For legal ethics scholars, in-house lawyers are an irresistible and enduring subject of study. As lawyers who derive their living solely from one client and who are embedded in the culture and incentive structures internal to that client, in-house lawyers bring several “classic” legal ethics concerns into sharp focus: What does lawyer independence require? How should lawyers balance client and public interests? When should a lawyer say “no” to a client? There is also, of course, the fact that in-house lawyers have been the subject of multiple front-page scandals in recent decades. Although the query “where were the lawyers?” was first used, as I understand it, in the 1980s in relation to outside counsel in the U.S. savings and loan scandal, the question is being increasingly trained on in-house lawyers, who have risen significantly in number and status.
With In-House Lawyers’ Ethics, Moorhead, Vaughan, and Godinho add their own deft, distinct, and deep contribution to the literature on in-house lawyers. At the centre of their book is ambitious new empirical research on the role of in-house lawyers, drawing on interviews with 67 in-house lawyers and compliance personnel and surveys of 400 in-house lawyers. To be sure, thoughtful empirical research on in-house lawyers has been conducted by others before. However, Moorhead, Vaughan, and Godinho break fresh ground with their focus on legal risk management and their use of quantitative methods to explore concepts previously examined mostly in qualitative terms.
The topics covered are expansive, ranging from a discussion of the interviewees’ perception of how in-house counsel practice has changed over time, to how risk is conceptualized in the organizations in which in-house counsel work, to an assessment of the impact of professional codes of conduct on in-house lawyer behaviour. The sheer density of the book precludes a tidy review of everything it has to offer. The insight to page ratio is very high.
One aspect of the book worth highlighting is the work that In-House Lawyers’ Ethics does to add nuance to ideas that have long been percolating. For example, the conventional treatment of lawyer independence tends to approach this concept as static and binary—as a quality that a lawyer or a set of lawyers either has or lacks. The authors here, however, draw on their empirical findings to offer a much more dynamic conceptual understanding of independence in the context of in-house lawyering.
More particularly, throughout the book, the authors paint a picture of the “tournament of influence” in which in-house lawyers must engage to have a meaningful voice in their organizations. In-house counsel, the authors note, must adopt a “cultivated posture of helpfulness” in order to be heard and taken seriously. Stated differently, in-house counsel can be seen as having a “‘credit bank’ with their peers which gets topped up by being ‘helpful’ and which gets eroded when ‘difficult’ decisions or requests are made.” This latter point is brought to life in a quotation from one of the interviewees (condensed here due to space constrictions):
To put it rather broadly, you win people over by being sensible, by making money for the company, by making good calls, by negotiating well, by being a really good ally on commercial projects, by making things happen, by going away and saying, “Yes, that’s a horrible messy thing and I’ll sort it out for you.” And then, when you’re in the board and you’re doing the unpopular thing….And at that point, you are absolutely not going to win friends and influence people and they will say, “For God’s sake, why are you doing this? That’s horrible, that’s nasty, that’s beastly and I don’t want to know about it so just shut up.” And that’s the point at which you use all the brownie points you’ve got by doing all the other things that they liked, and eventually, if it all works out, they may say, “Actually, that was quite a good call, it’s a good thing you did that.” But they may not, they may just go, “Oh well, she’s a bit difficult sometimes, but on the whole, she’s quite useful to have around.”
The authors comment, in relation to this quote, that “the tournament of influence and pragmatism is reshaped here as a kind of quiet heroism.”
By drawing on quotes like these and other data collected, the authors present a picture of independence as a concept that “operates along a continuum and may be found to be weaker or stronger, in the same person, at different times and in different contexts” and which “relates to the positioning of the in-house lawyer in the organisation and the need to work for influence.”
This richer view of independence in the context of in-house lawyering is unlikely to shock either the lawyers who work as in-house counsel or scholars who study them. Nonetheless, the detail in which Moorhead, Vaughan, and Godinho lay out this picture and the evidence they marshal in support of it are very important contributions to the literature. Their work adds a valuable degree of evidence-based specification to describing the realities of in-house lawyering which might otherwise be bluntly or casually explained.
This specificity, in turn, gives the authors analytic leverage to interrogate important questions relating to the context in which in-house lawyers work. Issues like “how widely or narrowly legal advice is framed; what is done when the law is uncertain; [and] how proactively in-house lawyers respond to risk” are thoughtfully and empirically explored. This contextual focus also provides the basis for the authors’ exploration of promising avenues of intervention (like, for example, discouraging the narrow framing of legal tasks in a manner that “shuts out ethical considerations”).
A second noteworthy contribution is the authors’ use of quantitative methods to unpack role identities previously qualitatively ascribed to in-house counsel. To this end, the authors isolate five role orientations—commercial, ethical, independence, neutral advisor, and exploiting uncertainty—and examine not only the degree to which such orientations accord with how in-house lawyers conceive of their role but also how these orientations relate to lawyers’ inclination to act ethically.
To arrive at these five role orientations, the authors used a sophisticated methodology. For the purposes of this Jot, it is perhaps helpful to crudely summarize that the five role orientations were derived from survey data that involved participants’ responses to certain attitudinal statements about the in-house lawyer role and that “each of the orientations indicates a group of questions which [the] respondents tended to answer in similar ways.” So, for example, the commercial orientation identified related to statements such as “the commercial success of my organisation is important to me” and “it is important for a legal adviser to add value to the business.” The ethical orientation related to statements such as “my advice goes beyond legal considerations to assess whether something is the right thing ethically to do,” and “where the law is uncertain, I take a lead on what the right thing to do is.” And the exploiting uncertainty orientation related to statements such as “loopholes in the law should be identified that benefit the business” and “where the law is uncertain, I help the business benefit from that uncertainty”.
Having isolated these five role orientations, the authors then embark on “evaluat[ing] these orientations normatively and link[ing] them to other dimensions of in-house practice: professional orientations, team orientations, relationships with the organisation, and ethical pressure.” For example, the authors note an association between thinking of exploitation of uncertainty as part of the in-house role and a weaker ethical inclination (as measured using established tools for measuring ethicality which focus on moral attentiveness and moral disengagement).
