California Lawyers Slam Bar Proposals for Fee-Sharing, Nonattorney Ownership
"This is madness. Why are we even contemplating allowing non-attorneys to practice law and provide legal advice?" one Big Law partner said in a letter to the California bar. Here's a snapshot of some of the other comments.
September 23, 2019 at 10:25 PM
6 minute read
Hundreds of responses received over the last two months about various California bar proposals that could alter fee-sharing and open a door to nonattorney ownership of firms reveal a common thread: Most of those who shared their thoughts don't support a wholesale reshaping of how legal clients are served in the Golden State.
The bar asked for opinions on 16 concepts under consideration by the Task Force on Access Through Innovation of Legal Services, a panel charged with proposing ways to increase the availability of legal help. The concepts under consideration range from promoting greater use of technology to allowing different forms of fee-sharing.
Many of the respondents are solo practitioners or lawyers at small firms, although several Big Law names responded, too. The deadline for submitting comments on the state bar committee's ideas for restructuring legal services in California ended Monday.
"This is madness. Why are we even contemplating allowing non-attorneys to practice law and provide legal advice? There are attorneys admitted to the bar of this state who are barely competent and provide questionable advice. They also commit ethical malfeasance," Los Angeles-based Alston & Bird partner Elizabeth Sperling said in a letter. "How much worse will it be for people who are not even attorneys?"
The task force is expected to send its final recommendations to the bar's board of trustees in January. Changes will need the approval of the California Supreme Court and possibly the Legislature.
What follows are excerpts from some of the hundreds of comments about contentious issues under consideration:
|'Drastic' nature of proposed changes compels narrower discussion.
>> Ten AmLaw 200 firms, including Morrison & Foerster, Baker McKenzie, and Cooley, said in their responses: "At the same time that this task force considers innovations that would aid the underserved in gaining access to justice … there is also a wider debate in progress between lawyers and non-lawyers over how legal services will be delivered to those who have no impediments to access. In particular, large accounting firms have long coveted the legal fees that lawyers in California and elsewhere receive for serving their best clients."
The firms also said: "Changes of such a drastic nature on so important a topic should not be made, inadvertently or otherwise, via a vehicle designed to address expansion of access to the underserved residents of California. Instead, if such an action is to be considered, it should be undertaken by a task force chartered specifically to address that issue."
>> And a comment from the California Defense Counsel: "At the outset, we believe that the [task force] report … fails to make the case for such radical suggestions as opening up ownership of law firms to virtually any entity, and almost completely unfettered fee-sharing." The California Defense Counsel added: "Respectfully, the [task force] report seems designed to support a predetermined position on the major recommendations. Throughout the report, the 'pros' and 'cons' of the various proposals are long on the supposed benefits of promoting a 'one-to-many' change in the delivery of legal services, especially to low- and middle-income consumers, with little to no recognition of the harm which could result from a move away from a human lawyer evaluating and counseling individual clients from a position of fiduciary duty."
|The proposed exemption to regulations barring unlicensed practice of law "deserves further study."
The Consumer Attorneys of California said in a letter to the bar: "This proposal provides three different options of having non-lawyers provide legal services directly to the public, either through a regulated entity, a hybrid regulatory scheme where both the entity and non-attorneys are regulated, or by certification of non-attorney legal technicians. … The contemplated entity or limited license legal technician (LLT) regulation would be through the State Bar or another regulatory agency, such as the Department of Consumer Affairs (DCA)."
"The areas of practice being considered for those certified as LLTs are housing, health and social services, domestic relations and domestic violence. It may make sense in connection with authorizing entity regulation for non-profits to allow non-profit legal technicians to provide these limited types of legal services to underserved communities. Allowing non-profits to provide services on a sliding scale to consumers in these areas may positively impact the justice gap."
|Two competing views on allowing "mixed entities" to own law firms.
>> J. Frederick Clarke, a Berkeley solo, wrote in opposition to the bar's proposal. "The responsible elder law community and the State Bar have fought for years against unscrupulous financial products companies partnering with attorneys for living trust seminars that actually sell annuities. Why is the State Bar now proposing to legitimate such arrangements?"
>> Raj Abhyanker, a partner at LegalForce Law, supported the measure. "In order for law firms to innovate and become more efficient, [they] need to have skills of different viewpoints in ownership level decisions. Moreover, it is important to open up access to capital so that law firms can have access to the capital needed to innovate."
|Support, and opposition, for allowing fee-sharing with nonprofits and allowing nonlawyer ownership.
>> Genie Harrison of Genie Harrison Law Firm, opposed the proposal. "There is already too much pressure to be profitable, and making Google Law Firm, or something like that, a possibility is going to drive this into a gig economy task-based system instead of a profession that expects individualized attention to each case and client," Harrison wrote. "This business model would invite and encourage corners to be cut instead of encourage what the State Bar says it wants, which is more professional lawyers."
>> Meanwhile, Blake Slater of Legal Value Firm offered support. "I fully support changes to the traditional model to increase access and affordability to the public. Due to prohibition of non-attorney ownership to date, the ability to increase these benefits have been extremely hamstrung," Slater wrote. "Approving these rules will increase investing and maximize efficiency in the legal landscape. These results will further allow for lower prices for consumers and a refocusing on delivery of such services by legal service providers across the board. These potential benefits should far outweigh any perceived risks."
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