. We have long been active in support of efforts to increase access to counsel, including by strengthening legal aid, increasing attorney pro bono requirements, and expanding the civil right to counsel. It is precisely because of those efforts that we share the Utah Supreme Court’s understanding that lawyers alone will never be able to solve the access to justice crisis in this country. Utah, like the rest of the nation, needs to identify safe, effective models of legal services delivery that are non-traditional and have the potential to empower people who will never have lawyers, but who need help to be able to enforce their rights and protect their interests

    We believe that to succeed, reforms must enable people to rely on individuals who do not have JDs, but who are able to use the law effectively to help others. Utah has already embraced this core idea by creating the new Licensed Paralegal Practitioner program.

    The regulatory sandbox envisioned under Standing Order 15 will allow room to expand on the idea in innovative ways. We hope that Utah will embrace approaches that empower qualified non-JDs to do more with the law, and without assuming a need to create expensive new credentials. In Washington State, Limited License Legal Technicians (LLLTs) have delivered high-quality family law services for several years now to people who might otherwise be priced out of the market for legal help. The only cautionary tale we see there, is that the state’s extraordinarily rigorous credentialing requirements may have throttled the program’s growth and limited its potential reach. Indeed, Washington’s Supreme Court recently announced its intention to sunset the program— justifying the move largely by pointing to its slow and limited expansion.

    Many frontline advocates know the law and are well positioned to provide some kinds of legal help with the right support and regulation. This could make all the difference for people who would otherwise be likely to receive no legal help at all. We think that approach—democratizing the law and giving people more freedom to get help from qualified people they know and trust— holds the most promise in putting unrepresented litigants on a more equal footing under the law.

    Opponents of reform have at time caricatured these calls for change as reckless, or insisted they will bring an end to the profession of law. But fears of consumer harm are often rooted in the straw man vision of a chaotic, unregulated marketplace where incompetent laypeople and scam artists prey upon unsophisticated consumers. And while as champions of legal representation we believe in the essential role of lawyers in our society, we also recognize that the defense of the profession must not be so expansive as to eliminate the real-world opportunity for people to protect and defend their rights. The choices are inevitably complex, and we certainly agree that concern and caution are warranted. Care must be taken to ensure that reforms provide for robust regulation, protect consumers of legal services from harm and maintain the integrity and strength of the legal profession. Standing Order 15 is rooted in a clear understanding that a main virtue of the regulatory sandbox model is to reduce risk by requiring close monitoring and rigorous evaluation.

    The simple truth is that we don’t yet know what some of the best and most effective models will look like. The only way to find out is to allow space for innovation and experimentation that existing rules largely preclude. We believe and expect that Utah’s vision of a regulatory sandbox model will strike the right balance between the imperative to allow space for new models for access to justice to develop, grow and improve, and the need for robust regulatory oversight to protect the public from harm.

    Finally, it has to be emphasized that these ideas have never been more urgent. The economic catastrophe COVID-19 has unleashed upon this country has thrown millions of people out of work and into precarious situations. The sad reality is that this will translate into a wave of unmet legal need as many Americans struggle with unpaid debts and medical bills, face eviction from their homes, and struggle with other newfound legal woes. We have a moral duty to ensure that people get the help they need to know their rights, protect them, and get a meaningful day in court. America’s access to justice crisis is about to assume terrifying new proportions, and we can only hope that other states will follow Utah’s example in taking such determined steps to solve it.

     
  52. Roger LeFevre

    A large percentage of people are precluded from accessing the Courts, and from obtaining the most basic and elementary legal services.

    Virtually all courts and administrative agencies have adopted some type of Pro Se assistance mechanism(s). That’s because many attorneys ignore their Pro Bono responsibilities or ask for fees that do not accommodate low/lower income or otherwise financially disadvantaged clients.

    Non-attorney owned technology and innovative services companies formed and evolved nationwide over the last 25-years to address the common and mass legal needs of our citizenry. Attainable legal services for family and domestic matters, immigration, consumer exploitation, bankruptcy, entity formation, and social justice have become a reality through non-lawyers. Non-profit and other non-government organizations, in particular, serve the interests of those who would not otherwise have a voice.

    There is no question that essential legal services can be delivered through non-attorney owned firms and service providers. The thoughtful and considered basis and predicates underlying Standing Order 15 vindicate any arguments for not giving the ‘Pilot Legal Regulatory Sandbox’ an opportunity to be tested. Ample governance is established by the proposed rule.

     
  53. Adam

    I do not see how we could reasonably support these proposals, especially Order 15, without better assurance this would not lead to the exploitation and monopolization of the legal profession. Who will administer this “sandbox” regulatory body? How will the gatekeeper be selected? How will it be funded? How will it make sure it is able to unwind unintended or adverse consequences when big tech and other industries poor millions of dollars into growing their legal services platforms etc?

    Also, how does refer all splitting and removing restrictions on solicitation possibly help those in need of legal services? It seems to me it would only encourage awarding referrals to the highest bidders and diminish important advertising standards that serve to protect consumers.

    Overall, while I applaud the effort to increase accessibility to legal aid to those most desperately in need of it, these proposals seem to go too far while being too broad. Increase tools for pro se parties, fund more legal aid programs, do more to encourage pro bono efforts. These proposals unnecessarily jeopardize and devalue the legal profession and are too vague to earn my support.

     
  54. Roy Huntsman

    It is apparent to everyone that the world is changing. Big tech is buying up every aspect of our lives. I suspect those who pitch the “regulatory sandbox” are sincerely trying to do the right thing, but are unwittingly selling ALL attorneys to big tech. Soon, even the big advertisers in this state will be unable to complete with Amazon Law, or Google Law, or Microsoft Law. We will eventually all work for the tech firms for low pay.

    It was shocking to me that the Supreme Court wanted to allow fee sharing with non-attorneys even before it was allowed between attorneys, until I realized the people pulling the strings are multi-billion dollar corporations, and we were all chattel for sale in the marketplace.

    So, before it happens, let me throw my, “I Object!!!”, into the abyss where no one will hear it. The rule changes will not protect Utah’s attorneys, nor the public, but it will empower big tech to take over the market. It will kill the profession. It will affect justice and the rights of the people who need real legal help.

    Every attorney in the state can oppose the rule changes, but nobody, I suspect, has any power to stop it. Something like this should be beyond the power of the court to regulate or change. But it will change because big tech wants it to change. We, the attorneys in this land of the free cannot litigate it, or fight it. We can only watch with horror as the ship of the legal profession is driven into the rocks.

     
  55. Michael Schwab

    I am deeply concerned with the provision in Standing Rule 15 that sandbox participants, including non-lawyers, may be approved to exit the sandbox and granted the appropriate license to practice law. Early in my career, I was asked by the Utah State Bar to handle its litigation against Public Adjusters. At the time, Public Adjusters were, in our opinion, clearly practicing law without a license. They were representing people on a contingency fee basis, negotiating settlements, reviewing legal documents, etc. It was causing horrendous problems because they were not bound by attorneys’ Rules of Ethics, had no Court or Bar oversight, and could basically do anything they wanted (even if it was illegal or unethical) without any fear of reprisal. I personally saw how some of their clients were seriously damaged by their conduct and lack of experience.

    I see the exact same danger with this Rule. Non-lawyers who are “approved” and given a license to practice have not gone to law school, may not have apprenticed with a lawyer, have no malpractice insurance to protect their clients, and are not bound by our Rules of Ethics. Their clients would also not have access to the Bar’s Client Security Fund because their “representatives” are not members of the Bar and have not paid into the Fund. This is NOT something that serves the public’s interests.

    It appears the entire basis for Rule 15 is a concern regarding “access to justice.” There are plenty of (some would say too many) lawyers available, so that phrase is apparently in reference to potential clients not being able to afford a lawyer rather than not being able to find a lawyer at all.

    First, the “access” argument simply does not apply to many areas of the law. For example, in areas like personal injury, wrongful death, medical malpractice, product liability, Social Security disability, etc., all such cases are taken on a contingency fee basis and clients pay nothing out of their own pockets. That fact, along with the thousands of attorneys who handle such cases, makes an “access” argument simply irrelevant in those type of cases. Likewise, in 30+ years of practice, I have never heard of a corporation (whose legal fees are written off as a business expense) claim “denial of access” to legal help. Therefore, if this Rule is adopted, it should ONLY be in areas of the law where there truly is a “lack of access.” It should not be applied across the board to all legal work.

    Furthermore, even in the limited areas where there is an access problem, non-lawyers “practicing” without a license are presumably not going to do their work for free, so indigent and low income people will still not have “access.” They will still be paying, but getting a lesser product.

    Finally, this rule raises troubling constitutional issues. There are thousands of lawyers practicing right now who were required to graduate from an accredited law school, pass the Bar exam, pay annual Bar dues, maintain continuing legal education, and fulfill other requirements. How could one say that attorneys had been given equal protection (or the “uniform operation of laws” guaranteed by Art. I, Sec. 24 of the Utah Constitution) when they were required to do all those things to “practice law,” and non-lawyers were not?

    There are obviously needs that should be addressed in certain, limited areas of the law where access does not exist. However, for all of the above reasons, efforts to do so should be narrowly tailored to those situations and areas so that other areas of the law, which have no “access” problems, are not unnecessarily affected.

     
    1. Roy Huntsman

      I agree.

      If there is to be change, it should be narrowly tailored to provide the access to those who have limited resources and to areas of the law that do not already provide access to the poor. It should be very limited. Anything more is a money and industry grab by the rich and powerful.

       
  56. Danielle Wallace

    I am certain that many attorneys have brought this up before but why is there still no measure of commensurate accountability for non-lawyers? For example, if I go and work for one of these non-lawyers and the non-lawyer demands that I do anything that violates my ethical duties as an attorney, I can and will be replaced or be punished. Even if I report my hypothetical employer’s conduct, the worst that could happen is that the entity can no longer participate in the program. Assuming, however, that I am a new associate who is still learning the Rules of Ethics and I trust my employer and engage in activity that violates the rules I can be disciplined and that mark will follow me to various jurisdictions for the remainder of my career. While the business owner or middle management employee can go on to form a new entity or work somewhere else in their profession, I cannot form a new identity and my professional career as an attorney is brought to an end. I believe that 5.4A subsection B absolutely puts new attorneys in an untenable situation and for that reason alone I cannot support this proposal.

    The Utah Work Group on Regulatory Reform (“UWG”) has already compiled a report which identified a justice gap in the legal fields of: (1) debt collection (2) landlord-tenant, (3) small claims cases (disputes valued at $12,000 or less), and (4) family law. I field calls every day dealing with at least one or more of those practice areas. It doesn’t surprise me that at least the first two practice areas have a “justice gap” as both debt collection and land-lord tenant law statutorily benefit those who can afford to bring the action in the first place. If there is a “justice gap”, the gap was statutorily created and so even if everyone had equal access to civil litigation the “justice gap” would still exist.

    The proposed rules disincentives new attorneys from remaining in this jurisdiction and aren’t going to bridge the gaps created by statute.

     
  57. James Sandman

    I strongly support the Utah Supreme Court’s Regulatory Reform Proposal.

    I am currently Distinguished Lecturer and Senior Consultant to the Future of the Profession Initiative at the University of Pennsylvania Law School. I am also President Emeritus of the Legal Services Corporation (LSC), the United States’ largest funder of civil legal aid programs for low-income people; I served as President of LSC from 2011 until February of this year. I practiced law with Arnold & Porter for thirty years and served as the firm’s Managing Partner for a decade. I am a past President of the District of Columbia Bar and currently chair the American Bar Association’s Task Force on Legal Needs Arising Out of the 2020 Pandemic.

    I believe the Supreme Court’s proposal offers Utah the opportunity to lead the nation in improving the legal profession’s service of the public’s needs and in increasing access to justice. I admire the Utah Work Group on Regulatory Reform and the Utah Supreme Court for their strong commitment to making America’s solemn pledge of justice for all a reality, as opposed to the cruel illusion it is for so many today.

    The proposal is rooted in a clear-eyed understanding of the magnitude, urgency, and gravity of the access-to-justice crisis. The Work Group’s report minces no words in describing the justice system’s struggle to provide meaningful access to justice: “[W]e have not only failed, but failed miserably.” The report and recommendations are based on data from multiple sources: the National Center for State Courts’ 2015 finding that in 76 percent of non-domestic civil cases in state trial courts, at least one party was unrepresented; the Legal Services Corporation’s 2017 finding that 86 percent of the civil legal needs of low-income people in the United States receive no or inadequate legal help; and the Third District for the State of Utah’s 2018 statistics showing that at least one party was unrepresented in 93 percent of all civil and family law disputes. These numbers have enormous human consequences. They reflect the inability of people to obtain redress in matters affecting the most basic of their needs – the stability of their families, their shelter, their personal safety, their health, and their economic subsistence. And they result in a dangerous erosion of public confidence in the justice system.

    As the Work Group’s report emphasized, the proposal will allow Utah “to harness the power of entrepreneurship, capital, and machine learning in the legal arena.” It offers the prospect of a system of justice that reflects the kind of access, effectiveness, and efficiency that innovation has brought to so many other professions and industries serving the public in the 21st century. The proposal is thoughtful, reasonable, and rigorously protective of the public interest. It ensures that the practice of law by nontraditional legal services providers will be regulated with the core objective of improving access to justice; will conform to clear and unassailable principles; will be subject to controlled, risk-based, empirically-driven evaluation in a carefully constructed regulatory sandbox before new service models are implemented; and will at all times be subject to the Supreme Court’s direction and control. Most importantly, the proposals will allow Utah to craft solutions to the access-to-justice crisis that are commensurate with the magnitude of the problem.

    The proposal to replace current Rule 5.4 of the Rules of Professional Conduct with new Rules 5.4A and 5.4B will ensure the professional independence of any lawyer sharing fees with a nonlawyer and will subject lawyers proposing to practice through new business structures to the strict safeguards of the regulatory sandbox. No new service delivery models will be implemented without first having been tested for their impact on consumers. These wise constraints address any potential harm to the public that might attend the mere repeal of current Rule 5.4.

    The elegant simplification of the Rules of Professional Conduct governing lawyer advertising will promote the provision of clear, helpful information to people in need of legal services while protecting the public from false and misleading claims.

    As a former Bar President, I know that proposals like these inevitably draw negative comments in large numbers from lawyers who are concerned about the effect that change might have on their practices. I encourage the Supreme Court to focus on the public’s proven and desperate need for more accessible legal services. I believe the profession will thrive and prosper when it achieves its first goal – serving the public well. The proposals position Utah and its bar to prove to the rest of the country that public service and professional success need never be inconsistent.

    This is a particularly appropriate time to embrace the proposal – a time when a pandemic has propelled unemployment and economic hardship to the highest levels in almost a hundred years, and when racial inequities in the justice system have shaken our country. I believe the crisis in unmet legal needs is about to become far greater and even more urgent, with all those who have recently lost their jobs soon to face a flood of eviction, foreclosure and debt-collection cases. And the burdens of the justice gap fall disproportionately on people of color. This is a time for action.

    The founders of our country and the framers of our national government emphasized over and over again that their highest value and goal was justice. Alexander Hamilton wrote, “The first duty of society is justice.” James Madison wrote in Federalist No. 51, “Justice is the end of government. It is the end of civil society. It ever has been and ever will be pursued until it be obtained, or until liberty be lost in the pursuit.” And Thomas Jefferson wrote, “The most sacred of the duties of government is to do equal and impartial justice to all its citizens.”

    The Utah Supreme Court’s Regulatory Reform Proposal gives me hope that the most fundamental of America’s values – justice – is alive and real. Thank you to all who have worked so hard on it.

     
  58. Rebecca Kourlis

    I write to support the proposed changes wholeheartedly.
    I am a retired Justice of the Colorado Supreme Court and former trial court judge in Colorado as well as the former Executive Director of IAALS, the Institute for the Advancement of the American Legal System at the University of Denver. In all of those capacities, I have been exposed to the widening gap between the need for legal services and the provision of those services.
    In this increasingly complex world, justice for all is an illusion unless we all have access to legal advice, legal services and court process. Experimentation with ways to deliver those services in an accessible and affordable way has been caught in a web of regulatory constraints that have prevented innovation and creativity. Accordingly, we have not responded to the public need. Legal services are extremely expensive and hard to obtain. That is not acceptable. Almost every other profession has opened its ranks, changed its rules and figured out ways to meet the needs of the user. Now it is time for the legal profession to do the same.
    The Utah Supreme Court and Bar have led the nation in other reform efforts, including online provision of court services and efforts to streamline and reduce costs of civil litigation. Utah is now leading the way in regulatory reform.
    Not only are the proposals visionary, with a clear focus on how to serve the needs of the people – but they are also humble. They recognize that not all of the solutions are the right ones, and they have thus built in a plan to evaluate outcomes. If there is a need to tweak and change, the Court will have the benefit of clear, objective evaluations to accomplish that end.
    The whole nation should be applauding what Utah is on the verge of doing. Change is hard, but long overdue. Let us all support these changes, lend a hand to make them work, and most importantly, refocus ourselves on the needs of the users, the people for whom Justice functions.

     
  59. Ernest Istook

    The most-important concern, expressed in a multitude of comments, is that clients will not be properly protected or served if non-lawyers are allowed to provide legal services or to own the entities which provide legal services.
    Providing this protection for clients would require a new regulatory scheme to create legal duties, responsibilities and liabilities for those non-attorneys. But creating that is beyond the constitutional authority of Utah’s court system.
    The courts’ ability to regulate attorneys does not give the courts legislative authority to regulate non-attorneys. Only the legislature has power to create consumer and client protection from the non-lawyers who would be invited to provide legal services.
    Take note of what the Utah Bar Association writes on its webpage at https://www.utahbar.org/public-services/unauthorized-practice-law/: “Despite the serious consequences that the unauthorized practice of law can have on innocent victims, the unauthorized practice of law is not a crime in Utah. The Committee itself [the bar association’s Unauthorized Practice of Law Committee] cannot arrest people who violate SCR 14-802 [Rule 14-802. Authorization to practice law.] or impose monetary sanctions. The Committee also cannot file lawsuits on behalf of complainants.”
    No matter how well-intentioned, the proposal to allow non-attorneys to practice law or to own law firms cannot require them to follow the existing safeguards whereby attorneys can be sanctioned or disbarred as necessary. Nor can they be required to demonstrate their fitness and character in order, as lawyers are required in order to be admitted to the bar.
    It is no remedy to claim that clients can sue non-lawyers who provide legal services. The question is rightfully posed of “what standard of care” would apply to such a lawsuit. The courts cannot unilaterally create that standard of care outside of admission to the bar; it would require action by the legislature to create such laws.

     
  60. Leslie Slaugh

    The proposal promises regulation by the Utah Supreme Court, but how would the court have authority to regulate the business end of the arrangement? The court’s authority is limited to regulating the “practice of law.” Utah Const. art VIII sec 4. The court has been unable to define the limits of that term: “We have never precisely defined the practice of law, and have noted that what constitutes the practice of law in any given situation requires a case-by-case decision.” In re Discipline of Jardine, 2015 UT 51, ¶ 21, 353 P.3d 154, 159.

    The supreme court apparently views its authority very broadly, but the court probably does not have authority to regulate the business of providing legal services. The court probably does not have authority to regulate the ambulance chasers who do not provide any legal advice or legal services but merely refer injured persons to a lawyer (of course in exchange for a fee from the lawyer or other provider of services).

    The need for comprehensive regulation will lead the legislature to attempt to regulate the field, which will lead to confusion and additional litigation.

    A better approach would be to simplify the legal process so that litigation is not so expensive. Curtailing extensive motion practice and getting the cases to trial sooner would be a good start.

     
  61. John Ludlum

    Dear Sir or Madam,

    I am utilizing this opportunity to comment on “Narrowing the Access to Justice Gap by Reimagining Regulation” (“Legal Reform 2020”) although it is my understanding that comments will not matter because the decision to proceed with the proposals has already been taken. I saw recently a comment that we are supposed to live in a republic that functions with the consent of the governed, which I find inconsistent with living in a state where the legislative bodies ignore public referendums. I see this unilateral approach to decision making on Legal Reform 2020 as systemically dysfunctional. It is my opinion that this “already decided” approach will cause many to save the time it would take to comment, and many suggestions and experience-based considerations will not be offered on Legal Reform 2020.

    The stated mandate for Legal Reform 2020 is to “[t]o to promote innovation to increase both access and affordability of legal services.” Legal Reform 2020 appears to be quite a bit broader than that. It is undeniable that legal services are unaffordable to many who need them, but we should consider the likelihood of success for implementing the “regulatory sandbox” for achieving the stated objective, and the potential for unintended consequences. How effective and influential is the Utah Bar at ensuring social and legal functions are done well and properly? Consider, for example, the Utah State Bar’s failure to cause the state to provide adequate funding for indigent criminal defense, a constitutionally guaranteed right, over many years. Even after the funding increase in 2018, we are still behind Idaho, Oregon, Nevada, Washington, Colorado, and Montana, typically by multiples of 2 or more in per capita spending (although Utah is ahead of Mississippi). https://idc.utah.gov/wp-content/uploads/2020/02/Web-System-Per-Capita-Spending-Comparison-Chart.pdf . While there can be other standards than funding, I am unaware of any parties saying that Utah’s indigent defense is functioning well for timeliness and effectiveness of providing this constitutionally guaranteed right. We also have had problems with the courts being used to enable predatory lenders to prey on the poor: https://consumerfed.org/wp-content/uploads/2020/02/Payday-Lending-in-Small-Claims-Court.pdf With “Payday Lenders” making up 68% of small claims court hearings, 3 in 10 of these cases resulting in bench arrest warrants, and the Utah legislature’s allowing lenders to obtain bail money (https://le.utah.gov/~2014/bills/static/SB0159.html ), it is safe to say that while small claims courts were intended to improve access to justice for average Americans, it appears that the majority function for small claims courts in Utah is to enable lenders to aggressively collect inflated interest rates from poor, insolvent borrowers. These are complicated issues, and I am aware that efforts are being made to improve a system not completely within the control of the Utah Bar and courts, but it is relevant to consider concrete examples of poor regulation or unintended outcomes in evaluating the potential for problems arising in Legal Reform 2020 implementation.

    The question arises, what could go wrong? There are comforting examples of trusts and estates lawyers partnering with financial planners to provide comprehensive services to clients seeking estate planning. While this seems benign, although hardly a service targeted towards the average citizen priced out of legal services, how about cooperation between a debt collection firm, a bail bonds company, and a high rate lender? That seems a partnership ripe for abuse and very detrimental to the intended community that Legal Reform 2020 aspires to serve. Would the debt collection firm be ethically accountable for the practices of its partner bail bonds company and high rate lender? It is also expected that the major accounting firms will come to the state and partner with law firms to provide integrated services in the same model that these “Big 4” accounting firms apply to jurisdictions outside of the U.S.A.. Again, these services are not really applicable to the underserved citizens that Legal Reform 2020 is targeting, but we have some noteworthy examples of times when consolidated services have been problematic: Arthur Anderson illustrated the challenges of combining independent audit and consulting services, and our clients are still burdened with Sarbanes-Oxley for the crimes of Enron. It is noteworthy that Utah does not allow law firms to take equity in clients as a legal ethical conflict (USB EAOC Opinion No. 98-13), and maybe this position should be revisited in the present loosening climate? Major firms in other jurisdictions have taken stock in their clients for many years allowing these firms to serve early stage business clients that could not otherwise afford legal advice from these firms, and while it seems a clear ethical violation of the policy of separating legal and business interests, the practice continues for more than 2 decades without reported problems.

    One example of the reforms will be products like SoloSuit offered by SixFifty which is a subsidiary of Wilson Sonsini Goodrich and Rosati. This service markets a product that would help the intended beneficiaries of Legal Reform 2020. In looking at the site, I am not sure how someone who struggles with the English language would fare, so is the Utah Bar going to require multiple languages as a condition to approval in the regulatory sandbox? In addition, many services are not free, but the prices are not disclosed: attorney review, filing service, service on an opposing party, et al. The total costs are not clearly less than hiring a competent and efficient attorney. And there is the inevitable question for people using these services of what next when the other litigant responds with no attorney retained to advise the client.

