Category Archives: Blog

Blog, Lawyer Monopoly, Legal Aid

Who Deserves Legal Help and Who Doesn’t? The Answer Is Not In Words, But Actions

Section 81.102(a) of the Texas Government Code states that “a person may not practice law in this state unless the person is a member of the state bar.” Section 81.102(b) then allows for the Supreme Court of Texas to “promulgate rules prescribing the procedure for limited practice of law” by lawyers admitted out-of-state and by law students.

On August 29, 2017, the Supreme Court of Texas took advantage of this power, by adopting “Emergency Order After Hurricane Harvey Permitting Out-of-State Lawyers to Practice in Texas Temporarily.”

The Order provides that a lawyer who is admitted to the bar of another state and is in good standing in that state may, for a period of six months from August 29, 2017, “practice law in Texas” if that lawyer “is retained by a legal-aid or pro bono program or a bar association that provides services to victims of Hurricane Harvey.”[1]

It is important to note that no one, at least not in any online forum, has criticized the Order. Most notably, no one has said that out-of-state lawyers will provide inferior legal services to victims of Hurricane Harvey, by virtue of not being admitted to the Texas bar. No one has complained that the out-of-state lawyers will steal legal aid or pro bono work from Texas lawyers. No one has even complained that the out-of-state lawyers, working for free, will deprive Texas lawyers of paid work.

No, rather than criticizing the Order, it was welcomed. On the very day the Order was issued, the blog of the Texas Bar (of which all lawyers admitted to the bar in Texas are obligatorily members) posted an entry announcing the Order and providing a link to a form for out-of-state lawyers to fill out in order to volunteer. On the next day (August 30), the ABA Journal published an online article to publicize the Order and provide information about how out-of-state lawyers can assist. And the bars of other states, like Florida, Tennessee and Maryland publicized the Order, encouraging its lawyers to volunteer and providing links for additional information. Indeed, the only negative comment I was able to find about Texas opening itself to out-of-state lawyers was one by Margaret Becker of Legal Services NYC, who was involved with recovery efforts after Hurricane Sandy. As reported by Bloomberg BNA: “A lot of outside firms came to help with flood insurance and ‘they’re a mixed bag,’ Becker said. Some were conscientious but others were not, she said.”

While the Order itself was not criticized, that does not mean that its issuance did not prompt criticism. That criticism was directed at the circumstances that required the Order, and namely the restrictions that Texas and other states (either on the basis of ABA Model Rule 5.5 or otherwise) place upon multijurisdictional practice. One commentator to the ABA Journal article, Josh Effron, wrote that the Order:

helps to show the silliness of preventing lawyers from practicing across State lines in the first place: if an out-of-State lawyer is good enough to practice law in one case (i.e., pro hac vice) and is good enough to practice on a temporary basis (such as in this case), then clearly that lawyer is good enough to practice in general.

The only reason why we make it hard for lawyers to practice across State lines is not to protect the public but, rather, as a form of protectionism, for in-State lawyers to insulate themselves from competition. This runs completely counter to the alleged goal of State bars as protectors of the public interest (rather than the economic interests of the lawyers in that State).

Another commentator was equally harsh: On the website Above the Law, Elie Mystal wrote an article entitled “Texas Allows Out-Of-State Lawyers To Help, Kind Of Highlighting The Stupidity Of State Bar Restrictions.” He continued:

While we’re casting about for silver linings, might this kind of assistance lead us down a path where state bars more generally loosen out-of-state prohibitions on lawyers willing to work pro bono? I mean, I get the economics of out-of-state restrictions. This State’s bar can’t have That State’s lawyers flying in and scooping up all the legal work. It’s stupid and leads to economic inefficiencies, but I get the reasons for it.

But surely, when it comes to pro bono work, why should it still matter what state you are barred in? Why should we make people willing to help for free endure the friction of finding “local counsel” and all that? I don’t mean to sound like Jim Harbaugh, but Legal Aid should be a backbone of our social safety net, and limiting that service based on state bar requirements doesn’t seem to be helping anybody.

The point that Effron and Mystal are making is, essentially, that if a state can allow multijurisdictional practice in order to help victims of Hurricane Harvey, then why can’t other states —all states —allow multijurisdictional practice in other contexts? Mystal limits his question to the context of pro bono (free) legal work, while Effron asks it with respect to all legal work, without differentiation. Both complain that restrictions on multijurisdictional practice do not serve the public interest. To the contrary, they are nothing but a form of economic protectionism for in-state lawyers that operate to limit the public’s access to legal services.

