Shaping Regulatory Reform that Increases Access to Justice
In the last few years, under Deborah Rhode’s singular leadership, the Center has worked hard to reform legal-services regulation in order to increase access to justice in the United States. In recent years, these efforts have gained momentum as several states have started to relax their regulations and rethink regulatory strategies. The Center has helped to shape this revolution through discussions with policymakers, and the production and synthesis of relevant research.
The specific reforms fall into two categories. The first is to change Rule of Professional Conduct 5.4 to allow nonlawyer ownership and investment in legal service providers, through use, in some states, of a pilot program known as a “regulatory sandbox.” The second is to promote the licensing of paraprofessionals to do limited tasks for consumers who are—currently—largely unserved by lawyers. The idea, here, is essentially nurse practitioners for law.
Under the Center’s new leadership, these activities will be continued and expanded—with an aim to make legal services more readily available to American consumers.
Key Center activities over the last few years have included:
Fall 2019 Convening on Regulatory Reform – This gathering brought together judges, lawyers, scholars, bar leaders, non-profits, and entrepreneurs to discuss the state-of-play and plot next steps. It has led to continued collaboration.
Winter 2020 Policy Lab – This course—led by Deborah Rhode and Jason Solomon, in conjunction with the DC-based nonprofit Responsive Law, and powered by five Stanford students—resulted in several interesting and useful papers on regulatory reform. One, for example, traced the origins of the nurse practitioner model and tracked how nurse practitioners improved access to care in medicine. Another explored the role of nonlawyer advocates in immigration courts. And, a third analyzed how to regulate the use of technology in providing legal advice. CLP will release the first of these in revised form as white papers this fall.
In what follows, we provide more specifics about reform developments and the Center’s vital and expanding role.
Could We Have the Equivalent of Nurse Practitioners for Law?
The idea of licensed paraprofessionals comes from the nurse-practitioner analogy in medicine. Could licensed paraprofessionals play a role in lowering costs and broadening access to legal services—as they did for health care—for individuals of modest means and small businesses?
Consider the example of Hello Divorce. Started by Bay Area family lawyer Erin Levine, it uses a technology platform, legal document assistants (who are authorized paraprofessionals in CA), and subscription pricing to reach middle-income individuals who can’t afford (and don’t need) a lawyer to handle every aspect of their case. The average cost of a divorce with children in California is an astounding $26,300 per person; Hello Divorce’s average is $1500 per couple. Hello Divorce is looking to expand nationwide, but as Levine told a FutureLaw panel, organized by the Center on Deborah Rhode’s legacy and including our co-directors, “regulation is my biggest challenge.”
Washington is one state that has such a program. There, starting in 2015, “legal technicians” were permitted to provide legal advice and representation in family law matters. It was a big breakthrough on paper. But there was little evaluation of how well it worked—blurring any firm conclusions about the program’s efficacy. Recognizing this gap, the Center hired 3L Noelle Smith as a research assistant to canvas the available data, and interview stakeholders like judges, lawyers, and legal-technicians themselves. The result was a CLP white paper, “The Surprising Success of Washington’s Limited License Technician Program,” released in April 2021 and available on the Center’s website. Jason Solomon testified before the Washington Supreme Court on the white paper’s findings, and he and Smith published an op-ed in Bloomberg Law on the lessons for the use of paraprofessionals in law more broadly.
Inspired by the Washington model, the State Bar of California launched a working group in 2020 to explore whether to authorize licensed paraprofessionals to provide legal services in limited contexts. In the last few years, Utah and Arizona have launched such programs, and several other states are considering whether to follow suit. Ontario has had such a program for 15 years, and their “independent paralegals” are now considered “part of the landscape,” according to one experienced judge there. The Center has worked closely with the California working group to provide syntheses of research on the use of such paraprofessionals in other jurisdictions—through oral comments at public meetings and written submissions. California’s working group’s proposal is scheduled to be released for notice and comment in the fall of 2021, and it will then go to the state Bar Board of Trustees and Supreme Court.
Alternative Business Structures and a Regulatory Sandbox
The Center has been influential in the move to relax Rule 5.4’s ban on nonlawyer investment and ownership in order to promote innovation, as well as the idea that a “regulatory sandbox” might be a good way to experiment with allowing such providers.