    There is potential in ideas like SoloSuit, and I understand that “the regulatory sandbox is a well-established policy tool through which regulators permit new models and services in a market under careful oversight to test the interest, viability, and consumer impact and inform policy development.” Does the regulatory sandbox have a structure for collecting data independently of the regulated entities on the performance of such entities, does the regulatory sandbox have a budget that would enable it to function effectively and independently, or would it rely on anecdotal data and user fees and other funding that will lead to conflicts of interest? It seems that there are many questions about implementing such broad reforms, and it is easy to feel that there has simply been a decision to “wing-it.”

    Thank you for any attention you have paid to my thoughts about certain issues that Legal Reform 2020 raises.

    Sincerely,
    John Ludlum

     
  62. Art Lachman, Co-Chair, APRL Future of Lawyering Committee

    The Association of Professional Responsibility Lawyers’(APRL) Future of Lawyering (FOL) Committee generally supports the Utah Supreme Court Regulatory Reform Proposal published for comment on April 24, 2020. APRL is not offering comment as to the details of the specific regulatory and ethics rule changes being proposed in Utah; however; APRL’s FOL Committee supports Utah’s bold action as a significant step in facilitating a crucial discussion about improving access to legal services.

    APRL is a national association of lawyers who provide advice and representation in all aspects of legal ethics and professional responsibility. APRL’s members include practicing lawyers, academics, judges, corporate counsel, risk management attorneys, and government lawyers. For 30 years, APRL has taken public positions on the rules governing lawyers, as well as professional discipline regulations, legal malpractice statutes and principles, and other developments in professional responsibility matters. APRL holds twice-yearly conferences on ethics topics, and submits public statements, reports, and amicus curiae briefs in pending state and federal litigation and rule amendment proceedings.

    APRL issued landmark reports in 2015 and 2016 proposing reforms regarding lawyer advertising and solicitation rules, which have formed the basis of rule amendments and amendment proposals in several states and at the ABA.

    In 2018, APRL formed the Future of Lawyering (FOL) Committee to consider comprehensive regulatory reform for improving legal services delivery and for easing overly restrictive ethics rules that inhibit legal help for middle- and low-income Americans.

    APRL’s FOL Committee applauds the Utah Supreme Court’s acknowledgment of the judiciary’s primary role in regulating legal services delivery in the U.S., and its recognition that the rules and regulations that are in place in every U.S. jurisdiction simply are not working in light of technological developments in our 21st Century world. Not only is access to legal services largely inadequate and too expensive for a large segment of the population, but also the rules in place unnecessarily restrict innovation.

    The Utah Supreme Court’s proposal seeks to explore methods to correct these inequities. Creating a regulatory sandbox for alternative providers of legal services is an excellent way to develop much needed data on how consumers are both benefitted and potentially harmed by permitting nonlawyer persons and entities to deliver legal help.

    Dating back to the early 20th Century, bright-line restrictions in regulations such as Model Rule 5.4 and the unauthorized practice of law, along with the disciplinary approach to the law of lawyering, have been based on the assumption that multidisciplinary legal practice will detrimentally impact both lawyer professional independence and consumer protection. The Utah proposal recognizes the importance of putting in place effective, common sense regulation that is based on and tailored to the evaluation of real-world risks and outcomes to consumers rather than mere speculation about consumer harm.

    And the data developed in this consumer-tested regulatory sandbox will no doubt inform the efforts at APRL and in other U.S. jurisdictions considering regulatory reform to allow for the delivery of legal services in a manner that reflects the realities of our 21st Century world.

    APRL’s FOL Committee also appreciates Utah’s proposal for reframing the ethics rules to permit licensed lawyers to participate in non-traditional entities in the contemplated sandbox. As lawyers who advise and represent lawyers, APRL too often sees first-hand the chilling effect of the bright-line and non-consentable restrictions, with the practical effect that nonlawyer providers can often do things to serve legal needs of the consuming public in a manner in which lawyers are ethically prohibited.

    Under the Utah proposal, licensed lawyers operating in the sandbox will remain generally subject to their legal ethics obligations when working with nonlawyers, with appropriate adjustments under a court-supervised regime charged with assessing the reasonableness of regulation based on public benefit as weighed against costs, burdens, and consumer harm. As APRL’s FOL Committee’s own study is ongoing, it appears that the Utah experiment will inform regulatory change in lawyer regulation beyond Utah, and ultimately will benefit lawyers as well as legal services delivery.

    Finally, APRL’s FOL Committee applauds the Utah proposal for recognizing that in addition to Rule 5.4 on nonlawyer investment and ownership in law firms, other legal ethics rule will likely need to be amended to accomplish comprehensive regulatory reform. Utah’s proposal effectively adopts APRL’s earlier recommendations to simplify and improve the legal ethics rules regarding lawyer advertising. It also recognizes that historical restrictions on in-person solicitation and referral fees, including the near-absolute prohibition against fee sharing with nonlawyers, unnecessarily limit the ability of the public to locate and obtain cost-effective legal help.

    The Utah proposal appears to be a thoughtful attempt to strike an appropriate balance in broadening the availability of legal services to the public while maintaining the appropriate level of protection to consumers based on real risks and real outcomes. The proposal is for reregulation, not deregulation. APRL’s FOL Committee believes Utah’s data will inform APRL’s effort to develop a comprehensive regulatory reform proposal that can serve as a roadmap for adoption in multiple jurisdictions on a national or regional basis and that will apply broadly to lawyers and nonlawyers alike. APRL’s FOL Committee commends Utah’s willingness to take action in attempting to improve access to affordable legal help for everyone and allowing us to learn from its experience.

     
  63. Stacy Butler

    On behalf of the Innovation for Justice Program at the University of Arizona James E. Rogers College of Law, I write in support of the Utah Supreme Court’s Regulatory Reform Proposal.

    An annotated version of this comment is available at: https://docs.google.com/document/d/1q51gkQB4UPBCjXG352KEZf5fF_E94cJuWUBVaOo8oAA/edit?usp=sharing

    The Innovation for Justice Program (i4J)

    i4J is a social justice innovation lab that designs, builds, and tests disruptive solutions to the justice gap. Barriers to entry, power imbalances, and flawed processes exclude marginalized populations from effective use of the civil legal system and inhibit the system from delivering on the promise of justice for all. i4J applies design- and systems- thinking methodologies to launch and evaluate new and replicable strategies for legal empowerment. It produces action-based research and real-world deliverables that support legal service providers and their efforts to bridge the gap. i4J is actively engaged in Utah: i4J worked with the LawX Lab at BYU on an eviction prevention project that produced Hello Landlord, an online tool for tenants, and i4J partnered with the Utah State Court on a forthcoming evaluation of the usability of Utah’s online dispute resolution platform.

    i4J’s upcoming work on medical debt in Utah

    The i4J lab is in the initial stages of community-engaged research in Utah that can leverage Utah’s regulatory reform efforts to expand legal services for people experiencing medical debt. The COVID-19 pandemic is amplifying the connection between poverty, illness, and debt in the civil legal system. That connection is exacerbated for people of color, who experience higher rates of COVID-19 because of their living conditions, work conditions, and existing health disparities, and who are more likely to lose employer-sponsored health insurance due to unemployment. A quarter of Americans have health insurance but are nonetheless underinsured, many others experience gaps in coverage, and deductibles have grown at ten times the rate of wages — all leaving Americans increasingly exposed. Accordingly, even before the pandemic, the number of debt collection suits more than doubled nationwide between 1993 and 2013—to about 4 million—and became the single most common type of civil litigation, representing 24 percent of civil cases. Medical debt in particular accounted for more than half of all collections activity, and was one of the leading causes of foreclosures and bankruptcies, with more than half of bankruptcy debtors having medical debts. Medical debt stands in the way of subsequent treatment and causes mental health problems. And, by the time a medical debt reaches the court system, devastating consequences for the debtor are almost inevitable: more than 70 percent of debt cases end in default judgments against the debtor. Medical debtors are at the mercy of a dysfunctional legal system, which fails to achieve its most fundamental goals of providing parties an opportunity to be heard and adjudicating a claim on the merits based on facts presented by both parties. Default judgments translate into wage garnishments, liens, civil arrests, and the inability to secure housing, credit, and employment. Racial inequity occurs here too; with debt collection judgments in mostly Black neighborhoods nearly double that of mostly white ones.

    Research by the National Consumer Law Center (NCLC) has shown that, “low-income consumers may have a variety of health law and consumer law claims and defenses to debt collection efforts by doctors, hospitals, and their collection agencies,” but these legal protections vary wildly across the United States and are buried in highly technical legal documents (e.g., the canonical chapter on medical debt collection is written for lawyers—with 888 footnotes). Our under-resourced non-profit legal service sector lacks the capacity to serve many who seek their services, and so legal innovation has prioritized serving the urgent demands of those who can articulate a civil legal need. Expansion of publicly available legal information on lawhelp.org sites, self-help resources, and technology tools for self-represented litigants all rely on an assumption that the person engaging with the innovation knows they have a legal issue. However, the millions of low-income Americans seeking free civil legal help and legal information are only the top of the access to justice iceberg: forty years of surveys reveal that “the vast majority of civil justice problems are never taken either to lawyers or to a court” because most Americans do not understand their justice situations to be legal. That “justice awareness gap” is evident in the high rate of default by defendants in medical debt collection lawsuits.

    To protect our most vulnerable populations from the devastating consequences of medical debt, we need to get below the surface and find ways to address the justice awareness gap, because unidentified civil legal issues such as medical debt keep low-income Americans in poverty. A person ignoring calls from medical debt collectors, because she is unaware that she might negotiate and settle the debts, is likely to face default judgments that will destroy her credit and put her at risk of homelessness or imprisonment. Delivering legal advice upstream, before a socio-economic problem becomes a legal problem, has the potential to radically expand the capacity of legal services to combat poverty. Traditional legal service models are not designed for and are insufficient for this type of upstream work, and “the absence of action by legislative and executive branches leaves courts managing litigants’ socio-economic needs, which courts are neither designed nor equipped to address.” However, “effective, accessible, non-legal routes to solutions for common and significant civil justice problems [can complement traditional legal services].”

    The Capacity for Change in Utah:

    The State of Utah is uniquely positioned to lead the nation in the identification, design and launch of disruptive legal service models that provide accessible solutions for common and significant civil justice problems like medical debt. With the launch of its regulatory sandbox, Utah is prepared to look below the top of the iceberg and reach those in the justice awareness gap by expanding the delivery of legal advice through adaptation of unauthorized practice of law (UPL) restrictions. Those with unrecognized civil justice issues could be helped by non-lawyer advisors who “would not be limited to legal routes to obtain solutions; rather, they would be focused on helping people understand their options and resolve their substantive problems,” perhaps without recourse to formal legal institutions.

    That leadership is much needed: the current landscape of regulatory reform of UPL reflects a lack of understanding regarding how low-income Americans experience and navigate civil justice issues. Regulatory reform decision-makers are primarily judges and attorneys; non-legal social service providers serving the poor and vulnerable have not robustly engaged with regulatory reform efforts and few members of the public engage in the process. Not surprisingly, proposed changes to UPL have narrowly focused on elevating traditional legal service models, like the paralegal, through a market-driven approach. The Utah regulatory sandbox offers an unprecedented opportunity for the social service sector to safely explore new pathways for legal empowerment for underrepresented communities and an incredible opportunity to model for the rest of the nation how regulatory reform can expand access to justice..

     
  64. Utah Defense Lawyers Association

    The Utah Defense Lawyers Association (UDLA) is a Utah non-profit organization serving the interests of Utah lawyers principally involved in the defense of civil litigation. UDLA serves its members by promoting professional development through the exchange of information, ideas, and litigation techniques to enhance the knowledge and improve the skills of Utah civil defense lawyers.

    DRI is the leading international membership organization of lawyers who represent business in civil litigation. DRI is committed to enhancing the skills, effectiveness, and professionalism of defense lawyers, anticipating and addressing issues germane to defense lawyers and the civil justice system, promoting appreciation of the role of the defense lawyer, improving the civil justice system, and preserving the civil jury.

    UDLA and DRI agree with the Utah Supreme Court that access to justice is an area of national concern. But for several reasons, both UDLA and DRI are concerned the proposed changes to Rule 5.4 will erode the quality of legal representation available to Utah legal consumers while failing to meaningfully address individuals’ abilities to afford legal service.

    First, there is little evidence that nonlawyer law firm ownership, fee sharing, and entity regulation licensing reforms, if implemented, would increase access to justice. In jurisdictions where nonlawyer ownership of law firms exists, it has not accomplished similar policy goals. Similarly, it is not clear, regardless of the regulatory sandbox framework proposed, that for-profit legal technology services would in any way assist the disadvantaged with legal representation.

    In the U.K. and Australia (or in the District of Columbia which has had a relaxed version of Rule 5.4 for many years), where reforms similar to those under consideration here have been enacted, there is no evidence the changes have had any impact whatsoever on the access to justice crisis. Instead, evidence shows the typical alternative business structure in the U.K. competes with the same types of law firms that had been servicing the fee-paying public long before the U.K. recognized nonlawyer ownership, as opposed to providing services to disadvantaged clients. Notably, a recent study concluded that the use of alternative business structures in the U.K. and Australia had been accompanied by no measurable improvement of those countries’ access to justice needs. Robinson, Nick, When Lawyers Don’t Get All the Profits: Non-Lawyer Ownership.

    On the contrary, the changes might lead to a decrease in access to justice. Big business and tech could tailor legal services towards individuals and entities most likely to minimize investment risk while avoiding expenses incurred through traditional legal providers. That shift could in turn result in a substantial decrease in pro bono work. Currently, many profitable firms subsidize their attorneys’ pro bono work by permitting or even requiring attorneys to meet their billable requirements through pro bono representation of disadvantaged clients. But under the proposed changes, non-lawyer owned entities would have little incentive to do this given they would not be subject to the same ethical or professional standards to which members of the Utah bar are held. Indeed, the proposed changes do not establish any duties on non-lawyers, let alone duties to provide disadvantaged groups with access to legal services.

    UDLA and DRI are also concerned that these changes may exacerbate the decline of access to legal services for rural Utahns. Unlike lawyers along the Wasatch Front, many “country lawyers” cannot afford to specialize in only one type of law and instead offer services across the legal spectrum, from criminal defense, to preparing wills and trusts, to defending their clients in a range of civil disputes. The proposed changes may alter this balance by shifting certain types of work (for example, estate planning) away from the rural lawyers and into the hands of corporations in far-off cities. In doing so, country lawyers may find they can no longer afford to practice law in rural areas, leaving entire areas of Utah without access to any local legal practitioner (even today, there are counties in Utah with few, if any, lawyers living in their boundaries). While the individual who has procured discounted estate planning might be said to have benefited from such a situation, the same individual might not find the tradeoff worth it next time they find themselves in need of representation not easily provided by a smartphone app.

    Second, UDLA and DRI are concerned the proposed changes would erode the ethical protections the Utah Rules of Professional Conduct currently ensure. Although the committee charged with addressing the rule changes insists a Utah lawyer’s ethical obligations would theoretically remain unchanged should the new rules be adopted, this would be practically impossible in practice. Under the current system, legal services providers are owned and controlled by the lawyers representing the client. Thus, while outside entities (like insurance companies) may pay a lawyer’s legal fees or litigation expenses, the case is always ultimately controlled by the lawyer and client, to whom the lawyers owe an ethical, non-delegable duty.

    But a lawyer may not be practically capable of performing this duty should ultimate control be delegated to a non-lawyer. When the outcome of a case is driven by profit as opposed to client benefit, business interests will often win out even if the client is disadvantaged as a result. One possible example would be a lawyer who is incentivized to seek medical interventions for his client to increase claimed special tort damages, even if that attorney (or the client’s treating doctor) believes those medical interventions to be unnecessary. A lawyer employed in an environment that prioritizes financial outcomes over the client’s interest would potentially be forced to jeopardize their job should their ethical duty to put their client’s interest first conflict with their employer’s business interest.

    Utah’s Rules of Professional Conduct reflect the core values of our profession, and they are designed to protect the public whom we, as licensed Utah attorneys, are all privileged to serve. As attorneys, we are sworn to serve as key members of a legal system on whom our society relies for justice and fairness. Lawyers must complete a rigorous program of education just to be permitted to sit for a bar examination. Our bar admission system is designed to test knowledge and competency, determine character and fitness to practice law, and assess adherence to a prescribed set of rules of professional conduct throughout an attorney’s tenure. This system not only serves to protect the public from untrained and unscrupulous would-be practitioners, but it also far surpasses what is required for a typical business. Fundamental change to our profession should not compromise our core values and enable profit-seeking by entrepreneurs who are unencumbered by our rules of ethical responsibility.

    Finally, consequences to the practicing bar should be a major concern of any access to justice review. The impact of changing law firm ownership and fee sharing rules would bring major upheaval to the practice of law. The effect of the ownership, fee sharing, and entity regulation recommendations would not simply involve channeling legal practice revenues from lawyers to private investors or legal tech companies. These revenue shifts would likely also result in both the Utah State Bar and local bar organizations realigning their focuses away from service to and regulation of practicing attorneys and toward the novel (and as yet unknown) consequences of these fundamental changes to Utah legal practice. This would represent a profound disruption to the traditional work of Utah Bar and local bar associations, which could better work through the current regulatory framework to encourage and support licensed attorneys’ efforts to deploy technologies and non-traditional legal services directly, instead of through intermediary business and technology firms.

    In sum, UDLA and DRI are concerned that the proposed rule changes will not lead to an increase in access to justice and would likewise negatively impact both the legal profession and the profession’s reputation.

     
  65. Attorneys' Liability Assurance Society Ltd.

    Attorneys’ Liability Assurance Society Ltd., a Risk Retention Group (ALAS) responds to the request of the Utah Supreme Court and Judicial Council for comments on the proposed amendments to Rule 5.4 of the Utah Rules of Professional Conduct (Rule 5.4).

    I. Introduction

    ALAS is a mutual insurance company that insures 217 law firms, including more than 66,000 lawyers in 49 states, the District of Columbia, and 30 foreign countries, and is the leading provider of professional liability insurance for large law firms in the United States. We insure nine member firms with offices in Utah—with 241 total lawyers practicing in the state. In its 40 years in business, ALAS has handled more than 16,000 claims and has developed substantial knowledge and experience concerning situations that give rise to legal malpractice claims. By virtue of the extensive loss prevention services it provides to its members, ALAS has a unique understanding of problems confronting lawyers and law firms today.

    Lawyers from ALAS were actively involved in the American Law Institute’s development of the Restatement Third, The Law Governing Lawyers and in the American Bar Association’s (ABA) 2002 revision of the Model Rules of Professional Conduct. ALAS is also involved with other professional and bar associations that have defined the ethical and professional duties of lawyers and is mindful of the need to enhance access to justice for middle- and low-income individuals. ALAS applauds the Utah Supreme Court for its efforts to increase access to justice for all.

    The Utah Supreme Court’s recent initiative to amend or eliminate several rules governing the manner in which lawyers and law firms function seeks to balance dual goals: (1) shrinking the access-to-justice gap, while (2) protecting consumers of legal services from harm. While some of the proposed recommendations appear to be in line with those objectives, the proposed revisions to Rule 5.4 do not promote either. Instead, the proposed revisions threaten to undermine the core values of the U.S. legal system and compromise client confidentiality and the attorney-client privilege without reliable evidence that the changes will increase access to justice. Accordingly, ALAS opposes the proposed revisions to Rule 5.4.

    II. History of Select Rule 5.4 Proposed Revisions

    The reasons that led other authorities to reject revising or eliminating Rule 5.4 apply equally in Utah. The ABA has debated this very issue multiple times since the early 1980s. Each time, the ABA has ultimately rejected proposals to revise Model Rule 5.4, because such a change threatened the core values of the legal profession. For example, between 1977 and 1983, the Commission on Evaluation of Professional Standards (Kutak Commission) considered the issue of lawyers partnering with non-lawyers and proposed a draft Model Rule 5.4 allowing such conduct. The ABA House of Delegates rejected the proposal and instead adopted a version of Model Rule 5.4 that is substantially the same as the current version of the rule.[1] In 2000, the ABA House of Delegates again considered and rejected a proposal for non-lawyer ownership, and instead adopted a recommendation stating that “the sharing of legal fees with non-lawyers and the ownership and control of the practice of law by non lawyers are inconsistent with the core values of the legal profession.”[2] We share the ABA’s view in this regard.[3] Most recently, in 2019, the ABA Center for Innovation released a resolution that would have again encouraged “variations” to Rule 5.4 as a way to address the access to justice problem. However, in the wake of strong opposition from multiple state bar presidents, the ABA House of Delegates adopted a version of the proposal that explicitly disclaimed any recommendation regarding changes to Rule 5.4.[4]

    In March 2017, the United States Court of Appeals for the Second Circuit upheld the dismissal of a complaint by two related New York law firms alleging that New York’s version of Model Rule 5.4 infringed their First Amendment rights to petition and of association.[5] In that case, the plaintiffs alleged that New York Rule 5.4 improperly prohibited the law firms from accepting non-lawyer investment, which they claimed would enable the firms to improve the quality of the legal services offered, reduce fees, and expand their ability to serve needy clients.[6] In affirming the lower court’s decision dismissing the complaint, the Second Circuit held that New York Rule 5.4 serves New York’s “well-established interest in regulating attorney conduct and in maintaining ethical behavior and independence among members of the legal profession.”[7]

    The District of Columbia is the only jurisdiction in the United States that permits non-lawyer ownership in law firms. D.C. Rule 5.4(b) states:

    [a] lawyer may practice in a partnership or other form of organization in which a financial interest is held or managerial authority is exercised by an individual non-lawyer who performs professional services which assist the organization in providing legal services to clients, but only if: (1) the partnership or organization has as its sole purpose providing legal services to clients; (2) all persons having such managerial authority or holding a financial interest undertake to abide by the [D.C. Bar] Rules of Professional Conduct; (3) the lawyers who have a financial interest or managerial authority in the partnership or organization undertake to be responsible for the non-lawyer participants to the same extent as if non-lawyer participants were lawyers under Rule 5.1; [and] (4) the foregoing conditions are set forth in writing.[8]

    Even though D.C. has allowed non-lawyer investment in law firms since the 1980s, very few firms have done so, thereby making it difficult to assess the benefits of the D.C. rule.[9] We have also been unable to identify any D.C. law firm that has utilized D.C.’s Rule 5.4 to improve legal access to middle- or lower-income individuals.

    III. Rule 5.4 Should Not Be Revised

    Rule 5.4 serves critical public-policy interests. The rule ensures that lawyers will protect client interests and uphold the principles of the profession, including lawyer independence. These core values will be threatened if the financial interests of non lawyer owners, who have no ethical duty to the law firms’ clients, overshadow the best interest of clients.[10] Indeed, given that profit is the principal goal in most business ventures, there is substantial risk that non lawyer investors will focus only on the bottom line at the expense of client interests and the quality of services. Potential consequences of this focus include a decrease both in the quality of law-related services and pro bono work.[11]

    Based on ALAS’s extensive experience, we know that building and maintaining an effective risk management program in a law firm takes considerable resources. It is also a matter of culture and professionalism that puts ethical practice and client concerns above profit. We are very concerned that allowing non-lawyer ownership will erode the culture and professionalism of law firms and result in a practice that is less protective of clients.

    For example, consider what might happen if private equity investors were permitted to have an ownership stake in law firms. It is not unrealistic to envision those investors taking dividends out of the firm, cutting costs expended on risk management and quality control, and taking other steps to realize profits. These actions might benefit the investors financially, but they would undermine the firm’s lawyers’ professional obligations to their clients.[12]

    These are not the only risks associated with non-lawyer ownership of law firms. The attorney-client privilege and client confidentiality are long-standing principles at the heart of every lawyer’s relationship with every client. See Utah Rule of Professional Conduct 1.6. It is unrealistic to think that non-lawyer partners will not want data on clients that is both confidential and privileged. Revealing such data will breach the lawyer’s duty of confidentiality (absent client consent) and likely waive the privilege.[13] In light of these concerns, the proposed revisions to Rule 5.4 do not achieve the Utah Supreme Court’s goal of maintaining consumer protection.

    Nor will the proposed revisions of Rule 5.4 promote the Utah Supreme Court’s stated purpose of access to justice. ALAS supports efforts to increase access to legal representation for all middle- and low-income individuals, but we have found no reliable evidence that non-lawyer investment in law firms furthers that goal.

