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Future Fridays: Will Limited Licensed Technicians Kill Solos & Smalls?

by Carolyn Elefant on September 27, 2013 · 4 comments

in Future Fridays, Solo Trends

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Editor’s note: see updates at the end of the post
Last week, the ABA Task Force issued a Draft Report and Recommendations on the Future of Legal Education . Among other things, the Task Force recommended the concept of limited licensing of non-lawyers who could directly serve clients as well as development of educational programs to license and train those seeking to become legal technicians.  The ABA’s proposal is consistent with developments in a handful of states; Washington state is currently implementing a limited law license program while the concept is under consideration in California and New York.

In theory, limited non-lawyer licenses expand access to justice by increasing the number of providers who can serve clients on small matters that aren’t profitable enough for most full service lawyers to handle – and do the work for less.  But some are skeptical, most significantly ABA Legal Rebel and respected lawyer and technologist Richard Granat who questions whether limited license technicians are a good idea. Richard brings unique credibility to the debate because he’s devoted more than four decades of his career in the law on the problems of access to justice. Moreover, as owner of Directlaw, an automated, online legal form generator, Richard could make a mint selling forms to legal technicians. So Richard’s criticism of legal licensed technicians run counter to his economic interests (a rarity these days in the blogosphere).

Richard raises two primary objections. First, he argues — correctly – that there is no evidence to suggest that legal technicians will charge any less than attorneys, a point I made here. Citing evidence of declining legal fees, Richard argues that we’ve reached a point where many consumers can hire a lawyer (at least for the tasks that legal technicians would provide); the problem lies in convincing them that they should.  Legal technicians won’t solve that problem. Nor can legal technicians cut rates much more since they will need to cover the costs of the special training programs developed (Richard foresees a new cottage industry – Get your legal certificate now!) with the creation of special training programs and regulatory oversight. Plus, unlike full service lawyers, legal techs won’t have the ability to subsidize low end, unbundled work with higher cost services – which is what many lawyers do to make low bono work viable. In short, running a licensed legal technician shop may not be viable business model.

But Richard raises a far more serious objection close to my heart:  a licensed legal technician program will kill solo:

Introduction of a new class of limited licensed professionals will continue to erode the economic model of solo and small law firm practice by sucking out from those practices the more routine legal services which are important to sustaining the economic viability of those law firms. It is naive to suggest that solo practitioners should concentrate on doing “more complex legal work” leaving the routine legal work to “limited license professionals.”. If the ABA wants to deliver a death blow to solo practitioners this is a good way to do it.

With unemployment rampant in today’s legal market (more than 50 percent of 2012 grads found full time jobs in 2012, reports The Atlantic), hanging a shingle is a lifeline for lawyers who want a career in the law.  Starting out, most solos and smalls would gratefully accept small scale referrals — an uncontested divorce here, a will or LLC formation there — to get their name out in the community and begin building a reputation while earning some cash in the process (even drafting a $300 will beats working 15 hours reviewing docs as a contract lawyer). More importantly, these small cases give inexperienced new lawyers a chance to cut their chops and work their way up to more difficult and high-paying cases.

Limited technicians aren’t the only safety net for solos and smalls. Earlier this month, Scott Greenfield blogged about New York’s decision to transfer the bulk of indigent criminal defense appointments to Legal Aid, leaving only limited conflicts appointments available to the private bar through New York’s court appointed program. (18-b) Scott observes that:

New lawyers and lawyers trying to transition into private criminal defense, whether from their gig as a prosecutor or public defender, will find this particularly troubling. They don’t have the client base or reputation to bring in clients, and survive on assigned work. Without it, they will starve. Without it, they will have little opportunity to develop experience and reputation to become the great lawyer they might be .

While stories of six-figure success by law school grads starting a practice abound (and do happen, most lawyers who start a firm generally require roughly three years  to truly soar.  Happily, many solos and smalls make it to the finish, but others don’t – and often, it’s because they run low on cash before they can get their firm off the ground.  Those small cases – whether criminal defense or uncontested divorce or $99/one hour consultations – serve double duty in those early years in way that side jobs doing doc review or working at Starbucks can’t by keeping cash flowing and enabling lawyers to establish reputation and build a client base.

