Non-Lawyer Ownership of Law Firms

Despite the grand vision implied by the title of the ABA “Future of Legal Services” Commission, the Commission’s scope is modest. It might be summed up as trying to address this question: are there incremental ways that the practice of law could be tweaked – whether in practice or via regulation – such that access to justice might be improved?

There’s certainly work to be done on that front. Getting access to legal services is far from ideal for most folks. And, paradoxically, it’s worst for those who need it the most – those seeking help or government benefits must navigate an increasingly-complex bureaucracy.

Amidst the comments submitted to the commission are many solid ideas. Some, like allowing a measure of non-lawyer ownership of law firms, or eliminating most of the restrictions on attorney advertising, will be seen by many attorneys as massive changes. But these suggestions are really just in line with a simple idea: that the business of providing legal services to consumers could be handled a lot more like other types of services, without any meaningful reduction in quality.

This requires acknowledging some truths that most lawyers, if they are being honest and objective with themselves, would be hard pressed to deny.

Non-Lawyer Ownership

The limitation on ownership of law firms is supposed to preserve the professional independence of lawyers. This regulation presumes that lawyers answer to a higher calling than the cool logic of business.

We’d really, really love to believe that. It’s probably even true sometimes.

But the reality is that law firms are businesses. And even if it is only lawyers at the helm, these are lawyers who must take business considerations into account when making decisions. There are bills to be paid, payrolls to be made, reputations to be preserved. It’s delusional to think that lawyers running law firms are somehow magically above the tradeoffs and calculations that are inherent in running any business.

Businesses and Client Protection

OK, so lawyers face “business” pressures too. But they’re still better about protecting client rights than a faceless corporation would be, right?

Not necessarily.

Yes, attorneys have a fiduciary obligation to clients. But frankly, that’s not that important for a whole lot of routine consumer matters. We’ve got this paradigm of the adversarial system, or the lone individual fighting to speak truth to power, but let’s face it: a whole lot of legal issues involve people just trying to plow through the bureaucracy to get shit done. Get a visa, change a name, establish paternal rights, start a business – the list goes on and on.

Banking, insurance, real estate, finance – all involve similar consumer issues that are capably met by businesses. For many legal issues, people just need to get something dealt with, get the right boxes ticked, predictably, properly and on time, and know that they can move on with life.

And frankly, these types of client interests are going to be better protected by the business virtues of consistent, easy-to-use processes, than by a poorly-run law practice that’s barely scraping by.

Business Ownership and Unpopular Causes

The criminal defense lawyer lined up against the government, the consumer lawyer taking on big business, the civil rights lawyer representing a deeply unpopular cause – so much of our lawyerly identity is tied up in these sorts of “heroic” cases.

It’s a fair objection that most business-owned law firms would stay away from these sorts of cases. But again – the vast majority of legal matters don’t present this sort of stress test of a lawyer’s independence. 1

We shouldn’t let this idealized vision of independence keep businesses from being able to invest in enhancing consumer access to legal services. And remember – just because businesses can do so in this scenario, that doesn’t mean such firms are the only game in town. Just as with banking, or medicine, or a host of other occupations, specialist practices – probably owned exclusively by lawyers, as they are today – would exist to handle the truly tricky, high-stakes work.

Ultimately, improving access to justice is going to take one of three things: attorneys reinventing their businesses to better serve consumers; the definition of “the practice of law” being scaled back; or the regulators permitting businesses to participate in the legal industry.

I would love to see #1 come to pass, but it may be the case that such reinvention can’t happen at scale until businesspeople can truly partner with lawyers.

Notes:

  1. And it’s not as if traditional law firms are immune from having difficulty representing unpopular clients.

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