    In fact, it was this lack of evidence that led Ontario, Canada, to decline a recommendation to allow non lawyers to become majority owners in firms.[14] That decision was premised on an Ontario-commissioned 2014 study by Jasminka Kalajdzic that sought to determine whether alternative business structures (ABS) had improved access to justice in England and Australia, two jurisdictions that allow non-lawyer ownership.[15] Ms. Kalajdzic’s study concluded that there is “no empirical data to support the argument that nonlawyer ownership has improved access to justice.”[16]

    This lack of evidence was again manifest in the ABA Commission on the Future of Legal Services’ 2016 Report on the Future of Legal Services in the United States (Legal Services Report), which documented the commission’s findings stemming from a two-year study focused on access to legal services.[17] Here too, there was “little reported evidence that ABS has had any material impact on improving access to legal services.”[18] Similarly, in England, where non-lawyers have been allowed to own interests in law firms since 2011, the lack of access to justice persists for most of the low- and middle-income population.[19] According to a 2019 Solicitors Regulation Authority survey, 68% of those surveyed stated they cannot afford the cost of legal services, and 79% believe that it needs to be easier for people to access legal guidance.[20]

    Instead of increasing access to justice, Australia and England have seen growth in a single practice area—personal injury cases—since allowing non-lawyer ownership of law firms.[21] Other areas where such access is desperately needed, such as family law; property and landlord/tenant law; and criminal law, have not seen the same growth.[22] Indeed, the rate of self-representation in family law matters in Australia was more than 50% in 2014.[23] This is entirely consistent with the conclusions of a 2014 study conducted by Nick Robinson, a fellow at the Program on the Legal Profession at Harvard Law School, which found that non-lawyer investment is “likely to be attracted to legal sectors, like personal injury, where expected returns are high and that are relatively easy to commoditize, but where there may not be as much of an access need because of the long-standing practices like conditional or contingency fees.”[24] This provides further evidence that allowing non-lawyer ownership of law firms will not serve the Utah Supreme Court’s stated purpose of access to justice.

    Because the Utah Supreme Court’s stated goals, namely access to justice and consumer protection, will not be served by the proposed revisions to Rule 5.4, and there is a risk that the proposed changes will erode attorney independence and client service, ALAS opposes the Utah Supreme Court’s proposals concerning this rule.

    IV. Conclusion

    ALAS thanks the Utah Supreme Court for its consideration of these comments and recommendations. They do not necessarily reflect the views of ALAS member firms.

    Mary Beth Robinson, Senior Vice President— Loss Prevention

    Givonna St. Clair Long, Senior Loss Prevention Counsel

    _______________________________
    1. ABA Comm. on Ethics 20/20 Issue Paper Concerning Alternative Business Structures (Apr. 5, 2011).
    2. Id. at 6.
    3. The topic of non-lawyer ownership surfaced yet again in 2011 and 2016, and each time the ABA declined to make any changes to Model Rule 5.4. Press Release, ABA Comm. on Ethics 2020, ABA Commission on Ethics Will Not Propose Changes to ABA Policy Prohibiting Non-Lawyer Ownership of Law Firms (Apr. 16, 2012); ABA Report on the Future of Legal Services in the United States (Aug. 2016).
    4. ABA House of Delegates Resolution 115 (February 17, 2020), https://www.americanbar.org/content/dam/aba/directories/policy/midyear-2020/2020-midyear-115.pdf.
    5. Jacoby & Meyers, LLP v. Presiding Justices, 852 F.3d 178 (2d. Cir. 2017).
    6. Id. at 181.
    7. Id. at 191.
    8. D.C. Rules of Professional Conduct 5.4 (2017). D.C. is currently considering revisions to its version of Rule 5.4 to further loosen the restrictions on nonlawyer ownership of law firms.
    9. ABA Comm. on the Future of Legal Services, (Apr. 8, 2016).
    10. Nick Robinson, When Lawyers Don’t Get All the Profits: Non-Lawyer Ownership of Legal Services, Access, and Professionalism, 29 GEO. J.L. Ethics, 14 (2016).
    11. Id. at 11.
    12. The Pandemic Helped Topple Two Retailers. So Did Private Equity (May 14, 2020), New York Times, https://twnews.us/us-news/the-pandemic-helped-topple-two-retailers-so-did-private-equity#:~:text=The%20Pandemic%20Helped%20Topple%20Two%20Retailers.%20So%20Did,of%20connection%20with%20a%20new%20generation%20of%20shoppers.
    13. ABA Comm. on the Future of Legal Services, at 3.
    14. Alternative Business Structures (ABS) report: Majority non-lawyer ownership off the table (Sept. 28, 2015).
    15. Memorandum from Jasminka Kalajdzic to Linda Langston of the Ontario Trial lawyer Ass’n on ABS Research 1 (Dec. 1, 2014).
    16. Id. at 1, 10-11, 14.
    17. ABA Comm. on Future Legal Services Report at 1.
    18. Id. at 42.
    19. Solicitors Regulation Authority: Legal Access Challenge launched to encourage innovation (May 30, 2019), https://www.sra.org.uk/sra/news/press/2019-press-release-archive/legal-access-challenge-launch-may-2019/
    20. Id.
    21. Memorandum from Jasminka Kalajdzic to Linda Langston of the Ontario Trial lawyer Ass’n on ABS Research at 10-11.
    22. Id.
    23. Id.
    24. Id.

     
    1. Russell Mitchell

      Thank you ALAS for that well-researched and well-stated position. I agree with your conclusions and the reasoning that lead to it. You have raised serious concerns about confidentiality as well as loyalty that will not be served by non-lawyers impacting decisions. I believe that there can be reforms implemented that do not rely on these changes to Rule 5.4 that may lead to better access to justice in the way that is truly needed by those that are not able to afford it.

       
    2. Art Lachman

      Rule 5.4 is essentially a non-consentable conflict of interest rule that was originally adopted in the early 20th Century without any evidence or data of client or consumer harm to justify the absolute prohibition. I have compiled the fraught history of the rule and prior attempts at reform in a piece I authored for the ABA’s ethics conference last year (https://aprl.net/wp-content/uploads/2019/07/prof-ind-5-19.pdf). I know from personal experience in advising lawyer clients that the rule has a chilling effect on lawyers’ ability to collaborate with entities and people who are not licensed lawyers. It detrimentally impacts innovation in the delivery of legal services. The values of professional independence and avoidance of conflicts of interest are adequately dealt with in other legal ethics rules, including Rules 1.7, 1.8(f), and 2.1. I personally applaud the Utah Supreme Court’s willingness to join D.C. in falling back on general fiduciary duty principles and notions of informed consent, and rethinking the regulatory approach to “nonlawyer” participation in providing legal services to improve access to legal help for everyone.

       
  66. Sarah Brinton

    I am a stay-at-home mom and part-time practicing attorney. As someone who has worked full-time at a firm and now works in what is sort of a professional no man’s land (almost literally–the others I know in my position are primarily women), trying to balance the cost of bar dues (high) with the likelihood that we’ll find enough contracting work to justify paying the cost of bar dues (and for child care), I applaud this effort to change up Utah’s regulatory landscape. The practice of law is run as a sort of cartel in most states and that means people in power get to keep out people without power.

    I hope that these efforts to innovate and iterate are beneficial to the legal services industry and to Utahns as a whole, but I’m going to be especially watchful for the effects this regulatory experimentation will or may have on people like me, who are trying to maintain a financially viable legal practice without being able to associate full-time with a full-service law firm.

    Also, I encourage the Sandbox Monitors to pay special attention to the consequences of these experiments on marginalized populations in Utah, both in the service provider sector and in the customer base.

     
  67. Jayne R. Reardon

    I write in support of the proposed changes to the Rules of Professional Conduct and in support of Standing Order 15 establishing a regulatory sandbox. I applaud the Supreme Court of Utah for its leadership in crafting well-needed changes and additions to the regulation of legal services that should inure to the benefit of lawyers, non-traditional legal providers and, more importantly, the people who can benefit from legal assistance.

    I am the Executive Director of the Illinois Supreme Court Commission on Professionalism. Previously I served as Counsel to the Review Board of the Illinois Attorney Registration and Disciplinary Commission where I developed expertise in the practical applications of the Rules of Professional Conduct in the disciplinary context. I was a member and subsequently Chair of the American Bar Association’s Standing Committee on Professionalism and am a member of the Association of Professional Responsibility Lawyers, the Future of Lawyering Committee and the Referral Fees/Fee Sharing and Rule 5.4 subcommittees as well as the Chicago Bar Association-Chicago Bar Foundation Task Force on the Sustainable Practice of Law and Innovation. I write and speak frequently on topics concerning professionalism and attorney regulation. The viewpoints I offer are mine personally and do not necessarily reflect those of any organization with which I am affiliated.

    First, I appreciate that the Utah proposals represent a considered analysis and application of the purpose of attorney regulation: to further the public interest. As stated in Preamble [12] to Utah’s Rules of Professional Conduct:
    “The profession has a responsibility to ensure that its regulations are conceived in the public interest and not in furtherance of parochial or self-interested concerns of the Bar.”
    The public interest includes, of course, consumer or client protection from incompetent or inappropriate legal services. The focus of our current system has been to prescribe or proscribe attorney behavior to minimize harm to clients.
    However, the concept of public interest is broader than consumer protection. As Steve Mayson states in Reforming Legal Services: Regulation Beyond the Echo Chambers, “public interest” also refers to an objective to secure the fabric of society and the legitimate participation of citizens in it. We cannot adequately protect individual consumers without a framework in place that recognizes and preserves the rule of law and the independent, effective administration of justice. The existing alienation or exclusion of significant swaths of the population from the legal system threatens our constitutional democracy. Events of the last few months show that many people in society do not believe ours is a system of fair laws. And legal institutions in a constitutional democracy depend on popular participation and support to maintain their authority. Preamble [6]

    By loosening restrictions on lawyers so they may more efficiently connect with consumers and by bringing other providers of legal services into a regulatory framework, not only will more people be able to access legal services, the fabric of our society will be strengthened.

    Second, I support your recommended changes to the Rules of Professional Conduct and the creation of the regulatory structure for non-traditional legal services providers. With respect to the advertising rules, Utah stands alongside every task force, including the CBA/CBF Task Force, in recognizing that the rules must be streamlined to allow lawyers and clients to connect. Utah’s proposal eliminates heavy-handed provisions in Series 7 of the Rules that may be stifling delivery of legal services. At the same time, it focuses on the essentials of consumer protection in modifying Rule 7.1 to prohibit attorneys from making false or misleading claims about themselves or their services or interacting in a way that involves coercion, duress, or harassment.

    Similarly, the amendments to Rule 5.4 protect and preserve the professional independence of lawyers while allowing lawyers or law firms to pay for client referrals and share fees with nonlawyers (5.4A) or to work together with other professionals in structures where nonlawyers have an ownership interest. (Rule 5.4B) Rule 5.4B recognizes that customers will benefit if lawyers collaborate with professionals who have expertise that lawyers do not have to more efficiently and effectively deliver higher quality services.

    I am aware that attorneys have posited in these comments (and elsewhere where regulatory reform is under consideration) that allowing nonlawyers to join the same business venture with lawyers, or to deliver services by entering the regulatory sandbox, will undermine the core values of the profession and/or lawyers’ duties to their clients of confidentiality, client loyalty, lack of conflicts of interest, etc. These assertions are specious. I offer the following considerations:

    • Core values of the legal profession extend beyond those imbued in the attorney-client relationship. As mentioned above, lawyers should consider their obligations to the public interest wider than their obligations to existing clients. As the Preamble to the Model Rules exhorts, we are charged to “seek improvement of the law, access to the legal system, the administration of justice and the quality of legal services rendered by the profession.” Given the growing access to justice gap, if we think attorney regulations may be contributing to the problem, it undermines our core values to NOT seek reforms.
    • In England and Wales, which have allowed similar arrangements for a number of years, there is no evidence of decreased quality of services or professionalism.
    • Customer service reports in England and Wales support the conclusion that a business structure that allows the services of both lawyers and allied professionals improves customer service and lower costs to the customer.
    • Exercising independent professional judgment doesn’t necessarily require separation from other professionals. A person is not ethical or unethical based on their education, licensure, or co-workers. To argue that allowing lawyers and other professionals to have an ownership arrangement would cause a lawyer to abandon his or her ethical obligations is insulting both to the lawyer and to the other professional.
    • The Office of Legal Services Innovation is charged under Standing Order 15 with developing, overseeing, and regulating the non-traditional legal providers and services in the sandbox. Under the authority of the Supreme Court, the Office thus has the authority and responsibility to make sure proper and adequate safeguards and regulations, ethical and otherwise, are put in place.

    Finally, the Utah models are a welcome rational approach to the regulation of the legal sector. Experimenting and testing regulations in a controlled environment, collecting data along the way, is a responsible yet nimble way to address the market failure that characterizes the status quo. Although the status quo is untenable, we cannot overhaul the current regulatory structure in one fell swoop. The flexible model put forth in Utah promises to bring forth data that may be used by other states developing reform models throughout the country.

     
  68. Langdon Owen

    MEMO

    DATE: July 22, 2020
    FROM: Langdon T. Owen, Jr.

    Re: Utah Regulatory Sandbox – Comments from an Estate Planning and Elder Law Perspective

    This memo is in three parts: The first part is a summary of comments from the members of the ad hoc legislative committee of the Estate Planning and Elder Law sections of the Utah Bar. The second part contains additional comments from other estate planning and elder law attorneys. The third part is the comment by an experienced estate planning attorney after listening to the July 17, 2020 Bar Zoom teleconference in which Justice Himonas and Dr. Rebecca Sandefur participated.

    Part One.

    This first part of this memo will describe in a summary fashion the comments raised by a number of estate planning and elder law attorneys who have commented to me about the issues raised by the proposed Regulatory Sandbox. (This part of the memo is a revised and expanded version of the memo circulated as part of the July 17, 2020 Bar Zoom teleconference in which Justice Himonas and Dr. Rebecca Sandefur participated.) The comments are in no particular order; they are numbered simply for ease of reference.

    I am the Chair of the Ad Hoc Legislative Committee of the Estate Planning and Elder Law Sections, and the comments set forth in the first part of this memo are the result of discussions held by the members of that committee. The comments are not the position of that committee, those sections of the Bar, or of the Bar itself. They are the personal comments of the experienced attorneys who provided them.

    1. The Sandbox proposal states that decisions about non-traditional regulatory levels (e.g., under a notification protocol or under an application protocol) are to be data-driven and based on an assessment of risk. The type and source of the data is unclear, as is the standard for using that data to evaluate risk to the consumer. We understand that there may exist some data in other jurisdictions relating to errors by lawyers, and that if it is not too likely that the proportion of errors by lawyers will be exceeded too much by non-lawyers providing a similar service, then the non-lawyer may be allowed (under the applicable protocol) to perform the service. However, it is not clear what someone might consider an error by a lawyer, and whether lawyers are making the error determination. Among other things one person may think there has been an “error” while the matter may in fact be a legitimate judgment call by a lawyer with sufficient knowledge and experience to make that call. It is not clear that a non-lawyer without that knowledge and experience should be put in a position to make the judgment call. A great deal remains mysterious about how the Sandbox will actually function. As will be noted below, there are also other risks to consumers, beyond legal errors, that should be analyzed empirically, such as risks to confidentiality and loyalty. It seems clear that this determination, in each case, should require the input of attorneys with expertise in the specific area of law for which the admission is sought. It is unlikely a lawyer without such experience or a non-lawyer will have sufficient expertise to spot issues where problems could arise.

    2. It is not clear how a non-lawyer’s capacity to judge what is beyond his or her expertise will be evaluated. Lawyers are trained to spot issues over a wide range of legal areas; how is this training to be duplicated for non-lawyers? For example, a non-lawyer may be able to manipulate a form of a simple will, but will the non-lawyer be able to appropriately judge whether a simple will is actually what the client needs? Will the non-lawyer have the necessary knowledge to know what he or she does not know, and what alternatives may be available, in order to refer the client to someone (e.g., a lawyer) with the required expertise? A simple will may appear “error free” but be quite wrong for the client. The same concern applies to any number of services in the estate and elder law world.

    3. In evaluating the risk of harm to clients, how is that risk to be assessed when any harm may not be apparent for a long time. For example, a will only speaks at death, which could be many decades in the future. The Sandbox apparently contemplates that the non-lawyers will report statistics; statistics on use should be relatively simple, but any relating to harm or risk should not derive from the practitioner him or her self and inherently will be more subject to doubt regardless of the source because a level of judgment will be required.

    4. Although online form systems (e.g. Legal Zoom) are available to consumers presently, they do not carry with them the imprimatur of the Utah Supreme Court having granted such groups authority to practice law in this area. Blank legal forms and virtual volumes of legal “advice” are available on the Internet. Those resources can be improved by legal advice specific to the client’s unique circumstances. That would require the time and expense of an experienced lawyer – not contemplated by the Sandbox. If such services are approved by the Utah Supreme Court, how are clients to be warned about the quality of what they are actually receiving from such services so they are not misled?

    5. It appears that the concepts behind the rules coming out of the Sandbox will include that the ethical rules to which lawyers are subject will also apply to non-lawyer practitioners. Such concepts also appear to include novel corporate and other ownership and delivery structures. Should Some level of lawyer supervision should be required in some or all areas of legal services. How are authorized non-lawyers to be disciplined when the authorized practitioner may be a technology or financial company, not a particular human being? Such companies need to use people to structure their systems, but these people may not even reside in Utah or even in the United States. Even if some people involved reside in Utah, those in actual control may not. Discipline applied to a corporation may be seen by it as a cost or risk of doing business (born by shareholders, ultimately). Experience has shown that in many areas of the corporate world, regulation and discipline will be ineffective unless and until it applies to the responsible human being, particularly to those in control, in addition to disciplining the company. Only human beings located in Utah should be authorized and be directly responsible for the conduct of the companies they serve. Those in control should be determined and be required to consent to Utah jurisdiction. Bonding should be required of corporations or other entities. Is adequate insurance actually available for such people or corporations? In any event, errors and omissions insurance should be required. There should be stringent background searches for nonlawyers seeking to provide legal services or own interests in companies providing legal services. How are the costs of analyzing data and of admitting, auditing, and disciplining nonlawyer participants to be covered?

    6. As already stated, and as I restate here for emphasis, any regulatory authority set up by the Utah Supreme Court to grant authority to provide services in a particular legal area should include lawyers knowledgeable in the area at issue.

    7. The concept of the Sandbox appears to have the goal of providing access to justice for those who are underserved. But it also appears to allow law firms and lawyers to be acquired by and controlled by corporations such as large insurance, investment, or accounting firms seeking to add another profit center, but which have no interest in serving low net worth individuals. The non-lawyer authorizations should focus exclusively on the underserved. It is not appropriate to allow Sandbox regulatory exceptions to restructure the finance and business world where clients can afford to pay for services.

    8. Mixed discipline organizations carry with them built-in potential conflicts of interest that lawyers traditionally have shunned. A lawyer or non-lawyer practitioner inside an insurance company preparing estate planning documents for a client, for example, will be placed in a compromising position when the sales force tries to sell the client annuities or insurance products that the lawyer recognizes are not in the clients’ best interest. Mere disclosure of the potential for conflict is not sufficient protection for all but the most sophisticated clients. The lawyer or non-lawyer may be under the control of the company as its employee, or otherwise under control as a practical matter by making the practitioner choose between his or her livelihood and the client’s best interest. Such inherent conflicts will tend to tarnish the hard-won reputations of all lawyers, not just those tied to financial houses. Traditional lawyers and law firms will also suffer. Lawyers and other practitioners should at least have protections while doing their duty for clients against interference with professional judgment and against retaliatory actions. Perhaps a form of “Chinese Wall” should be imposed between the law related area and other areas. Anti-retaliation and whistle blower protection for attorneys in mixed groups should be required. The sort of situations that can lead to conflicts of loyalty are not restricted to the law. For example, the accounting industry has struggled over the relationship between the consulting and auditing functions, and the financial industry has also struggled over the duty owed to investors, such as suitability but without fiduciary duty (know your customer) compared to true fiduciary duties to the client. Requirements should be imposed to assure that the lawyer or practitioner’s fiduciary obligation to the client prevails over other considerations.

    9. Is there evidence that fee-sharing and advertising of legal services actually reduces cost to those least able to pay?

    10. Is there an actual gap in the provisions of pro-bono estate planning services for those least able to pay? Many practitioners help with pro-bono wills either alone or through Bar programs (Legal Services, Wills for Heroes, etc.) and it may be these efforts have been effective for wills and simpler estate planning.

    11. There should be an effort to educate the public more regarding existing pro-bono programs.

    12. Litigation and trials are expensive. Simplified procedures in certain types of cases affecting underserved populations should be explored. Our Uniform Probate Code is good in the situation of a simple probate (informal opening, informal closing, etc.), but in cases of disputes, litigation becomes as expensive in probate matters as in any other cases. Disputes leading to expensive litigation can arise in guardianship and conservatorship matters, and trust matters, as well as will and estate administration matters. Non-lawyers would not be allowed to represent clients in litigation. Will the attorney client privilege be extended to nonlawyer practitioners (such as those drafting instruments), and if so, on what terms; note that the tax practitioner privilege under federal tax law has all the limits applicable to the attorney client privilege but has further limits as well.

    13. Have we in the legal profession, practitioners and the courts, fully tried all other possible solutions to solve the issue of access to justice for the underserved?

    Part Two.

    The following comments and questions have been added to the original draft used at the July 17, 2020 Zoom teleconference. They are from estate planning and elder law attorneys. They have not been edited to conform with the prior comments in this memo.

    The following questions regarding nonlawyers apply both to nonlawyers who are applicants to develop programs under the Sandbox, and to nonlawyers who may be allowed to practice law under the new program of regulatory reform. Some of the questions may overlap in subject matter. For protection of the public, nonlawyers should not be allowed to practice law.

    14. The Utah Supreme Court / regulatory reform project should not allow any nonlawyer to provide legal advice, to act as lawyer for a client, or otherwise to engage in law practice. Although it could under exceptional circumstances seem reasonable to allow a specific nonlawyer to practice law, the risks of unintended consequences outweigh the potential benefit. If the Sandbox program makes limited exceptions to allow nonlawyers to practice law, will the Utah Supreme Court or State of Utah have funds available to defend lawsuits or other claims by multi-national corporations or other deep pocket applicants who sue for the right to practice law, once exceptions have been made in the Sandbox program? For example: would the Utah Supreme Court have the funds required to defend such lawsuits and appeals by deep-pocket multi-national corporations, all the way to the Supreme Court of the United States?

    15. Regulatory reform should not allow a nonlawyer to have authority to represent the client as “counselor or legal representative.” The nonlawyer’s role should be subject to strict limits within the level of knowledge and experience of the nonlawyer. How will that be determined? The current requirement for lawyers to pass the bar exam and to have a JD or other law degree may not be perfect indications of competence, but they are easy to define.

    Nonlawyers should be required to complete coursework training in law and legal ethics

    16. Nonlawyers developing proposed programs or materials for clients should be required to complete annual or other periodic coursework for legal and ethics education. What will be the entry level legal and ethical education requirements for the nonlawyer?

    17. The regulatory reform program must have safeguards to prohibit the providing of legal advice for clients who are mentally incapacitated, who lack the requisite mental capacity to enter into contracts, and/or who are under duress or undue influence when they seek legal advice? What screening procedures will be required of non-lawyers to protect vulnerable potential clients from undue influence, fraud, or other problems resulting from the client’s diminished mental capacity?

    Cost and funding of regulatory reform

    18. How much will the program cost? Are funds currently available to pay for this requirement stated by the proposed standing order: “New providers will be required to submit regular reports to the new regulator, providing data on consumer complaints and satisfaction, and the regulator will also conduct audits, expert testing, and secret shopper actions to independently test quality — with special attention to the most vulnerable populations.”

    Written notice to client regarding the nonlawyer organization

    19. Detail required for written notice to the client of the financial or managerial structure of the organization: Names and contact information of principals, and of nonlawyer(s) who are responsible for service to the client. At what stage will the nonlawyer’s contact information, credentials, and proposed programs be made available to the public or at least to members of the USB? The program should err on the side of transparency: the material provided by the applicant/nonlawyer to the regulator should be available for review by the public and the client no later than when the nonlawyer receives authorization to start providing services to clients.

