ABA Takes Symbolic Vote To Reaffirm Its Resistance to Innovation—And Its Dwindling Relevance

by Tom Gordon

On August 9, the American Bar Association House of Delegates voted unanimously to adopt Resolution 402, which reaffirms the ABA's opposition to lawyers sharing fees with non-lawyers. The practical effect of this measure is zero, but it provides further evidence of the obstinance of a lawyer cartel that sees self-regulation as a way to maintain a market advantage rather than changing to meet consumers' needs.

In nearly every other service industry, service providers have made their services more affordable and more widely-accessible by joining with others who can provide ideas and capital to create new, innovative, scalable business models. As a result, consumers can get services ranging from tax help to medical services to child and elder care through national platforms that not only make services more affordable, but also ensure quality of service through internal controls and customer feedback.

In law, though, innovation and outside perspectives have often been seen as a threat. Utah and Arizona have loosened their restrictions on lawyer fee-sharing, and we're beginning to see the benefits to consumers, with dozens of innovative providers offering their services (and almost no reports of consumer harm). However, the rest of the country hasn't yet followed suit, so there's still no H&R Block or Care.com of law firms. 

The ABA is a trade association, not a regulatory body, so its pronouncements don't change the rules governing the legal industry. And this resolution merely reaffirms previous resolutions by the ABA opposing fee-sharing, so the ABA isn't staking out a new position. It merely continues to claim, without evidence, that shared ownership of law firms with non-lawyers is a threat to consumers. Essentially, the argument is that only lawyers are ethical enough to put clients above profits as the owners of law firms, yet these ethical lawyers would throw their clients under the bus at the request of non-lawyer owners.

The more significant aspect of the ABA's vote is the insight it provides into the mind of the lawyer cartel. The ABA is not a representative sample of lawyers. With annual dues of up to $450, it skews heavily toward lawyers from large firms. Those who are underemployed, or struggling to maintain a small or solo practice are less likely to be members, and are certainly less likely to dedicate the time necessary to being a member of the House of Delegates. In short, the ABA is the rearguard, not the vanguard of innovation in the legal industry.

But these hidebound traditionalists are also dedicated to preserving the status quo in the legal industry. They feel threatened by the idea that someone might provide legal services in a more effective way than they've been doing for decades. Why else would they take a vote to approve a resolution that reaffirms previous resolutions expressing the sentiment that nothing about how legal services are provided needs to change, despite the public's overwhelming need for better legal solutions? ABA membership used to include half of all American lawyers; that number is now fewer than one in seven. Lawyers who want to create new ways to serve the public are busy doing so, while the ABA caters to a dwindling minority who prefer to sit in conference rooms and pass resolutions about how dreadful it is that the world around them is changing.