In addition to studying the role orientations, the authors also engage in a quantitative analysis of the impact of the environment in which the in-house lawyer works and their ethical inclination. For example, a link was established between a stronger ethical inclination and stronger ethical infrastructure (as measured both through the presence of formal measures like ethics training and written guidance as well as the presence of informal conversations about conduct).
As was the case with the book’s presentation of a more nuanced concept of lawyer independence, a key part of the value of the quantitative work conducted lies in its specificity and rigour. In providing a detailed and evidence-based understanding of the links between things like in-house role orientation, ethical infrastructure, and general ethical inclination, the authors lay out a sophisticated picture of in-house lawyering as well as a solid foundation for further scholarly work and policy intervention. As they themselves note on the issue of impact:
Through this detailed, and mixed methods approach, we hope to offer fresh insights on the in-house lawyer. Whilst it provides evidence relevant to the traditional question of whether in-house lawyers really are ‘professionals’ or mere employees, we think the more important contribution is to inform debate on how to make in-house lawyers more ethical. Improvement, not judgement, is the ultimate aim here.
So much more could be said about the content of In-House Lawyers’ Ethics—it is a book full of detailed data and big ideas. The above summary simply highlights two areas of its contribution to the literature. For those with an interest in in-house lawyering, the entire book is well worth a read and, no doubt, readers will find other and additional aspects of the book to be engaging and informative.
Before ending this Jot, however, I would be remiss if I did not note that, for a book so deeply steeped in methods, data, and theory, there is vivid colour and sometimes even moments of playfulness delightfully sprinkled throughout. The skillful deployment of interviewee quotations and the use of memorable turns of phrases by the authors made the book a delight to read in addition to it being so informative.
In-House Lawyers’ Ethics: Buy it, read it, cite it!
Bruce Green and Rebecca Roiphe, Can the President Control the Department of Justice?
, ___ Ala. L. Rev.
___ (forthcoming), available at SSRN
One need look no further than Donald Trump’s tweets berating the Attorney General and Deputy Attorney General to view the pronounced tension between the oval office and the Department of Justice (“DOJ”). Not merely hypothetical or academic for this generation of scholars, the topic of executive power and its parameters has been thrust into the limelight. However, scholarly interest in executive power, usually stoked by fraught historical moments (Watergate, the Lewinsky affair, post-9/11 torture memos, and now the Russia investigations), rarely focuses on history itself. Much of the existing and growing body of work in the legal academy examines presidential power in constitutional and administrative terms. However, the question posed by this article, “Can the President Control the Department of Justice?” lives in a textualist’s wasteland bereft of guidance from these usual suspects. Neither the Constitution nor leg-reg provides an answer—instead, both are conspicuously silent.
Enter Green and Roiphe. Where others find a void, their article finds meaning in Congressional silence as it traces the power of professional institutional norms built incrementally over time. Starting with the originalist rationale for executive control over government lawyers, to the emergence of today’s federal bar and administrative state, Roiphe and Green craft a vivid picture of the modern legal profession generally, and prosecutors specifically. Drawing on historical sources ranging from public confirmation hearings and opinions to personal letters, this narrative reveals federal prosecutors to be a doggedly independent group, providing a check on partisan politics through professional commitments to rule of law and bureaucratic neutrality. As such, “prosecutors may not accept direction from the President but must make the ultimate decision about how to conduct individual investigations and prosecutions, even at risk of being fired for disobeying.” (P. 64.) In their telling, the modern prosecutor knows that politically motivated action is illegitimate, and therefore, in some cases, resignation is preferable to capitulation. Resignation leaves intact a culture of commitment to rule of law, bureaucratic neutrality, and independence.
The core assertion here is simple, but compelling: when Congress allocates power to lawyers, and particularly prosecutors, it does so expecting them to be bounded by historically established norms and standards of professional conduct. These standards are found in everything from DOJ internal policy documents, to the substance of Attorney general confirmation hearings, all of which extoll as an “essential qualification” of a prosecutor a commitment to independence and need to remain unbiased by political considerations. (P. 19). Thus, our system of governance relies on lawyers’ professional norms to separate legitimate policy from partisan interference. It is “professional independence [that] helps ensure that prosecutor will be able to exercise that discretion and seek a fair and just administration of criminal law in individual cases rather than sacrifice justice to further political ends.” (P. 5.) Green and Roiphe argue that imbedded in what the law leaves unsaid (and assumed), Congress has acquiesced to a diffuse balance of power within the executive between the President and the Attorney General, with the President expressing views and generalized policy and the Attorney General and subordinate attorneys retaining ultimate charging power (the authors reserve for further treatment the specific exercise of the presidential foreign affairs power).
Exhibiting the rare alchemy of being timely, methodologically refreshing, and substantively weighty, this article provides a vital piece in understanding executive power. Here, Roiphe and Green apply their ample expertise and knowledge to the present day’s arguably most pressing issue, making clear that a President does not generally have the right to interfere with individual cases before the DOJ. But this is undervaluing the contribution of the Article. Its broader point is more interesting and ominous: it is not the Constitution, but rather the professional norms of independent and non-partisan lawyering, that safeguard the state from executive overreach and corruption.
Diversity, Hierarchy, and Fit in Legal Careers: Insights from Fifteen Years of Qualitative Interviews is a new article by Bryant Garth and Joyce Sterling about the challenges for diverse lawyers (here meaning women and non-whites) in navigating career paths that lead to satisfaction and success. This is a popular topic. Garth and Sterling’s article stands out because it speaks both to the broad scale difficulties reflected in frustratingly slow progress on an organizational level, and to the particular contexts that frame the experiences, opportunities, and choices of individual lawyers hoping to find fulfillment in their careers.