    Client’s private information

    20. The nonlawyer and all others involved should be prohibited from selling or in any manner disclosing the client’s private information including: client’s name, birth date, social security number, address, email, phone number, facts unique to the client’s case, and other private information.

    21. If the Implementation Office believes any client private information should be disclosed to the nonlawyer, under what circumstances would the client’s name or other private information be disclosed to the nonlawyers? Why?

    Enforcement of nonlawyer’s duties to the client

    22. How will this program define the nonlawyers’ legal and ethical duties to the client? The duties of lawyers to their clients have been defined by case law, statutory law, rules of procedure, rules of conduct, and other means developed over many years. Rules of professional conduct for the nonlawyer should be established and enforced.

    Effect on errors and omissions insurance premiums for the lawyer participating in a project allowed by regulatory reform

    23. What effect will a lawyer’s participation by sharing fees or duties with a nonlawyer have on premiums and availability of errors and omissions insurance for the lawyer?

    Dispute resolution

    24. Nonlawyers should be required to consent to jurisdiction of the State of Utah and agree that Utah laws govern any disputes with the client.

    25. Mandatory arbitration clauses should be prohibited for these projects. Arbitration can be helpful and save money for parties with assets sufficient to afford to pay for arbitration. Most people who cannot afford to pay a lawyer would not be able to afford to pay for an arbitrator. Small claims court jurisdictional financial limit could be increased. Any dispute should be subject to Utah court jurisdiction with venue in the county where the client resides.

    26. Who will be responsible to respond to the client’s questions and complaints about the service? That information, along with procedures and solutions regarding complaints, should be provided to the client in writing in the initial contract for services signed by the client, the lawyer, and the nonlawyer.

    27. Which areas of law have the highest need for regulatory reform? Why not start with a few areas of law in which the poor are most underserved? For example:
    = Defense of debt collection
    = Defense of landlord tenant issues
    = Protection against payday lending
    = Protection against other predatory lending

    Composition of the Innovation Office: Section 2.1 of the proposed standing order regarding Office Composition provides: “The Utah Supreme Court will appoint the members of the Innovation Office. The Innovation Office will consist of a Chair, Vice-Chair, and seven additional members, all serving on a volunteer basis. In the event of a vacancy, or on its own motion, the Supreme Court will appoint, depending on the vacancy, a new Chair, Vice-Chair, or member.”

    28. What sources of funds will pay for the program? What is the budget? What grants were provided, the duration of each grant, the amount of funds, the source of the funds? For any grant provided by an entity, what is the source of the funds, what are the obligations of the Utah Supreme Court, the Utah State Bar, the Innovation Office, etc., to the entity providing the funds? Many other questions arise about this topic.

    29. Since there are only 12 members of the Innovation Office – and all serving on a volunteer basis: Depending on the number and scope of applications, it seems a larger staff will be necessary to assure protection of the public/potential clients. Who has the time to spend to volunteer to assure that the new legal services are of high quality? Members of the Innovation Office should include lawyers with several years in law practice. It doesn’t seem to me that 12 members would be sufficient. For each application the Innovation Office should have sufficient resources to call upon several lawyers who are licensed in Utah and experienced in the particular area of law that the applicant proposed to address.

    Regulatory Scope per 3.3 of the proposed standing order

    30. What will be the process for developing regulations? Members of the Utah State Bar should have opportunity to provide input and comments on proposed regulations.

    31. What enforcement tools will be available to the Innovation Office?

    32. Regarding the requirement for the lawyer to set forth “in writing to a client the financial and managerial structure of the organization in which the lawyer practices,” how much detail? How is this writing to be communicated so that the client understands the risks associated with having a lawyer who is doing business with the nonlawyer?

    To protect the public from harassment and irritation, Rule 7 should be tightened, not relaxed

    33. Rule 7 and its subparts, of the Utah Rules of Professional Conduct, should not be amended other than to tighten restrictions on advertising. Both lawyers and nonlawyers who are accepted by the Sandbox should be prohibited from making initial contacts by cold phone calls or uninvited emails or texts to seek to establish business with potential clients.

    Part Three.

    The following is the comment of one estate planning lawyer after watching the July 17, 2020 Zoom conference:

    Justice Himonas indicated that 80% or so of the legal needs in Utah are not being met because people are either not educated as to when they need help or its too expensive. It appears his solution is not to educate the public, but to drive the price so low that the 80% will all buy it because it’s cheap by allowing non-lawyers to use computer programs to provide services. While I am a firm believer in using technology to create documents, you can train a chimpanzee to operate a keyboard. Knowing what options to use is the real value. Ten years ago, Jonathan Blattmachr said that clients would eventually not pay for the documents produced but for the expertise to determine what should be produced.

    If low cost was the answer. Legal Zoom would be filling the needs of the 80%.

    The argument that allowing non-lawyers to do legal work so you can drive the price down so the 80% will be willing to pay for legal services is meritless. A good portion of the 80% can afford decent legal representation, they either choose not be pay the expense or they don’t know what they need and what’s available. Yes, its costly to get good legal work and its usually outside the normal budget items, but so is buying a decent car or buying a house or paying for a medical procedure not covered by insurance.

    Just because something is not on Amazon.com or at Walmart, doesn’t mean it’s not of value. Determining that the only way to fill a need is to slash the price by allowing anyone with a computer and printer to provide the service is shortsighted at best. Some professional services take significant expertise and training. Having my heart surgery done at the drive through next to the car wash will be cheaper and all 80% of the public can get the service.

    It was clear to me that the panelists were of the opinion that there was no expertise needed to do any estate planning, not just simple wills. Mass production by untrained personnel at the lowest cost was more than sufficient. We all know the lawyer who is the cheapest, who meets with his client for 30 minutes and then has a document produced by a computer which is signed in front of an office staff. The cost is cheap and the product is worth the price.

    I do not engage the cheapest doctor, or auto mechanic and I don’t buy my food at the cheapest place available. It’s not that I don’t care about the cost, I care about getting decent quality.

    I am offended at the attitude that I do not produce value equal to the cost. Yes we can be expensive and yes using our services takes some budgeting, but sometimes getting real value is worth making a sacrifice. My doctor doesn’t take my insurance, but I pay the bill because I get good care and it’s worth it to me.

     
  69. Jenny Gnagey

    I support proposed Standing Order 15 to create a regulatory sandbox for testing and evaluating innovative models for providing legal services. I am an adjunct professor of economics at Weber State University, and I also work as a housing advocate for a partnership of nonprofits in Ogden. I provide education about housing programs and help tenants understand their rights and options in a variety of situations, including but not limited to eviction proceedings. I am not a lawyer or legal professional, but I make referrals to legal services when appropriate. Especially during COVID-19 I have seen the existing threadbare infrastructure to provide legal services to low-income tenants get stretched to the brink. The need for alternatives is more pressing than ever.

    I have a good understanding of landlord-tenant law but little knowledge of the law outside this area. I cannot comment on how these reforms will affect the provision of legal services generally, but I feel very optimistic that these reforms can improve access to justice for low-income tenants. I strongly agree with the statement from the National Center for Access to Justice that, “Many frontline advocates know the law and are well positioned to provide some kinds of legal help with the right support and regulation. This could make all the difference for people who would otherwise be likely to receive no legal help at all.”

    From an economic perspective, allowing lawyers (and LPPs) to effectively hold a state-granted monopoly on the provision of legal services has the downside of limiting supply, which raises prices and reduces access and affordability. The benefit of the monopoly is a highly regulated, uniform, high quality labor force of legal service providers. Some of those opposing the proposed reforms worry that unqualified service providers lacking strong ethical standards will undermine the provision of quality legal services. I think there are several institutional and market forces that will prevent this. First, the sandbox will require close monitoring and rigorous evaluation of new actors. Second, as new professions grow, so do the incentives to self-regulate. It is in the interest of high quality service providers to form professional associations and distinguish themselves from amateurs and scammers. The Utah State Bar was created by lawyers, was entirely self-regulated for many years, and today shares internal regulatory responsibilities as authorized by the Court. It is likely new professions will chart similar courses. Finally, it is also worth saying that comparing the quality of new legal service providers to existing lawyers is only the right comparison if (in the absence of the new providers) the client would have had a lawyer. If the client would have gone it alone, the comparison to a lawyer is not very relevant.

     
  70. Russell Mitchell

    I appreciate having this opportunity to provide comments regarding the proposed changes to the practice of law to make it more affordable to the people who interact with our justice system. I have been practicing law for over 25 years, predominantly in civil litigation but with a somewhat general civil practice and have had individual clients with a wide variety of issues that needed help. I hope that I can bring some of what I have learned to the table to help. In the FAQ prepared by the task force, it states numbers I disagree with. I do not know where they obtained their numbers, but I bill much more than 2.2 hours in an 8 hour day and I am very careful about tracking my time. I do not think this “reason” for “dramatic changes” is a legitimate claim. Also in the FAQ’s, it states that the reason for the “dramatic changes” is that the need for legal help is great and the areas they identify are nearly all litigation/court based (employment disputes, divorce, custody, wage theft, eviction, consumer debt and small business matters). Except for the vague item of “small business matters” nothing of the stated critical need for legal reform involved civil transactional work. I think this distinction is important to keep in mind as we evaluate the “sandbox” paradigm that is being suggested, especially since the task force states one of the primary goals is to provide high quality and affordable legal services that those with the greatest identified need (divorce, eviction, consumer debt) currently find unavailable.

    While I appreciate what the Utah Supreme Court is attempting to do to reform the practice of law, as I think about this “sandbox” and the way it is currently being described, it appears to focus most of its attention to the transactional side of the use of lawyers, except, perhaps, for personal injury matters. It would seem that there is a hope that having other businesses come in to “play” in the “sandbox” will infuse money into the system in a way that somehow pays for litigation involving consumer debt, divorce, custody disputes, evictions, etc. that the individual needing the service cannot otherwise afford. I am having a hard time seeing an accounting firm, banker, realtor, engineer, or any other professional trying to wade into quasi-legal representation as it relates to the myriad rules of civil or criminal procedure. I don’t understand how any other group of people would want to become enmeshed in what can become a virtual black hole of process, motions, posturing, discovery disputes, etc. as a way they want to make a profit while adhering to all of the rules of professional conduct associated with providing legal services. I just don’t think it will impact this area of legal services, where the need is greatest.

    To me the “sandbox” approach seems to be a way for non-lawyers to try to reach into what others may view as the profitable side of the practice of law. In my view, this will end up being a vain attempt to try to make a “show” as though we are addressing a problem when there is little or no hope that the stated objectives will actually be met. It is these people that cannot afford legal counsel in these areas stated above that would benefit from legal assistance – whether in justice/small claims court or District Court, that are the real reason for needing legal reform to begin with. Therefore, I think their needs are the place to start and finish our focus of attention.

    In order to address these issues, we must look further than just fees (splitting, sharing, etc.) and advertising that impacts the attorneys that are appearing in court. From what I have observed in my 25 years of litigating in a variety of venues throughout our State, both in District and Justice/small claims court, it is the entire system that needs reform as the adage “time is money” aptly reflects the current court process. Having worked in the private sector for a decade and been involved in litigation before ever applying to law school, I know a bit about what it looks like from the private individual side of the bar as well as the litigator side. I think that there are some institutional changes that could be made in the court system which I think will have a greater impact on the target population than the “sandbox.”

    The Utah legislature has already done much to impact the affordability of legal services by legislating in certain areas, such as expedited hearings in evictions, guardianship, probate and other areas. Anytime the length of time to get before the person adjudicating the issue can be shortened, the fees go down and make it more affordable. I believe that one way to achieve this is an expansion of the jurisdictional limits as to what small claims court can handle or greatly increase the number of justice court judges. I know this requires legislative action as it was a bill not too long ago that raised the monetary limit in Small Claims to $10,000 (which I know some opposed). I think it could be raised much higher as to the amount in controversy – at least to $25,000 or $30,000, or possibly up to and including a Tier 1 ($50,000) case. I also think that the types of cases could be expanded as well (evictions, trespass, injunctions come to mind).

    There are administrative law judges in a variety of different areas that handle matters not based on the monetary limit, but the legal issues, some quite complex (labor commission, DOPL matters, etc.), where the matter is expedited and rules of civil procedure and evidence do not necessarily fully apply similar to Small Claims court. In some situations when a decision is appealed in these other administrative settings, it is a decision on the record that the District Court is to review and determine if the adjudicative body acted appropriately, more like an appeal rather than a de novo review that is done in Small Claims court.

    It would seem that the Small Claims court could serve more like that kind of setting for certain kinds of cases in its expanded jurisdiction so that a decision gets finalized quickly and rather than a strictly de novo review, it is more of an appellate-type review. Due process can be met and still have matters move quickly. In this setting, a small business owner (dba or closely held LLC, etc) who can represent themselves in a small claims action could take care of a lot of issues that come up as it relates to debt collection, etc. The defendant may be more likely to be able to hire legal counsel because the attorney knows that it will be a brief representation (a matter of months) which makes taking on a new matter more “doable” and making the fee much less due to the expedited nature. This might require hiring more justice court judges, or getting attorneys as judge pro tem, in some jurisdictions, but that is preferable as a way to benefit this part of our community. There will be pros and cons to discuss, but getting cases resolved quickly will have a big impact on affordability of legal services.

     
  71. Kelly Silvester

    It might be easy for anyone to assume that I waited until the last minute to provide my opinion of the proposed regulatory rules because today is the last day for comment. That is the problem with assumptions if they are often made without all the facts.
      
    I would argue that no one, including those behind these proposals, has spent more time on this subject than I have.  Having been in discussions with the Rocket Lawyer to represent their possible entrance into the regulatory sandbox, I made it a full time commitment, since the announcement in April, to understand all angles of this project.  However, my investment and investigation into legal technology began several years before. And, as an attorney and a founder of a legal tech start-up, I would also argue that I have 30 years of unmatched expertise in both technology and the law.  It is my full time job.

    Therefore, I offer this introduction, not to boast, but to address my first concern about these matters.  Respectfully, I found all of the CLE’s presenting this information to attorneys to be unorganized, uninformative, unprofessional, and completely biased. I participated in 3 of these Zoom discussions.  My questions were rarely answered, mostly ignored, and offered mostly opinions rather than evidence.  I was told I was uneducated and uninformed. In addition, I felt patronized, marginalized, and not given the adequate opportunity to present any information about this subject in these discussion settings.  Eventually, I participated on a CLE panel on Zoom, with other attorneys, including a Utah State Senator who is a lawyer and Utah State Representative, who is also a lawyer, to provide a more balanced discussion about these important changes.

    SInce the standing order announcement, I have also met with CEO’s and founders of other tech start-ups, accountants, venture capitalists, securities attorneys, other data privacy experts, and my own tech design team. For 90 days I have made daily follow up phone calls with above, as well as, case management software representatives, consumer advocacy experts, and professionals from countries where alternative legal services have already been studied and/or implemented.  Additionally, I have thoroughly read the research on both sides of the issue. I am not uninformed or uneducated on this matter as one of the Zoom proponents suggested.

    Which begs the question, why, even though I submitted 80 plus pages to the committee, was my research completely ignored.  Not a response email, not a phone called. Ghosted? 

    Again, here is the problem with assumptions, they are useless without the facts.  

    The fact is, at first I was very eager to enter the sandbox–even with a product/service prototype ready to go, that supports my genuine desire to close the justice gap!  But, I have been shocked and dismayed at a dismissive, winnowing process that clearly represents an agenda rather than the fair treatment most matters receive when reviewed and heard by the court system.  Will this Office of Innovation, and those behind it act, arbitrarily and capriciously in their decision making going forward?  Will there be codified rules and guidelines that are open, transparent, published and adhered to by those that review the proposals?  This remains to be seen, but so far, I am not confident that will be the case.

    Rocket Lawyer has recently informed me they have decided not to go in this direction.  I can understand why.  Most of my discussions with various professionals were received with skepticism about this ad hoc approach to innovation. After careful research it was determined that 
    • providing an outstanding product or service
    • within a tightly controlled customer experience,
    • with very little variation in delivered outcomes,
    • through a just-in-time supply network,
    • profitably
    • at scale
    would be difficult for any start-up or existing company even with capital resources like Rocket Lawyer because it would require• precisely tuned system for getting
    • high-quality product
    • in front of customers
    • with extreme discipline of procedure
    • ensure commonality of outcome, and
    • extensive customer service training,

    All of the above are not whim and fancy bullet points.  They are sound tech principles that are found in almost all successful tech startups. Even then, with these rigorous standards, there is no guarantee that the product or service will have market success.

    The good news is that data, not assumptions, ulterior motives, hidden agendas, personal bias, outside influence,–data can measure the effectiveness of technology.  If the sandbox is willing to put aside any bias, and let the data do the talking, I am all for being a part of technology and the law!  

    If not, it is my opinion, that this pilot program will not succeed because it is ill conceived, cloaked in agenda, does not have the majority of attorneys support or backing, will not have the financial commitment needed to bring services to market, and does not give attorneys, already in this field, the kind of respect they have always shown the courts. 

     
  72. Jeff Ward

    On behalf of the Duke Center on Law & Technology, the NuLawLab at Northeastern University School of Law, Vermont Law School’s Center for Legal Innovation, and Cat Moon, Director of Innovation Design at Vanderbilt Law, we write in support of the Utah Supreme Court’s Regulatory Reform Proposal. An annotated version of this comment is available here: https://drive.google.com/file/d/1sJtT-As3o2mz5s-y4xgCPbXwlaQ7eHf7/view?usp=sharing

    This comment on the Petition to Adopt Standing Order 15; Redline Rules 5.4A and 5.4B; and Clean Rules 5.4A and 5.4B is shaped by our mutual proximity to innovation in legal-services delivery and our commitment to improving the law for all. We write to express our strong support for the Task Force on Regulatory Reform’s proposal that Utah amend the Utah Rules of Professional Conduct and establish an Office of Legal Services Innovation that will oversee a Regulatory Sandbox wherein nontraditional legal services and providers can operate.

    We believe that enabling lawyers to harness the power of technology in the delivery of legal services is a key component of the broader efforts that are necessary to increase access to justice. To be sure, any efforts at regulatory restructuring require careful deliberation to ensure the protection of both the integrity of the legal profession and consumers of legal services. Toward these ends, the rule changes currently under consideration would not only establish the necessary infrastructure to encourage legal innovation without compromising lawyer’s duties or professional independence, but also would institute a full, end-to-end system of consumer protection that does not exist with current regulatory structures.

    A History of Access Challenges

    The Task Force’s report summarizes the relevant statistics: the US is tied for 99th out of 126 countries for the accessibility and affordability of our civil justice system, and “86% of civil legal problems reported by low-income Americans in [2016–17] received inadequate or no legal help.” Even at glance, the data paints a bleak picture of America’s “unrepresented majority,” priced out of bespoke legal representation and too often beyond the resource capacities of underfunded civil legal aid organizations.

    Yet it should come as no surprise that, in a justice system founded on the presumption of two competently represented parties, having an attorney increases a litigant’s likelihood of success. On the flip side, “unrepresented lay people fare poorly when they attempt to navigate this system on their own.” This means that tens of millions of Americans, already disadvantaged socioeconomically, are yet further disadvantaged when they turn to the legal system for recourse in high stakes issues such as eviction, domestic abuse, or child custody.

    Though the legal community is not blind to the breadth and depth of this access crisis, our community has yet to accept meaningfully that legal practitioners working within current regulatory and commercial structures cannot meet the public’s civil legal needs. Present-day legal aid expenditures amount to a mere 3.5% of the estimated full cost of providing low-income individuals with necessary legal assistance, and—insofar as only 16% of lawyers lend financial support to legal assistance organizations—crowdsourcing the remaining 96.5% seems unrealistic. “Low” and “pro bono” solutions fare no better. Plainly, the legal community cannot ‘volunteer’ its way out of the unrepresented litigant crisis. As such, choosing to maintain the regulatory status quo means choosing to exclude millions from access to the law to help address their important issues. New models of service delivery are necessary; we need the kinds of innovation that this proposal aims to support.

    Tech-Enabled Scaling

    To move the needle on access, we need an exponential increase in the public accessibility of legal assistance, a magnitude that requires the fundamental recalibration of our approach to legal service delivery. While incapable of providing fully automated solutions, modern technology tools can play significant roles in these efforts to democratize access to legal help. Especially where one-to-one models of lawyer-litigant legal aid fall short, optimizing scalability through technology would allow the legal community to harness the advantages of one-to-many service delivery.

    Nevertheless, the current regulatory system hinders technological innovation and scalability by limiting who can (and cannot) provide legal services or contribute meaningfully to legal services innovation. Between state regulation of the unauthorized practice of law (UPL) and Rule 5.4’s prohibition against nonlawyers owning or controlling interests in law firms, legal services innovation is limited to demonstrably ineffective calls for more lawyers, more affordable lawyers, more access to lawyers, or some combination of these 1-to-1 models that have proven difficult to scale.

    End-to-End Consumer Protection

    Though UPL ostensibly exists to “protect the public from bad legal advice and representation and from inferior legal or law-related services,” in practice UPL fails to balance quality, effectiveness, and equitable reach of legal services in an era of technological change. Likewise, Rule 5.4 does little to balance concerns for quality with fundamental needs to enhance access. By precluding law practitioners from partnering effectively with technologists, social workers, venture capitalists, accountants, and others, Rule 5.4 stymies the cross-disciplinary collaboration necessary to foster innovation.

    Worst of all, beyond undermining innovation, neither UPL nor Rule 5.4 as currently implemented effectively protects consumers. Both regulatory approaches focus only on who delivers services, even though certification as a lawyer is only a loose and imperfect proxy for the quality of service provision. The primary benefit of the Task Force’s proposed Office of Legal Services Innovation is that—in overseeing a sandbox in which nontraditional legal services and providers can operate—it will focus on the effectiveness and equity of service delivery as primary measurements of success. In this way, such a regulatory framework offers end-to-end consumer protection and fosters the kinds of innovation that might finally, meaningfully enhance access to legal services.

    For all of these reasons, the undersigned centers, labs, and individuals support the Petition to Adopt Standing Order 15; Redline Rules 5.4A and 5.4B; and Clean Rules 5.4A and 5.4B.

    Sincerely,

    The Duke Center on Law & Technology

    The NuLawLab at Northeastern University School of Law

    Vermont Law School’s Center for Legal Innovation

    Prof. Cat Moon, Director of Innovation Design at Vanderbilt Law

    About Us

    The Duke Law Center on Law & Technology (DCLT) coordinates many of Duke’s activities in legal technology, including using human-centered design principles to understand, re-imagine, and lead the next generation of tech-enabled legal practice to ensure that rapidly emerging technologies empower and ennoble people. Notably, through the Duke Law Tech Lab, the DCLT works with early-stage legal technology startups pushing to increase access to legal services. Jeff Ward serves as Director of the DCLT (law.duke.edu/dclt).

    The NuLawLab is the interdisciplinary innovation laboratory at Northeastern University School of Law. Dan Jackson serves as Executive Director of the NuLawLab (https://www.nulawlab.org/).

    Vermont Law School’s Center for Legal Innovation (CLI) is dedicated to helping to create a future where innovation and entrepreneurial energy redefine legal education, the practice of law, and law itself. The CLI focuses on the current challenges for effective and affordable legal education and providing legal services access to all. To accomplish this, CLI champions the use of technology and business innovation in the legal industry. Jeannette Eicks and Oliver Goodenough lead the CLI (https://www.vermontlaw.edu/academics/centers-and-programs/center-for-legal-innovation).

    Cat Moon is Director of Innovation Design at Vanderbilt Law and co-founded and produces the Summit on Law and Innovation (SoLI), which brings together experts across legal, technology, and other disciplines in collaborative legal innovation projects (c.moon@vanderbilt.edu).

     
  73. Natalie Anne Knowlton

    We write on behalf of IAALS, the Institute for the Advancement of the American Legal System at the University of Denver, in support of the Utah Supreme Court Regulatory Reform Proposal (the “Proposal”).

    We applaud the Utah Supreme Court and the Utah State Bar for their leadership in regulatory reform efforts. While many commissions and committees nationwide have issued reports on the accessibility and affordability of legal services, the Utah Task Force stands among the few that have taken real action toward legal system improvement. Recognizing the unacceptable access to justice gap, the Utah Supreme Court has sent a clear message to the public that the status quo is no longer an option.