More importantly, why is the profession looking for ways to provide faux-legal service to clients rather than capitalizing on technology to deliver real legal service for less? One example -Lawyering on the Front. Allow lawyers to post themselves outside of courtrooms to review files, assist with forms and if needed, present an argument for the client. Assuming courts have decent wireless signals, the who cycle – doc review, mini case research forms or payment can be accomplished on an ipad or mobile phone. Plus lawyers would appear side by side with litigants which is what many if them want. That’s not the only option;small walk-in clinics staffed by new grads can also provide affordable pricing – and real legal help rather than simply functioning as middleware — which is largely what many legal technicians would do.  Creating a class of legal technicians isn’t innovative – it’s defeatist. Instead, harnessing technology to expand the scope and quality of legal services that we can provide while contributing to the sustainability of solos and smalls is the right direction to the future and ensuring access to justice that’s not just cheap but meaningful.

Updates (9/29/13, 9 am) For an opposing view, see Scott Greenfield, Saving the Law or the Lawyers from Themselves. Scott’s point is that having lawyers handle this kind of low end work potentially dilutes the overall value of legal services. The work isn’t viable or worth lawyers’ time – and lawyers who take these types of small matters wind up running volume practices in a race to the bottom. While I agree that a steady diet of unbundled service or low bono work isn’t a viable, long-term business model for lawyers, I’m not sure that it’s necessarily a viable business model for any individual provider simply because of the fee structure. At least when lawyers provide unbundled/low bono work, they can offset it with full service matters – or, it’s possible that the low end cases may grow into larger matters. That can’t happen with legal practitioners. On the other hand, if legal practitioner service were operated in a clinic or corporation style (rather than solo legal practitioners) or covered through pre-paid legal or subscription plans and if the cost of obtaining a practitioner certificate was not high (Scott envisions a college degree would suffice), then the model might make more sense.

Finally, I want to emphasize that this isn’t about protecting lawyers’ turf. If prevailing legal fees are significantly higher than what a legal technician would charge for the same level of service, I’d be on board with a practitioner’s program in a minute. But like Richard Granat, I am not convinced that a legal practitioner would charge less. And unlike Scott, I don’t see a problem with competition and having a class of lawyers charging less. As I wrote in the comments, if my family or I is sick on the weekend and our regular doctor isn’t available, I would rather go to the cheap doctor at the walk-in clinic than to the nurse-staffed CVS practitioner clinic.

One final note. If practitioners are not subject to the same advertising limitations as lawyers (or alternatively, if restrictions on lawyers are not eased), practitioners will have a substantial competitive advantage. One analogy here are the “debt settlement companies” – which purport to negotiate debts for consumers but obtain the same results that customers would get on their own. Further, these companies advise consumers not to show up in court to challenge debts, which leads to garnishments and other adverse consequences. But these programs are widespread because they can advertise these services in a way that lawyers cannot.

  • junilla

    Wow, this is truly upsetting and I am shocked that the ABA would recommend such a thing. Seems to be eroding the value of a law degree altogether.

  • Preston Clark

    One thing is for sure, if the ABA goes this route, a massive industry will emerge in lead generation for lawyers. Limited license practitioners would establish relationships by providing low level services, and would then become referral points to licensed attorneys for elevated matters.

    There’s also the undeniable problem that a limited license holder would invariably go beyond the scope of the license to increase revenue (notarios do it everyday) which would simultaneously erode (further) the credibility of the legal profession and take business away from (fully) licensed attorneys.

  • myshingle

    That is an interesting point that hadn’t occurred to me – but it could potentially become an acute problem if technicians aren’t regulated and subject to similar referral fee restrictions as lawyers. Interesting times.

  • George Zuganelis

    It seems to me that all solo practitioners would link with several of these limited license practitioners for the referrals they could get. I practice criminal defense in Chicago, and I don’t see any threat to my practice. It will be somewhat like the British system where the limited licensed practitioners will bring cases to the lawyers for court action. Perhaps those lawyers practicing in non-litigation areas will be hurt.

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