Committee to Improve the Delivery of Legal Services looks at testing regulatory reforms
Setting up a process to experiment with rules that allow new ways for lawyers to practice and improve access to justice is a way to get hard data on how the lawyers can meet modern challenges.
Three states — Utah, Arizona, and California — are considering or implementing that approach, which is also called the “regulatory sandbox.” On August 25, the Bar’s Special Committee to Improve the Delivery of Legal Services heard from Andrew Arruda, a Canadian lawyer who now lives in the U.S. and works on legal-related technology and was a member of the California committee that looked at modernizing regulations there.
Arruda also works with ROSS Intelligence, an artificial intelligence powered legal research service that is part of the Bar’s Member Benefits Program. He presented the seven recommendations from the California study and talked about the importance of getting public feedback, although he spent much of his time talking about the regulatory sandbox.
“With the sandbox approach, you kind of skip through a lot of the harsh debate [about practice reforms],” Arruda said. “You end up moving to a place where you start tracking data….
“The idea of a regulatory sandbox is to put a wall around [a rule change or new program], suspending our current regulatory scheme in some ways…and say, ‘Hey, we’re going to allow individuals and entities into this program that are going to deliver aspects of legal services that outside of the sandbox would be considered the unlicensed practice of law or would be against our current rules.’ Then you track the [experimental] rules in terms of what is the quality of the services that were delivered.”
It also has the advantage that it allows “the ability to rip the plug from any initiative you think is harmful,” Arruda said, as well as providing hard data.
“We [in California] are asking to create an environment where we can track the data and see and start to study some of the assumptions we made 100 plus years ago when we put some of these regulatory schemes in place,” he said. “We are asking for a sandbox to get the data to prove both sides right or wrong…. This is about getting to the best system for the public.”
It also addresses the Catch-22 of trying new programs, he said, where needed changes are stymied by fears that untried solutions may cause harm.
In response to a question, Arruda said anti-competitive concerns can be addressed by allowing any interested firm to participate in a regulatory sandbox experimental effort, and investments can be protected by allowing those who comply with the provisional rules to continue as long as they are not causing harm, even if the overall program is terminated.
One project that might be tried in such a legal laboratory environment, he said, would be to allow lawyers to partner with nonlawyers in a multidisciplinary firm where the nonlawyer partners invest sweat equity in the startup in exchange for an eventual share of the profits. Another would be allowing paralegals or other paraprofessionals to offer limited legal services to low- and middle-income consumers where few if any lawyers are now filling that need.
One finding from California, he said, is lawyers objected to new ideas on the grounds they wouldn’t protect consumers, while surveys showed consumers favored the ideas.
“It’s hard for us to say we need to protect the public when the public says, ‘I can’t afford these services,’” Arruda said.
Other recommendations from the California effort, called the Task Force on Access Through Innovation of Legal Services, include:
• Amending a bar rule to allow lawyers to share fees with nonprofit organizations such as legal aid offices.
• Amend bar rules to, like Florida Bar rules already do, require that lawyers’ duty of competence includes knowledge of relevant technology.
• Take public comment on a new rule on the “delivery of law related services provided by lawyers and businesses owned or affiliated with lawyers.”
• Consider allowing certain nonlawyers, such as paralegals, to offer limited legal services.
• Examine lawyer referral service rules to ensure they balance access and public protections, including allowing such innovations as automated referrals and online matching services if they are in the public interest.
• Review advertising and solicitation rules in light of recent recommendations from the ABA in its Model Rules of Professional Conduct. Arruda said ad rules need to encourage telling people about a broad range of rights, while much advertising now focuses on personal injury matters. “In particular, a lot of what is happening with the move to online delivery of services and we need to figure out how to best have advertising rules fit with the way people are getting access to services,” Arruda said.
The complete California report, along with those from Utah and Arizona, can be found on the committee’s webpage.
The next committee meeting is October 7 during the Bar’s online Fall Meeting.