    *We Support the Regulatory Reform Proposal for Maximizing Consumer & Provider Benefit*

    IAALS supports the Proposal for establishing a framework in which legal services innovation can benefit both consumers and service providers. Increasing access does not require harming the profession; and advocating for the profession is not necessarily contrary to the interest of the broader public.

    We strongly support the amendments to the legal regulatory structure of the sort detailed in the Proposal—specifically, new 5.4A and 5.4B and simplifying the lawyer advertising rules. These amendments will benefit both providers and consumers.

    A client’s “legal problem” is only one facet of a broader human problem. Family law professionals know this all too well. By allowing attorneys to create interdisciplinary partnerships that respect the independent judgment of all professionals involved, the Proposal will create new business opportunities for lawyers by allowing them to offer more holistic services to their clients. Finally, the ability to raise money from external sources will give providers an opportunity to expand and scale their services in a manner not currently allowed under the law. Consumers benefit greatly from more open markets and from services that, because of their scalability, are more affordable and accessible.

    *We Support the Regulatory Reform Proposal for Creating a Culture of Experimentation*

    We also support the Proposal’s commitment to data gathering and experimentation. The crisis in access to legal services is widely recognized. What is needed now is experimentation on potential solutions and empirical study of their effects. The Proposal creates an environment in which both systemic changes and individual services can be evaluated for their impact on the legal services market.

    This will not only benefit legal services in Utah, but also may shed light on innovative ideas and outcomes to help other jurisdictions think about reform. The regulatory sandbox structure and the corresponding amendments to the Rules of Professional Conduct align closely with IAALS’ Unlocking Legal Regulation model, developed in consultation with national experts in law and economics. In fact, Utah’s Proposal is one of the first steps in what we hope will eventually become a nationwide effort toward a risk-based regulatory system. Interstate operation would promote consumer access to a well-developed, high-quality, innovative, and competitive market for legal services. But before we can achieve this at scale, we must have leaders in particular states, like Utah.

    *We Encourage the Utah Supreme Court to Diversify Membership of the Innovation Office*

    We support the creation of an independent Innovation Office to manage risk-based regulation; however, we also encourage those responsible for launching the Innovation Office to include non-lawyer members from diverse perspectives as a majority of the staff. Any entity tasked with developing, overseeing, and regulating the sandbox must have among its ranks people with different backgrounds and expertise to understand and assess proposed solutions that may look very different from traditional law practice. Thus, the office should not be predominantly filled by lawyers.

    Many will argue that the demise of the Limited License Legal Technician program in Washington can be largely attributed to the complex barriers to entry erected by the state bar. This Proposal is too important to befall a similar fate. Diverse consumer groups, community leaders, technologists, and others outside of the traditional legal industry must be involved as members of the Innovation Office. This will ensure that the spirit of the Proposal—protecting consumers and facilitating innovation—will be realized in the program’s administration.

    *The Time for Change is Now; The Place for Change is Utah*

    In these unprecedented times, our legal system needs unprecedented solutions. Adopting the Proposal will help address Utah’s crisis in access to legal services in a pathbreaking way that promotes innovation while protecting the public and expanding opportunities for the legal profession. And by adopting the proposal, Utah will continue its leadership in building momentum for changes across the nation.

    Thank you for staying this course.

    Scott Bales
    Executive Director

    Natalie Knowlton
    Director of Special Projects

    Zachariah J. DeMeola
    Director of Legal Education & the Legal Profession

     
  74. Tom Gordon

    The PDF version of these comments can be found at: https://www.responsivelaw.org/uploads/1/0/8/6/108638213/utahsandboxcomments

    Comment On: Utah Supreme Court Regulatory Reform Proposal

    Responsive Law thanks the Utah Supreme Court for the opportunity to present these comments. Responsive Law is a national nonprofit organization working to make the civil legal system more affordable, accessible, and accountable to its consumers. We advocate for policies that expand how and by whom legal services may be provided so that people of all income levels can get the legal help they need. We urge the Court to implement the Sandbox proposal and put a new regulator in place to ensure that people at all income levels have safe and affordable access to the legal help they need.

    I. Low- and Middle-Income Consumers Cannot Afford Legal Help at Any Level

    The growing access to justice crisis in the United States extends from the poorest Americans to those of modest means and beyond, encompassing most of the middle class. In the World Justice Project 2020 report, the United States ranks 109th out of 128 countries in affordability and accessibility of its civil justice system.[1] Americans cannot afford assistance with everyday legal needs despite the fact that the average household will face a significant legal problem every year.[2] More Americans suffer from a lack of access to justice than do their peers in England and the Netherlands, where there are fewer restrictions on how legal services can be offered.[3] In fact, the Court’s Implementation Task Force has recognized the lack of access in Utah itself: “In Utah’s largest district, in 93% of family and civil law disputes, one party did not have a lawyer.”[4]

    Furthermore, the access to justice problem has been exacerbated by the current COVID-19 pandemic. Especially in areas of domestic violence, landlord-tenant law, and healthcare and consumer debt, many Americans will likely face a greater number of legal issues than this country has seen in the past. Even as the pandemic drastically increases the demand for legal services, it also diminishes consumer ability to pay. A risk- and outcomes-based regulatory plan will be necessary in the coming years to provide new, affordable, and high-quality innovations in the legal realm.

    II. Consumers Have Little Awareness of Their Legal Needs or How to Find Legal Help

    Most low- and middle-income individuals, families, and organizations have little awareness of how to go about getting help for their legal matters. Due to a lack of sophistication regarding the legal system, many individuals fail to recognize when their problems require legal help. As noted by the American Bar Association Commission on the Future of Legal Services, past promotional efforts by state bars have proven insufficient to raise public awareness of the need for legal assistance.[5]

    Moreover, even when a given consumer does recognize that their issue is legal in nature, they may be unable to determine what sort of aid they need and how it can be located. A 2013 study found that two-thirds of random adults in a mid-sized American city experienced at least one significant civil justice legal issue within an 18-month period; however, only one-fifth of those experiencing such a situation sought any formal help.[6] A significant factor in the justice gap stems from the inherent difficulty in identifying particular consumers’ needs and connecting them to appropriate legal aid providers. Under the regulatory regimes currently active in many states, the system through which consumers access legal services is “confusing, opaque, and inefficient for many people.”[7] When faced with a civil justice issue, up to half of those who do not choose to seek outside help fail to do so because they believe that such help would be ineffective, too difficult to locate, or too costly.[8]

    III. Misconceptions Regarding The Sandbox Proposal

    Many individuals and organizations have submitted comments regarding the Sandbox and regulatory reforms, outlining problems they believe the proposal poses. In many cases, these concerns are representative of misapprehensions and misperceptions that opponents of alternative business structures have previously raised in Utah and elsewhere.

    a.The Sandbox Proposal Permits Only Lawyers to Practice Law

    In fact, proposed Rules 5.4A and 5.4B explicitly prohibit the practice of law by non-lawyers, even if they own a business that employs lawyers. Further, lawyers in the Sandbox, no matter what entity employs them, are subject to the regulatory body, which is in turn subject to the Supreme Court. There is also no indication in the proposal that any kind of tech, AI, or other non-lawyer software would be permitted to “practice law.”

    b. The Sandbox Proposal Does Not Change Any Ethical Rules
    Governing Attorneys Besides Rule 5.4

    Lawyers operating under the proposed Sandbox will retain all of the same duties to their clients in areas of confidentiality, zealousness, competence, professional independence, and everything else covered by the Rules of Professional Conduct. The only change from traditional rules is that lawyers who choose to be regulated will be permitted to share fees with non-lawyers and non-lawyer entities, subject to findings of minimal to no risk. As with all professions that operate under a similar structure to the Sandbox, lawyers and law firms will maintain all of their professional ethics responsibilities as they are covered in the proposal and in the Rules of Professional Responsibility.

    c. Restrictions on Law Firm Ownership Are Ineffective in
    Protecting Lawyers’ Professional Independence

    Opponents of eliminating Rule 5.4 have cited the importance of protecting lawyers’ professional independence. However, Rule 5.4 is not a particularly effective means of safeguarding that value. Lawyers’ professional independence is already protected by numerous other provisions of the Rules of Professional Conduct.

    Additionally, the frequent argument that non-lawyers would exercise improper influence over lawyers in their employ simultaneously overstates and understates lawyers’ ethical propriety. It assumes that lawyers who own firms are saints who have no possible motivation to exercise undue pressure on subordinate lawyers to act against their clients’ best interests (e.g., padding of hours, pressure to settle a contingency-fee case). At the same time, it assumes that lawyers have so little backbone that they would ignore all their obligations to their clients if pressured by their corporate employer.

    Risk-based regulation will not lead to elimination of lawyer independence. On the contrary, by regulating entities rather than just individual lawyers, it will be able to use data to understand where this value may be threatened within a firm’s structure, and how to intervene to protect it.

    d. The Sandbox Provides an Additional Degree of Consumer
    Protection By Regulating Both Firms and Individual Lawyers

    The current regulatory structure for lawyers governs individual lawyers, but not the businesses through which they provide services. As a result, while consumers are protected from the incompetence or misconduct of their lawyers, there is no way for consumers to be protected from systemic problems that may exist at a law firm.

    In contrast, consumers using a company in the Sandbox will be protected by two sets of regulations. As mentioned above, the existing Rules of Professional Conduct (with the exception of fee sharing restrictions) would still apply. In addition, companies in the Sandbox would be regulated in a way that is common in other industries—although new to law—with the new regulator functioning as an inspector to maintain regulatory standards and protect consumers.

    The proposal will allow the Sandbox regulator to collect data through 5.4B’s notification and application processes; an “outcomes-based” approach in which the regulator will focus on how consumers are actually being harmed and formulate plans to combat those harms with innovative and flexible solutions. This is a marked and welcome change from the traditional, mechanistic “rules-based” approach, focused purely on technical compliance rather than actual consumer outcomes. With this approach, not only will the regulator be able to intake, review, assess, and respond to data from voluntary applicants, but approval is dependent on a finding of “no risk” or “minimal risk.” This process is designed to catch bad faith actors from the outset.

    Additionally, these processes are subject to further review by the Utah Supreme Court whenever the regulator finds it necessary to deny an applicant or remove a participant from the Sandbox. All such decisions are based on actual data indicating the risk the individual or entity poses to consumers in the state, regardless of economic status. Any finding of “more than minimal risk” will be placed under further review by the regulator and by the Court for final removal or denial.

    Furthermore, the proposed Sandbox is a “risk-based” approach, assessing consumer risk under various business structures for legal services and designing specific and targeted regulations to protect consumers from foreseen harms. This proposal specifically allows the regulator to tailor the Sandbox to best benefit consumers and lawyers at the same time. Rather than taking an all-or-nothing approach when it comes to new structures and practices, regulators using a risk-based approach can design regulations that preserve flexibility and access while ensuring that clients are protected. What’s more, this process focuses more on prevention than post-act damage mitigation.

    Finally, consumer surveys show support for policies allowing non-lawyers to have ownership stake or partnership in law firms, so long as regulations exist to catch bad actors.[9] Rule 5.4B will permit the new regulator to do just that: expand access to services while acting as another level of protection against consumer risk. Not only will the regulator be an inspector for individual lawyers, but it will also assess entities, such as law firms, which has been uncommon in regulatory bodies in the past.

    iv. Relaxing or Eliminating Rule 5.4 is a Necessary Condition for Making Legal Help Safer and More Affordable

    a. The Sandbox Proposal Permits Outside Investment, Which
    Will Allow Lawyers to Garner More Financial Resources, Free
    Up Time to Spend on Clients, and Increase Productivity

    Allowing the corporate practice of law is a necessary condition to fill the gap in providing adequate legal help. Just as H&R Block and TurboTax have made navigating the tax code widely accessible and affordable, a mass‐market law firm could allow Utahns to affordably and accessibly navigate the legal system. The economies of scale that can only be achieved by outside investment would bring down the costs of legal services. Almost every law firm providing services to middle‐income individuals and small businesses on issues such as family law, employment law, housing, and basic corporate and business law is a small business of no more than a dozen attorneys. A large, well-capitalized firm specializing in these issues could provide standardized training to the attorneys it works with, perform quality control on services offered to clients, and let lawyers focus on practicing law rather than finding clients, maintaining trust accounts, and collecting fees.[10]

    b. The Proposal Puts Law on a Level Playing Field with Other
    Professions

    The concept of ownership from outside the profession is not an outlier in the professional world: For example, the corporate “practice” of medicine is far from unusual in the United States. While most states prohibit corporations from directly practicing medicine, all states “provide an exception for professional corporations and many states provide an exception for employment of physicians by certain entities.”[11]

    Under this proposal, Rule 5.4B would be similar to corporate practice of medicine laws and statutes. Lawyers would be able to work for a range of different types of employers, without being restricted by the employer’s corporate structure.

    c. Lawyers in the Sandbox Should Not Be Subject to a Double
    Standard Compared to Lawyers in Traditional Firms

    Some commenters have suggested requiring lawyers in the Sandbox to have malpractice insurance or to guarantee that they will serve a certain quota of underserved clients.

    It’s worth noting that no such requirements currently apply to Utah lawyers. We would welcome a requirement that all Utah lawyers be required to have malpractice insurance, but there is no reason to apply such a requirement solely to Sandbox lawyers. In fact, a Sandbox firm is less likely to need malpractice insurance, as regulators would be able to assess and minimize risk at the firm level.

    Similarly, while a minimal means focus is laudable, a minimal means requirement would unduly tax innovation and flexibility in this area, wasting precious time and energy on definitions, measurement, and compliance. We believe this proposal, unweighted by such bloat, would be an enormous step in the direction of expanded access to legal services.

    v. Simplifying Advertising Rules Will Raise Public Awareness of Lawyer Services and Make Those Services More Accessible

    While most of the attention given to this regulatory proposal has focused on the Sandbox, we would be remiss in failing to address the proposed changes to lawyer advertising rules. Advertising has an important role to play in making the public aware of the legal components of their problems and the availability of legal services. It also serves as a valuable aggregator of legal information and resources.

    The current advertising rules are archaic, overreaching, and unreasonably restrict lawyers’ ability to provide information to consumers about the availability of legal services. This is particularly true as the growth of electronic media has exposed the inaptness of rules created in an era prior to either the internet or the recognition that advertising is protected by the First Amendment. Any excess advertising regulation represents another barrier preventing consumers from connecting with lawyers and making informed decisions about their legal needs. Changes to advertising rules will only increase the effectiveness of Rules 5.4A and B and expand access to justice across the state.

    The proposal would strengthen Rule 7.1 to provide all of the consumer protection needed, while loosening unnecessary restrictions on lawyers. The proposed changes focus on false and misleading communications, as well as prohibiting interactions involving coercion, duress, and harassment. Under the current rules, lawyers face outdated, byzantine restrictions on the methods and messages they can use when trying to reach potential clients. The Task Force correctly determined that there is no need for specific regulation around attorney-matching services or other forms of marketing. Broadly prohibiting false and deceptive practices is sufficient to protect the public and provide a basis for discipline when required. We should actively welcome rules that provide flexibility for new development in communications technology, rather than being trapped in the expectations and methods of a particular time.

    Repealing Rules 7.1-7.5 and replacing them with a strengthened 7.1 would greatly increase the ability of lawyers and law firms to use modern digital marketplaces and marketing methods to reach the public. A recent study of California residents shows that 66 percent of Californians who are comfortable using the internet have looked online for legal help.[12] There is no reason to expect that this number would vary greatly for Utah. Furthermore, this number will only continue to grow as younger generations start facing legal issues of their own. By removing restrictive barriers and leaving an improved Rule 7.1, in combination with an overhaul of Rule 5.4, the proposal will undoubtedly help to provide many underrepresented Utahns with the legal assistance they need.

    vi. Conclusion

    The access to justice crisis in America is growing and cannot be improved without systemic changes to the rules and business models applicable to legal services. Adopting the proposed Sandbox regulations is a critical step, especially as the COVID-19 pandemic increases in severity. Uncertainty and consumer legal problems are only going to proliferate in the months ahead. Regulatory reforms that allow for flexibility and address actual public harms are critical. An updated Rule 5.4 will not only facilitate a broader range of practices for lawyers to expand their businesses, but it will also ensure that consumers are better protected from bad actors than they have been in the past. Modernized attorney advertising rules will allow for better-informed consumers. These changes are necessary, proportionate, and must be prioritized at an historic time of crisis and uncertainty in the United States. On behalf of the overwhelming majority of Utahns who cannot afford legal help, we urge the Court to adopt the proposed Sandbox regulations.

    Tom Gordon
    Executive Director, Responsive Law
    ___________________________________________
    1. World Justice Project, WJP Rule of Law Index 2020, available at https://worldjusticeproject.org/rule-of-law-index/factors/2020/United%20States/Civil%20Justice.
    2. Gillian K. Hadfield & Jamie Heine, Life in the Law—Thick World: The Legal Resource Landscape for Ordinary Americans in Beyond Elite Law: Access to Civil Justice for Americans of Average Means (Samuel Estreicher & Joy Radice eds., 2015) (observing that fifty to sixty percent of low- and moderate- income American households face an average of two legal problems annually).
    3. Id.
    4. Utah Implementation Task Force on Regulatory Reform, “Frequently Asked Questions,” 2020, https://uploads-ssl.webflow.com/5d03efebc4cbd6d7c884b485/5eb4ce994c8c0c802e2c6bc2_Utah%20FAQs%20FINAL.pdf.
    5. ABA Commission on the Future of Legal Services, “Report on the Future of Legal Services in the United States,” 2016, http://abafuturesreport.com/#1.
    6. Sandefur, Rebecca L., Accessing Justice in the Contemporary USA: Findings from the Community Needs and Services Study (Aug. 8, 2014). Available at https://ssrn.com/abstract=2478040.
    7. Carter, Stephen, “The Legal Services Corporation Launches Pilot Program to Increase Access to Justice,” quoting Legal Services Corporation President James L. Sandman, Apr. 19, 2016, http://www.lsc.gov/media-center/press-releases/2016/legal-services-corporation-launches-pilot-program-increase-access-0.
    8. Sandefur, supra, n. 2.
    9. State of Arizona Public Opinion Survey, Arizona Supreme Court Task Force on the Delivery of Legal Services, (Jan. 20-24, 2020).
    10. Lawyers spend only 2.3 hours a day on billable tasks and collect an average of only 1.6 hours of their billable time (Clio 2019 Legal Trends Report, https://www.clio.com/resources/legal-trends/ reported on at https://abovethelaw.com/2019/11/clios-latest-legal-trends-report-reveals-a-troubling-truth-about-lawyers/).
    11. Issue Brief: Corporate Practice of Medicine, American Medical Association (2015), available at https://www.ama-assn.org/media/7661/download.
    12. ATILS Task Force Study, The State Bar of California, (Mar. 2020), available at http://www.calbar.ca.gov/Portals/0/documents/ATILS-TaskForce-Study-Technical-Report.pdf.

     
  75. Natalie Anne Knowlton

    We write on behalf of IAALS, the Institute for the Advancement of the American Legal System at the University of Denver, in support of the Utah Supreme Court Regulatory Reform Proposal (the “Proposal”).

    We applaud the Utah Supreme Court and the Utah State Bar for their leadership in regulatory reform efforts. While many commissions and committees nationwide have issued reports on the accessibility and affordability of legal services, the Utah Task Force stands among the few that have taken real action toward legal system improvement. Recognizing the unacceptable access to justice gap, the Utah Supreme Court has sent a clear message to the public that the status quo is no longer an option.

    We Support the Regulatory Reform Proposal for Maximizing Consumer & Provider Benefit

    IAALS supports the Proposal for establishing a framework in which legal services innovation can benefit both consumers and service providers. Increasing access does not require harming the profession; and advocating for the profession is not necessarily contrary to the interest of the broader public.

    We strongly support the amendments to the legal regulatory structure of the sort detailed in the Proposal—specifically, new 5.4A and 5.4B and simplifying the lawyer advertising rules. These amendments will benefit both providers and consumers.

    A client’s “legal problem” is only one facet of a broader human problem. Family law professionals know this all too well. By allowing attorneys to create interdisciplinary partnerships that respect the independent judgment of all professionals involved, the Proposal will create new business opportunities for lawyers by allowing them to offer more holistic services to their clients. Finally, the ability to raise money from external sources will give providers an opportunity to expand and scale their services in a manner not currently allowed under the law. Consumers benefit greatly from more open markets and from services that, because of their scalability, are more affordable and accessible.

    We Support the Regulatory Reform Proposal for Creating a Culture of Experimentation

    We also support the Proposal’s commitment to data gathering and experimentation. The crisis in access to legal services is widely recognized. What is needed now is experimentation on potential solutions and empirical study of their effects. The Proposal creates an environment in which both systemic changes and individual services can be evaluated for their impact on the legal services market.

    This will not only benefit legal services in Utah, but also may shed light on innovative ideas and outcomes to help other jurisdictions think about reform. The regulatory sandbox structure and the corresponding amendments to the Rules of Professional Conduct align closely with IAALS’ Unlocking Legal Regulation model, developed in consultation with national experts in law and economics. In fact, Utah’s Proposal is one of the first steps in what we hope will eventually become a nationwide effort toward a risk-based regulatory system. Interstate operation would promote consumer access to a well-developed, high-quality, innovative, and competitive market for legal services. But before we can achieve this at scale, we must have leaders in particular states, like Utah.

    We Encourage the Utah Supreme Court to Diversify Membership of the Innovation Office

    We support the creation of an independent Innovation Office to manage risk-based regulation; however, we also encourage those responsible for launching the Innovation Office to include non-lawyer members from diverse perspectives as a majority of the staff. Any entity tasked with developing, overseeing, and regulating the sandbox must have among its ranks people with different backgrounds and expertise to understand and assess proposed solutions that may look very different from traditional law practice. Thus, the office should not be predominantly filled by lawyers.

    Many will argue that the demise of the Limited License Legal Technician program in Washington can be largely attributed to the complex barriers to entry erected by the state bar. This Proposal is too important to befall a similar fate. Diverse consumer groups, community leaders, technologists, and others outside of the traditional legal industry must be involved as members of the Innovation Office. This will ensure that the spirit of the Proposal—protecting consumers and facilitating innovation—will be realized in the program’s administration.

    The Time for Change is Now; The Place for Change is Utah

    In these unprecedented times, our legal system needs unprecedented solutions. Adopting the Proposal will help address Utah’s crisis in access to legal services in a pathbreaking way that promotes innovation while protecting the public and expanding opportunities for the legal profession. And by adopting the proposal, Utah will continue its leadership in building momentum for changes across the nation.

    Thank you for staying this course.

    Scott Bales
    Executive Director

    Natalie Knowlton
    Director of Special Projects

    Zachariah J. DeMeola
    Director of Legal Education & the Legal Profession

     
  76. Francisca Blanc

    Utah Housing Coalition (UHC) is a state-wide membership-based non-profit organization located in Salt Lake City, UT. Through Education, Advocacy, and Community Partnerships, UHC is dedicated to promoting equitable and sustainable communities to ensure all Utahns have a safe and affordable place to call home.

    Many of our members serve low-income renters across the state. We are well aware about the barriers this population faces in the rental market and legal representation when they receive eviction notices, eviction and debt collection judgments, and wage garnishments. Utah Legal Services provides great services to our state, but they can not simply cover all of the hundreds of eviction cases happening monthly. The volunteer attorneys through the Utah Bar services are a great resource; however, it is difficult to provide proper representation when they meet with their clients for a few minutes at the courthouse every Wednesday. Private attorneys and their law firms are unable to support a sustainable business model by providing low or no-cost legal representation to low-income renters and individuals who are unable to afford many basic necessities.

    Thus, UHC supports the Supreme Court Regulatory Reform Proposal. We welcome the reform to have trained and licensed professionals that are not members of the Utah State Bar under traditional admission requirements to have the ability to provide legal representation to low-income individuals. This reform is much needed in our state and is overdue for those who have limited means and is essential for our judicial system to efficiently deliver outcomes that are fair and accessible to all.

     
  77. Francisca Blanc

    Utah Housing Coalition (UHC) is a state-wide membership-based non-profit organization located in Salt Lake City, UT. Through Education, Advocacy, and Community Partnerships, UHC is dedicated to promoting equitable and sustainable communities to ensure all Utahns have a safe and affordable place to call home.

