Routine Legal Services Research Articles

Canada's Law Societies Need a Civil Service

The law societies’ articulated mandate shows insufficient concern as to: (1) the threats to the legal profession’s markets presented by the commercial producers of legal services such as the very successful LegalZoom; and, (2) the legal profession’s political vulnerability due to its failure to try to solve the access to justice problem that is the unaffordability of legal services for middle and lower income people (the “A2J problem”). Theirs is a mentality of maintaining fixed and unchanged: (1) law society management infrastructure; (2) the “bencher mentality” of its lawyer-managers; and, (3) its 19th century institutional culture. That will bring about either, their replacement, but more likely their continued reduction in purpose, power, prestige, and lawyer membership. The price of the “bencher mentality” is inherently poor law society management by practicing lawyers. No longer is it possible to be both a good lawyer and a good bencher. Canada’s law societies need a national civil service so that its bencher-managers can act like an elected government’s Cabinet ministers, and not have to be its civil service as well. The cause of the A2J problem is, “there are no economies-of-scale in the practice of law.” For that reason, all of the manufacturing of goods and services has moved away from the “cottage industry” method of production that is still used by the legal profession, to various forms of “support services” methods of production. Automobile manufacturers have their “parts industries.” And no doctor’s office provides all medical treatments and remedies for all patients as does a law firm try to do for all clients. A civil service for law societies could establish such support services for the legal profession. Otherwise, affordable of legal services, beyond routine legal services, for middle and lower income people is not possible. This article sets out a long list of such support services. But, such a solution leaves in place, management by way of the “bencher mentality.” Lawyers like the opportunity to embellish their careers that the bencher position gives them. It can be helpful in becoming a judge and advancing the fortunes of one’s law firm. And, “organizations do not change until the fear of the consequences of not changing, is greater than the fear of the consequences of changing.” Until they fear the consequences of not changing, law societies will remain too devoted to maintaining their 19th century origins of institutional structure and culture. Then the only way the A2J problem will ever be solved is by way of some form of socialized law. Innovation requires pressure, but that pressure can be that provided by inducement as well as by fear. A support services method of production can help lawyers make money as well as serve their clients better.

Law Society Accountability for the Access to Justice Problem

Law Society Accountability for the Access to Justice Problem

Access to Justice and Routine Legal Services: New Technologies Meet Bar Regulators

We are in the early stages of a technological revolution in legal services. Technology is displacing lawyers in a wide array of tasks such as document drafting, review, and assembly, and is also reshaping the way that lawyers find clients and deliver assistance. For most consumers, these are welcome developments. Such innovations generally reduce costs and increase both accessibility and efficiency. The potential gains are particularly great for low- and middle-income consumers, who lack access for a vast array of basic, often urgent, legal needs. Yet for lawyers, the consequences of technology have been more mixed. Many feel that their professional independence and livelihoods are threatened by the growth of online forms, computerized algorithms, and price competition with internet providers. Responding to these concerns, bar regulators have often fought back through ethics rulings that attempt to rein in organizations such as LegalZoom, Rocket Lawyer, and Avvo Legal Services. This article explores the contested technological terrain of legal services for low- and middle-income Americans and uses the battles brewing over Avvo Legal Services as a case study of how bar regulators are, and should be, responding to innovations in the legal market for consumers of limited means. We cover the rise of the online provision of legal services, with a special focus on the three big players in consumer-oriented internet legal services, Avvo, LegalZoom, and Rocket Lawyer. We then assess the recent objections of bar regulators to the latest entry into this market – Avvo Legal Services. We argue that these concerns are largely incorrect. The argument relies partially on the controlling law and partially on business and common sense. As a business matter, small firm and solo practitioners are trying to survive in a brutally competitive market for consumer legal services. Avvo Legal Services attempts to connect these lawyers to clients directly, albeit with inexpensive, fixed-fee legal services. But LegalZoom and Rocket Lawyer are already driving the prices for these services down. Avvo Legal Services just allows regular lawyers to try to compete. The business case is also the public interest case: Avvo Legal Services can help lower the barriers to hiring a lawyer and the cost. This will, in turn, increase access to justice in a country that was recently ranked sixty-seventh (tied with Uganda) of ninety-seven countries in the accessibility and affordability of civil justice. We can and must do better and technological innovations such as those pioneered by Avvo are part of the way forward. Our central argument is that lawyers should embrace the inevitable. Technological innovations are here to stay, and the organized bar should be looking for ways to harness their potential to help underserved constituencies, and the legal profession itself, not try to hold back the inexorable.

Alternative Business Structures' 'Charity Step' to Ending the General Practitioner

Alternative Business Structures' 'Charity Step' to Ending the General Practitioner

Access to Justice--Unaffordable Legal Services' Concepts and Solutions

Access to Justice--Unaffordable Legal Services' Concepts and Solutions

Legal Advice Services Cannot Be Automated by Alternative Business Structures

It is proposed that Ontario lawyers adopt an “alternative business structure” (ABS) having three parts: (1) law firms can be invested in (owned — up to 49% or 100%) by non-lawyer people and entities; (2) legal services be enabled to be provided with related non-legal services; and, (3) routine legal services be automated by software applications. The theme of these ABS proposals is that in order to have (2) and (3), the legal profession must accept (1). That is disagreed with. And, what is not dealt with is how they are going to make legal advice services affordable, given that legal advice services cannot be automated. Such proposals do not take advantage of the economic forces that enable support services to greatly lower the cost of legal services. Therefore, although such proposals will make legal services more attractive to clients who can still afford legal services, they will do nothing to solve the problem that the majority of population cannot afford legal advice services. The theme of this article is that the legal profession can itself make available to clients all that ABS proposals allege that they can provide. Such solution does not put law society authority at risk, nor impose an increased “profit duty” that would conflict with the fiduciary duty owed to clients.