The article begins with a rich discussion of various theoretical approaches that scholars have used to explain the failure in the profession — and particularly with regard to the ranks of positions of power and influence in the largest and most elite law firms — to reflect the increasing diversity of law school graduating classes. Garth and Sterling begin by explaining the “capital assets theory,” which grounds their work:
[W]e see the legal field as a semi-autonomous space of struggle according to certain rules of the game that can also be contested. Actors within the field adopt ‘strategies’ oriented toward success in the field. Strategies are not necessarily chosen instrumentally or self-consciously. Actors internalize the rules of the game, such that it seems natural, and they try to build up the capital that is valued in the field or find ways to get the capital that they possess to be valued within the field. (P. 127.)
Moreover, they explain, the capital assets that are valued in one setting aren’t necessarily the same as those valued in another setting, nor are the “forms of capital valued within the law and within the large law firm at the top of the hierarchy . . . static.” (P. 142.)
Rather, to understand the dynamics shaping the effort to transform large law firms into organizations that embrace and reflect diversity and inclusion, Garth and Sterling caution that we must consider the history of the legal profession in the United States and the role in that development of law firms serving corporate clients. Because corporate-focused firms are at the top of the status hierarchy, and further, because those who have led these firms historically have been white men with stay-at-home wives, the characteristics, strengths, habits and attitudes intrinsic to the white male leaders of elite law firms are reflected in their firms’ assessments of what matters, what instills confidence, what makes for success. For example, “[e]lite law degrees . . . are valued not because those who hold the degrees are necessarily better lawyers, but because lawyers and clients are persuaded that preferences should be given to those with elite degrees. . . . The experience of working in corporate law firms (even if only document review), we contend, is also valued mainly as a form of symbolic capital.” (P. 132.) As Garth and Sterling explain, “the qualities for success (including stay-at-home spouses) are measured within a set of racial and gendered categories by definition subordinate to the hierarchies embedded in the law and the law firm.” (P. 142.)
The authors compare and contrast the capital assets theory to other approaches that address — from organizational and individual frameworks — the underrepresentation of diverse lawyers in elite law firms, including, among others, implicit bias (P. 134) and critical race theory. (P. 140.) Their analysis reads as a conversation between them and the scholars who have advanced alternative theories. They highlight important and sometimes subtle differences between the various theories and, at the same time, identify points of convergence and overlap. Substantively, one recurring distinction they make is that the capital assets approach recognizes the fluidity of what is valued as a reflection of the hierarchy of the field; as that hierarchy shifts, so do the values inherent in what is considered essential for success. Status is not frozen.
At this point in reading, the Passover song, Dayenu, is playing in my head. Dayenu — meaning “it would have been enough” — because had Garth and Sterling presented only this insightful analysis of theoretical approaches, while simultaneously explaining the comparative benefits of the capital assets approach, their article would have done plenty. It would have offered both some consolation for the stuck feeling that the Big Law diversity and inclusion context engenders and it also would have provided some cause for hope that change may be forthcoming.
But the article goes further, offering a second dimension by applying the capital assets theory to qualitative data on lawyers’ careers, drawn from interviews conducted as part of the After The JD (AJD) project. Many have written about AJD, which was a longitudinal study that gathered survey and interview data about the career trajectories, satisfaction and demographic characteristics of a national sample of lawyers who passed the bar in the year 2000. To my mind, it’s one of the most important projects ever to study the American legal profession, and it continues to inform even after its funding disappeared. But most scholarship using ADJ draws on its quantitative data; the only qualitative AJD data derives from interviews – conducted primarily by Garth and Sterling over the life of the AJD – and it is these that are the centerpiece of Diversity, Hierarchy, and Fit. Staging rounds of interviews after each of the three survey administrations enabled them to gather intimate details from lawyers at different stages of their careers through 219 interviews (and counting). In this article, the interviews provide unique insight into how career decisions are made, and the ways in which career decisions reflect lawyers’ perceptions of their relationships to their firms.
They frame the interview data around the notion of “fit.” They explain: “Fit is a way for embedded histories and power relationships to make it more difficult for people who do not possess the cultural capital represented by golf . . . to succeed in particular settings . . . .” (P. 127.) The reference to golf relates to an image they include in the article, showing four men on a beautiful golf course, mountains in the background, posing with their golf clubs and wearing golf gear. Garth and Sterling note that the men in the photo are “diverse” — they include two who “are white, one of whom appears to be Asian, and another who appears to be black — dressed the same and posing on the golf course. It is a perfect illustration of the fact that, at the elite level, the ‘fit’ required of minorities entails much more than doing quality legal work. Golf is in part a symbol of what is required and a factor that comes into play in real careers.” (P. 125.)
Golf — playing golf, wanting to play golf, and understanding why golf matters — is a factor, both real and metaphorical, of what Garth and Sterling dub an “On-Broadway” career path, one that includes “the elite track of large law firms, . . . [and] the advantages that come from possession of the most highly valued credentials in the legal profession.” (P. 127.) Garth and Sterling explain that the On-Broadway career path favors white men with stay-at-home wives: “there are countless almost imperceptible ways that the capital value structure affects success directly—credentials and ability to work long hours, for example.” (P. 129.)
Next up are career tracks in the “regional theater” mode, which follow the general contours of On-Broadway and Big Law but in smaller firms, or in alternative positions to the partnership track, or both. (P. 127.) An example is a female lawyer who moved from an elite firm to a firm in her hometown, where she eventually was appointed head of litigation. Nonetheless, by her third interview she had stepped away from partnership status to focus on her children. Garth and Sterling see these sorts of trajectories as possibly “presaging changes that will take place in the large corporate law firms. But . . . they [also] are providing outlets that make it so the large corporate law firms can change very slowly, especially with respect to gender. In a way, they protect the ‘cultures’ of the corporate law firms while allowing those who do not fit to find a good position outside.” (Pp. 161-62.)
