Ch 21 Abdication of Regulatory Power

Endless Objections and Calls for Evidence and the Lawyer Monopoly on Legal Services(Or, Having Your Cake and Eating It, Too)

If the laws of the United States accord to the legal profession the exclusive privilege to serve the entire market, shouldn’t the counterpart to that exclusive privilege be the corresponding obligation to serve the entire market? If it is the legal profession — and the legal profession only — that has the right, by law, to serve the legal services market, then shouldn’t the legal profession have the obligation, by law, to develop and implement solutions that do effectively serve the entire market?

Alternative structures are controversial, if not highly controversial. Much has been said and written about them and, no doubt, much more will be. Many objections have been raised and many calls for evidence have been made. With each response, a new objection is raised or a new call for evidence is made. Part I of this book addresses the more commonly raised objections and calls for evidence, but there are a great many more.

Here are some of the additional objections:

  • “It is not clear how the implementation of ABS, by themselves, would contribute to enhancements in technology.”[1]
  • “Systems for checking conflicts would necessarily have to become much more complex.”[2]
  • “Different providers of professional services (which presumably, under an ABS model, could provide services under the same roof) will have different professional codes of conduct, and these may be in conflict with one another — including provisions in different professional codes relating to privilege.”[3]
  • “[I]magine someone who has diverted a lot of cash from his business and is looking for a quick way to clear it up. Buy a law firm and run it through the trust account. Works like a charm, and who thinks … regulators will catch it.”[4]
  • “[ABS does not] result in a better quality of service…In the UK, professionalism of the bar has remained steady since 2011. In contrast, in Illinois disciplinary charges are decreasing and formal disciplinary complaints are at an all-time low.”[5]
  • “The nonlawyer investment ownership and management reforms adopted by our common law cousins were put into place many years ago. Given the quick pace of technological change those reforms […] may simply no longer be applicable or appropriate for the current American experience.”[6]
  • “ABS structures could erode reputational incentives that exist today to encourage lawyers to perform their best work.”[7]
  • “[L]awyers [would become] salaried employees of legal services corporations, lawyers would become mere revenue producing units for outside business owners. On balance, we believe fewer lawyers would prefer that system over the current system.”[8]
  • “ABS could result in a widening gap in income among top tier lawyers and the rest of the profession. … the lawyer “middle class” would shrink.”[9]
  • “Nonlawyer ownership would have allowed Enron.”[10]
  • “Maurice Blackburn, [one of] Australia’s three largest personal injury firms…has not gone public. Because Maurice Blackburn has been able to scale and grow the firm without going public, a comparison of this firm to [Slater and Gordon and Shine] may cast doubt on whether outside ownership is necessary to achieve economies of scale.”[11]
  • “Investment by non-lawyers may allow firms to scale and grow their brand and increase advertising funding, to better allow customers to comfortably rely on brands when trying to seek a legal service provider…However, in reality, the attachment of a brand name to a product is a tenuous guarantee of its quality.”[12]
  • “Well-known companies which own legal service providers may be less likely to offer legal services to publicly unpopular clients out of fear of harming their brand.”[13]
  • [There has been] a dramatic increase in marketing by personal injury lawyers…For the most part, this advertising in in very poor taste. In an ABS world, the amount of advertising by personal injury firms would likely increase…Skillful marketing by financial backers of unskilled lawyers will result in uninformed consumers not getting proper representation.[14]
  • “[We] are concerned about the disappearance of lawyers who provide complex, non-commoditizable services like criminal and family law with no solution for replacing access to justice in these areas, especially for low to middle income clients.”[15]
  • “[A]ny growth of unregulated legal services does not necessarily imply that existing regulatory restrictions are unduly constraining innovation, but could indicate instead that the public is being sold services with little or no value albeit at low costs.”[16]
  • “ABS advances in technology are overstated.”[17]
  • “Many [bar] associations depend on revenue from [continuing legal education (“CLE”)] programs to ensure their financial existence. With firms like Slater and Gordon offering internal [CLE] courses to their staff, without charge, there is no reason for their staff to register and pay for outside [CLE] programs and courses, thus significantly reducing the overall revenue to local [bar] associations.”[18]
  • “ABS entities…may include disbarred lawyers, licensees who have had their licenses revoked or even candidates who petitioned for a license and were refused due to bad character or other issues.”[19]
  • “[T]here is an inherent risk that by introducing non licensed shareholders into the equation, women paralegals will continue to endure more systemic barriers as there is no guarantee that ABS entities will view diversity and equity on the boards as a must.”[20]
  • “[T]here may be other regulated possibilities worth exploring.”[21]
  • “ABS would … take so much money out of the public that the public would have that much less to devote to charitable endeavours.”[22]
  • “[S]everal of the large ABS entities in England have suffered badly and have lost millions and millions of pounds.”[23]
  • “ABS is mostly a smoke-screen to avoid doing anything about the time and cost of litigation.”[24]
  • “Would anyone like our most prestigious firms, or the bulk of our mid to small firms… to be owned by Arthur Andersen, AIG, Enron, WorldCom, Societe Generale, Royal Bank of Scotland, Lehman Brothers, Bear Stearns, Volkswagen, Barker Trust, Barlow Clowes, Phar-Mor, Bernie Madoff, Allan Stanford, Tyco International, Health South, Swissair, Baninter, HIH Insurance, Polly Peck, Barings Bank, Bank of Credit and Commerce, Nordbanken, Carrian Group, Bre-X, Equitable Life Assurance, Pacific Gas & Electric, One.Tel, Adelphia, Parmalat, Nortel, Dynergy, Banco Espirito, Union Carbide, and future versions of Medici Bank and the South Sea Company? … What about being owned by divisions of arms manufacturers, drug cartels looking to launder money, immigration fraud companies? Russian carpetbaggers with close ties to global destabilization efforts? Companies ostensibly independent but really controlled by foreign communist or totalitarian regimes looking for an in? … How would you like to be a lawyer on the payroll of those entities and then try to get a job when they are exposed for what they are? How do you wash that taint off?”[25]
  • “We are so proud that the American legal system, while flawed, is the best in the world… We are DIFFERENT for a reason that we should be proud of and embrace. Our system should not look backwards to what other, more flawed, legal systems have had to become. They should be more like us and not us like them.”[26]

