Professor David Freeman Engstrom, co-director of the Stanford Center on the Legal Profession (CLP), discusses the urgent access-to-justice crisis currently gripping California and the California State Bar’s Closing the Justice Gap working group, a group of judges, lawyers, and academics who are exploring possible innovations in the delivery of legal services to Californians.
Read the letter to the judiciary committee chairs on increasing Californians’ access to legal services.
You say that the access-to-justice problem is urgent and of crisis proportions. Why? What’s the problem?
The access-to-justice crisis is deep and socially costly. In three-quarters of filed civil cases in state courts, at least one side lacks a lawyer. Many of those cases are debt collection cases, evictions, or family law matters, including domestic violence—significant, and often life-altering, moments in a person’s or family’s life. We all grew up watching legal dramas featuring lawyers squaring off in climactic trials in court. The everyday reality of the American legal system is very different.
Meanwhile, the pro se litigants we see in court are merely the tip of the iceberg, for below the pro se crisis (which is visible), lies a larger but hidden crisis. That consists of the tens of millions of Americans who are currently confronting a legal problem—an ex-spouse who has fallen behind on child support, an employer who refuses to pay overtime, or an insurer who has denied a legitimate claim—but who are “lumping it,” which is to say taking no steps to protect their interests.
It’s a two-layer problem—and it’s a calamity and a national embarrassment.
Is the problem worse in the U.S. than in other countries?
Sadly, yes. According to the World Justice Project, the U.S. ranks #126 out of 139 countries in accessible and affordable civil justice, behind, among others, Uzbekistan and Angola. Among higher-income countries, and countries in North America and Europe, the U.S. ranks dead last.
California is no exception: As the State Bar’s own 2019 Justice Gap study showed, nearly 70 percent of Californians who face a legal problem receive no legal assistance at all.
Is the answer to the crisis more pro bono work and a boost in legal aid funding?
Pro bono work and legal aid are critically important and socially valuable, but we can’t rely on lawyers alone. The sad fact is that we can’t lawyer our way out of the access-to-justice crisis. Even a doubling or tripling of pro bono hours won’t put a dent in the problem. Instead, we need to consider adding entirely new models to meet Americans’ civil justice needs.
Why are new approaches needed? And how do we get them?
A significant reason for the persistent and yawning justice gap is that state supreme courts and state bars have long limited who can provide legal services. They’ve choked off supply. In particular, lawyer regulations impose hefty entry requirements and pervasive constraints on practice, financing, and advertising, and these restrictions raise the price at which lawyers can provide legal services well above most Americans’ ability to pay.
Existing lawyer regulation not only imposes an inefficient business model on law practice over the short-term, it also chills innovation over the longer-term.
The traditional model of providing legal services is one lawyer serving one client and charging that client by the hour. But this approach cannot reach the millions of individuals and small businesses who can’t afford to pay $200-$300 an hour.
To reach those consumers, we need “one to many” models where an individual lawyer’s expertise can be shared with many at once, often with the help of technology. But doing this requires technical skills and capital that most lawyers lack.
Allowing people who are not lawyers to own legal service providers helps overcome this challenge in two ways. First, relaxing the usual rules that govern delivery of legal services allows lawyers to partner with technologists and business experts by offering them equity in new ventures. Without non-lawyer financing sources, many law firms find it difficult to attract top non-lawyer talent. Second, relaxing the rules allows lawyers to tap investment capital to build out the kind of technology systems and business processes that are critical to serving people at scale.
These are some of the ideas that I, along with the other members of the California State Bar Closing the Justice Gap Working Group, are considering.
What is the Closing the Justice Gap Working Group?
The Working Group is a group of judges, lawyers, and academics appointed by the California State Bar to explore possible innovations in the delivery of legal services to Californians who currently don’t get them.
In particular, the group is exploring the development of what’s called a “regulatory sandbox” for legal services. A regulatory sandbox is a controlled policy environment where regulatory constraints are relaxed to stimulate and test out innovative approaches to solving problems.
In the access-to-justice area, the goal of a sandbox is to loosen the usual prohibitions on law practice—think bans on unauthorized practice of law and on non-lawyer ownership and financing of law firms—in order to see what types of new legal services delivery models might emerge and then evaluate their potential to increase access and decrease costs, all while protecting consumer welfare.
Importantly, a sandbox is not a Wild West, anything-goes sort of space. Sandbox entrants are subject to significant oversight in return for their ability to test out new approaches and then make the case for longer-term change. The Working Group is studying all of this and has been asked to make specific recommendations to the Bar’s Board of Trustees about the sandbox design options California might want to consider.
Have these reforms been tried elsewhere? Or, would California be headed into uncharted territory?
We’d be innovative—but not breaking new ground. In the United Kingdom, a 2009 law permitted new law firm models, sometimes called alternative business structures, or ABS entities. The best evidence is that these reforms have led to increased innovation, which has expanded consumers’ options for legal services—all while ensuring that consumers are protected and lawyers aren’t threatened. Indeed, consumer complaints are rare, and lawyers have continued to thrive.
In the U.S, two states—Arizona and Utah—have moved in similar directions. In particular, Utah has created a version of a “regulatory sandbox” that the California Working Group is tasked with exploring. It has been operational for more than a year and has authorized entities offering a range of services, including end-of-life planning, real estate, veterans’ benefits, medical debt assistance, help for domestic violence victims, expungement of criminal records, and small business services. Many of these entities are led by lawyers, but some are not. All are subject to substantial ongoing oversight, including significant disclosures of data and proof of quality. Critically, consumer complaints have been negligible.
Is the Working Group making progress on this important work?
Absolutely we are. The Working Group is hearing a range of perspectives and working toward thoughtful compromise, all with the goal of increasing access-to-justice, by promoting innovation in legal services while protecting California’s consumers.
We’ve recently hit a bump in that the Judiciary Committee chairs of both houses of the General Assembly have questioned the working group’s efforts, ostensibly because they are worried that, if new delivery models are rolled out, client protection will suffer. Some say that certain segments of the bar are exercising influence here, because they’re worried that new providers will undercut their monopoly and capture some of their revenues. The politics of all of this is clearly complicated.
But, in my view, it’s critical that this bump doesn’t detour us from our broader mission. As I’ve already noted, the working group is just engaged in thoughtful fact-finding—and, for all of us, consumer protection is front-of-mind.
Moreover, the ultimate goal of innovative delivery services is not to take clients away from lawyers. It is to ensure that the millions of Californians who are currently entirely shut out from the legal system have some assistance. The goal isn’t to re-cut the pie—it’s to expand it.
Even the ABA, long opposed to any changes to the structure of the legal services industry, recognizes that we need innovation in order to address the access-to-justice crisis. In 2020, the ABA adopted Resolution 115, which “encourages U.S. jurisdictions to consider innovative approaches to the access to justice crisis in order to help the more than 80% of people below the poverty line and the many middle-income Americans who lack meaningful access to effective civil legal services.” In California, we need to heed that call—and the Working Group must continue in its efforts.