    Many of our members serve low-income renters across the state. We are well aware about the barriers this population faces in the rental market and legal representation when they receive eviction notices, eviction and debt collection judgments, and wage garnishments. Utah Legal Services provides great services to our state, but they can not simply cover all of the hundreds of eviction cases happening monthly. The volunteer attorneys through the Utah Bar services are a great resource; however, it is difficult to provide proper representation when they meet with their clients for a few minutes at the courthouse every Wednesday. Private attorneys and their law firms are unable to support a sustainable business model by providing low or no-cost legal representation to low-income renters and individuals who are unable to afford many basic necessities.

    Thus, UHC supports the Supreme Court Regulatory Reform Proposal. We welcome the reform to have trained and licensed professionals that are not members of the Utah State Bar under traditional admission requirements to have the ability to provide legal representation to low-income individuals. This reform is much needed in our state and is overdue for those who have limited means and is essential for our judicial system to efficiently deliver outcomes that are fair and accessible to all

     
  78. James L. Barnett, Administrative Partner for Holland & Hart, Salt Lake City Office

    Chief Justice Matthew B. Durrant
    Utah Supreme Court
    320 E. Capitol Street
    Salt Lake City, UT 84103

    Re: April 24, 2020 Utah Supreme Court Standing Order No. 15 and Associated Proposed Changes to the Rules of Professional Conduct

    Dear Chief Justice Durrant:

    I write on behalf of Holland & Hart LLP in response to the Utah Supreme Court’s April 24, 2020 Standing Order No. 15 and associated changes to the Rules of Professional Conduct (“Regulatory Reform Proposal”).

    Holland & Hart has a long-standing national reputation as a firm committed to providing legal and civic pro bono services to non-profit organizations that help others, and to those who are indigent or would otherwise go without legal help. The firm expects and requires that all of its lawyers donate a portion of their time and services and recognizes the unmet legal needs in our community. We applaud and support the stated aim of the Regulatory Reform Proposal to increase access to legal services for those who could not otherwise afford them.

    We also welcome regulatory reform that allows us to better serve our clients and appreciate the potential in the Regulatory Reform Proposal to do so. That said, Holland & Hart shares the concerns and recommendations outlined by the Utah State Bar Committee on Regulatory Reform (dated July 8, 2020), and as outlined by Attorneys’ Liability Assurance Society Ltd., a Risk Retention Group (ALAS) (dated July 22, 2020), which we understand have both been conveyed to the Utah Supreme Court. Before such reform occurs beyond the access-to-justice context, we believe that a deeper analysis and discussion with stakeholders outside the access-to-justice context would lead to reform that supports innovation and improvements to the practice of law while protecting consumers. Without such an analysis and discussion, we are concerned about unintended consequences that could harm Utah consumers and attorneys with potentially no material impact on improving access to justice.

    We applaud the Utah Supreme Court’s efforts to address the critical need for legal services by people of limited means, and we are hopeful that the proposal can be narrowed to ensure that need is served by making access-to-justice a requirement of the regulatory sandbox proposals.
    Very truly yours,

    James L. Barnett
    Administrative Partner
    for Holland & Hart LLP’s Salt Lake City Office

     
  79. Dean Collinwood

    Dear Chief Justice Durrant and Justices Lee, Himonas, Pearce, and Petersen,

    For my PhD dissertation at the University of Chicago, I studied white collar unions, specifically unions affiliated with college professors. I was puzzled to see professors with advanced degrees and enjoying a lot of self-governance authority picketing their campuses and joining unions affiliated with the meat packers and machinists. What were they complaining about? Why couldn’t they handle their disputes internally? Why were professors at community colleges joining unions but not professors at top tier universities?

    It turns out that the professors were upset because the people they would have to meet with to resolve disputes—the college administrators—were not of their culture. That is, over the years, the business world had penetrated the lower levels of academe, bringing in “business types” rather than scholars to run the campuses. Imagine a school principal who had never taught in a classroom. Imagine a college dean who had never engaged in scholarly research. How could those people know what their faculties needed or wanted?
    These new administrators were people who knew about spreadsheets and profit and loss statements but not about the life of the mind. They kept talking about “scale” and the “business of education,” but showed little interest in, and no understanding of, the spirit and true purpose of higher education.

    At one time, a professor of mine told me that if I wanted to be a college administrator someday, I must first establish my bona fides as a scholar: publish in refereed journals, present at scholarly conferences, and write books based on new research. In contrast to that approach, the administrators I encountered in my research thought they knew how to run campuses because they had studied “operations management,” “portfolio investing,” and “advertising.” They knew very little about academe, nor were they interested, which is why they were constantly butting heads with the faculty. They just saw education as a way to make money.

    There is an important message here as regards the law and the proposed “sandbox” changes. Non-lawyers, like the non-academics I encountered, will not “get it.” They will falsely think of the law as a business that needs to be “scaled,” that needs “investments.” They will want to advertise and advertise, and their advertisements will diminish respect for the legal profession, as the ads currently running on TV already do. But the law is a service, not a business, and it needs service-oriented people (i.e., lawyers) running it, people who are not interested in seeing how many cases they can handle but how well they handle them.

    Before becoming a lawyer, I was a professor of management and director of international business at the University of Utah school of business. I taught MBA students how to succeed in the midst of intense global competition from Asia. I know business as well as the law, and I know that the two are different and need to be kept different. There are valid reasons for tradition, for black robes, for standing when a judge enters the courtroom, for speaking respectfully, and dressing professionally. There are valid reasons for keeping the “taint” of crass capitalism away from our profession. We are in a profession in which people’s lives can be curtailed or even ended, a profession that needs to maintain dignity and quality so that it can continue to be respected, a profession that should never be allowed to devolve to the level of cheap “discount store” culture.

    I see the proposed sandbox changes, well-meaning as they obviously are, as a threat to the dignity of the profession, and I urge you not to adopt any of them for the reasons I have outlined here.

    Sincerely,
    Dean Collinwood, JD, PhD
    Attorney at Law

     
  80. Kathleen McConkie

    The proposed sandbox changes will not succeed in increasing access to legal services. Instead, they will likely diminish the standing of the law in the eyes of the public. Over my 30 plus years of legal practice, I have seen a decline in civility between lawyers as a result of mainstream culture seeping into the profession. The proposed changes will hasten that decline as well as hasten the decline in respect for the profession that most lawyers have worked so hard to earn.

    Kathleen McConkie
    Attorney at Law

     
  81. James L. Barnett, Administrative Partner for Holland & Hart, Salt Lake City Office

    Chief Justice Matthew B. Durrant
    Utah Supreme Court
    320 E. Capitol Street
    Salt Lake City, UT 84103

    Re: April 24, 2020 Utah Supreme Court Standing Order No. 15 and Associated Proposed Changes to the Rules of Professional Conduct

    Dear Chief Justice Durrant:

    I write on behalf of Holland & Hart LLP in response to the Utah Supreme Court’s April 24, 2020 Standing Order No. 15 and associated changes to the Rules of Professional Conduct (“Regulatory Reform Proposal”).

    Holland & Hart has a long-standing national reputation as a firm committed to providing legal and civic pro bono services to non-profit organizations that help others, and to those who are indigent or would otherwise go without legal help. The firm expects and requires that all of its lawyers donate a portion of their time and services and recognizes the unmet legal needs in our community. We applaud and support the stated aim of the Regulatory Reform Proposal to increase access to legal services for those who could not otherwise afford them.

    We also welcome regulatory reform that allows us to better serve our clients and appreciate the potential in the Regulatory Reform Proposal to do so. That said, Holland & Hart shares the concerns and recommendations outlined by the Utah State Bar Committee on Regulatory Reform (dated July 8, 2020), and as outlined by Attorneys’ Liability Assurance Society Ltd., a Risk Retention Group (ALAS) (dated July 22, 2020), which we understand have both been conveyed to the Utah Supreme Court. Before such reform occurs beyond the access-to-justice context, we believe that a deeper analysis and discussion with stakeholders outside the access-to-justice context would lead to reform that supports innovation and improvements to the practice of law while protecting consumers. Without such an analysis and discussion, we are concerned about unintended consequences that could harm Utah consumers and attorneys with potentially no material impact on improving access to justice.

    We applaud the Utah Supreme Court’s efforts to address the critical need for legal services by people of limited means, and we are hopeful that the proposal can be narrowed to ensure that need is served by making access-to-justice a requirement of the regulatory sandbox proposals.

    Very truly yours,

    James L. Barnett
    Administrative Partner
    Holland & Hart LLP, Salt Lake City Office

     
  82. Steve Whitehead

    It looks like I lost my formatting and footnotes.

    As stated by Charles F. Kettering, “a problem well stated is a problem half solved”. The Utah Supreme Court has proposed to reform in an effort to “strengthen access to justice.” Unfortunately, “access to justice” means different things to different people and does not define the problem that is to be addressed. For a problem to be properly and effectively addressed, it needs to be clearly defined. I am in favor of solving specific problems and shortcomings with the justice system. I am adamantly opposed to some of the proposed solutions currently being considered and strongly believe that they are counter to the stated goals.

    I have independently researched the issue, read articles, participated in webinars, reviewed comments, and thought about the problem. I concur with some that have commented that it appears that comments provided by the legal community will not be considered and that the decision has already been made. I was very disheartened and extremely disappointed in a comment made by a member of the judiciary in a webinar that any attorney that does not support the proposed reforms is solely acting out of self-interest and protectionism. The comment reflected an attitude that opposing or divergent views will be summarily dismissed and has the effect of stifling free speech and silencing dissent and comment. I sincerely believe that because of this attitude, real or perceived, will result in most members in the legal community remaining silent on these important issues. I hope and trust that all views and comments will be thoughtfully considered.

    As recognized by the Court, 86% of the civil legal problems reported by low-income people is that they received inadequate or no legal help. The Court has recognized that there is an access-to-justice problem. In other words, people need access to affordable meaningful legal services, including competent advice and access to the courts. As stated by the Court, the overarching objective is “to ensure consumers have access to a well-developed, high-quality, innovative, affordable, and competitive market for legal services”. While this sounds nice, it does not specifically identify an issue to be addressed or solved. From the information provided, I understand that the three main areas of concern are (1) landlord/tenant issues, including evictions, (2) estate/wills/probate, and (3) family law and divorces.

    Court Reform. Access to justice includes the ability to appear before judges and to receive timely rulings, orders, and decisions. Of the three main areas of the law identified, all three concern litigation related issues: unlawful detainer/eviction matters, probate proceedings, and divorces and restraining orders. The proposals contained in the revised rules do not address access to the court system. The various reforms are meaningless unless true justice is established through the court system.

    Access and Timeliness. Access to the court system can be address by the courts without changing the attorney licensure rules. As an example, a client had a hearing before a judge last December. The judge stated that the ruling will be issued within three weeks, which is the typical time frame for this type of ruling. The ruling will determine how the case progresses. It has now been approximately seven months and the judge has yet to rule on the issue presented in the motion despite following up multiple times with the court. Given that new cases have been suspended due to the COVID-19 situation, there is no justification for this delay. Any legal reform must address the actual litigation process and address the access to courts and the timeliness of judicial decisions. Having more people represent parties does not solve this problem. It may just make the backlog of cases greater. If there is a need to have more people provide legal services to meet the legal demand, there also needs to be more judges, courthouses, and other facilities.

    Competency. While people need to be provided competent legal services, the judicial decisions should be made by competent judges that know the specific area of the law. It is not feasible or expected that any one attorney knows all aspects of every legal subject matter. Attorneys tend to focus on certain practice areas. While a party may retain a competent attorney with knowledge and experience in a certain subject matter, if the matter is litigated, the odds are that the judge will not be well versed in that area of the law. As a result, the rulings may not be the best and justice will not be served. I suspect that one of the reasons for delays in making decisions is that a judge is unfamiliar with the subject matter and is uncertain of the ruling. To foster competency and trust in the legal system and to address the timeliness of decisions, it should be considered that judges be trained and educated in certain areas of the law and to just hear cases involving those subject matters. Instead of having to research legal issues for each case that comes up, which takes time and creates delays, judges can already be knowledgeable in certain areas and have a good knowledge base. This is already done in probate and other areas. Access to justice is just not access to the court system, but access to competent legal services and decisions made by competent judges that are knowledgeable in the applicable area of the law. In addition, cases can be recorded for consistency and to provide a basis for appeal. Additional funding should be provided so that rulings and decisions are issued on a timely manner.

    Competency. One of the main elements of access to justice is access to competent legal services, especially to marginalized and poor people. By allowing unlicensed persons to provide legal services, persons may not be provided with competent advice or meaningful service. To ensure that proper advice and meaningful service is provided, those providing legal services are property trained, educated and licensed, with appropriate continuing education requirements. For example, LPPs need to be trained and licensed. In order to provide legal advice on any particular subject, LPPs need to pass a test to demonstrate competency and should be required to participate in mandatory CLE and be re-licensed. Likewise, attorneys to be licensed in Utah should pass the Bar Exam, participate in mandatory CLE and be licensed. While there is a high passage rate, the reason for the high passage rate may be because the exam requires applicants to study and learn the material. Without the exam, persons will not study and learn the material.

    Attorneys, like medical doctors, solve complex and unique life changing issues for people by representing and advising their clients; they don’t simply have clients check boxes or sign and submit forms with the Court. Untrained non-lawyers are unable to provide clients with proper legal advice because they lack adequate expertise in the law. Nobody would be content relying on advice from a non-doctor, even an experienced nurse, on their unique cancerous medical condition, why would we be content relying upon an untrained non-lawyer’s legal advice. Similar to how every human body is unique and medical doctors must carefully plan to successfully treat a patient of their unique and particular health issue, attorneys must also carefully plan and strategize to protect their clients’ interests, a boilerplate form may be sufficient in some instances (and there are plenty of examples of forms available on the internet) but it cannot be sufficiently tailored to and adequately protect a client’s interest in most instances. Non-trained and non-licensed persons should not give legal advice.

    Affordability. To address the affordability issue, the cost of legal services needs to be decreased and the ability of LPPs and parties to participate pro se in matters need to be increased. Creating another profit layer through ownership by unlicensed attorneys or the payment of referral fees (which I suspect is a major driving force in the rule changes) will increase the cost of legal services. Below are some ideas on how the cost of legal services can be decreased:

    Pro Se Representation. For some matters, the court may allow parties to represent themselves pro se before the court.

    Licensed Paralegal Practitioner. The Court recently adopted the licensed paralegal practitioner program, which is similar to the licensed limited licensed legal technician’s programs that have been adopted by other states. The LPPs can perform legal services for very specific areas under the supervision of attorneys similar to LLLPs in Oregon and California. The State should wait and evaluate the effectiveness of the LPP program and its impact on legal services before adopting more drastic measures. The adoption of LLLPs and LPPs seem to be the most popular and accepted means to provide meaningful legal services at a lower cost. While LPPs do not need to attend law school and pass a bar exam, they still must have knowledge and competency in an area of the law and be licensed in order to provide legal advice. The idea is that LPPs will charge a lower fee. Use of LPPs should be encouraged and can be provided as part of community outreach programs discussed below.

    Mandatory Landlord/Tenant Mediation Program. For residential landlord/tenant disputes and evictions, the court has established a landlord/tenant mediation program. Before an order of restitution can be issued in an unlawful detainer action, the parties need to participate in mediation. Attorneys and trained mediators volunteer to provide the pro bono mediation services. This program allows tenants to participate in mediation before an eviction proceeding occurs. This program can be expanded to include additional pro bono legal services to advise tenants, such through a family law/divorce program, estate planning and probate program, etc. The Landlord/Tenant Mediation Program does address some of the concerns expressed regarding landlord/tenant matters.

    Community Outreach Programs. Similar to issues related to police reform, promoting rights awareness and training community members or LPPs to help low-income and marginalized groups. For example, trained social workers and LPPs can provide assistance and act as a liaison with these groups through community clinics and support centers. This may be the most effective means of addressing the issue and can be combined with the police/justice reform. As part of the community clinics and support centers, justice facilities can be included that would include meeting rooms for consultations and mediations and courtrooms where judges can go to the local community. This would address the barrier of the poor having to travel to a centralized courthouse.

    Incentivize Pro-Bono Work. Incentivizing licensed and experienced attorneys to provide pro-bono legal services for the underprivileged and marginalized groups would remedy many of the issues listed above. Attorneys would be able to provide adequate representation, would be able to maintain client priority and keep legal costs down. The State could incentivize attorneys and law firms to provide more pro-bono work by providing them with a tax credit for pro-bono work. In addition, if need be, pro bono hours could be required as a condition of licensure. I believe that there are approximately 8,250 actively licensed attorneys in the state. If each attorney is required to perform 20 hours of pro bono hours every two years as part of their license renewal, that would be 165,000 hours or approximately 82,500 hours per year. That would be the equivalent of 50 full time attorneys. In addition, greater hours could be required of newly admitted attorneys. The attorneys can provide services in their particular practice areas to ensure competent legal representation and representation can be through their standard process, which would include conflict checks, etc. This is probably the most effective means of addressing the access to justice issue.

    Allow 3L’s to Practice Law in a Limited Capacity. Many law students are enthusiastic and passionate about justice and actively seek opportunities to participate in legal clinics such as the Rocky Mountain Innocence Clinic, as well as PBI programs which include services such as American Indian Law, Debtors Counseling, Expungement, Family Law, Medical-Legal, Rainbow Law, Street Law, Community Legal Sites. Allowing 3Ls, who already have two years’ experience, would be able to represent individuals before the Court thus providing greater access to justice. Other states have adopted this practice by allowing 3Ls be a licensed legal intern. The 3Ls would primarily work with the poor and marginalized persons, thus directly addressing the access to justice for these groups.

    Encourage Local Law Schools to Admit More Law Students. Admitting more law students will produce more lawyers who will enter into the legal profession. With more lawyers in the legal market there will be greater number of lawyers to provide legal services thus creating greater access to justice.

    Increase Funding for Legal Aid and Justice Reform. The State had over a billion-dollar surplus in 2018, while the COVID-19 pandemic will dramatically impact the State’s finances, it appears that access to justice must involve greater funding and investment in judges, legal aid, and infrastructure, such as courthouses and community centers. By expanding legal aid, legal services would be made available to those who otherwise would be unable to obtain such services on their own thereby increasing access to justice.

    One will notice that the solutions proposed above are not included in the proposed reforms. In fact, many of the proposed reforms appear to be counter to the solutions and will make the problem worse. Instead of providing competent legal services to poor and marginalized persons and addressing true reform to the justice system, the proposed reforms tend to be concerned with the dissemination of information, allowing corporate and non-attorney ownership of law firms, and sharing of legal fees with non-attorneys.

    Dissemination of Legal Information/Advertising/Modification of Rule 7.1 through 7.5. I believe that many law firms avoid sharing legal information because it would be deemed advertising and in violation of the advertising rules or be deemed legal advice and be subject to other various rules. Many law firms and attorneys issue bulletins or legal alerts to clients. These are not sent to the general public because it may run afoul of advertising rules. If there is a concern about dissemination of legal information, I am in favor of loosening the advertising rules so that law firms can provide legal information to the general public. Once the advertising restraints are lifted, attorneys and law firms may develop technology or apps to disseminate this information. The marketplace will encourage this. The dissemination of information may be through podcasts, videos, articles, apps, etc. The courts and bar can work with law firms to disseminate information. Before opening the door to non-licensed attorneys to provide legal information, I strongly suggest that attorneys and law firms be given an opportunity to address the issue. Loosing advertising rules will also allow attorneys to reach out to the public and inform the public of the services that they offer. Other than personal injury attorneys, many people may not know who to contact for their legal needs.

    Fee Sharing and Ownership of Law Firms/Modification of Rule 5.4. I AM STRONGLY OPPOSED TO CHANGES TO RULE 5.4. It is common that professionals and practitioners in licensed occupations are not allowed to share compensation with non-licensed persons. A common example is in the real estate industry where real estate broker cannot share real estate commissions with non-licensed individuals. Most states prohibit the sharing of real estate commissions with unlicensed persons. In addition, this practice is also prohibited by federal law in most cases (See Real Estate Settlement and Procedures Act). It is illegal for a licensed real estate broker to pay a commission share a commission with someone for performing work for which a license is required. Likewise, attorneys are prohibited from sharing fees with persons that are not licensed attorneys. The rationale is similar in both industries. My thoughts concerning this rule change are below.

    Professional Independence. One of the principal purposes behind the prohibition about sharing compensation is to protect and maintain professional independence. One of the bedrock principals of the legal profession is that attorneys must maintain professional independence to advise clients without outside influence. The same holds true for other occupations, such as real estate brokers, where there is a duty of loyalty and a fiduciary relationship. If outside parties have an ownership interest in a law firm, there will be interests competing with the lawyers’ fiduciary duty and duty of loyalty to the client. This is such a common place understanding that it is difficult for me to comprehend why the rule change is proposed. It appears that it is recognized that professional independence is a concern, so it is repetitively stated that attorneys’ professional independence will not be compromised. Just saying this does not address the reality that it in fact will be compromised.

    As proposed by James Moliterno, law professor at Washington and Lee, one of the purposes of the movement for the involvement of non-lawyers in the law profession is to regulate the legal profession in light of cultural trends. According to Professor Moliterno, “History demonstrates that lawyers are inept at being their own exclusive regulators. Lawyers tend to look backward to precedent and sideways to existing articulations of law. When lawyers do look forward, their primary task is to predict and guard against risk. It is not in lawyers’ nature to be forward-looking planners or sensitive to cultural trends. . . .” As such, one of the primary purposes of having nonlawyers involved in law firms or have non-lawyer ownership of law firms is to enable community or special interest groups to have the ability to exert influence on the law firm in order to influence the clients and the types of cases the law firm takes in light of “cultural trends”. If any entity or investor has an ownership interest in law firms, those parties will have influence over the management of the law firm. As a result, clients with a culturally disfavored position may be denied as clients or pressure will be exerted on attorneys as to what advice to give to the client. The direct result is to deny justice to clients that take culturally unpopular positions.

    While this concern may be dismissed, the reality is that we do not live in a utopian or perfect world and third party investors or owners will exert influence or control over law firms and attorneys. Some proponents of the rule change are counting on it. For example, if a company or investor group invests in a law firm and the law firm is approached by a client that wants to take an unpopular position, outside public interest groups may exert influence on the company or investor group (such as boycotts or activities that will turn away sponsors or advertisers from the company) that has an ownership interest in the law firm. The company in turn will exert influence within the law firm. There are many current examples of special interest groups exerting influence on advertisers to drop sponsorship or advertisements from companies with whom the special interest group disagree. By not allowing ownership of law firms by unlicensed attorneys (such as investment groups), the law firm is somewhat insulated from outside political and other pressures whereby it can fulfil its fiduciary duty and duty of loyalty to its client. One cannot honestly believe that if Atticus Finch was a member of a law firm where outside interests had an ownership interest in his law firm that he would defend Tom Robinson given the current cultural standards at the time.

    Allowing non-lawyer ownership of law firms will inevitably lead to the non-lawyer entity exerting influence on the law firm, which will weaken the professional independence of attorneys. This risk is widely acknowledged and recognized by states and the federal government when establishing rules and laws that prohibit the sharing of compensation with third parties. Because of this risk, the rule and comments state that the lawyer’s professional judgment needs to be protected. These comments further acknowledge the risk of the loss of the lawyers’ professional judgment. In light of this risk, why make the rule change? No other jurisdiction has allowed this in light of the risk and there is no reason or justification for Utah to do so. No valid argument has been provided that allowing fee sharing with non-lawyers or non-lawyer ownership of law firms will enhance access to justice. Instead, the opposite will be true. No matter how often the rules may state or emphasize that professional independence must be honored, if one is honest with oneself, one knows that professional independence will be compromised. This is the reason why rules have been universally adopted to prevent this possibility.