These are entirely accurate observations about the Order, and they raise entirely legitimate objections to restrictions on multijurisdictional practice. However, they do not go far enough. Here is how they could, and should, go further:

1)         While there is no count—official or otherwise —of the number of victims of Hurricane Harvey who will need legal assistance, it will likely be a high number. And many of those persons won’t need legal help for just one matter or requiring just one type of legal expertise. To the contrary, they are likely to require help with respect to multiple matters and a wide range of subject areas: insurance, real property and mortgage, landlord/tenant, family law, bankruptcy, litigation, wills and estates, probate, consumer protection, employment. In this context, it is quite possible if not likely that the demand for free legal services by victims of Hurricane Harvey will be greater than the supply that lawyers, be they from Texas or out of state, will be willing or able to provide. That is, just as legal aid organizations across the country are not able to serve the needs of everyone who is eligible for legal aid, so many victims of Hurricane Harvey will not be able to access free legal services because the demand will be greater than the supply. Some of those persons will be able to pay at least something for legal services. Who will they turn to? If they are paying for the services, they will be limited to lawyers admitted in Texas. Where is the logic in that? According to the laws of supply and demand, the fees charged by the Texas lawyers should be higher than they would be if Texas were open to competition from out-of-state lawyers on a fee-paying basis also. If the victims of Hurricane Harvey can access out-of-state lawyers for free legal services and no one claims that the quality of those services will be harmful to those victims, or even simply inadequate, then on what basis can it be legitimate to deny the victims access to out-of-state lawyers on a fee-paying basis in a more competitive marketplace than one that is limited to Texas lawyers only?

Keep in mind that the Order is valid for six months—unless the Supreme Court issues an extension, all of the out-of-state lawyers (again, working for free) will need to wrap up their work by late February/early March 2018. It is unlikely that all outstanding legal issues connected to Hurricane Harvey will be fully resolved by then. Regardless of whether the Supreme Court issues an extension or not, the Order will at some point expire and when it does, victims of Hurricane Harvey will no longer have access to free legal services by out-of-state lawyers (not legally, anyway). And if they can’t find a Texas lawyer willing to work for free then they’ll have to get in line and pay for a Texas lawyer, just like everyone else.

It is in considering the situation from this urgent context that the pure protectionist purpose of Model Rule 5.5 (the protection of in-state lawyers) is laid bare—indeed, stark naked—and the need to end such protectionism becomes even clearer.

2)         The Order itself is an acknowledgement on the part of the Supreme Court that how lawyers are regulated generally, and the unauthorized practice of law rules specifically, have a direct and demonstrable effect upon the extent to which citizens of a state are able to access legal services. (This is a topic that I explore in my book Modernizing Legal Services in Common Law Countries: Will the US Be Left Behind?). Going further, the Order is an acknowledgement that the exclusion of out-of-state lawyers (Model Rule 5.5 and its counterparts) has the effect of denying needed legal services to a population. Hurricane Harvey did not invent this situation, it simply made it more acute and more blatant for a very particular population: one that is large but still contained and easily identifiable, as well as highly mediatized and easy to sympathize with.

3)         The Order exposes the belief on the part of Supreme Court of Texas (if not all legal regulators) that some legal needs are more worthy than others. As regards the victims of Hurricane Harvey, the Supreme Court considers their legal needs so worthy, the court acted very quickly (just four days after Hurricane Harvey hit the Texas coast on August 25) in order to take very rare (unprecedented?) steps to expand the supply of free legal services, even if some (many?) of the beneficiaries of those services could pay at least something for them. (Unlike the rules of most legal aid organizations, there is nothing in the Order that restricts the beneficiaries of free legal services by out-of-state lawyers only to victims of Hurricane Harvey who are unable to pay for them.)

Contrast what the Supreme Court of Texas presumably learned back in June, 2017 from a report by the Legal Services Corporation (LSC), “The Justice Gap: Measuring the Unmet Civil Legal Needs of Low-Income Americans.” This 68-page Report offers these startling statistics: 71% of low-income households in the United States have experienced at least one civil legal problem in the past year, and 25% have experienced six or more civil legal problems. Of those civil legal problems, the Report states that 86% of them received inadequate or no legal help.” 86%.

The Report lists the most common civil legal problem areas as health, consumer & finance, rental housing, children & custody, education, disability and income maintenance. These problems (together with a host of others, such as domestic violence) afflict the more than 60 million Americans across the country that have family incomes at or below 125% of the Federal Poverty Line (FPL), including senior citizens, persons with disabilities, veterans and residents of rural communities. The Report calls out Texas as having 5.7 million people with incomes under the FPL, a large number as compared to other states. More specifically, of Texas’s total population of 26.8 million, 21.1% have incomes under the FPL. Based upon an average household size of 2.84 persons, this means that there are approximately 2 million low-income households in Texas. Extrapolating from the national figures of 71% and 86%, this means that last year in Texas approximately 1.4 million low income households experienced at least one civil legal problem, and of those, no fewer than 1.2 million of those problems received inadequate or no legal help. Contrast that number to these currently available numbers for Hurricane Harvey: as of Friday September 1, it was estimated that 185,149 homes were damaged or destroyed and 364,000 people had registered with FEMA (Federal Emergency Management Agency) for assistance. Those numbers are considerable, but they do not surpass the 1.2+ million unmet legal needs of low-income households in Texas in the past year.