And here are some of the additional calls for evidence:

  • “[C]omparisons [to the use of ABS in foreign countries] are of extremely limited utility, in the absence of comprehensive data concerning how the legal systems of those countries operate… in countries such as the UK and Australia, the distinction between barristers and solicitors is still maintained…European countries employ a civil law system, dramatically different from the common law heritage of the United States. The point is that what works well and is beneficial in the context of one society may not be productive at all in the context of another. Further study, or at least further explanation, is needed before attempting to justify an ABS on the basis of its existence in other countries.”[27]
  • “ABS proponents also need to show that ABS structures can work in the regulatory regime we have, not just in the very different regulatory regimes of other common law jurisdictions (if indeed ABS works even in those jurisdictions — a question it is too early to answer).”[28]
  • “There is currently little evidence supporting the conclusion that ABSs are having a transformative effect on the delivery of legal services in the United Kingdom.”[29]
  • “[T]here has been no showing that firms cannot achieve their goals of providing seamless law-related services to clients (if that is what they want to do) by forming ancillary entities as is presently permitted.”[30]
  • “[T]here is not enough empirical evidence available from the jurisdictions in which ABS is permitted (namely Australia and UK), to endorse permitting ABS… Until empirical evidence on the benefits of ABS to access to justice and the market as a whole is available and has been fully and critically reviewed … the introduction of ABS on any level would be premature and, therefore, ill‐advised.”[31]
  • “[M]ore discussion is needed about the true impact for the unemployed licensee before preference is given to non-licensees.”[32]
  • “[T]he deliberations need to remain focused on who will stand to lose the most as opposed to who will gain from ABS.”[33]
  • “[The] impact ABS will have on access to justice in both rural communities and urban communities [should be examined] before concluding that alternative business structures are appropriate.”[34]
  • “What evidence is there to show that ABS has had no negative impact — professional or business on the bar and, in particular, on soles and smalls in Australia and England?.. [We] should be cautious and only proceed once a strong empirical case can be made and only once the practicing bar fully appreciates the impacts to the profession and their business model.”[35]
  • “[C]hanges to the regulation of the legal profession made primarily for the purpose of enhancing access to justice should only be made on the basis of unequivocal evidence of successes from other jurisdictions, and not on theoretical arguments or assertions that ABS will enhance access to justice…[There should be] unequivocal empirical evidence compiled over a significant period of time of substantial net benefit to the public.”[36]
  • “[T]here is a lack of data on the impact of [ABS] on equity and diversity in the legal profession and on access to justice.”[37]
  • “To the extent that proponents of ABS predict benefits from economies of scale in the delivery of service, it is important to determine whether, and to what extent, these require changes to the regulatory framework.”[38]
  • “The decision we face in regards to non-lawyer ownership of law firms will have far reaching consequences that will affect/effect the rule of law, and the very foundation of our government; therefore this issue should be reviewed and discussed exhaustively…There must be a philosophic line of inquiry to accompany the soft science research… To discuss this matter philosophically will help us identify where we want to go as a profession and, ultimately, as a country…We should commission an in-depth study by comparative law scholars and attorneys who practice internationally in order to compare the legal culture, legal structures, and constitutional structures of [the jurisdictions outside the US] to our own.”[39]
  • “There is an absence of empirical data showing savings to consumers of legal services… [T]here are segments in the legal system that have particular access concerns, especially in the family law context [yet] no evidence has been brought forward to show how these access concerns will be effectively addressed and reduced through ABS.”[40]
  • “Proponents of ABS who argue that it offers technological benefits that are unavailable to traditional law firms have thus far fallen woefully short in producing any evidence in support of such claims.”[41]
  • “There is, quite simply, a lack of any empirical evidence that shows:
  1. Why ABS was introduced in the UK and Australia;
  2. Whether the problems sought to be solved in other jurisdictions correlate in any way to the legal landscape in Ontario;
  3. Whether the introduction of ABS has in fact solved the problems it presumably sought to resolve in the UK and Australia;
  4. Whether there has been significantly improved access to justice (particularly in areas of practice where access to justice is a concern);
  5. Whether core values such as avoiding conflicts of interest and the independence of counsel have been compromised to any extent with the introduction of ABS;
  6. Whether the regulatory bodies in the UK and Australia have been effective in dealing with ABS‐related issues as they arise (which includes an examination of the structure of the regulatory bodies and complaints reporting systems); and
  7. What the overall impact has been for the profession and the public interest since the introduction of ABS in jurisdictions where it has been adopted.”[42]

