Written by Tom Gordon
A member of the North Carolina Senate has introduced a bill that would promote the delivery of innovative legal services. Senate Bill 254 would allow non-lawyers to own a minority stake in law firms. As we mentioned in our previous post, outside investment in law firms could provide them the capital they need to innovate and find ways to serve consumers better. Some lawyers have claimed that non-lawyer ownership could compromise their ethical duties to their clients or to the courts. However, the bill would protect consumers by warning non-lawyer owners that duties between shareholders do not trump duties to clients. If passed, the bill would be a first step toward helping the legal profession join the rest of the economy in providing integrated and innovative services. We urge the North Carolina legislature to pass SB 254 and encourage other states to introduce similar legislation. Tom Gordon is Executive Director of Responsive Law.
0 Comments
A recent survey found that 60 percent of British consumers would consider buying legal services from a nationally known brand such as Barclays or Virgin. Although we know of no comparable study for American consumers, we expect that their preferences would be similar. Unfortunately, legal ethics rules prevent non-lawyers from having an ownership interest in a law firm, preventing national brands from taking root in the US. This prohibition is unfortunate, not because large non-lawyer corporations would necessarily provide better legal services than law firms, but because outside investment could be the key to making legal services available to the general public.
A recent New York Times article describes advances that allow computers do much of the work lawyers do in complex litigation where there are millions of documents and emails that need to be reviewed before trial. But computers can also help simplify everyday legal matters such as wills, divorces, and bankruptcies.
The New York Times recently noted the trend toward third-party litigation investment, where investors provide money to litigants in exchange for a share of potential judgment award. Blogger Jordan Furlong decried the practice, saying it “bump[s] up against the basic principles of the justice system” and is “a grave embarrassment to the legal profession.” While his point that third-party litigation funding serves as evidence of the prohibitively high costs of litigation is valid, it is difficult to look past anything that might help consumers gain access to the legal system.
A recent unpublished study by two Harvard researchers has arguably called into question the effectiveness of free legal aid and started a conversation as to whether such organizations help or hurt those they serve. It’s a conversation, however, that should be placed in a wider context. The vast majority of Americans are priced out of the legal system, not just the indigent. The question should not be about the effectiveness of legal aid societies – such organizations are struggling with limited resources to meet huge demand. Instead, we should be asking how the legal profession has continually permitted the need for affordable legal services go unmet, not just for the poorest amongst us, but indeed for the majority of American consumers.
|
Blog History
Archives
February 2024
Categories
All
|