Last is the “Off-Broadway” experience of lawyers who developed their careers in patterns where diversity is valued differently. One example is an Arab-American lawyer who started working at an elite firm, but found the environment extremely difficult after 9/11. He temporarily left law practice, but eventually returned and, on the return, developed a network of contacts with Arab-Americans who were active in the healthcare industry, and this enabled him to build a practice in that field. Garth and Sterling explain: “He managed to make what he possessed — a set of contacts within the medical community among Arab-Americans — valuable. Indeed, this new addition to his own portfolio of marketable capital assets made him attractive to law firms as a partner. As of 2017, he had joined a prominent regional firm as a partner, focusing on corporate law and the health care industry.” (P. 162.) Generally, the Off-Broadway track offers opportunities for “[i]ndividuals [to] turn a lack of fit — related to social class, identity, or even non-elite law school credentials — within the traditional corporate law firms into very successful careers that build space for new consumers of legal services and for diverse attorneys who generally have trouble talking to corporate law firms.” (Pp. 168-169.)
By weaving these three alternative tracks together, Garth and Sterling send a strong message to diverse lawyers and law students: identifying one’s own strengths, and identifying the capital assets valued by the profession or by a particular firm, allows lawyers both to identify the gaps and to envision strategies and steps towards a practice setting where one’s characteristics and identity will be recognized as assets. It doesn’t do much good to be the best singer in the play if there is no role for a singer. There might be value in joining with various theater companies to gain particular skills and experience, but before long the singer needs a role that will allow her to sing. That might involve developing community relationships in order to build a new theater company that prefers musical theater, or a move to a new neighborhood or city where musical theater opportunities are abundant, or singing in another venue apart from traditional theater. But without that musical role to enable the singer to shine, her talents will be wasted. It’s the same for lawyers: those who carry different capital assets from what is rewarded within the legal profession’s hierarchy must escape the diversity-stagnation surrounding the highest status career trajectories (On-Broadway) and chart their course towards organizations and opportunities that recognize and reward their differences, whether those differences relate to gender, race, ethnicity or an international identity (as Swethaa Ballakrishnen and I explore in recent and ongoing work). Garth and Sterling brilliantly hone in on the ways in which these lawyers can exert some control over their destinies, whether or not On-Broadway, and in so doing, they offer a positive message for the profession and its future.
Cite as: Carole Silver, Diversity, Golf, and the Rules of the (Legal Career) Game
(November 8, 2018) (reviewing Bryant Garth and Joyce S. Sterling, Diversity, Hierarchy, and Fit in Legal Careers: Insights from Fifteen Years of Qualitative Interviews
, 31 Geo. J. Legal Ethics
123 (2018)), https://legalpro.jotwell.com/diversity-golf-and-the-rules-of-the-legal-career-game/
In September 2018, Utah launched its small claims court online dispute resolution (ODR) system. Years in the making, a goal of Utah’s new ODR system is to provide greater access to justice for Utah’s citizens. The ODR system has been designed to provide “simple, quick, inexpensive and easily accessible justice” that includes “individualized assistance and information that is accessible across a multitude of electronic platforms.”
This description of Utah’s new ODR program comes from Utah Supreme Court Justice Deno Himonas’s article entitled Utah’s Online Dispute Resolution Program Justice Himonas’s article should be of particular interest to readers who followed the work of the ABA Commission on the Future of Legal Services or readers interested in developments such as Washington’s Limited License Legal Technician program (LLLT) or New York’s Court Navigator program.
Having a public ODR program, as opposed to private ODR providers such as eBay, is not a new concept. For example, UNCITRAL (the United Nations Commission on InternationalTrade Law) has been working on this topic for years. In the United States, the National Center for State Courts has documented and facilitated state court ODR developments. Some state courts have linked up with ODR providers such as Modria on a limited basis. Utah, however, is the first U.S. jurisdiction to launch a “soup-to-nuts” ODR system for its small claims disputes, which currently include claims up to $11,000. The implications of this development are profound. As Justice Himonas observed in his Utah ODR article, “at this point in time we’re only authorized to implement ODR in small claims court; but it doesn’t take much of a stretch of the imagination to see that if it’s successful, we’ll take it to the next level.”
The beginning of Justice Himonas’s Utah ODR article provides information that explains why Utah created its ODR system. It recites “access to legal services” statistics that are depressingly similar to statistics that many have read elsewhere. For example, the World Justice Project’s Rule of Law Index ranked the U.S. 94th out of 113 countries with respect to access and affordability. Utah-specific statistics tell a similar story. In the Third District where Justice Himonas served as a trial court judge for ten years:
- 99 percent of the respondents in debt collection cases were unrepresented. (These were the bulk of cases that were filed);
- 98 percent of the respondents in landlord/tenant cases were unrepresented; and
- in approximately 60 percent of family law cases, one or both parties were unrepresented.
Statistics such as these show why the Utah Courts have devoted considerable resources to helping self-represented clients. After briefly reviewing some of these initiatives, many of which are set forth on the Court’s excellent “Self-Help Resources” webpage, the article reviews the process by which the Utah Court system developed its ODR system.
The article continues by reviewing the ODR system’s four stages as well as the philosophy behind each. The first stage of the process provides resources to educate the prospective litigant and to help that person evaluate the claim. The article includes an ODR screen shot that shows how defendants can ask for information about their options before responding to a complaint. The second stage in Utah’s ODR process allows litigants to gather additional information. As Figure 1 shows, defendants can respond to the suit by stating that they have already paid the debt, or they want to make a full or partial payment, or they are in bankruptcy, or it is not their debt, or they dispute the claim. (P. 883). The follow-up exchange between the parties will differ depending on the option the defendant selects. The third stage provides an opportunity for settlement discussions. Figure 2 is a screen shot that shows the options available if a defendant indicates that the defendant wants to make a payment. (P. 884). Figure 5 illustrates a chat box the parties can use for their settlement discussions. (P. 888). During the fourth stage of the small claims ODR process, either the parties will settle, or a judicial officer will make a ruling based on the documents the parties mark as “public.” Justice Himonas described this stage of the process as follows:
Let’s say you can’t resolve the dispute with the facilitator, then the facilitator is going to prepare a trial preparation document. The trial preparation document will narrow the issues, the facilitator will help the parties describe what’s left, what they’ve been able to resolve, if anything, and what they’ve been unable to resolve and put it in simple understandable terms for the judge. The facilitator will allow the parties to upload whatever documents they think are appropriate and may help guide that decision. If the judge feels like he or she needs a live hearing, they can do that; if not, the parties can elect to do this entirely electronically and have the judge make a decision.