Underscoring these issues, and going further back, in December, 2016, the Texas Commission to Expand Legal Services issued a report containing eight recommendations to the Supreme Court with the purpose of expanding the availability of civil legal services to low- and middle-income Texans. Those recommendations include “The Court should form a standing committee to maintain accountability for closing the justice gap and to monitor the effectiveness of reform initiatives,” “The Court should encourage the State Bar of Texas, the Texas Access to Justice Commission, and local bar associations to create pipelines of services for modest-means clients,” and “A primary objective of future rulemaking projects should be to make the civil justice system more accessible to modest-means clients.”

There is no evidence in the public record that, since December, 2016, the Supreme Court of Texas has acted upon these or any of the other recommendations in the Texas Report. Nor is there any evidence that since June, 2017, the Supreme Court of Texas has taken any steps to address the situation of the 1.4 million low-income Texas households described in the LSC Report. Why would the Court would be utterly inactive with respect to the dire needs described in those Reports and at the same time be so quickly reactive with respect to the needs of the victims of Hurricane Harvey, if the Court did not believe that some legal needs are more worthy—more deserving of resources and attention—than others?

Do we agree? We can all agree that the victims of Hurricane Harvey deserve legal assistance. Lawyers can demonstrate that agreement by volunteering to help them on a pro bono basis. By all accounts, many lawyers have volunteered, all within a matter of days. But do we also agree with the Supreme Court of Texas that the 1.4 million low income households in Texas (and by extension the 60 million low-income persons throughout the United States) are less deserving of assistance with their legal issues that are unrelated to Hurricane Harvey? We can declare over and over that they are equally deserving of assistance, but, like the Supreme Court of Texas, our inaction says otherwise: We do believe that some legal needs are simply more worthy than others.

[1] The Order also allows a lawyer to “practice law in Texas” if that lawyer was displaced form his/her home state due to Hurricane Harvey and works remotely from a Texas location to provide legal services in his/her home state.

If you’d like to subscribe in order to receive notices of new posts, you can do so by scrolling to the bottom of this page — you’ll see the place in the bottom left corner. Thanks for subscribing!

Related posts on this site:

Chapter 9: Alternative Structures Cannot Help Those Who Cannot Pay

Chapter 12: Opportunities for Legal Aid

Chapter 20: Unmet Need as Human Rights Crisis

Chapter 23: Endless Objections and The Lawyer Monopoly

Blog, Privatization

You Asked For Research? You Got It! Now What Are You Going to Do With It?

The last post described recent (and still evolving) research by NYU PhD candidate Hannah Simpson. Her empirical research focuses on how the fees that a state (that is, a country’s national and/or local government) charges to access its legal systems (courts as well as other agencies such as those for property registration and licensure – which collectively Simpson refers to as a state’s “property rights institutions”) interact with other institutional and economic conditions, and what the effect of that interaction is upon access to justice in that state. In a nutshell, her models demonstrate that the effect upon access to justice is as follows: in wealthy countries economic growth increases demand for access to the state’s legal system but decreases supply. This is because wealth and economic development in a wealthy country are liable to motivate the state to increase fees, on the grounds that the wealthy can and will pay them. However, those same fee increases are usually substantial enough to dissuade the poor from using the state’s system and thus there is an overall decrease in access to justice. In contrast, in poor countries, economic growth increases not only demand for access to the state’s legal system but also supply. This is particularly the case when the state’s system is institutionally biased in favor of the wealthy, even though, Simpson observes, such a conclusion appears counterintuitive. This is because economic growth motivates elites to buy into an otherwise fragile and unappealing institutional framework. This participation increases the system’s effectiveness and thus its appeal, and also leads to reduced administrative costs, enabling the state to reduce its fees, thus increasing accessibility.

Simpson’s research goes further, to also seek to understand: when a state uses its “property rights institutions” to generate revenue, what effect does it have upon competition from private legal services providers? Her conclusion in this regard is in two parts:

On the one hand, when a poor group exits a state system in favor of a private system, the remaining population is unequivocally worse off because the state system becomes both less effective and more expensive. It’s not clear that the exiting group becomes better off either, given that, Simpson observes, when a poor group exits a state system in favor of a private one, the poor group is generally moving from a system based upon procedural safeguards to one based upon “cheaper” methods of enforcement, notably peer pressure and violence. On the other hand, if the poor group’s access to the state system was more theoretical than real because of the system’s bias against the poor, then the poor group can understandably perceive itself to be better off with real peer pressure and violence as opposed to nothing more than theoretical procedural safeguards.

When a wealthy group exits a state system, the state system also becomes less effective, because of the reduction in the number of participants. On the other hand, the additional consequences for the remaining population are equivocal—indeed, they are paradoxal. In theory, the remaining population should benefit from lower fees, but only under certain conditions, namely that the country is experiencing low economic growth and income inequality is increasing, because under these conditions the state will likely lower its fees in response to the exit of the wealthy group. However, Simpson explains, those are not the conditions under which wealthy groups are motivated to exit a state system. Instead, they are motivated to leave when economic growth is high and income inequality is decreasing, because those are the conditions under which a wealthy group is more likely to benefit from participation in a private system rather than a public one. Further, under those conditions, wealthy groups are willing to pay a higher premium to access a private system. In sum, it appears that if a wealthy group does choose to opt out of a state system in favor of a private one, it is more likely than not to do so under conditions that will result in negative effects for the remaining population.