    Third Parties to Profit from Legal Services Instead of Providing Access to Justice. Third parties primarily would like to invest in legal services so that they can make money. One of the identified reasons for the rule change is for developers of software applications to be able to be able to share in legal fees paid to attorneys. There is nothing currently that prevents a developer from developing an app and providing referrals to law firms or attorneys that will provide legal services. If the app is popular, advertisers may purchase space on the app. The app developers, however, obviously want to be paid through the fees paid to attorneys, most likely through attorneys’ fees paid by the client for the services provided. It appears that the business model for the app developer is as follows: Law firms can pay money to the app developer as “advertising” and have the law firms advertise on the app (hence the rationale to lessen the advertising rules for lawyers). The app will refer potential clients to law firms that enter into a referral agreement with the app developer. If the app refers a client to a law firm and the law firm provides legal services, a portion of the fee paid by the client will then be paid to the app developer as a referral fee. Since the additional cost of the referral fee needs to be covered, the fees charged by the law firm will likely increase. While law firms may view this as a way to “advertise” their services and a way for the app developer to make a lot of money, this business model does not increase access to justice or make legal services more affordable to clients. The proposed change in Rule 5.A(c) specifically is drafted to allow the actions described in the above example. By adjusting the advertising rules, law firms can simply advertise on the app and pay a fee to the app developer. Inasmuch as the app developers to prominently involved in the advocation in the change to the rules, it appears that one of the primary reasons for the rule changes is to benefit the app developers. Technology platforms can provide knowledge and information regarding the law so long as the information is reviewed by and attorney. If parties need specific advice, the parties can consult an attorney or other licensed provider that can provide competent advice.

    Ethics and Malpractice. Attorneys are held to a high standard of ethical care for their clients. To become an attorney in Utah, candidates must attend three years of an accredited law school, pass various background checks and pass the bar exam to ensure they can adequately represent their clients. Licensure is intended to ensure the public that the person you are hiring is competent to practice in that profession. Many occupations require state licenses before one can practice in that occupation, examples include barbers, fishermen, milk samplers, preschool teachers, real estate agents, security guards and teachers’ assistants. If a milk sampler or fisherman must be licensed before they can work in their occupation then it seems to be important that those practicing in a profession as significant as the law should be competent and the public should be ensured that those practicing law are competent. It is through licensing that the State and the Courts can enforce compliance with ethical standards and effectuate change. As a condition of licensing, the State and Courts can mandate focused education on access issues or require attorneys to participate in pro bono activities or otherwise address access to justice.

    Insurance. Although lawyers are not required to carry a malpractice insurance policy it is generally beneficial to both lawyers and their clients. Insurance companies are unlikely to be willing to provide a policy for firms who have inexperienced, non-lawyers practicing law because there is a much greater likelihood of these non-lawyers committing malpractice thus meaning that the insurance company is more likely to pay out, and if insurance companies do provide a policy to cover such persons the policy is likely to be much more expensive and firms may be unwilling to carry that policy and hire such persons. Likewise, if non-attorneys have an ownership interest in a law firm, it is uncertain how the insurance company would address the risk associated with such non-attorney owners since they would also be covered by insurance policies.

    Conflicts. Currently, attorneys’ greatest responsibility is to protect their client’s interests. By allowing non-lawyers to invest in law firms, the law firms will have a responsibility to the investors and shareholders to the detriment to their clients. The non-lawyer investors are interested in the return on investment and to make a profit, they will be unconcerned with rules of ethics, conflict checks or even the client if it means making money. There is a history of investors buying or investing in companies, and to save a penny, cut costs on what made the initial business worth frequenting to begin with. There is an inherent non-waivable conflict if there is a conflict between a law firm, an attorney within a law firm, or an owner of a law firm and a client. As such, as part of a conflict search, most firms have attorneys within the firm review the potential matter and client and indicate if there is a conflict. It is uncertain how this is to be performed if there is a non-attorney owner. If an investor group or corporation is a part owner of the law firm, it would seem that the law firm would need to deny representation if there is a potential conflict with the non-attorney owner. Somehow a mechanism would need to be developed to determine conflicts, which may be very difficult to do. This system does not seem to foster greater access to justice, but rather limit access to legal services.

    Conflicting Standards. Different industries have different standards. If different professionals, such as real estate brokerages, accounting firms, and law firms have different ethical standards regarding duties owed to clients, cross ownership across professional platforms create conflicts between the duties owed. For examples, lawyers have a strict duty of confidentiality. Real estate brokers, however, are legally and ethically obligated to disclose to buyers/adverse parties material issues related to property.

    Homie Legal Services. By opening up legal services, there is a risk that legal services may become like Homie where some legal information may be provided, but conflict checks are not performed, competent advice is not provided, and other ethical duties are not adhered to. Providing bare generic legal information or very basic legal services does not address the access to justice problem and does not result in the poor and marginalized groups being provided competent legal services.

    Regional Firms and Dual Licensed Lawyers. Many states disallow any firm with licensed lawyers with that State from splitting fees with non-lawyers, whether hired or as investors. For instance, California has a rule stating, “[n]either a member nor a law firm shall directly share legal fees with a person who is not a lawyer . . . .” Rules similar to California’s would disallow regional firms in Utah with offices or lawyers licensed in these states from hiring non-lawyers to practice law or to invest in the law firm which already disqualifies a number of firms in Salt Lake from following the Courts proposal. Modifying the rule for Utah firms will create a quagmire of problems. This rule may result in any dual licensed attorney (or any law firm having attorneys practicing in Utah) being banned from practicing in other states. Before one changes the rules, the outcome must be clearly known.

    Greater Expenses for Legal Services. Allowing non-lawyers to invest in law firms will make legal services more expensive, not less expensive. Investors expect to make money off of their investments and will demand that they receive a return on their investment. This simply adds another layer of compensation to persons who do not perform legal work. Another layer of compensation or profit disbursement will likely result in higher legal fees since attorneys and those performing legal services still need to be paid. Instead of making legal services less expensive and making legal services form affordable to provide access to justice, legal services will become less affordable.

    Referral Fees. Some non-lawyers may not want to actually invest in a law firm but would rather be paid referral fees for referring business to a law firm. A plausible example is an app developer who wants to develop an app or website (technology platforms) to refer individuals to lawyers for legal services. As exchange for the referral, the app developer would demand a fee for the referral. The app isn’t going to display or recommend the best or most competent lawyer for the job, but instead refer the person to the attorney who is going to pay the highest referral fee. The referral fee is just an extra expense the attorney will need to pay and does not create any value to the client. The referral fee will result in an increase in the cost of legal services and make legal services less affordable. Hence, instead of making legal services less expensive and making legal services form affordable to provide access to justice, legal services will become less affordable. If the concern is that people may not know of an attorney, the advertising rules can be adjusted to allow attorneys and law firms to market themselves. As is common in the real estate practice, home builders and others will give a cash discount if home buyers use their “preferred” appraiser, lender, title company, etc. With the proposed rule change, I guess we can include preferred law firm. I believe it is problematic for a company to refer one of their “clients” (a person they are adverse to) to a law firm and the law firm pays a referral fee back to the company, which then offers a discount to the “client”/adverse party. In this case, the law firm will be more loyal to the company that refers it business than to the “client”/adverse party. The party making the referral will not be interested in the competency of the attorney, in fact, they may want the legal services to be as incompetent as possible since they may be on the opposing side.

    Forms. Alternatively, a technology platform may provide boilerplate forms, such as leases, purchase and sale agreements, wills, estate documents, contracts, etc. As previously recognized, these platforms already exist and form documents are readily available. As such, the rule change is not necessary. If the technology platform is intended to customize the form, then legal advice will be given and the advice may not be competent or necessarily satisfy the needs to the client. A form cannot replace a trained and experienced attorney.

    Sandbox. It seems to me that the regulatory sandbox is merely a way to get past the valid concerns expressed by the legal community and to adopt reforms. Instead of trusting that Utah will “get it right,” we should be honest to ourselves, about ourselves. Many Utahns believe us to be morally superior to many of our fellow states but in reality, we are not. Utah, mainly Utah County, has a major fraud problem. “Utah has a long-held reputation as the fraud capital of the United States . . . . Overall, Utah investors lost over $1.5 billion in those [Ponzi] scams . . . .” In fact, fraud in Utah is so bad that the FBI’s Salt Lake field office is directed at fraud found only in Utah. The only other office that handles fraud in the United States is in Quantico. Before, issues and concerns are casually dismissed claiming faith in Utahn’s morality let us first consider the reality of where we are. I have encountered many instances where licensed attorneys simply ignore or dismiss conflicts. I have attended national CLEs where Utah was recognized as the problem child of the county, such as SEC compliance issues, where licensed attorneys attempt to skirt the issues. In some instances, the violations from Utah are so pervasive that the SEC had to change the rules to avoid widescale actions against Utah attorneys. The Court recognizes that the “approach does not remove all incidence of harm from the market” and that there may be “no effective enforcement action even though some customers may experience harm”. Given Utah’s reputation and the actual incidence of fraud and not complying with the rules, it is naïve to believe that unlicensed attorneys would comply with the professional responsibility requirements imposed on attorneys. Given the consequences, I would suggest that all of the issues be carefully thought through and resolved before changing the rules. It seems like a lot of national commentators are suggesting that we “jump off the cliff” and see what happens without even inspecting the area below to see if there are rocks. I suggest that we take a measured and prudent approach by adopting policies that are within the existing rules and have the greatest impact to enhance access to justice.

    In summary, there are many policies and reforms that can be adopted to address access to justice to provide affordable and competent legal services within the existing rules and framework. Unfortunately, the proposed rule changes do not adequately address the problems and actually will increase the cost of legal services and/or make less competent legal services available to poor and marginalized people.

     
  83. Angela McGuire

    Peoples Legal Aid is in support of the proposed changes to in person solicitation of a client as it will greatly benefit organizations like ours that provide services to low-income individuals who may not have the resources or knowledge of how to find help. Additionally, allowing for easier advertising will shrink the justice gap as information is more readily available.
    The proposed changes to rule 5.4 we believe have the potential to decrease the price of legal services and increase access to services as lawyers partner with non lawyers to seek economical advantages through the use of technology and modern business practices.
    PLA believes that for our justice system to efficiently deliver outcomes that are fair and accessible to all, legal representation should not be dependent on wealth and status.
    We believe that housing is an essential human right that is unbalanced under current law and court procedure. This reform effort is an important first step in closing the gap between the need for, and the availability of, quality legal assistance in Utah.

    Jeffrey Daybell
    Executive Director

    Angela McGuire
    Assistant Director

     
  84. Charisma V. Buck

    This comment has two parts.

    Part 1:

    I agree that we need to narrow the access to justice gap. However, I disagree with the current solution of the Regulatory Sandbox to allow companies to come in and provide nontraditional legal services and not have continuous oversight throughout the life of the company.

    After listening to Judge Himonas speak about the implementation of the Regulatory Sandbox, I have grave concerns about this “solution” to the access to justice gap. One concern was when Judge Himonas talked about how in the beginning, a company allowed into the Regulatory Sandbox first operates in the limited parameters of the Regulatory Sandbox with ample oversight. However, the company can “graduate” and move out of the sandbox and operate without any real regulation or oversight in regards to the ethical practice of law. Companies providing nontraditional legal services, without ample oversight and continued monitoring, will degrade the integrity of the legal profession and the quality of law.

    Currently, for lawyers and licensed paralegal practitioners, there are several requirements, many continuing requirements, a person must meet in order to receive the privilege or license to practice law in Utah and ensure legal justice is being administered ethically. Several of the requirements, or similar requirements, apply to Utah attorneys and licensed paralegal practitioners. Below are requirements specifically for attorneys, even though licensed paralegal practitioners are subject to most of the requirements listed below.

    Utah attorneys are required to:
    1. Pay thousands of dollars to attend and graduate from an accredited law school;
    2. Learn about and pass a test on the ethical rules Utah attorneys must follow when admitted to the Utah Bar and practicing law in Utah,
    3. Take an oath and accept the responsibility for “the quality of justice”;
    4.accept and follow stringent ethical rules or face disciplinary measures of the OPC;
    5. Follow the Rules of Professional Conduct even if performing only activities “related” to the practice of law
    6. Pay several hundred dollars yearly to maintain mandatory membership in The Utah Bar in order to continue their license to practice law;
    7. Pay annually into a consumer protection fund that reimburses clients for losses by the dishonest conduct committed by a lawyer or a licensed paralegal practitioner in Utah for the purpose “to promote public confidence in the administration of justice and the integrity of the legal profession.”;
    8. Invest time and money over every two-year-period for continued education (a quarter of the required credits must be on ethics or professional responsibility); and
    9. Pay thousands of dollars each year for malpractice insurance to help compensate that attorney’s clients who are wronged by his or her inappropriate representation (I am unsure if this is a general requirement of the Utah Bar, but it is required to participate in several of the Bar’s programs and offerings (i.e. Modest Means program, NLTP, etc…).

    Each member in a nontraditional legal service providers organization should be required to:

    1. Pay for each person providing nontraditional legal services within its organization to join and continue with a regulatory organization similar to the Utah Bar, after the organization is no longer within the bounds of the Regulatory Sandbox, to advance the same directives as the Utah Bar (i.e. advance the administration of justice, to provide for the regulation and discipline of nontraditional legal service providers, provide continuing education on duties of ethically practicing law, etc….)
    2. Receive intense training on the ethical rules of practicing law, and required for that organization—all to prevent harm to the public without an avenue to ensure the integrity of legal services being offered in Utah.
    3. Have the same responsibility for the quality of justice.
    4.Accept and follow stringent ethical rules or face disciplinary measures of a similar body to the OPC;
    5. Pay yearly to maintain mandatory membership in the organization that will regulate and discipline nontraditional legal service providers;
    6. Pay annually into a fund to reimburse clients for losses by the dishonest conduct committed by a nontraditional legal services in Utah to promote public confidence in the administration of justice and the integrity of the legal services provided;
    7. To continue to invest time and money every year for continued education, especially for ethical education; and
    8. Pay for a similar malpractice insurance that attorneys have to compensate clients who are wronged by inappropriate representation.

    Etc…

    Recently, a licensed paralegal was allowed to become a licensed paralegal practitioner. However, they are put under the same oversight, scrutiny, ethical requirements, as lawyers when practicing law—they are required to renew licensing with the Utah Bar, they must take a certain amount of training, etc…

    Part 2:

    A concern I have with the Regulatory Sandbox is the unintended effect on the pool of lawyers that are available to the public in coming years. Already, law school admissions have dropped. About 8-10 years ago, I started hearing young college students contemplating graduate decrees discuss avoiding going to law school to practice law. When I joined the discussion and asked why, they said the requirements to obtain and maintain a license to practice are too high compared to other professions and it is hard to have a decent income, especially as a solo practitioner. After viewing articles on the subject, they discuss the dramatic drop in law school admissions and applicants in 2010, and have only moderately recovered—some 2019 articles discussed the fact that law schools are having to lower their standards on the admission to new law students (accepting more with lower LSATS and GPA).

    Already, the attorneys are at a huge disadvantage to other businesses, due to the high cost of obtaining a license to practice law (law school, malpractice insurance, continuous training, discussed in the previous section) maintaining a right to practice law. A negative affect and concern of this legal sandbox is the effect it has on deterring future law students from entering law school due to the cost of becoming a lawyer and maintaining a license and law business. The Regulatory Sandbox creates additional obstacles to entering and practicing law

    Additionally, attorneys who traditionally provide pro bono service to the underserved will need to focus that time, energy, and lost money to employ extensive advertising in order to compete with these companies and organizations who can cut corners due to not being held to the same standards as attorneys and licensed paralegal practitioners.

    In conclusion, these nontraditional legal service providers need to be held to the same legal practice standards as attorneys and licensed paralegal practitioners and they need the proper oversight throughout the company’s entire existence.

     
  85. Mark Britton

    As two lawyers who have founded legal technology companies with the purpose of increasing the general public’s access to legal services, we write to encourage the Bar Commission to strongly support the Utah Supreme Court’s Regulatory Reform Proposal (the “Proposal”).

    At a macro level, the Proposal is important because it acknowledges that we, as lawyers, must aggressively innovate to survive. That seemingly small step is actually quite large because, for years, access-to-justice and lawyer-utilization data has screamed that the house is on fire, and yet most legal regulators seem to either not notice or care. For example:

    • most Americans cannot afford lawyers (a recent study shows 86% of people in this country living on 125% of the federal poverty standard have inadequate or no access to the civil justice system);
    • most Americans avoid lawyers (multiple studies show that 70+% of Americans don’t use lawyers); and
    • many lawyers leave the profession after just a few years because they can’t make ends meet (the legal profession is the only profession in the country with an entire industry devoted to helping people leave the profession).

    Such data would be a three-alarm fire in any other industry or profession. As such, we are very proud to see the Utah Supreme Court donning their “turnout gear” and charging into the burning building.

    At a more micro level, the Proposal’s acknowledgement that non-traditional legal service providers as well as other individuals can help put out the fire is supremely accurate and important. In this regard, we strongly recommend that the Supreme Court open the “sandbox” to all businesspeople willing to invest their time and money into the legal industry and into improving access to legal services. For years, we as a profession have been turning away some of the brightest minds and biggest investors for fear that businesspeople would somehow undermine the delivery of legal services. Why are we so afraid of smart “nonlawyers” bringing their experience from other industries to help us better serve our communities? If anything, it is an exercise in issue-spotting rather than opportunity-spotting, and lawyers should celebrate the help. Think of scientists, software developers, chefs or singers – they all team with businesspeople so that they have the resources to better focus on their art and have more people experience it. Lawyers should have similar partnering opportunities. Legal consumers should have the benefit of such partnering opportunities.

    Finally, we applaud the Proposal for attempting to simplify the Rules of Professional Conduct governing lawyer advertising. Lawyers have great stories to tell, but our industry has historically been so focused on the downside that we’ve missed the upside – both for the profession and the public. In years of consumer research at Avvo, we found that two principal factors kept people from hiring lawyers: (1) they didn’t know what lawyers did, and (2) they assumed that lawyers were too expensive. Lawyers must have the space to tell their stories so that people can find them and are not afraid to hire them. We also encourage the Supreme Court to develop a simple FTC-like construct where regulatory issues around advertising are reserved for those who have made false and misleading claims. That will allow the Court and Bar to focus their limited resources on the truly bad actors, while allowing the good actors to develop the craft of effectively communicating with potential customers.

    As a closing note, it is fair to say that all eyes are on Utah as you vote on the Proposal. Never before has a Supreme Court so nobly acknowledged that their house is on fire and that innovation is the primary fire retardant. Please do not flinch at this important juncture because both legal consumers and legal practitioners need your help – even though they’ve likely stopped believing that you’re willing to help. Supporting the Proposal will be a large shoutout to the public that help is on the way in the form of a firehose aimed at expanding both the access to and utilization of legal services in Utah and beyond.

    Regards,

    Mark Britton
    Founder, Avvo

    Marty Smith
    Founder, Metajure

     
  86. Paula Littlewood

    There are rare moments when the opportunity for systemic change presents itself for an industry. The legal profession is at such a crossroads, perhaps long past the crossroads, making the time for bold leadership like that of the Utah Supreme Court critical.

    As a profession, we have made nary a dent in the access to justice problem over the decades. Indeed, the problem has become worse if anything in the last decade or so. The Covid pandemic will only exacerbate these numbers. We need to understand and acknowledge that the lack of access is not reserved to lower wealth populations, but plagues those in moderate and middle income populations.

    In the United States and Canada we have held onto the monopoly of legal services for centuries, despite the fact that consumers are leaving in droves to find legal help elsewhere. LegalZoom estimates that every three minutes someone starts a new business on their website, every four minutes someone starts a will. Avvo.com reported 325,000 hits a day to their website. 325,000 hits a day. Imagine the magnitude of that number.

    While we as profession fret over losing our independence of judgment, consumers seek alternative means to resolve their issues outside the profession every single minute. When I was Executive Director of the Washington State Bar Association, we implemented the new Limited License Legal Technician license as well as spent time talking to regulators in other countries about entity regulation and alternative business structures. The most important lesson we took away from all of those conversations was that lawyers didn’t lose their independent judgment, rather, the ethics and professional expectations of those professionals from other industries who partnered with lawyers to advance legal services were brought up to our high standards as a profession. There was no loss of independence of judgment by the attorneys.

    Importantly, by making this bold move in the regulatory arena, the Utah Supreme Court is MAINTAINING CONTROL over the regulation of the practice of law in Utah. In 2007, the British Parliament marched the other way when it passed the 2007 Legal Services Act and overnight took self regulation away from lawyers in one of the most sophisticated economies and democracies in our world. Utah legal professionals should thankful that their Supreme Court is leading in the vanguard, rather than risking coming from the rearguard to defend against a loss of self regulation.

    Change is hard for humans. Change is particularly hard for lawyers, as we are trained to be precedent bound and risk averse. These attributes are so critical when working with our clients. But in the larger scheme of serving the consuming public, our problem solving must seek to implement systemic change to the system.

    Over the years, as I have worked to advance regulatory advancements for our profession, some have questioned if I am a lawyer hater. On the contrary, I am proud to be a lawyer and seek to save a profession that is becoming obsolete as evidenced both by consumers voting with their feet to find legal services and a widening gap for those in our country who cannot access the services they need to solve their every day legal problems.

    Onward with the Utah Supreme Court’s proposed reform. By taking this action you are preserving our profession and the critical role we play in our nation to serve the public. Full speed ahead.

     
  87. Gary Longmore

    I have practiced law for a large law firm in Utah for 25 years. I am writing this on my own behalf and on behalf of my partners, D. Jay Curtis, John R. Madsen, Gregg D. Stephenson, Angela E. Atkin, and Kelly J. Applegate. We all practice business, tax, and estate planning law at the same firm.

    We are opposed to lawyers sharing fees with nonlawyers as proposed in Rule 5.4A(b) because we believe it will erode the quality of legal work, increase the cost of legal fees for the same legal work, and ultimately harm clients and the legal profession. We have talked with numerous lawyers inside and outside of our firm who share these concerns. We have also reviewed similar proposals in other states (California and Illinois) and have read hundreds of comments on these proposals from lawyers who overwhelmingly opposed them and believe that such proposals will not fulfill the stated purpose “to increase access to and affordability of legal services”. We concur with these comments and feel that that Rule 5.4A(b) will cause the problems that we outline in these comments, and will create disruption, and not solve any real problems, as enumerated below. In fact, no one that we have talked to has been able to articulate how fee sharing will provide access to legal services for the disadvantaged. To the contrary, the consensus is that it will result in higher fees and/or lower quality work and compromise the independence of lawyers in the same way physicians’ independence may be compromised by insurance companies, hospitals, pharmaceutical sponsored incentives, and healthcare investors. Rule 5.4A(b) uses a “shotgun” approach to make sweeping changes to the entire legal profession, when, a “rifle shot” is all that is needed to solve the landlord tenant law, debt collection, family law and criminal law concerns which have been the focus of discussions. In fact, big money investors who want to share legal fees will focus on other more lucrative areas of the law such as personal injury, commercial litigation, mergers and acquisitions, corporate law, and tax and estate planning.

    We offer the following additional specific comments:

    1) 5.4A(b) provides that ”a lawyer or law firm may share legal fees with non-lawyers.” This provision seems to permit unlimited referral fees and fee sharing arrangements with any nonlawyer, for any reason, with virtually no oversight or regulation and with little disclosure to the client.

    2) Fee sharing and referral fees are prohibited, unethical, and/or illegal in many professions, such as the procurement of governmental contracts and in many other industries. The medical profession has strong anti-kickback laws where a payment solely for a referral of a patient by another physician or medical provider is illegal. In the securities arena, kickbacks paid to individuals who “find” capital for investment advisors are generally illegal. Even referral fees paid by realtors to non-realtors are prohibited. Contractors’ arrangements to pay fees for soliciting or obtaining government contracts have long been considered contrary to public policy because such arrangements lead to the exercise of improper influence, bribery, conflicts of interest, and even corruption. The rules governing the legal profession should likewise facilitate and promote the ability of attorneys to subscribe to the highest ethical ideals of the legal profession. Fee sharing moves the profession in the other direction. It puts lawyers in difficult compromising positions, benefits promoters and middlemen and big money investors who want a portion of the legal fees for providing little, if any, value, which harms clients. Several of us have worked for Big Four accounting firms. When these firms expanded their services into non-accounting areas and started charging contingency fees and obtaining referrals, the result was a loss of independence and revenue driven decisions, which led to the demise of Arthur Anderson and almost KPMG. When money drives decisions, everybody, especially clients, lose.