One of the most notable and important aspects of Utah’s ODR system is its use of trained facilitators to help the parties resolve their disputes. As Justice Himonas explains:
As soon as both parties have joined the web portal, a facilitator is assigned to the case. The facilitators will go through extensive in-house training. We’re going to start with five individuals who have been intimately involved in the development of the process and involved in drafting the manual for the facilitators to use as we train them in the future.
When reading this article, I appreciated the fact that Utah ODR includes screen-shots of the ODR system that supplement the article’s explanations of how the system will work. Figures 1-4 show some of the interview questions, while explaining that the litigants’ answers do not become part of the court record. (P. 883-886). Figure 5 is a screen shot that illustrates the ODR system’s chat function that allows the parties to speak directly to one another. (P. 888). Figure 8 is a screen shot that shows how the parties are able to preview, edit, sign, or reject a settlement document. (P. 891). Figure 11 shows the ODR portal from the facilitator’s perspective. his section contains information about the “trial preparation” document the facilitator prepares in the event the parties are unable to settle and the dispute is sent to a judicial officer for resolution. (P. 894). (Under Utah’s ODR small claims system, if the parties do not like the small claims court ruling, they have the right to a de novo appeal to a Utah district court.) In short, after reviewing these screen shots and reading the article’s accompanying narrative, a reader will understand why Utah created its new ODR system, the philosophy and assumptions that drove its design, and the logistics of how it will work.
My one regret regarding this article, which is an edited transcript of Justice Himonas’s Symposium remarks, is that it did not include the lengthy footnotes and citations found in a traditional law review article. Citations that would have provided additional information and context include documents from the National Center for State Courts, the Utah Court system, and others such as the American Bar Foundation, IAALS, and others. Despite this regret, I recognize that Penn State’s Dickinson Law Review was extremely fortunate to have Justice Himonas participate in its 2018 “Access to Justice” Symposium and that his behind-the-scenes article about the development of Utah’s groundbreaking ODR system is an invaluable resource.
In sum, Utah ODR is now on the short list of articles that I am recommending to others. It is worth reading not only because it documents Utah’s cutting-edge access to justice efforts and provides a wealth of details to which the reader would not otherwise have access, but also because it is uplifting to read about the Utah Courts’ outside-the-[jury] box efforts to serve its citizens and remain relevant. It was difficult to select just one article for this Jot, but this topic was the one I knew the least about and learned the most from.
The fascinating case made by Yuval Feldman’s recent book is that most wrongdoing is done by good people who, too frequently, allow themselves to do wrong. We are egocentric; our brain works hard to promote self-interest whilst protecting the self-image that we are morally upright. And it does so quietly (my word, not Feldman’s); much of the decision-making is done subconsciously, intuitively – albeit sometimes, importantly, with glimmers of recognition.
Feldman classifies us into three types: deliberate wrongdoers; situational wrong doers, subject to this quiet egocentricity; and the genuinely good. Even the latter are prone to moral blindspots. Concerned about the prevalence of the last two groups, Feldman makes a strong case for taking situational ethics more seriously. This allows a psychological engagement with sociological questions of structure and agency. Situational ethics sees anxieties about bad apples and bad barrels as being better understood as a concern with bad decisions; we are located in webs of design and accident. What Feldman wants is for regulatory design and jurisprudence to take bad barrels and bad decisions more seriously. The normative judgements that drive ex post punishment as a regulatory strategy are superseded by seeking improvements in behaviour before wrongs can manifest. Intentionality, he suggests, is “outdated.” (P. 40.)
My interest is narrower: how his insights apply to lawyers and their regulation. Much of Feldman’s work is of general application to lawyers as ‘ordinary’ humans; but for me there were also many questions posed for lawyer exceptionalism. The book is a treasure trove of cognitive challenges especially relevant to lawyers. Might lawyers need to pay more attention to the objectivity illusion, given a naïve belief that they are trained to see facts from all sides? Does thinking like a lawyer encourage us to discount the impact of intuitions and emotions on our decision-making? How littered is our world with post hoc rationalisations for the misconduct, of ourselves or of clients? How varied are our moral identities and attentiveness? If tiredness and quick decision-making under pressure diminish ethics, how well are lawyers’ working lives constructed for good decision-making? If collaborative rather than competitive environments encourage good conduct, what then of the cultures of law firms and law schools? And perhaps most fundamentally, if an appetite for ambiguity is strongly associated with conscious and unconscious unethicality, how should we see a central facet of lawyering: managing or exploiting the ambiguities of facts and law?
Feldman surveys a vast range of his own and others’ work, teasing out the impact of our motivations and cognitive limitations on making ‘good’ decisions. He then turns to the crucial, but under-researched, field of solving or ameliorating these problems. He urges greater attention to the expressive function of law, the ways in which the choice of rules, and their framing, effect motivation and behaviour. Do the specifics of rules, their clarity, how punitive they are, even social identities revealed in phrasing, encourage good people to be better; do they even encourage bad people to refrain from punishable wrongs?
Designing decision processes, training and de-biasing, better conceived and delivered codes of ethics, may all challenge quiet unethicality. Similarly, group norms are generally thought to inhibit self-interested behaviour, that is part of the point of the profession, but do the particular group norms of lawyers or law firms do that? Not enough, might be a fair, if trite, response. Feldman shows that it might be important to have more precise understandings of individual and group characteristics: how many lawyers are bad, or situationally vulnerable, or good but with blind-spots, for example? What are the expressive functions of lawyers’ ethical rules?