Simpson’s research is complex. It requires significant intellectual investment. But those facts do not make her research less compelling, or less deserving of attention. Again, you can read about her research in more detail here.

What are the implications of Simpson’s research? I suspect there are many—in this post I’d like to consider two of them.

Implication N° 1: We Can Predict the Consequences of Privatization

Let’s start with Gillian Hadfield’s 2016 book Rules for a Flat World: Why Humans Invented Law and How to Reinvent It for a Complex Global Economy. In this book, Hadfield deplores the “abysmal” state of “our knowledge about legal infrastructure.” She continues: “there is next to no research on the fundamental questions of how most effectively to provide legal infrastructure in different environments.” She deplores that “legal infrastructure is simply not on the research agenda in our universities.” She bemoans that “research on how to build legal infrastructure in the face of mounting costs, with the dramatic upheavals of the complex global economy, or in places where legal order is absent or broken” is barely on the radar. Hadfield further laments the lack of research in this post.

Of course Simpson’s research does not respond in full to Hadfield’s lamentations, but it is a beginning of a response, and a highly significant one. It exposes the consequences for access to justice of an important element of legal infrastructure—the use of legal institutions to generate revenue—an element that Simpson persuasively argues has not received sufficient attention to date.

More than that, Simpson’s research speaks directly to the principal argumentation of Rules for a Flat World: that regulation should be privatized. More specifically, the book argues that “markets” (private enterprise) should be allowed to compete with state (public) agencies as well as with each other for the provision of regulatory services. An important element of Hadfield’s proposal is that private regulators would be allowed to charge fees to generate not just revenue, but profit (“dangling the prospect of profit”).

Simpson’s research indicates that if the proposal of Rules for a Flat World were to be implemented, certain groups would likely benefit, while certain others would likely suffer. The beneficiaries would be what Simpson terms “wealthy groups,” that is, it would be the “companies” and “businesses” (that is who Hadfield depicts as the customers of private regulators) who can afford the fees of a private regulator. Those who would not benefit would essentially be everyone else (individuals, businesses and other organizations unable to afford the private fees). They would, Simpson’s research demonstrates, be left with a state legal system that is necessarily less effective (because of reduced usage) but no less expensive (because it would be unlikely that the state would be motivated to lower its fees in response to the exit of the wealthy groups). The remaining users would have the right, like the wealthy groups, to also exit the state system for a private one, but Simpson’s research suggests that such a right would be little more than theoretical. If they were to exit the state system, the remaining users would end up in private systems inferior to the state’s, because they would not be able to pay the fees required to establish and maintain a system approaching the state’s. So, instead of having recourse to (expensive) procedural safeguards to protect their rights, they’d have little more than (cheap) peer pressure, if not violence.

Implication N° 2: A Stark Reality and a Stark Choice

Recall Simpson’s finding that in wealthy countries economic growth increases demand for access to the state’s legal system but decreases supply. Again, this is because wealth and economic development in a wealthy country are liable to motivate the state to increase fees, on the grounds that the wealthy can and will pay them. However, those same fee increases are usually substantial enough to dissuade the poor from using the state’s system and thus there is an overall decrease in access to justice.

This finding places us before a stark reality. In a wealthy country like the United States, we can use our courts and other “property rights institutions” (without forgetting that our courts are intended to protect not just property but also civil—human—rights) as a means of generating revenue for the state, or we can use them as a means to disseminate access to justice on as wide a basis as possible. They cannot be used for both because, based upon Simpson’s research, in wealthy countries one of these objectives is mutually exclusive of the other. If we choose to use our courts and other state legal institutions as a source of revenue, then at the same time, we are choosing—deliberately and with full knowledge—to limit if not entirely block access to justice for a certain portion of the American population, and the more we rely upon those institutions for revenue (that is, the greater the fees we charge), the larger will grow that portion of the American population with limited to no access to justice.

This stark reality leaves us with an equally stark, three-option choice:

  • Do we continue to accept that our courts and other legal institutions may be used as a means for generating revenue for the state, with the consequence of denying to a significant portion of the population access to state (public) legal institutions, and thus continue to deny them access to justice?
  • Do we move in the direction proposed by Hadfield? That is, do we open a regulatory “market” and allow private regulators to compete for regulatory “customers,” including competition with state (public) courts and other property rights institutions, with the consequences described above? Or,
  • Do we recognize that courts and other state legal institutions provide a public service—that they provide something that we as a society need and value because it brings economic as well as social value to everyone? And at the same time do we recognize that in order to disseminate this public service—access to justice—on as wide a basis as possible, that our courts and other state legal institutions must be financed publicly not with user fees but through equitable, progressive revenue sources?

As I’ve already noted, Simpson’s research is new and, as yet, exists only in the form of an evolving working paper. Nevertheless, her work is highly intriguing, it has multiple implications, and it already merits attention.

It’s a beginning of a response to Hadfield’s call for more research. The question is: now that we have it, what will we do with it?

