Open the Legal Marketplace (Perspective)

The American legal system is suffering a crisis of access.

Recently, the American Bar Association found that 92 percent of Americans facing a serious legal issue do not hire a lawyer. If 92 percent of Americans facing a serious health issue did not go to a doctor, there would be calamity, contagion, and death. Meanwhile, the World Justice Project’s 2015 Rule of Law Index ranks the US in the lowest quartile for “accessibility and affordability.” We are failing to provide justice for all — and failing badly.

One reason is the dizzying cost of legal help. A 2012 survey showed business clients paying an average rate of $370 per hour for a junior lawyer at a firm and $536 for a partner. Consumer data is harder to find, but the US Department of Justice 2015 fee award rates start at $255 an hour for a lawyer just out of law school.

These numbers confirm what we all know: routine legal advice is priced out of reach for all but the wealthiest among us. But there are other factors as well, which data suggest may be as or more important than the price. These include lack of accessibility, intimidation, and simply not knowing whom to trust.

How has our legal system fallen into this trap?

It’s not for lack of lawyers. Studies rank the US #1 or #2 in terms of lawyers per capita. We’re not even using the lawyers we already have: in recent years, up to a third of law school graduates have failed to find law related jobs within nine months of getting their JDs.

When pent-up demand fails to meet excess supply, simple economics says that the market is broken. And we know what broke it.

The structure of the legal services market creates a limited-access guild for dues-paying lawyers across the country. Yes, a guild. In most states, this guild approach restricts the provision of legal services to bar-qualified J.D. graduates, down to the legal equivalent of giving a flu shot.

The cost in time and dollars to earn a J.D is one factor forcing lawyers’ fees sky high. Graduating attorneys often carry tuition debt equivalent to buying a house. But there’s more to the story. The guild bans investment by non-lawyers in law firms, making technical and managerial know-how hard to implement, and keeping efficiency low. The guild has restricted advertising, and put in place unauthorized practice rules that criminalize competition from non-lawyers — or even from lawyers practicing in states where they are not members of the local branch.

All this is done in the name of public policy, but conveniently serves to insulate the status quo.

To borrow from the language of computer programmers, the crisis we face isn’t a bug, it’s a feature. It is the outcome of a protectionist system functioning exactly as designed.

Don’t get us wrong — we aren’t against lawyers. We are both admitted to practice, and one of us makes a living as a teacher of J.D. candidates. We think the skill and expertise of the traditional attorney is the cornerstone of a functioning legal system.

But we also think that we need to throw open the legal service market to create new delivery systems to stand alongside what lawyers do. A more open market would produce a number of options.

Some may look like online legal services companies. Some may look like the Limited License Legal Technicians that Washington State has authorized to give help in specific fields like divorce and child custody. After only two years of training. That can take place at a certified community college. Developments like this will give people the benefits of law in their everyday lives at prices they can afford.

Will quality suffer? History suggests otherwise. Nurse practitioners did not diminish the quality of medical care. Permitting non-lawyers to play an appropriate part encourages scale, which in turn allows for the development of expertise and the deployment of technology to improve outcomes and lower costs. The expanding market for legal services will provide jobs for unemployed lawyers now kept on the sidelines, as the expanding market requires their help.

Oversight will be welcomed by responsible players, because it creates trust with the public. Market forces will also help keep quality high, particularly in the current environment, where social media can do so much to tarnish a national brand.

What’s clear is that the guild is not going to change on its own. Help has to come from outside the guild. This is starting: State bars’ monopoly has been called into question by a recent US Supreme Court decision, which we applaud. And it will be a step towards realizing the ideal engraved in stone on the front of the United States Supreme Court: EQUAL JUSTICE UNDER LAW.