The book is also a treasure trove of findings: a mixture of the important and the quirky. Carrying weights, washing hands, lowering lighting, and reducing glucose levels all have an impact on misconduct; at least in some experiments. So does making a decision in a room full of children’s toys. The nudges, primes and self-deceptions are mainly, but not always, automatic. Feldman thinks about how to encourage more awareness of the risks of self-deception and begins a debate about how our rational models of ethics can influence our unconscious ones. In reminding the reader of the now familiar (but contested) System One and System Two thinking from Kahneman and Tversky, he focuses crucially on how individuals and regulators can heighten awareness, controllability and attention on ethical deficits.
Regulatory strategies may need to be developed for each of his three groups. Such strategies may be in competition with each other, or they may be capable of “acoustic separation” (see Dan-Cohen 1984): the intriguing idea that the same rules can send different messages to different audiences. Such work highlights fundamental dilemmas. Regulators need to be persuaded that poor conduct is widespread if they are to act against it, but signalling that misconduct is common encourages that misconduct. If I think tax avoidance is widespread, I am less likely to pay my taxes. If I fine the parents who pick up their kids late from nursery school, some of those parents will quietly redefine the payment as a tax, which they pay for the privilege of being late, and tardy pick-ups will increase. Heavy-handed regulation or the overuse of incentives and punishments may crowd out better behaviour. It may also signal distrust of the regulated community, diminishing levels of compliance. But contrarily it may sometimes be necessary punish overt unethical conduct severely. And Feldman notes times when getting the basics right is more important than behavioural sophistication: in one study, monitoring tax payer income does more to foster tax compliance than the working of motivational levers.
Feldman is rightly worried about the methodological limitations of behavioural ethics, and he is also right that there is nowhere near enough work to be confident about the underlying mechanisms behind these problems and the solutions to them. Many studies are small and experimental. Quirkiness is fun, but magic circle firms are not about to start building difficult-decisions suites stuffed with cuddly toys. Yet in these limitations is the central challenge: can ecologically realistic, methodologically robust, replicated studies develop our understanding of behavioural ethics further? Feldman and his collaborator’s own studies are a rich resource here. Can regulators, or even lawyers and compliance managers, be encouraged to experiment with behavioural interventions? After all, lawyers need to be interested in both how rules work and how people behave ethically if they are to do their job effectively. Feldman’s book shows us how important this could be.
You Don’t Own Me is a colorful telling of the Bratz v. Barbie battle, a modern David and Goliath decade-long dispute fought by MGA Entertainment and toy giant Mattel. It is a story of competition, innovation and greed, economic espionage and corporate personalities larger than life, of creativity and its legal treatment, of dolls, and ultimately of American culture itself. In Professor Orly Lobel’s masterful hands this award-winning book ((For reviews of Professor Lobel’s book see Wall Street Journal, New Yorker Magazine, and the Financial Times.)) effectively mixes legal analyses and business insights to offer a compelling read.
At the same time, if you dig a little deeper, You Don’t Own Me is also a fantastic account of the legal profession saga behind the toy story, examining the various roles legal actors–outside counsel, in-house lawyers, judges and jurors–played in the litigation, and their interactions with clients, related parties, and the general public. In particular, Part III, titled Warring Titans (Pp. 125-243), is a must read for lawyers and law students interested in contemporary law practice.
Briefly, Mattel sued MGA (then a smaller toy manufacturer) and Carter Bryant (Bratz’s designer) in federal court for intellectual property infringement in 2005, asserting that Carter initially conceived of Bratz, the so-called anti-Barbie doll, while he was an employee of Mattel; that Carter assigned to Mattel all his future creativity and innovation while at its employment; and that Mattel owed the copyright to Bratz. Initially, Mattel prevailed, winning a 2009 jury verdict after which Judge Stephen Larson issued a global all-inclusive injunction ordering MGA to pull Bratz from the market and stop production. (Pp. 145-174.) Judge Kozinski writing for the Ninth Circuit Court of Appeals reversed (chapter 9, Taming Barbie, Pp. 175-191), and MGA prevailed before Judge David Carter in 2011 (chapter 10, Round 2, Pp. 193-229). Recounting this legal saga within the greater story, Lobel provides deep insights into the practice of law.
To begin, consider the interplay between the following three phenomena in contemporary law practice: the federal-state court litigation dichotomy, the corresponding distinction between BigLaw and litigation boutiques, and increased specialization. As Lobel explains, elite BigLaw firms tend to dominate federal court litigation—especially specialized litigation, such as intellectual property infringement cases—leaving the less prestigious state court litigation to solo practitioners and small law firms. Thus, MGA’s decision, in preparation for Round 2, to retain a general litigation boutique to take over the lead in its defense from the BigLaw firms which handled Round 1, was surprising. How bold, and uncommon given the under-representation of women lawyers in positions of power and influence in the legal profession, was the move to entrust the first chair to Ms. Jennifer Keller of a small all women-owned law firm? Less surprising was the establishment’s response to these moves: “Mattel’s Quinn Emanuel attorneys,” writes Lobel, treated Keller condescendingly. “At one point John Quinn said about Jennifer dismissively, ‘She’s behaving like a state court attorney.’” (P. 195.)
Relatedly, Lobel’s gripping account provides a window into the complex world of lawyer identity, client identity, and corporate attorney-client relationships. MGA’s unorthodox decisions, points out Lobel, were made by its flamboyant immigrant outsider Chief Executive, Isaac Larian, because he “had been unable to get along with the highly paid lawyers from some of America’s biggest law firms.” (P. 194.) In contrast, Mattel, led by Robert Eckert, its “all-American professional CEO” (P. 168), opted for BigLaw elite outside counsel. Eckert was “[p]art of an old boys’ network of Fortune 500 professional CEOs, [who] frankly admits that lucrative executive gigs only go to members of an exclusive society.” (P. 110.) You Don’t Own Me suggests similarly that lucrative legal gigs (still) only go to members of an exclusive legal society, the elite club of elite large law firms, in part because of the informal ethno-religious and class affinity between their lawyers and C-Suite executives making decisions as the authorized constituents for Fortune 500 entity clients.
