California ATILS Task Force Comments: Are Lawyers More Ethical Than Babysitters?

by Tom Gordon

Responsive Law has submitted comments to the California Task Force on Access Through Innovation in Legal Services (ATILS) in response to its proposed reforms to regulation of legal services in the state.
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Overall, we like the task force’s proposal. It does a good job of balancing the potential for increased access to legal services against the potential for consumer harm. Additionally, it looks at regulation as something that needs to address specific potential harms, rather than taking regulations that were created decades ago to govern potential misconduct by lawyers and treating the regulation itself as the principle to be preserved, rather than looking at the reason behind the regulation and seeing whether it is still the best way to address a particular regulatory objective.

Our comments focused on three areas:

(1) Reform of UPL laws to allow consumers to get legal help from either online software or professionals without law licenses. Individuals with limited .licenses can be helpful, but are not a scalable solution to the large number of replicable problems and solutions. Bridging that gap will require automated solutions such as legal self-help software. The safe harbor against UPL proposed by the task force can help broaden consumer options in this market, if it doesn't evolve from a safe harbor into a standard that online services must comply with.

(2) Streamlining of advertising rules. The task force recommends making California’s advertising rules conform to the recent ABA changes. We’d like to have them go a step further and scrap everything except the prohibition on false and misleading statements. That's all that consumers need to protect them from misinformation. Everything else, to the extent it’s relevant, could be relegated to commentary. 

(3) Removing the ban on lawyers sharing fees with partners or investors. The task force proposed two alternative reforms to Rule 5.4. One would allow a very limited sharing of fees between layers and active participants in a law-related business. This would make, at most, a marginal difference in the availability of legal help. We prefer the task force's second alternative, which would allow all fee-sharing, subject to disclosure to clients a requirement that "there is no interference with the lawyer’s independent professional judgment or with the lawyer-client relationship."

True mass-market consumer law firms will need to be supported by outside investment or they won’t be able to achieve the scale needed to provide affordable services. Allowing outside investment in companies that provide legal services (which may not look like traditional law firms) is a necessary—although not sufficient—condition for increased access to legal help.

Also, the burden of proof with regard to this rule should be on those who defend keeping an ossified regulation that does little to protect the people it claims to protect. Most of what Rule 5.4 is intended to accomplish is accomplished through other parts of the rules, including requirements that lawyers put the interests of their clients above their own interests or those of their firm.

At a hearing on this proposal that the task force held last month, I pointed out that my wife and I left our then-18-month-old daughter in the care of a babysitter we found online through a website that acts as a clearinghouse for caregivers. It's likely that the website had an arrangement with its babysitters where they took a percentage of the babysitting fees they were paid. However, my wife and I did not worry for one second that our babysitter was going to put the company's interests ahead of those of our toddler.

Why, then, are lawyers so concerned about "protecting" the public against the harms of fee-sharing? If I can trust my child's welfare to a babysitter who shares fees, why can't I trust a lawyer who shares fees to review a lease? Are lawyers concerned that a corporation might persuade them to act against a client's best interests, despite rules of ethics prohibiting them from doing so, and despite their own moral compass? If so, then they've bought into the worst stereotypes of lawyers. I'd still like to believe that lawyers will treat their customers at least as well as a teenager making $15 an hour treats hers.

Tom Gordon is Executive Director of Responsive Law

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