    3) Fee sharing will increase fees and/or erode the quality of legal work. Assume referral fees are permitted for medical procedures and I refer my neighbor to Subpar Surgeon for a $50,000 surgery and request a 10% referral fee. Will the cost to the patient now be $50,000 or $55,000? Who will pay the extra $5,000—the patient or the physician? In contrast, assume Superb Surgeon doesn’t accept referral fees because she needs the amount she would otherwise pay as a referral fee for better equipment and staff for the “cutting edge” procedures that she performs. Who is better off under this scenario? Subpar Surgeon got a new patient because he was willing to pay a referral fee, and because he was either willing to do the work for less compensation or he charged more. Superb Surgeon who would have otherwise been referred a patient and performed a successful surgery, instead, lost a potential case, and my neighbor unknowingly got a surgery from a less skilled surgeon.

    Fee sharing works no better for legal fees. For example assume Superb Lawyer generally charges $5,000 for a certain type of trust. Financial advisor makes a referral of a client to the lawyer to prepare the trust agreement and requests a 20% referral fee. Superb Lawyer charges the client $6,000 for the trust work. While the client benefitted from superb legal work, client also paid $1,000 more than client would have paid if there was no referral fee. Keep in mind, that if referral fees were prohibited, financial advisor would have likely referred the same client to Superb Lawyer or to another excellent lawyer without receiving a referral fee. Assume that financial advisor makes the referral but client and/or financial advisor demand that Superb Lawyer provide a discount of $1,000 equal to the referral fee? Superb Lawyer may end up taking unnecessary risk or provide average legal service in order to do the legal work at a discounted rate. Superb Lawyer likely has other highly skilled estate planning lawyers who would also need to discount their work so that the financial advisor can receive his referral fee. Further, assume that Superb Lawyer is unwilling or unable to do the work for a discount, and so financial advisor refers the client to Subpar Lawyer who is willing to pay the $1,000 referral fee and do lower quality work for a total of $5,000. In either case, the client is harmed.

    Rule 5.4A(b) does not prohibit a lawyer who pays a referral fee from building the referral fee into the legal fee. As a practical matter most lawyers will increase their legal fees by the amount of the referral fee, which will simply increase legal fees for the client. If some lawyers don’t add the referral fee to the legal fee, it will be difficult for the lawyer to provide quality legal services if he/she must pay a substantial referral fee of say, 20% or 30%, to a nonlawyer who provides no legal services to the client. Also, Rule 5.4A(b) puts no cap on the fee sharing percentage or amount that a nonlawyer may receive. Aggressive promotors will negotiate for the highest possible referral fee, which will be paid by the client or the lawyer in the form of a discount. Eventually, some law firms will be willing to take deeper and deeper discounts as they “pay to play.” This will result in a “a race to the bottom” with work flowing to the “trust mills” and the lowest cost providers where legal work is a commodity and is not tailored to the actual needs of the clients. With this will come the inevitable layoffs of paralegals, associates, and legal staff to reduce overhead, lower quality of legal work for the clients, malpractice suits, and litigation. All so that nonlawyers can share in legal fees. Again, we fail to see how Rule 5.4A(b) would help clients.

    Medical services, insurance premiums, title fees, and trustee or asset management fees are set by pricing schedules, which are disclosed to customers. Legal fees are generally charged by the hour making it very difficult for the client to know whether the legal fee charged is more than it would have been had there been no referral fee—assuming that that referral arrangement was fully disclosed in the first place.

    4) Some nonlawyersm such as accountants and fiduciaries, have ethical duties to their clients when making referrals to lawyers to ensure that the clients receive good legal service for a fair price, but most nonlawyers have no such ethical duties. These nonlawyers may make referrals to unqualified or unethical attorneys solely for the maximum referral fee. Even professional nonlawyers will have a huge incentive to make referrals to lawyers who will pay the highest referral fee rather than to lawyers who do the best legal work.

    5) Rule 5.4A(b) does not ensure adequate disclosure of the fee sharing arrangement. While we are absolutely opposed to 5.4A(b), if, it is enacted, the disclosure requirements should be strengthened. Justice Louis Brandeis observed that “sunlight is said to be the best of disinfectants.” The only disclosure required by Rule 5.4A(b) is written notice of the relationship with the nonlawyer including the fact of the fee sharing arrangement. This is not sufficient. The fee sharing disclosure should be conspicuous and fully transparent. It should include the exact percentage or amount of the fee that will be shared with the nonlawyer and the client should consent in writing. Further, if the nonlawyer is an entity, all of the owners of the entity should be disclosed in writing to the client (and the lawyer). Big money investors will undoubtedly want to invest in nonlawyer “finder” entities, and it is important that the lawyer and client be fully aware of the identities of those who will be sharing in legal fees. This will be useful to avoid conflicts and to root out bad actors who will want to get involved in the lucrative new industry of sharing legal fees. Finally, as part of the disclosure, the lawyer should disclose whether the fee sharing arrangement will increase the legal fee that would have otherwise been charged.

    6) The practice of law has many requirements including licensing, malpractice insurance, ongoing training, and substantial overhead. Rule 5.4A(b) will siphon legal fees from the providers of legal services and their employees to enterprising professional and nonprofessional nonlawyers (and even aspiring nonlawyers) who will soon learn that the best way to make money in the legal profession will be to establish a cottage business of simply making referrals to lawyers and collecting referral fees, without the investment and risk, and client protections, associated with the practice of law. This will give nonlawyers substantial leverage to negotiate maximum referral fees with lawyers who are willing to “pay to play.” Nonlawyer rainmakers and promotors will have a platform to build a business to “find” clients and make referrals for a share of the legal fees. They will command significant income for simply making referrals, which could exceed the income of the lawyers who are doing the legal work. We understand the importance of “rainmakers” who are lawyers in a law firm, but law firm rainmakers understand their ethical duties to their clients and to the firm, and ultimately the legal fees are paid to the firm to cover the salaries of lawyers and staff and overhead of the firm. Rule 5.4A(b) will turn much of the rainmaking over to nonlawyers who will dictate which firms do the legal work and the type and extent of that work, without regard for the client’s interest or the cost of the services. Again, most nonlawyers have no ethical duties to clients. Thus, between the ownership by and fee sharing with big money insurance companies, accounting firms, and other nonlawyer investors, much of the control and “means of production” of the legal profession will be handed over to nonlawyers. Again, we don’t see how doing this to the legal profession promotes access to justice.
    In our view, the Rule 5.4A(b) fee sharing proposal will not increase access to justice. Moreover, it will affirmatively harm clients. The referral fee does not come out of thin air—it must be paid by the attorney or the client. When a referral is made, the client will either pay substantially more than the client would have paid if no referral had been made, or the client will pay the same legal fee that they would have paid to the lawyer, but for lesser quality legal work. Further, those making the referrals will have the profit motive first and foremost in their minds, not the interests of the clients. All of these results subvert, rather than bolster, access to justice.

    In conclusion, we feel that Rule 5.4A(b) will not increase access to and affordability of legal services for lower income people who have legal needs for landlord tenant law, debt collection, family law and criminal law. In addition, the quality of legal work for the entire profession will suffer as work shifts to low cost providers who will be willing to absorb the referral fee. Furthermore, we are convinced that the sharing of legal fees will undermine the legal profession and have a corrupting influence with side deals, kickbacks, and other problems associated with giving money to promotors and investors who have no connection or concern for those that matter most—our clients.

     
  88. Jason Solomon

    Stanford CLP

    The Stanford Center on the Legal Profession is devoted to the study of precisely the kinds of questions that the Utah Supreme Court has tackled: how should lawyers be regulated in order to preserve the profession’s core values while increasing access to justice. Our director, Professor Deborah Rhode, has taught legal ethics at Stanford Law School for more than 30 years, was the founding president of the International Association of Legal Ethics, is the nation’s most frequently cited scholar on legal ethics, and has won multiple awards for her scholarship on regulation of the legal profession and access to justice.

    Traditional Business Model is Obstacle to Access

    The principal obstacle to increasing access to legal assistance is the cost of the business model in which legal services have conventionally been available to ordinary individual consumers and small businesses. That model relies largely on one-on-one lawyering, through traditional solo and small firm practices, generally billed on an hourly basis, supplemented by online assistance. The model forgoes the cost-reducing benefits of scale, branding, technology, and the ordinary efficiencies that would come from having lawyers specialize in legal functions, while others (software engineers, financial analysts, business managers, marketing experts, etc.) specialize in all the other functions.

    Why has the traditional model of legal service delivery not achieved greater efficiencies and lower costs? The American approach to professional regulation is not the only answer, but it is clearly a major contributing factor. That approach is expressed primarily in the expansive rules on unauthorized practice of law and the restrictions on the corporate practice of law and fee sharing. These rules make the markets for legal services among the most, if not the most, intrusively regulated in the modern American economy. Even the practice of medicine is far more openly organized, particularly since the advent of health maintenance organizations.

    The legal profession can be stronger – and consumers of legal services can be better served – if we make it easier for new “one to many” business models to emerge through greater use of technology, and partnerships with and service from allied professionals.

    Reforming Rule 5.4 Is Critical

    We therefore write to strongly encourage you to move forward with the proposed regulatory “sandbox” that would allow people and organizations to provide legal services without Rule 5.4’s prohibitions against fee-sharing, ownership, or investment by those who are not lawyers. Though we do not suggest this will be a full response to the challenges of unmet legal needs, we believe that reforming Rule 5.4 holds the promise of enabling new ways of providing competent and ethical legal services to Utah residents and small businesses who urgently need assistance.

    In our view, the current prohibitions on fee sharing and outside investment by nonlawyers contribute to the lack of affordable choices for many individuals and organizations. Without the ability to enlist management and technology experts as full partners or investors, legal service providers are not able to benefit from the best expertise in how to reach and serve potential consumers. Countries that allow lay investment in or ownership of legal service providers consistently rank ahead of the United States in access to and affordability of legal services. Moreover, there is no evidence to support the claims of ethical problems that opponents of reform often invoke.

    The experience of the UK and Australia is particularly instructive. England and Wales have allowed nonlawyer ownership and investment since 2011, and research from the Solicitors Regulation Authority finds no evidence that these models result in adverse effects on consumers. Rather, the research indicates increased choice and competition, improved services to consumers, reduced prices, and increased innovation in the provision of legal services. Australia has also successfully allowed such ownership and investment, which has helped enable the development of widely accessible law firms serving consumers in a breadth and scope not available in the U.S.

    Some worry that if multidisciplinary practices and non-lawyer investment were allowed, lawyers’ independent professional judgment would be compromised. But the experience in the United Kingdom is that alternative business structures have thus far dealt better with complaints and had no more disciplinary sanctions than traditional lawyer-owned practices. Indeed, regulating legal service providers as entities can help improve practices that mitigate the risk of ethical violations. And of course, the existing ethical rules around conflicts of interest, confidentiality, and other issues would still apply to individual lawyers.

    No doubt, conflicts of interest will arise that need to be handled carefully. But they are not different in kind from conflicts that already arise in current legal practice. Any provider may have conflicts that prevent it from taking on certain matters. This is a good reason to have many such providers who are subject to the same conflict of interest rules, whether 100% lawyer-owned or otherwise; it is not a reason to ban affiliations with nonlawyer providers entirely.

    Allowing nontraditional legal service providers to participate in a regulatory sandbox should not and need not equal the “wild west” where anything goes, and the Standing Order recognizes this. The idea of a sandbox is to have a time-limited, controlled environment in which the regulator will monitor how services are being provided in order to make sure that consumers are protected. The Application Process (4.4) represents a cautious and thoughtful approach, with potential providers required to give information about their proposed approach, ownership and structure, plans for mitigating risk, and creation of consumer complaint processes. Applications that appear to present real risk of consumer harm can be rejected.

    Critics often claim that allowing nonlawyer ownership and investment would somehow introduce the “profit motive” to the legal services market. But private-sector lawyers are already driven by their desire to maximize their own profits while providing ethical service. Reforming Rule 5.4 to permit full participation by other profit-seeking entities would not appreciably increase the risk of misconduct if appropriate regulatory safeguards are in place. A regulatory sandbox is a proven way to monitor potential problems and devise appropriate rules without risk to the public.

    Consumer Focus for the Innovation Office and Sandbox

    We believe an Innovation Office capable of diving into these issues with a consumer-focused (and not attorney-focused) lens is critical. Therefore, the members should include consumers, people with experience as regulators of other consumer markets such as financial services or insurance, and social scientists such as economists and sociologists. Consumers should include both individuals and small to medium-sized businesses who have experienced justice problems. If individuals are difficult to identify, one might include consumer-facing representatives of institutions that serve many individuals of modest means including health care institutions, community banks, and people from community-based organizations such as those that serve the elderly, veterans, or people with housing challenges.

    A critical strength of your approach is the assumption that our current system of ex post attorney discipline in response to complaints is neither the only nor the best way to protect consumers in the legal services market. Rather, your regulatory principles’ use of a risk-based, data-driven approach — combined with the use of market surveys, expert audits, and “secret shopper” tests – holds great promise for optimizing the amount of high-quality legal services available while minimizing the risk of consumer harm. And this approach would be far superior for consumers than the status quo.

    Covid-19 Implications

    The one big thing that has changed since the Utah Supreme Court begun this work, of course, is the Covid-19 crisis, which has increased legal needs significantly. We have already seen in Utah and nationwide the effect of the justice gap: Large businesses with lawyers and connections at banks were able to get access to the PPP loans, while smaller businesses — many of them minority-owned — were left out. Thousands of individuals in Utah face justice problems related to housing, employment, debt, and more. Jim Sandman, the current chair of the American Bar Association’s Task Force on Legal Needs Arising Out of the 2020 Pandemic and former president of the Legal Services Corporation, has suggested that the “current Covid-19 pandemic makes this a particularly appropriate time to move ahead with regulatory reform,” and pointed to Utah’s sandbox as particularly promising.

    We agree and encourage you to move forward with the standing order as soon as possible to accelerate services to people in Utah, and thank you for your continued work and leadership.

    Jason Solomon
    Executive Director, Stanford Center on the Legal Profession

     
  89. Gary Longmore

    I have practiced for a large law firm in Utah for 25 years. I am writing this on my own behalf and on behalf of my partners, D. Jay Curtis, John R. Madsen, Gregg D. Stephenson, Angela E. Atkin, and Kelly J. Applegate. We all practice business, tax, and estate planning law at the same firm.

    We are opposed to lawyers sharing fees with nonlawyers as proposed in Rule 5.4A(b) because we believe it will erode the quality of legal work, increase the cost of legal fees for the same legal work, and ultimately harm clients and the legal profession. We have talked with numerous lawyers inside and outside of our firm who share these concerns. We have also reviewed similar proposals in other states (California and Illinois) and have read hundreds of comments on these proposals from lawyers who overwhelmingly opposed them and believe that such proposals will not fulfill the stated purpose “to increase access to and affordability of legal services”. We concur with these comments and feel that that Rule 5.4A(b) will cause the problems that we outline in these comments, and will create disruption, and not solve any real problems, as enumerated below. In fact, no one that we have talked to has been able to articulate how fee sharing will provide access to legal services for the disadvantaged. To the contrary, the consensus is that it will result in higher fees and/or lower quality work and compromise the independence of lawyers in the same way physicians’ independence may be compromised by insurance companies, hospitals, pharmaceutical sponsored incentives, and healthcare investors. Rule 5.4A(b) uses a “shotgun” approach to make sweeping changes to the entire legal profession, when, a “rifle shot” is all that is needed to solve the landlord tenant law, debt collection, family law and criminal law concerns which have been the focus of discussions. In fact, big money investors who want to share legal fees will focus on other more lucrative areas of the law such as personal injury, commercial litigation, mergers and acquisitions, corporate law, and tax and estate planning.

    We offer the following additional specific comments:

    1) 5.4A(b) provides that ”a lawyer or law firm may share legal fees with non-lawyers.” This provision seems to permit unlimited referral fees and fee sharing arrangements with any nonlawyer, for any reason, with virtually no oversight or regulation and with little disclosure to the client.

    2) Fee sharing and referral fees are prohibited, unethical, and/or illegal in many professions, such as the procurement of governmental contracts and in many other industries. The medical profession has strong anti-kickback laws where a payment solely for a referral of a patient by another physician or medical provider is illegal. In the securities arena, kickbacks paid to individuals who “find” capital for investment advisors are generally illegal. Even referral fees paid by realtors to non-realtors are prohibited. Contractors’ arrangements to pay fees for soliciting or obtaining government contracts have long been considered contrary to public policy because such arrangements lead to the exercise of improper influence, bribery, conflicts of interest, and even corruption. The rules governing the legal profession should likewise facilitate and promote the ability of attorneys to subscribe to the highest ethical ideals of the legal profession. Fee sharing moves the profession in the other direction. It puts lawyers in difficult compromising positions, benefits promoters and middlemen and big money investors who want a portion of the legal fees for providing little, if any, value, which harms clients. Several of us have worked for Big Four accounting firms. When these firms expanded their services into non-accounting areas and started charging contingency fees and obtaining referrals, the result was a loss of independence and revenue driven decisions, which led to the demise of Arthur Anderson and almost KPMG. When money drives decisions, everybody, especially clients, lose.

    3) Fee sharing will increase fees and/or erode the quality of legal work. Assume referral fees are permitted for medical procedures and I refer my neighbor to Subpar Surgeon for a $50,000 surgery and request a 10% referral fee. Will the cost to the patient now be $50,000 or $55,000? Who will pay the extra $5,000—the patient or the physician? In contrast, assume Superb Surgeon doesn’t accept referral fees because she needs the amount she would otherwise pay as a referral fee for better equipment and staff for the “cutting edge” procedures that she performs. Who is better off under this scenario? Subpar Surgeon got a new patient because he was willing to pay a referral fee, and because he was either willing to do the work for less compensation or he charged more. Superb Surgeon who would have otherwise been referred a patient and performed a successful surgery, instead, lost a potential case, and my neighbor unknowingly got a surgery from a less skilled surgeon.

    Fee sharing works no better for legal fees. For example assume Superb Lawyer generally charges $5,000 for a certain type of trust. Financial advisor makes a referral of a client to the lawyer to prepare the trust agreement and requests a 20% referral fee. Superb Lawyer charges the client $6,000 for the trust work. While the client benefitted from superb legal work, client also paid $1,000 more than client would have paid if there was no referral fee. Keep in mind, that if referral fees were prohibited, financial advisor would have likely referred the same client to Superb Lawyer or to another excellent lawyer without receiving a referral fee. Assume that financial advisor makes the referral but client and/or financial advisor demand that Superb Lawyer provide a discount of $1,000 equal to the referral fee? Superb Lawyer may end up taking unnecessary risk or provide average legal service in order to do the legal work at a discounted rate. Superb Lawyer likely has other highly skilled estate planning lawyers who would also need to discount their work so that the financial advisor can receive his referral fee. Further, assume that Superb Lawyer is unwilling or unable to do the work for a discount, and so financial advisor refers the client to Subpar Lawyer who is willing to pay the $1,000 referral fee and do lower quality work for a total of $5,000. In either case, the client is harmed.

    Rule 5.4A(b) does not prohibit a lawyer who pays a referral fee from building the referral fee into the legal fee. As a practical matter most lawyers will increase their legal fees by the amount of the referral fee, which will simply increase legal fees for the client. If some lawyers don’t add the referral fee to the legal fee, it will be difficult for the lawyer to provide quality legal services if he/she must pay a substantial referral fee of say, 20% or 30%, to a nonlawyer who provides no legal services to the client. Also, Rule 5.4A(b) puts no cap on the fee sharing percentage or amount that a nonlawyer may receive. Aggressive promotors will negotiate for the highest possible referral fee, which will be paid by the client or the lawyer in the form of a discount. Eventually, some law firms will be willing to take deeper and deeper discounts as they “pay to play.” This will result in a “a race to the bottom” with work flowing to the “trust mills” and the lowest cost providers where legal work is a commodity and is not tailored to the actual needs of the clients. With this will come the inevitable layoffs of paralegals, associates, and legal staff to reduce overhead, lower quality of legal work for the clients, malpractice suits, and litigation. All so that nonlawyers can share in legal fees. Again, we fail to see how Rule 5.4A(b) would help clients.

    Medical services, insurance premiums, title fees, and trustee or asset management fees are set by pricing schedules, which are disclosed to customers. Legal fees are generally charged by the hour making it very difficult for the client to know whether the legal fee charged is more than it would have been had there been no referral fee—assuming that that referral arrangement was fully disclosed in the first place.

    4) Some nonlawyersm such as accountants and fiduciaries, have ethical duties to their clients when making referrals to lawyers to ensure that the clients receive good legal service for a fair price, but most nonlawyers have no such ethical duties. These nonlawyers may make referrals to unqualified or unethical attorneys solely for the maximum referral fee. Even professional nonlawyers will have a huge incentive to make referrals to lawyers who will pay the highest referral fee rather than to lawyers who do the best legal work.

    5) Rule 5.4A(b) does not ensure adequate disclosure of the fee sharing arrangement. While we are absolutely opposed to 5.4A(b), if, it is enacted, the disclosure requirements should be strengthened. Justice Louis Brandeis observed that “sunlight is said to be the best of disinfectants.” The only disclosure required by Rule 5.4A(b) is written notice of the relationship with the nonlawyer including the fact of the fee sharing arrangement. This is not sufficient. The fee sharing disclosure should be conspicuous and fully transparent. It should include the exact percentage or amount of the fee that will be shared with the nonlawyer and the client should consent in writing. Further, if the nonlawyer is an entity, all of the owners of the entity should be disclosed in writing to the client (and the lawyer). Big money investors will undoubtedly want to invest in nonlawyer “finder” entities, and it is important that the lawyer and client be fully aware of the identities of those who will be sharing in legal fees. This will be useful to avoid conflicts and to root out bad actors who will want to get involved in the lucrative new industry of sharing legal fees. Finally, as part of the disclosure, the lawyer should disclose whether the fee sharing arrangement will increase the legal fee that would have otherwise been charged.

    6) The practice of law has many requirements including licensing, malpractice insurance, ongoing training, and substantial overhead. Rule 5.4A(b) will siphon legal fees from the providers of legal services and their employees to enterprising professional and nonprofessional nonlawyers (and even aspiring nonlawyers) who will soon learn that the best way to make money in the legal profession will be to establish a cottage business of simply making referrals to lawyers and collecting referral fees, without the investment and risk, and client protections, associated with the practice of law. This will give nonlawyers substantial leverage to negotiate maximum referral fees with lawyers who are willing to “pay to play.” Nonlawyer rainmakers and promotors will have a platform to build a business to “find” clients and make referrals for a share of the legal fees. They will command significant income for simply making referrals, which could exceed the income of the lawyers who are doing the legal work. We understand the importance of “rainmakers” who are lawyers in a law firm, but law firm rainmakers understand their ethical duties to their clients and to the firm, and ultimately the legal fees are paid to the firm to cover the salaries of lawyers and staff and overhead of the firm. Rule 5.4A(b) will turn much of the rainmaking over to nonlawyers who will dictate which firms do the legal work and the type and extent of that work, without regard for the client’s interest or the cost of the services. Again, most nonlawyers have no ethical duties to clients. Thus, between the ownership by and fee sharing with big money insurance companies, accounting firms, and other nonlawyer investors, much of the control and “means of production” of the legal profession will be handed over to nonlawyers. Again, we don’t see how doing this to the legal profession promotes access to justice.

    In our view, the Rule 5.4A(b) fee sharing proposal will not increase access to justice. Moreover, it will affirmatively harm clients. The referral fee does not come out of thin air—it must be paid by the attorney or the client. When a referral is made, the client will either pay substantially more than the client would have paid if no referral had been made, or the client will pay the same legal fee that they would have paid to the lawyer, but for lesser quality legal work. Further, those making the referrals will have the profit motive first and foremost in their minds, not the interests of the clients. All of these results subvert, rather than bolster, access to justice.

    In conclusion, we feel that Rule 5.4A(b) will not increase access to and affordability of legal services for lower income people who have legal needs for landlord tenant law, debt collection, family law and criminal law. In addition, the quality of legal work for the entire profession will suffer as work shifts to low cost providers who will be willing to absorb the referral fee. Furthermore, we are convinced that the sharing of legal fees will undermine the legal profession and have a corrupting influence with side deals, kickbacks, and other problems associated with giving money to promotors and investors who have no connection or concern for those that matter most—our clients.