Next, the book details Mattel’s aggressive corporate and litigation strategies, including spying on Larian and his family in conjunction with the litigation by, for example, taking pictures of his kids coming and going from their home. (P. 170.) It then chronicles the aggressive conduct of Mattel’s lawyers in the courtroom: “one of Mattel’s attorneys read one of Larian’s work emails back to him,” in which Larian responded to a female employee’s request for $12,000 for a project. (P. 171.) “Larian originally wrote, ‘All the women in my life–my wife, my secretary, you–want so much from me.’ But on the stand, Mattel’s attorney asked Larian why he wrote that his wives (plural), secretary, and so forth make demands. Larian,” writes Lobel, “face bright with anger exploded. ‘Wives?!? What did you say? Wives?!? You racist!’…Mattel’s attorney said it was only a slip of the tongue; Larian’s Iranian heritage had nothing to do with his accidentally saying ‘your wives,’ rather than ‘your wife.’ He turned to Larian’s wife and apologized.” (Id.) Whether Mattel’s lawyer indeed had a good faith slip of the tongue, whether his conduct revealed implicit bias, or whether this was an instance of explicit bias which backfired is beside the point. Rather, You Don’t Own Me raises challenging questions about the interplay between client identity and conduct, and lawyer identity and conduct, and the subtle and complex ways in which they shape and inform each other, as well as questions about the prevalence and use of bias in our courtrooms.
Finally, Lobel’s account of Judge Larson (Pp. 149, 174), his evidentiary rulings (P. 170) and jury instructions (P. 173), juxtaposed against the colorful personality and philosophy of Judge Kozinski (Pp.175, 178, 182), and contrasted with the calm and composed judicial temperament of Judge Carter (Pp. 196, 198) and his jury instructions (P. 205), provides an illuminating view of the role and impact of judges–trial and appellant–on litigation, the parties and the law. You Don’t Own Me’s detailed account reminds us not only that, to an extent, the law is what the judge had for breakfast, but also that the law is a function of the judge’s experience (or lack thereof, in the case of Judge Larson), philosophy, judicial temperament, and ambitions.
One of the manuscript’s many strengths is that it does not exaggerate the role of lawyers and other legal actors in the overall saga. This is not a book about lawyers, and it is not intended primarily for lawyers. Yet, it is a book lawyers (among others) should read: it carefully and compellingly documents how lawyers interact with and advise powerful clients, how clients in turn shape lawyers’ behavior, how lawyers’ conduct impacts related parties (do not miss Lobel’s moving but never sentimental account of Carter Bryant, left crashed and penniless, after two rounds of bitter litigation between the corporate titans (Pp. 199-202, 238)), how lawyers’ professional identity interacts with their personal identity and firm ethos, and how the practice of law reflects and features some of the highs and lows of American culture, its imagination and creativity on the one hand, but also its biases and injustices.
Cite as: Eli Wald, The Legal Profession Saga Behind the Toy Story
(July 26, 2018) (reviewing Orly Lobel, You Don’t Own Me: How Mattel v. MGA Entertainment Exposed Barbie’s Dark Side
Frank Pasquale, A Rule of Persons, Not Machines: The Limits of Legal Automation
, George Wash. L. Rev.
(forthcoming 2018), available at SSRN
It’s funny that people who are so infinitely fallible consistently seek to eliminate that fallibility—to get rid of the vagaries, inconsistencies, and unpredictable nature of human decision-making. In this insightful article, Frank Pasquale exposes a recent incarnation of this effort and its effect on the future of the legal profession. Legal futurists insist that software and new technology can edge out lawyers with a better, more efficient, and more consistent product. There is little that lawyers do that cannot be done better by artificial intelligence, smart contracts, and other block chain technologies. Governance itself will be more efficient, fair, and even-handed if we minimize the human element. Pasquale guides us through the flaws in the argument, the dangers and unintended consequences of the unbridled use of these tools. In doing so, he argues that legal futurists ignore the irreducibly human and discretionary nature of the law and he concludes with a more modest future for technology in the law.
Pasquale begins by exploring and debunking several myths about law and technology. Promotors of the new legal technology suggest that the products can eliminate human discretion. Part of the appeal of legal automation is that it can replace bias with fairness and human error with mathematical precision. The more social scientists teach us about how bias works, the more skeptical we become about the ability of well-trained individuals to make good decisions. But this goal is illusory. Technology does not remove human choice. It merely shifts responsibility from lawyers, judges, and regulators to programmers. In doing so it hides the human choices that are equally plagued by error and bias under the guise of neutrality and objectivity. It shifts decisions from those trained in law to those in a different discipline.
Legal futurists argue that technology solves a problem that has plagued the bar for over a century—this vaunted technology, they claim, will expand access to legal services by the poor and middle class. By routinizing and mass marketing legal information, LegalZoom and other innovators have been able to reduce costs and provide access to important services to those who couldn’t afford it before.
But, without disputing the value of products like LegalZoom, Pasquale notes that this software makes up a small fraction of the aspirations of legal futurists who seek to mechanize private legal arrangements among powerful businesses as well as governance itself. Many of the innovations will not begin to address unequal access to justice because they are designed for high-end consumers who do not serve lower-income clients at all. Further, even if legal technology is preferable to lawyers in some areas because of its power to reach underserved communities, it is no panacea: It is plagued by error and risks empowering new financial interests to influence normative policy areas. The tax software companies have, for instance, developed into a strong lobby, at times pushing for laws that create a market for their product but undermine the public interest in simplifying certain types of tax law. In addition, without the proper legal training and specialized knowledge, programmers can miss essential components of the law. The wills that LegalZoom drew up, for instance, neglected the effect of employer-sponsored retirement accounts, leaving many individuals with no provision for the distribution of those funds.