If you’d like to subscribe in order to receive notices of new posts, you can do so by scrolling to the bottom of this page — you’ll see the place in the bottom left corner. Thanks for subscribing!

Related posts on this site:

Chapter 27: Rules for a Flat World (Or Regulatory Dystopia)

Access to Justice vs. Revenue: A Zero-Sum Game?

Blog, Privatization, World Justice Project Rule of Law Index

Access to Justice vs. Revenue: A Zero-Sum Game?

The last post talked about the World Justice Project Rule of Law Index. It focused, among other elements, upon the Index’s sub-factor 7.1, “people can access and afford civil justice.” The Rule of Law Index reveals an apparent paradox: some wealthy countries perform poorly with respect to this sub-factor, while at the same time some poor countries perform if not well then at least better than certain wealthy countries. An obvious example is the United States, which the Index classifies as a “high income” country, but which ranks 94th out of 113 countries with respect to accessible and affordable access to justice. A contrasting example is Kyrgyzstan, which the Index classifies as a “lower middle income” country, but which ranks 36th out of 113 countries for the same sub-factor. Consider also Hungary, which the Index classifies as a “high income” country, but which ranks 71st out of 113 countries, as compared to Malawi, classified as a “low income” country, but which ranks higher than Hungary at 66th.

The WJP emphasizes that its Rule of Law Index is not intended to establish causation. This task is left to others.

I recently came across research that steps up to that challenge. It shines a fascinating light on the paradox of the Index’s sub-factor 7.1. More specifically, it proposes a novel and highly intriguing explanation, at least in part, for why some wealthy countries struggle to assure access to justice for a significant proportion of their populations (namely their poor), while some poor countries succeed in providing access to justice for the large majority of their populations, regardless of a person’s wealth or income.

The research is a working paper by New York University PhD candidate Hannah Simpson, entitled “Access to Justice in Revenue-Seeking Legal Institutions.” In this paper, Simpson builds on the work of Marc Galanter, among others, and notably upon Galanter’s seminal work “Why the ‘Haves’ Come Out Ahead: Speculations on the Limits of Legal Change.” In this article, which was published in 1974 and is today one of the most cited law review articles of all-time, Galanter demonstrates how with respect to litigation in the United States, “repeat players,” and especially those that have the resources necessary to pursue long-term interests, have significant and in most cases decisive advantages over “one shotters,” and especially those of limited resources. Since the publication of Galanter’s article, legal scholars have viewed access fees combined with legal-institutional bias as key impediments to access to the court system in the United States and, more generally speaking, as key impediments to access to justice and to large-scale social change. (“Bias” meaning the degree to which a legal institution’s procedural requirements privilege attributes of the wealthy, like the need for and ability to hire a lawyer).

Simpson takes this vision further. She does this in two manners: (1) by examining the specific question of access fees, and, in particular, the use of a state’s legal system to generate revenue for the state, and (2) by expanding the examination to be global in scope. On the basis of her research, Simpson argues that, in any country, the state’s (that is, government’s) use of the legal system to generate revenue, interacting with other institutional and economic conditions, has a profound effect upon access to justice in that country, but that this effect is different depending upon whether the country is wealthy or poor, and, in wealthy countries, the effect is different for wealthy persons as compared to poor persons in the same country.

For Simpson, we have not paid enough attention to how states use their legal systems—which she refers to as their “property rights institutions”—to generate income. She cites as examples England and the United States, both of which have sought to fix court fees not with the intention to simply cover costs, but, instead, to take advantage of an “untapped increased willingness to pay more,” and with the intention of using the fees to fund other functions of government. Further, states’ “property rights institutions” generate income not only for courts, but also for “other segments of the state legal apparatus,” such as land and other property registrars and licensing agencies. Simpson notes diverse examples, such as India where property registration fees and stamp duties are the third largest source of income for many states, and France and Nigeria, where stamp duties are regularly raised to address revenue deficiencies.

In her paper Simpson seeks to answer this question: when a state uses its “property rights institutions” to generate revenue, what effect does it have both upon access to justice as well as upon competition from private legal services providers? Notably, what effect does it have when the state’s system is institutionally biased in favor of wealthy participants? She seeks to answer this question by developing a series of formal models that capture the interaction between “rights protecting institutions” and a population of citizens.

Wealthy Countries vs Poor

On the basis of Simpson’s models, the effect upon access to justice is as follows: in wealthy countries economic growth increases demand for access to the state’s legal system but decreases supply. This is because wealth and economic development in a wealthy country are liable to motivate the state to increase fees, on the grounds that the wealthy can and will pay them. However, those same fee increases are usually substantial enough to dissuade the poor from using the state’s system and thus there is an overall decrease in access to justice. The greater the “opportunities for commerce” (that is, economic growth) in the wealth country, the more this effect is compounded, Simpson observes. In contrast, in poor countries, economic growth increases not only demand for access to the state’s legal system but also supply. This is particularly the case when the state’s system is institutionally biased in favor of the wealthy, even though such a conclusion may appear counterintuitive. The explanation is that economic growth motivates elites to buy into an otherwise fragile and unappealing institutional framework. This participation increases the system’s effectiveness and thus its appeal, and also leads to reduced administrative costs, enabling the state to reduce its fees, thus increasing accessibility. Further, Simpson observes, the strength of this effect increases the more the state prioritizes the legal system as a revenue-generating mechanism (another counterintuitive observation).