These examples show that there a great many objections that can be raised and calls for evidence that can be made in relation to alternative structures. They are infinite in number and limited only by imagination.

Under the rules of 50 states, only licensed lawyers may provide legal services. As a result of this restriction, licensed lawyers, and the traditional law firm structures in which they practice, hold a monopoly on the provision of legal services. No other person, and no other type of structure — and notably not a multidisciplinary practice or a structure owned in whole or in part by a nonlawyer — may offer legal services without the risk of running afoul of unauthorized practice of law (UPL) and fee sharing rules.[43] (There are two exceptions: since 1990 Washington DC has permitted a limited form of nonlawyer ownership, and in 2015 Washington State began licensing “Limited License Legal Technicians.” These are individuals — not organizations — who are licensed to provide legal advice and assistance in specified areas of the law without the supervision of a lawyer).

Certainly, the full scope of the monopoly is difficult to describe.[44] Further, nonlawyers and non-traditional structures have attempted to chip away at the monopoly, such that some have described the role of the legal profession as having become “a subset of a larger industry that is increasingly populated by nonlawyers, technologists and entrepreneurs.”[45] Others make what is essentially the same observation but from a different perspective — they say, for example, that “legal services to big companies are…already de facto deregulated.”[46]

To be sure, UPL rules have not succeeded in keeping all nonlawyers and all non-traditional structures out of the market — companies like RocketLawyer, LegalZoom, Axiom, Shake and Modria are proof of that. But UPL and fee sharing rules have succeeded in keeping a great many out. As Gillian Hadfield observed: “There are many things that U.S. companies cannot do, and the fact that there is a little going on at the margins does not come close to what could be done if the restrictions were not there.”[47]

Much has been written and said, on the one hand to defend UPL rules (lawyers, by reason of their legal education and training, are more effective and more ethical than nonlawyers) and on the other hand to oppose them (in certain if not many situations, nonlawyers and/or nontraditional structures can provide services of adequate quality and entirely ethically, and thus make legal services available to a greater number of people who otherwise would be forced to go without them altogether).[48]

Without minimizing the importance of that debate, UPL restrictions raise a second and equally important issue: The laws in place in the United States today allocate the entire legal services market to the legal profession — to the legal profession only — and those laws (more or less successfully) support bar associations and other groups of lawyers when they attempt to keep nonlawyers and nontraditional structures out of the market.

