Consumer Attorneys of California is leading opposition to bar's nonlawyer proposals

A State Bar task force has yet to finalize recommendations that could dramatically reshape the legal industry by permitting greater nonlawyer involvement, but a politically active group of trial attorneys is already raising concerns in Sacramento about the proposals under consideration.

Representatives from Consumer Attorneys of California have started sharing their deep misgivings with lawmakers and legislative staff about the regulatory change ideas recently put out for public comment by the bar's Task Force on Access Through Innovation of Legal Services.

CAOC President-elect Micha Star Liberty said her group with nearly 4,000 members is particularly worried about the potential for nonlawyers to be allowed to perform some legal services as well as own or have a financial interest in legal services providers such as traditional law firms.

While the bar task force has said such changes could strengthen access to justice, the trial lawyers fear non-attorney ownership could result in profit motives driving legal decisions in ways that would hurt consumers.

The task force has also been examining the role new technologies could play in improving the delivery of legal services, and Liberty expressed dismay about the potential for the legal profession to become "Uberized."

"There are some fundamental tenets to what we do that are not fungible, not transferable and not able to be easily performed through technology, so we have to be very careful that we are not delegating our core duties to provide advice, strategy and experience-based legal opinion to nonlawyers without training -- or to whatever app gets developed," she said.

Public comments on the 16 regulatory change options developed by the bar task force were due Monday, and the more than 1,000 written submissions were overwhelmingly in opposition. The task force planned to prepare a final report that would be presented to the bar's Board of Trustees by the end of 2019, but bar board Chair Alan Steinbrecher said Friday that deadline might be extended.

Any legal ethics rules change would need approval from both the bar board and California Supreme Court. Statutory changes outlining who is able to practice law would need to be implemented through legislation, which is why Liberty said CAOC has communicated its position on the proposals to key legislators and staff.

"This is a political and legislative issue that needs to be dealt with in a politically sophisticated way," she said.

Gillian Hadfield, a University of Toronto law professor who has long advocated for changes to how the legal industry is regulated, said she was not surprised by the opposition to the California task force's initial proposals.

Hadfield, who is also an economist, said attorneys have frequently rallied in recent decades to block efforts to broaden entry to the legal market. Nonetheless, she said she was disheartened by the consumer attorneys' efforts.

"I was very, very sad to see the lobbying become so aggressive, so fast," she said.

Both consumers and lawyers would benefit from permitting attorneys to share fees with nonlawyers as part of alternative business structures, Hadfield said, because the current "business model imposed on lawyers by legal ethics rules is inefficient."

"The reason why the consumer lawyers are wrong to say, 'Protect your practice, prevent those other entities from coming into our market,' is because those other entities will be providing their legal services primarily through lawyers," Hadfield said.

"The key thing you need to do is build a regulator that is capable of regulating the services provided by entities organized in these different ways," she added. "That is how you address concerns that there is going to be bad legal advice or low-quality service."

Some supporters of changes to the legal marketplace have said they are considering holding their own meetings with legislative officials in Sacramento in the months to come but acknowledged they don't have the financial resources of a group like CAOC.

The consumer lawyers' leaders recently met with State Bar Executive Director Leah T. Wilson and State Bar lobbyist Jennifer Wada in Sacramento to share their concerns in person. Liberty, who participated via phone, called the meeting productive.

The State Bar did not provide a comment in response to questions about CAOC conveying their criticisms of the bar's proposals to bar leaders and the Legislature.

The California Defense Counsel was represented at the meeting by Mike Belote, their lobbyist. He said the defense lawyers' group shares the consumer attorneys' concerns.

"We have got a lot of work to do on access to justice, but that doesn't establish in my mind justification to have big tech own law firms, hedge funds own law firms, and big accounting firms own law firms," Belote said. "I just don't think the case has been made at all."

Liberty says her group would like to see the State Bar "take a step back and really hear and appreciate the vigorously expressed concerns over the body of these proposals."

In the meantime, CAOC has no plans to ease off conveying its criticisms of the task force's ideas to lawmakers. A recent written communication the group sent to its members with the title "A Clear and Present Danger" said CAOC will be "aggressively involved" in efforts to thwart the task force's current proposals.

"We are going to do everything we can to protect consumers in the state and the members of Consumer Attorneys of California," Liberty said in an interview.

The California Lawyers Association, Legal Aid Association of California and Orange County Bar Association were among the written commenters raising concerns about the task force's proposals.

The California Lawyers Association said the proposal to allow nonlawyers to provide specified legal services and advice was worthy of further exploration, but it cautioned that many details would need to be worked out prior to implementation.

"We are concerned that if the appropriate balance is not struck, permitting nonlawyers (or nonlawyer entities) to provide legal advice or services may result in greater harm than good for consumers," the 100,000-member group wrote.

The lawyers' group also criticized a proposal to permit fee sharing with nonlawyers.

The Legal Aid Association of California said amending rules and regulations for the legal profession "to better encourage innovation and interdisciplinarity" was something it supported, though it offered cautions.

"Our central concern is that apps and other technologies will replace or supplant legal aid lawyers who can offer substantive, thorough advice, thereby harming the quality of the services and diminishing or diluting access for low-income Californians," the group wrote.

The Orange County Bar Association was more blunt about the recommendations overall.

"We have grave concerns that the State Bar's proposals will upend the profession and expose the public to new dangers without materially expanding access to justice or helping the public," the 9,000-member association wrote.