Competition from a Private System

Also on the basis of Simpson’s models, the effect upon competition from private legal services providers (without distinguishing between informal or formal providers) is as follows: In either type of country (wealthy or poor), wealthy social groups are willing to pay hefty premiums for access to private legal institutions, whereas poor or disadvantaged groups will prefer private legal systems only if they are cheaper to access than the state’s. Indeed, poor/disadvantaged groups that have low access to state legal protections would, if offered a private group alternative, pay a premium to be able to continue to access the state’s system. The reason for this is the following: private legal institutions constructed by and for poor groups (examples include Sharia Councils, tribal elders, religious militias and even the mafia) face challenges in achieving the level of effectiveness of state legal institutions. More specifically with respect to private legal institutions constructed by and for poor groups, Simpson notes that that such institutions (or mechanisms) often lack substantial procedural protections, and rely instead upon cheap methods of enforcement, such as the use of violence and/or the use of volunteers that exert peer pressure. In contrast, private institutions constructed for a wealthy/advantaged group (examples include members of a particular industry) can easily exceed the state’s effectiveness, making it worthwhile for a member of the group to opt in even if the fees are higher.

Theoretically, competition from a private system should motivate the state to lower its fees. However, Simpson explains, this does not necessarily occur. To begin, Simpson explains, the wealthier an advantaged group, the higher the premium it is willing to pay to opt out of the state institution and into a private one. In other words, the state would need to develop a system that competes with the private one not on fees but on some other factor valued by the advantaged group. If the state were to succeed in this, then it would, likely, need to increase its administrative costs, and consequently its fees, rather than lower them. As for the state going in the other direction, and lowering its fees to the extent it can in order to attract less wealthy groups, Simpson argues that if the state is concerned with generating revenue, then it may find this to be more trouble than it is worth, especially if that less wealthy (but still wealthy enough to pay something) group is not large as compared to the rest of the population. Finally, there is a point below which the state cannot reduce its administrative costs and thus is simply unable to compete with private institutions constructed for poor groups. In those cases, Simpson explains, the state will simply cede to those private institutions. In sum, in situations where a state is able or obliged to compete with a private system, it doesn’t mean that it will necessarily choose to do so, or that it will make sense for it to do so, especially if the state prioritizes the generation of revenue over assuring wide access to justice.

Simpson continues: when any group, wealthy or poor, opts out of the state system in favor of a private one, the state system suffers in effectiveness. This is because the effectiveness of a state legal institution depends in large part upon the number of citizens that have recourse to it. This negative effect is compounded when the exit is by a poor group, because in that case the state will also raise fees. Thus, when a poor group exits the state system, the remaining population is unequivocally worse off because the state system becomes both less effective and more expensive. In contrast, the exit by a wealthy group presents a paradox: the remaining population theoretically could benefit from the wealthy group’s exit, but only under certain conditions: when there is lower economic growth (that is, there are fewer economic opportunities in society or returns on investment are not increasing) and when income inequality is increasing. (This is because these are the conditions under which the state is most likely to lower its fees in response to the exit of the wealthy group). However, Simpson explains, wealthy groups are not motivated to exit the state system in favor of a private one under those conditions; they are motivated to do so under the opposite conditions, that is, when there is higher economic growth (that is, there are greater economic opportunities in society or returns on investment are increasing) and when income inequality is decreasing. (This is because these are the conditions under which a wealthy group is more likely to benefit from participation in a private system rather than a public one, and the group is willing to pay a higher premium to do so). Thus, if a wealthy group is motivated to exit the state system in favor of a private one, its exit is unlikely to benefit the remaining population because the same conditions that motivate the wealthy group to exit the state system are the same conditions that discourage the state from lowering its fees.

This is a complex discussion with many moving parts. On top of that, Simpson’s research is new and, as yet, exists only in the form of an evolving working paper. As she moves past her preliminary work towards something more definitive, her argumentation and her conclusions will in all likelihood continue to evolve. Nevertheless, her work thus far is highly intriguing and it already merits attention.

A future post will consider what some of the important implications of Simpson’s research may be.

If you’d like to subscribe in order to receive notices of new posts, you can do so by scrolling to the bottom of this page — you’ll see the place in the bottom left corner. Thanks for subscribing!

Related posts on this site:

Chapter 27: Rules for a Flat World (or Regulatory Dystopia)

WJP Rule of Law Index: Rankings for Four Sub-Factors

You Asked For Research? You Got It! Now What Are You Going to Do With It?

Blog, World Justice Project Rule of Law Index

WJP Rule of Law Index: Rankings for Four Sub-Factors

Recently someone contacted me with questions about the World Justice Project Rule of Law Index. The questions were good ones, and they got me thinking that it’s a topic worth a blog post.