Yet, those same laws do not require the legal profession to meet the needs of the entire market. Indeed, when in 2013 the New York Court of Appeals adopted a rule requiring New York attorneys not to provide any minimum amount of pro bono service, but simply to report the number of hours they do spend on pro bono work (as well as any financial contributions they make to organizations that provide legal services to the poor and underserved), the New York State Bar Association (NYSBA) strongly objected. In a letter to the Chief Judge of the State of New York, David Schraver, the President of the NYSBA and a partner at Nixon Peabody in Rochester, wrote that “the provision of legal services to the poor is a public responsibility” and that the reporting requirement was “an invasion of privacy.”[49] In 2015 the rule was scaled back to require only anonymous reporting.[50]

If Schraver is correct in saying that “the provision of legal services to the poor is a public responsibility,” then isn’t the effect of the monopoly to severely limit the public’s room for maneuver in meeting its responsibility? Doesn’t the monopoly essentially mean that the only way “the public” can meet its responsibility is to provide money to pay lawyers to provide legal services to the poor? That the public will not be permitted any other means to meet its responsibility?

Further, if “the provision of legal services to the poor is a public responsibility,” why isn’t the provision of legal services to the middle class and to the rich also a public responsibility? If Schraver is drawing a line in order to allocate what is the responsibility of the legal profession as opposed to what is the responsibility of the “public,” why does he draw the line at “legal services to the poor”?

If the laws of the United States accord to the legal profession the exclusive privilege to serve the entire market, shouldn’t the counterpart to that exclusive privilege be the corresponding obligation to serve the entire market? If it is the legal profession — and the legal profession only — that has the right, by law, to serve the legal services market, then shouldn’t the legal profession have the obligation, by law, to develop and implement solutions that do effectively serve the entire market?  Beverley McLachlin, the Chief Justice of the Supreme Court of Canada, has stated it in this manner: “If you’re the only one who can provide a fundamental social need from which you benefit, I think it follows that you have to provide it.”[51]

If the United States is not willing to change its laws, either at the federal or state level, in order to oblige the legal profession to serve the needs of the legal service market in its entirety, then doesn’t the United States have the obligation to change its laws in order to open the market to others — including nonlawyers and alternative structures? As discussed in Part III, one of the many objections made to alternative structures is that there is no proof they will increase access to justice. But why should such proof be required? If the provision of legal services to the poor is a public responsibility, shouldn’t members of the public be allowed to try to provide them, even if they may fail? Isn’t this all the more true in light of the examples of Australia and England and Wales — which demonstrate, each with its own example, how nonlawyers and non-traditional structures can play a greater role in the delivery of legal services safely — without the dire consequences to ethical standards that so many have predicted?

Viewed from this context, all of the arguments made in opposition to alternative structures and all of the calls for greater evidence lose their relevance. The bottom line is that there is a massive unmet need for legal services in the United States — a need that some consider a human rights crisis. By law, the members of the legal profession are the only persons who are allowed to meet this need. Yet, the legal profession does not have the means to meet it, and, speaking through its bar associations, it rejects that it has the obligation to do so. At the same time, the Government of the United States is obliged under international treaties “to provide effective remedies to rights violations,” “to guarantee equal treatment before the tribunals and other organs administering justice,” and “to protect against discrimination and provide equal protection under the law.” And under the Agenda for Sustainable Development, the United States has committed to “ensur[ing] equal access to justice for all,” as well as to “develop[ing] effective, accountable and transparent institutions at all levels” that are needed for that purpose.

In this context, what continues to justify the lawyer monopoly on legal services in the US?

Ending the lawyer monopoly on legal services will not, by itself, solve the access to justice problem in its entirety, but it is an important and necessary element. And it will certainly be cheaper than spending an additional $46.3 billion per year on legal aid not to mention more realistic than expecting (let alone requiring) the 1.2 million lawyers of the US to increase their average number of pro bono hours to 900 per year.


[1] The Advocates’ Society, Letter to the Law Society of Upper Canada’s Working Group on Alternative Business Structures, December 19, 2014, 2,’%20Society.pdf.

[2] Ibid.

[3] Ibid., 3.

[4] Nicholas E. Gehl, Letter to the Law Society of Upper Canada’s Working Group on Alternative Business Structures, December 9, 2014, 2,,%20Nicholas.pdf.

[5] Illinois State Bar Association, “Issues Paper Regarding Alternative Business Structures: Request for Comments,” 3.

[6] Ibid., 4.

[7] International Association of Defense Counsel, “ABA Commission on the Future of Legal Services – Alternative Business Structures,” 1.

[8] Ibid., 2.

[9] Ross, Letter to Katy Englehart, 2.

[10] Richard M. Leslie, “Nonlawyer Ownership of Law Firms,” May 1, 2016,

[11] McLeish Orlando, “Submissions Regarding the Implementation of Alternative Business Structures in Ontario,” December 17, 2014, 4,

[12] Ibid., 5-6.

[13] Ibid., 14.

[14] Ibid., 15-16.

[15] Ontario Bar Association, “Alternative Business Structures,” 8.