Attorney Advertising and the Contingency Fee Cost Paradox

It has long been taken as gospel that attorney advertising drives down the cost of legal services. The Supreme Court assumed it when first permitting attorney advertising in the landmark First Amendment case, Bates v. State Bar of Arizona. And, in the decades following Bates, courts, commentators, the ABA, and the FTC have followed suit, frequently touting advertising’s ability to cut consumer costs. The price effect of attorney advertising is thus both seemingly settled and also deeply embedded in its judicial justification.But there is a wrinkle. Though it appears advertising did drive down prices for routine legal services in the years immediately following Bates, in the intervening decades, there has been a decided, yet heretofore unexplored, shift. Contemporary attorney advertising is now mostly the province of the personal injury bar. Yet there is scant evidence that attorney advertising reduces the contingency fees personal injury lawyers charge. To the contrary, the best, most sophisticated, most comprehensive study of legal fees and attorney advertising ever conducted found that, unlike for most basic legal services (e.g., wills, personal bankruptcies, uncontested divorces), those who advertised personal injury legal services charged higher prices than their non-advertising counterparts. Other evidence likewise shows contingency fees have not dropped, even while personal injury lawyers’ ad expenditures have soared. This fact has been all but ignored, though it is of enormous consequence for both the legality of attorney advertising and the delivery of legal services more generally. This Article aims to reopen and reorient the “settled” attorney advertising debate, in light of the particularities of personal injury practice and the changing nature of the market for personal legal services in the United States.

Embeddedness and Price Formation in the Corporate Law Market

The determination of prices is a key function of markets, yet sociologists are just beginning to study it. Most theorists view prices as a consequence of economic processes. By contrast, we consider how social structure shapes prices. Building on embeddedness arguments and original fieldwork at large law firms, we propose that a firm's embedded relationships influence prices by prompting private-information flows and informal governance arrangements that add unique value to goods and services. We test our arguments with a separate longitudinal dataset on the pricing of legal services by law firms that represent corporate America. We find that embeddedness can significantly increase and decrease prices net of standard variables and in markets for both complex and routine legal services. Moreover, results show that three forms of embeddedness—embedded ties, board memberships, and status—affect prices in different directions and have different magnitudes of effects that depend on the complexity of the legal service.

Advertising and Competition in Routine Legal Service Markets: An Empirical Investigation

This study's findings, together with the results of earlier studies of the relationship between advertis ing and market prices, provide considerable empirical support for the pro-competitive view of seller advertising. Data on attorney fees an d advertising practices in seventeen metropolitan areas across the U. S. were used to estimate the effect of market advertising intensity o n firm demand elasticities, holding other possible influencing factor s constant. The results obtained for all three routine legal services examined are consistent with the hypothesis that advertising increas es competition among sellers in a market. Copyright 1987 by Blackwell Publishing Ltd.

Attorney advertising and the quality of routine legal services

This study examines the relationship between advertising and the quality of three relatively routine legal services. The nature of the services examined made it possible to use attorney time input data to measure output quality. The study's data were collected via attorney surveys conducted in seventeen metropolitan areas across the U.S. The study's findings suggest that advertising and average output quality are inversely related in routine legal service markets. The policy implications of such findings depend critically on the level of offered quality prior to the advent of advertising. If one assumes that attorneys offered inefficiently high levels of service quality to justify their non-competitive prices, then this study's findings suggest that advertising serves to move the average level of quality in the direction of greater efficiency.

Some Evidence on the Early Price Effects of Attorney Advertising in the USA

When the US Supreme Court gave attorneys in the US the right to advertise their fees for routine legal services, the Court assumed that such fees would fall as a result of attorney advertising. According to economic theory, however, it is not clear what impact seller advertising will have on market prices. A major research effort designed to measure the price effects of attorney advertising in the USA began one year after the Bates decision. Some of the major findings of that study are presented in this paper. While none of the study's results so far indicates that the price effects of attorney advertising in the short run are likely to be substantial, the results suggest that the level of routine legal service fees may fall slightly or remain unchanged in constant dollar terms as a result of attorneys' use of advertising to promote their services and prices.

Consumer Information and the Pricing of Legal Services

In a classic article on the economics of information, George Stigler discussed the impact advertising could have on the dispersion of seller prices quoted in a marketplace.1 As one source of price information, advertising reduces search costs for consumers wishing to obtain some product or service at its lowest possible price.2 The more comparison shopping consumers do because of lower search costs, the better informed they will be about seller price differences and, hence, the less price dispersion the market will support. Until recently, there has been little opportunity for Stigler's process to operate in the market for legal services. The first Canons of Ethics adopted by the American Bar Association in 1908 contained a prohibition against advertising by attorneys and within a few years that provision was adopted in every state, either by legislation, court rule, or court decision. Almost seventy years later, however, in June 1977, the U.S. Supreme Court held, in Bates v. State Bar of Arizona (433 U.S. 350), that attorneys had a first amendment right to advertise fees for routine legal services. The Court's decision was based in part on benefits to consumers that were assumed to follow from advertising-benefits such as the increased ability to shop for prices and, presumably, to obtain lower ones. In 1978 a study was conducted on legal service pricing and advertising in Phoenix, Arizona. Its results provide some evidence on the informed nature of the consumer of routine legal services and the importance of consumer information in the pricing of such services. The purpose of this paper is to present those results. The paper is divided into three sections. In the first section, several factors influencing attorney pricing behavior are analyzed. Routine legal services are distinguished from other legal services in terms of three production function variables. In the second section, the methodology and empirical results of the 1978 Phoenix Area Survey of Private Practicing