First, what is the World Justice Project (WJP)? It was created in 2006 as a presidential initiative of the American Bar Association (ABA). In 2009 it became an independent 501(c)(3) non-profit, with offices located in Washington, DC and Seattle, Washington. Former ABA President William Neukom is its CEO, and another former ABA President, William Hubbard, is its Chairman.

One of the principal activities of the WJP is the preparation of an annual (or nearly so) Rule of Law Index. The WJP’s website describes its Rule of Law Index as measuring “how the rule of law is experienced and perceived by the general public across the globe. It is the world’s leading source for original, independent data on the rule of law.”

The Index is prepared on the basis of polls of a country’s general population and of questionnaires submitted to in-country experts. The WJP’s process and criteria for assessing adherence to the rule of law have evolved since the organization’s founding. Today its process uses 47 indicators that are organized around nine wide-ranging themes, referred to as “factors:” constraints on government powers, absence of corruption, open government, fundamental rights, order and security, regulatory enforcement, civil justice, criminal justice, and informal justice. The 2009 Index assessed 35 countries; the 2016 Index (the most recent) assessed 113 countries.

The Index provides an overall score and ranking for each country based upon all of the factors, and also provides each country’s score for each specific sub-factor. Unfortunately, however, for most sub-factors the Index does not provide a ranking of each country by its score for that individual sub-factor. This is understandable in that it would make the already lengthy report unwieldy (the 2016 Index is already 209 pages plus a separate excel file) . At the same time, it is unfortunate as the sub-factor rankings reveal information about a country that is not evident on the basis of its overall score and rank.

Accessible and Affordable Civil Justice

Let’s take the United States, for example. In 2014, the United States’ overall rank (that is, based upon all sub-factors combined) was 19th out of 98 countries. In 2015, it again ranked 19th, this time out of 102 countries. In 2016 its overall ranking went up slightly, to 18th out of 113 countries. While those rankings are not stellar, they are respectable. But what if we dig deeper and look, most notably, at sub-factor 7.1: “people can access and afford civil justice?” This sub-factor appeared for the first time in the 2012-13 Index; that Index explains that this sub-factor combines what had previously been three different sub-factors, namely that: (i) people are aware of available civil remedies, (ii) people can access and afford legal advice and representation, and (iii) people can access and afford civil courts. In sum, the multi-component sub-factor 7.1 measures how easy (or difficult) it is for the average citizen of a country to assert and protect his/her rights and to understand his/her duties under civil (as opposed to criminal) law.

If we look at the rank of the United States specifically with respect to sub-factor 7.1, we see a very different picture as compared to the country’s overall ranking. With respect to this specific sub-factor, in both 2014 and 2015, the US ranked 65th. And in 2016 its ranking for this sub-factor plummeted to 94th. This ranking places the United States behind countries like Albania, Belarus, Bulgaria, Kazakhstan, Kyrgyzstan, Moldova, Myanmar, Russia, Venezuela and Zimbabwe. To be clear—this means that the persons living in those countries have better access to civil justice than Americans do. In most if not all aspects of their lives, they are better able to learn their rights and obligations, and better able to assure their rights and obligations are respected. Let’s repeat that list: Albania, Belarus, Bulgaria, Kazakhstan, Kyrgyzstan, Moldova, Myanmar, Russia, Venezuela and Zimbabwe all have better civil justice systems as compared to the United States.

This is not a respectable outcome. To the contrary, it is an unqualified disaster—for American citizens and for the country as a whole. Yet you’d never realize the full extent of this fundamental problem with the rule of law in the United States if you only considered the country’s overall score.

Freedom from Discrimination in Civil and Criminal Justice

Some of the other sub-factors also merit a closer look. Sub-factor 7.2 measures the extent to which a country’s “civil justice is free of discrimination.” With respect to this sub-factor, in 2014 the US ranked 69th of 99 countries, and in 2015 the US ranked 67th of 102 countries. In 2016, the US ranking also plummeted (albeit not as far as its rank for 7.1) falling to 84th of 113 countries. Some of the countries that rank higher than the US with respect to this sub-factor include Burkina Faso, Colombia, Romania, Sierra Leone, South Africa, and Uzbekistan. That means that the civil justice systems of those countries are less discriminatory than that of the United States.

Moving from civil to criminal justice, sub-factor 8.4 measures the extent to which a country’s “criminal system is impartial” and non-discriminatory. For this sub-factor, in 2012-13, the US ranked a low 76th out of 97 countries. In 2014, its rank jumped up to 47th out of 99 countries. However, in 2015 it fell again, to 64th out of 102 countries, and 2016 showed little improvement with a rank of 61st out of 113 countries. With respect to this sub-factor, the US ranks behind Albania, Belarus, Nigeria, Romania, South Africa, Ukraine and United Arab Emirates. That means that the criminal justice systems of those countries are less discriminatory than that of the United States.