[16] Ibid.

[17] Ontario Trial Lawyers Association, “Submission on Alternative Business Structures,” 1.

[18] Ibid., 19.

[19] Women’s Paralegal Association of Ontario, Letter to the Law Society of Upper Canada’s Working Group on Alternative Business Structures, January 30, 2015, 2-3,

[20] Ibid., 3.

[21] Ibid.

[22] Bradley Wright, December 30, 2014 (6:28 pm), comment on Mitch Kowalski, “Anti-ABS Arguments Continue to Be Based on Emotion.”

[23] Ibid.

[24] Bradley Wright, January 2nd, 2015 (4:45 pm), comment on Mitch Kowalski, “Anti-ABS Arguments Continue to Be Based on Emotion.”

[25] Bradley Wright, January 20, 2016 (8:00 pm), comment on Karen Dyck, “Innovating Regulation on the Prairies,” Slaw, January 20, 2016,

[26] Laura Bellegie Sharp, “Comments Regarding the Alternative Business Solutions Issues Paper,” April 28, 2016, 2,

[27] J. Richard Caldwell, Jr., “Report on ‘Alternative Business Structures,’” April 29, 2016,

[28] New York State Bar Association, “New York State Bar Association’s Comments,” 7.

[29] Perlman, “Towards the Law,” 85.

[30]Richmond, “Discussion Paper on Alternative Law Practice Structures,” 3.

[31] Ontario Trial Lawyers Association, “Submission on Alternative Business Structures,” 1-2.

[32] Lorne Berndt et al., 2.

[33] Ibid., 3.

[34] ABA Standing Committee on Legal Aid & Indigent Defendants, “Comments on Issues Paper on Alternative Business Structures,” May 5, 2016,

[35] The County & District Law Presidents’ Association, “CDLPA’s Response to the Discussion Paper on Alternative Business Structures: The Voice of the Practising Lawyer in Ontario,” n.d., 14,’%20Association%20(CDLPA).pdf.

[36] Thunder Bay Law Association, “Submission to the Law Society of Upper Canada’s Working Group on Alternative Business Structures,” February 18, 2015, 1,

[37] Equity Advisory Group Working Group on Alternative Business Structures, Memo to the Law Society of Upper Canada’s Working Group on Alternative Business Structures, January 21, 2015, 2,

[38] Ontario Bar Association, “Alternative Business Structures,” 8.

[39] William M. Leech, “Comment: Issues Paper Regarding Alternative Business Structures April 8, 2016,” May 2, 2016,

[40] Ontario Trial Lawyers Association, “Submission on Alternative Business Structures,” 1, 9.

[41] Ibid., 17.

[42] Ibid., 35.

[43] See generally Derek A. Denckla, “Nonlawyers and the Unauthorized Practice of Law: An Overview of the Legal and Ethical Parameters,” Fordham Law Review 67 (1999): 2581-2599, See also Hadfield, “Innovating to Improve Access,” 3-4.

[44] Laurel S. Terry, “Putting the Legal Profession’s Monopoly on the Practice of Law in a Global Context,” Fordham Law Review 82 (2014): 2907,

[45] William D. Henderson, “A Blueprint for Change,” Pepperdine Law Review 40 (2013): 461-507, 462,

[46] Michael Mills, “The Future of Legal Services: The American Bar Association Commission,” Neota Logic Blog, April 13, 2015,

[47] Laura Snyder, “Does the UK Know Something We Don’t About Alternative Business Structures?,” ABA Journal, January 1, 2015,

[48] See, for example, W. Bradley Wendel, “The Profession’s Monopoly and Its Core Values” (Forward to “Colloquium: The Legal Profession’s Monopoly on the Practice of Law”), Fordham Law Review 82 (2014): 2563- 2585,; Deborah L. Rhode and Lucy Buford Ricca, “Protecting the Profession or the Public? Rethinking Unauthorized-Practice Enforcement,” Fordham Law Review 82 (2014): 2587-2610,; Laurel A. Rigertas, “The Legal Profession’s Monopoly: Failing to Protect Consumers,” Fordham Law Review 82 (2014): 2683-2703,

[49] David M. Schraver, “Mandatory Reporting of Pro Bono Service and Contributions,” 1.

[50] “Pro Bono Reporting Requirements – Attorney Registration,” New York State Unified Court System, last modified May 4, 2015,

[51] Kirk Makin, “Access to Justice Becoming a Privilege of the Rich, Judge Warns,” The Globe and Mail, February 10, 2011,


Leave a Reply

Your email address will not be published. Required fields are marked *