SANDBOX Q&A
Q: What is a regulatory sandbox?
A: A regulatory sandbox is a policy tool through which new models or services can be offered and tested to assess impact and risk, and inform future policy-making. The sandbox tool was first put to use in the financial services industry, in which a highly regulated market was grappling with significant technological advances that did not fit under the traditional regulations (think cryptocurrency). The sandbox model offers similar advantages in the legal space, a traditionally highly restricted market in which the market—and particularly services driven by technology—are outstripping the traditional regulatory approach. In the sandbox, regulations can be relaxed, data gathered, and policy improved. The sandbox metaphor is intended to convey a safe place where market participants and policymakers can experiment, with close monitoring and data collection by the regulator.
Regulatory Reform Developments and CLP’s Role
2007 – The United Kingdom passes the Legal Services Act, allowing “Alternative Business Structures”—legal services providers that are not 100% owned by lawyers.
2007 – Australia becomes the first country to have a publicly traded law firm, Slater and Gordon. The firm uses the capital to scale a firm that helps middle-income consumers with a range of legal needs.
2012 – U.K. authorizes the first Alternative Business Structures.
2016 – Professors Deborah Rhode and Gillian Hadfield publish “How to Regulate Legal Services to Promote Access, Innovation, and the Quality of Lawyering” in Hastings Law Journal, arguing that the U.S. should adopt the U.K.’s regulatory approach in order to promote innovation in legal services delivery.
2017 – Gillian Hadfield speaks to Utah judges and bar leaders about the possibility of this new approach to legal services regulation that is based on calibrating risk, not following rules.
2018 – The Utah Supreme Court and State Bar charge Justice Deno Himonas and past Bar President John Lund to form a working group to make recommendations for “optimizing the regulatory structure for legal services in the Age of Disruption.”
April 2019 – Margaret Hagan, director of CLP’s Legal Design Lab, and Lab fellow Jorge Gabriel Jimenez publish the white paper “A Regulatory Sandbox for the Industry of Law” with the Thomson Reuters Legal Executive Institute.
August 2019 – The Utah Work Group on Regulatory Reform—including Margaret Hagan, Lucy Ricca, and Gillian Hadfield—releases their report “Narrowing the Access-to-Justice Gap by Reimagining Regulation” recommending a “regulatory sandbox” approach that “permits innovation . . . while addressing risk and generating data to inform the regulatory process.”
October 2019 – CLP hosts a convening on regulatory reform and access to justice, with a kickoff panel featuring Utah Supreme Court Justice Deno Himonas and Legal Services Corporation President James Sandman.
April 2020 – Deborah Rhode, Jason Solomon, and CLP research assistant Annie Wanless release the white paper “How Reforming Rule 5.4 Would Benefit Lawyers and Consumers, Promote Innovation, and Increase Access to Justice,” available here.
May 2020 – The State Bar of California Board of Trustees votes to move forward with a task force to explore a robust version of the sandbox. Before this divided vote, CLP submitted written and made oral testimony, organized a letter from California legal ethics scholars led by Deborah Rhode that urged moving forward, and helped to coordinate the efforts of others supporting a sandbox.
August 2020 – Utah Supreme Court hires former Executive Director and current Fellow of CLP, Lucy Ricca, to start their Office of Legal Services Innovation and run the regulatory sandbox.
August 2020 – Arizona Supreme Court, with support from their State Bar, abolishes Rule 5.4 and starts allowing Alternative Business Structures, without a sandbox, to “promote business innovation in providing legal services at affordable prices.”
October 2020 – Professor and now CLP co-director David Freeman Engstrom is appointed to the State Bar of California’s Closing the Justice Gap working group, to explore use of a sandbox.
June 2021 – Florida Task Force recommends a regulatory sandbox, citing CLP’s 2020 white paper on Rule 5.4 and the Stanford Civil Rights Civil Liberties Journal symposium that was based on work presented at our Fall 2019 convening.
June 2021 – CLP co-sponsors a webinar featuring Utah entities that have been submitted to the sandbox.