Effective Guarantee of Labor Rights

A final sub-factor that merits attention is 4.8, which measures the extent to which a country’s “fundamental labor rights are effectively guaranteed.” The 2016 Index explains that this sub-factor includes the right to collective bargaining, the prohibition of forced and child labor, and the elimination of discrimination with respect to employment and occupation. For this sub-factor, in 2012-13 the US ranked 52nd out of 97 countries. In 2014 its rank shot up, to 32nd out of 99 countries, and its rank went higher still in 2015, to 28th out of 102 countries. However, in 2016 its rank for this sub-factor fell sharply, to 59th out of 113 countries. With respect to this sub-factor, the US ranks behind Côte d’Ivoire, Romania, Russia, Senegal, Ukraine and Uzbekistan. The US ranking behind Uzbekistan is particularly noteworthy given that the very government of Uzbekistan has implemented and strictly enforces over its own population a system of forced labor.

Download Rankings for Four Sub-Factors (All Countries Indexed)

Below you can view as well as download an excel file that contains the full rankings for these four sub-factors, from 2012-13 through 2016. The data in this excel file was obtained from the World Justice website “Current & Historical Data Download.” The file includes all the countries indexed by the WJP for the year in question. For ease of analysis and comparison, the file below highlights data for these five countries: United States, United Kingdom, Canada, Australia and France.

The next post will focus on sub-factor 7.1: “people can access and afford civil justice.” In particular, it will consider a newly proposed and highly intriguing explanation for why the United States as well as certain other wealthy countries face such challenges when it comes to accessible and affordable civil justice.

If you’d like to subscribe in order to receive notices of new posts, you can do so by scrolling to the bottom of this page — you’ll see the place in the bottom left corner. Thanks for subscribing!

Blog, Legal Education

Encouragement, Love and Professional Success

Recently I had the opportunity to speak with Kami Haeri, one of the authors of the Haeri Report (the other authors being Sophie Challan-Belval, Eleonore Hannezo and Bernard Lamon).

Our conversation covered a number of different areas: how the Haeri Report came about and why Haeri was selected to lead the commission that prepared it; what approach the commission decided to take in preparing the Report and why; how different members of the profession have received the Report; the challenges Haeri perceives with respect to the legal profession’s governing bodies in France; how legal education can be improved, the challenges new lawyers face when they begin their careers,…

Please don’t hesitate to consult the full redaction of our conversation here.

While Haeri made a number of very interesting and thought-provoking remarks, there is one that stood out for me in particular.

He said “If you gather five interns in your office, you will immediately see which ones have been encouraged and loved.” The way they will have been loved, he explains, is that they will have been encouraged to expand their knowledge, notably with recommended reading. Haeri threw out a couple of examples of what an adolescent could be encouraged to read: To Kill a Mockingbird and Camus’s L’Etranger. But I got the impression those were the first two things that came to his mind on the spot, and that had he taken the time to think further, he could have come up with a long list of works that, in his opinion, introduce new ideas to the reader and force the reader to think about the world in a different way.  Works that, in Haeri’s opinion, would be sufficiently challenging for an adolescent reader without being beyond their reach.

For Haeri, the fact that some new lawyers received this encouragement and love in childhood and some did not produces a “massive gap in equality” when they embark on their careers. This is because those who received it develop two characteristics essential to success as a lawyer: confidence in themselves as well as the ability to speak and behave in a manner that conveys this confidence. For Haeri, these characteristics are just as important as substantive knowledge of the law, if not even more important.

Haeri didn’t stop there. He explained that he thinks that legal education, if designed correctly, can help to close that gap. That is, he thinks that legal education can help the students who, as children, were not encouraged and loved in this manner to develop the soft skills that they need to succeed as lawyers. In particular, he proposes that a special continuing legal education program be developed and implemented—a program directed specifically to new lawyers just entering the profession. For each year in the six (or so) year program, the new lawyer would focus on the development of a specific soft skill.

And Haeri kept going. For Haeri, encouragement and love is needed not only during adolescence but also in early adulthood, and those who get it are, yet again, massively advantaged over those who do not. So, Haeri proposes that such a continuing legal education program would not only help new lawyers to develop the soft skills they need to succeed, but also be used to help them to understand how to forge their path in the profession. Specifically, it could be used to help new lawyers understand the career challenges they face and to make the right decisions to foster the successful development of their careers.

I found Haeri’s suggestions intriguing on a number of levels. Most intriguing is the direct link that Haeri makes between, on the one hand, parental (familial) support in the form of “encouragement and love” during childhood and, on the other hand, professional success as an adult.  For him, the link is so important, and effect is so profound, that when new lawyers arrive at his firm, he can immediately “see” which ones received such support and which ones did not.

Again, the full transcript of our conversation is available here.

If you’d like to subscribe in order to receive notices of new posts, you can do so by scrolling to the bottom of this page — you’ll see the place in the bottom left corner. Thanks for subscribing!

Related posts on this site:

France’s Haeri Report on the Future of the Legal Profession: Intro

France’s Haeri Report and Alternative Structures (1 of 2): Je t’aime un peu

France’s Haeri Report and Alternative Structures (2 of 2): Je t’aime, moi non plus