Pasquale also exposes a third myth—the promise of perfectly impartial technological governance—as both unrealistic and undesirable. True, robotic law enforcement seems unproblematic in some areas. Red light cameras, for example, automatically take a picture of cars speeding through stop lights and send notices of conviction and fines to the owners. But Pasquale explains that this simple tool also has downsides. Most notably, it can shift costs from the government to individuals. It does so by imposing a difficult appeal process on those who have a viable defense. In addition, it dispenses with due process and denies the defendant the right to confront his accuser. Proponents argue that the genius of innovations like this is that they eliminate unwanted bias replacing it with a fair and impartial machine, but studies have shown that algorithmic risk assessment and sentencing regimes are not immune to racial and other biases, but instead integrate them into the system. Robotic law enforcement spawns market reactions like donotpay.com, which serves a legitimate purpose in helping innocent individuals avoid paying their fines but also encourages bad actors to game the system, which leads inevitably to more technological innovations to monitor individual behavior.
Another unrealistic promise of legal futurists is that technology can displace discretionary value judgments. Block chain technologies purport to replace both intermediaries and regulatory regimes. This innovation, for instance, could allow an individual to transfer a car without waiting on the long lines at the DMV to register ownership. But as, James Grimmelmann and Arvind Narayanan have argued, block chain technology can eliminate banks, exchanges, and registries like the DMV, but without a regulatory system, run by humans, the technology itself cannot solve the problem of equity and ownership. The technology may, for instance, make it possible to transfer a car immediately by using digital signatures. It could guard against theft by making it such that the buyer’s key will not work in the car until the money has been debited from his account and credited to the seller’s. But if a hacker manages to obtain someone’s key, we still need laws, norms, and human judgment to resolve the dispute.
Ultimately, computers cannot capture the “messy complexity of discordant human meanings” that define our physical reality. (p.26.) Equity requires human judgment, a nuanced, culturally sensitive understanding of meaning. As Pasquale recounts, in the 1990s, the first computerized chess program beat a grandmaster. By the 2000s, no grandmaster could beat a computer in a game of chess, but a grandmaster and a computer together can still beat a computer alone. The addition of human understanding, judgment, and the nuanced play of meaning is essential.
Pasquale speculates that part of the enthusiasm for technology is driven by investors. In addition, legal futurists may be motivated by the age-old desire of one part of the profession to assert superiority over another. No one likes to be associated with the image of the old guard, resistant to change and insistent on the way things have always been done. Legal futurists tend to cast those who are skeptical about technology in this way. Old, out-of-touch, stodgy, and perhaps even self-interested, these lawyers will do anything to preserve their world which is quickly disappearing whether they like it or not.
But, ironically, it is the legal futurists who are clinging to an outdated view of the law. They assume that the law is a set of clear rules established by a recognized authority prior to their application. Underlying their worldview is an understanding of law comprised of clearly ascertainable edicts that determine appropriate conduct and specific legal outcomes. But this formalist conception of the law was debunked over a century ago. Even in seemingly simple arrangements, law is full of ambiguity and its application is indeterminate and inevitably dictated by the views of the decision-maker.
Embracing a more contemporary view of law as a set of fair processes, which ensure a degree of internal logic, a connection between law and reasonableness, Pasquale argues that it is less obvious how a machine alone could surpass a human. If reasoned elaboration is the hallmark of law, then it seems more nuanced, more integrally connected to human understanding. Outcomes are both culturally dependent and linguistic in nature. If law is essentially a social institution, then it is harder and perhaps even impossible to mimic perfectly in code.
Like chess, the law is not a mathematical equation, and human relations are even more complex than chess moves. The sometimes arcane legal rules crafted and applied by humans are a suitable if imperfect adaptation to the messiness of real social interactions. Pasquale concludes that legal technology can be an important tool for lawyers. Together the lawyer, technology, and artificial intelligence may surpass the lawyer alone. But in order to realize this potential, legal futurists need to develop automation that cultivates and helps develop attorneys’ services rather than seeks to replace it.
Deborah L. Rhode and Scott Cummings, Access to Justice: Looking Back, Thinking Ahead
, 30 Geo. J. Legal Ethics
485 (2017), available at SSRN
In Access to Justice: Looking Back, Thinking Ahead, Deborah L. Rhode and Scott Cummings—two giants in the field—take stock of where we are when it comes to access to civil justice in the United States. Not content merely to offer an anodyne retrospective, they then use the opportunity to outline a bold agenda for future progress.
Rhode and Cummings begin their inquiry by assessing the scope of the problem. But, in so doing, they confront the same dismal paucity of reliable data that’s afflicted this inquiry for decades. As Rebecca Sandefur has bluntly put it: “[A]t present, we have no idea of the actual volume of legal need, and no idea of the actual volume of unmet legal need.” While the Legal Services Corporation (LSC) reports that “over four-fifths of the legal needs of the poor remain unmet,” it is hard to know whether that is true, as even identifying what a “legal need” is or isn’t is surprisingly difficult. (P. 487.) Many situations raise legal issues, have legal consequences, or pose legal risks, but how do we know whether any given situation is one of true legal need that can only be handled by someone with bona fide legal expertise? Worse, how do we assess those situations based on lay people’s sometimes hazy recollections, often long after the fact?
Then, assuming a genuine legal need exists, a second empirical question arises: How do we address that need? More to the point: Are lawyers required or can others suffice? In recent years, scholars have poured a huge amount of energy into answering that question, but Rhode and Cummings sum up the current state of the inquiry nicely: “Well-designed studies on the contributions of lawyers in routine cases are scarce and conflicting.” (Pp. 486-87.)
Where does this leave us? Rhode and Cummings are right, I think, in declaring that, notwithstanding uncertainty about just how big the civil justice gap is or how best it can be filled, “the limited data we do have suggest an unsettling lack of progress in assisting those who need help most.” (P. 487.) Though we can only roughly estimate the justice gap’s precise shape and exact size, there’s no question that the gap is large. Nor is there a question that this gap imposes significant costs: The individuals who are denied assistance, even in the face of urgent legal need, are obviously hurt, as they are thrust into the roiling waters of eviction, bankruptcy, family dissolution, deportation, or personal injury, without a legal lifeboat. And even beyond that, when some Americans’ legal problems are expeditiously resolved, while others’ problems are left to fester, the lopsided provision of legal services creates grave problems for society, all but guaranteeing the inadequate enforcement of law and the exacerbation of injustice and inequality.
Finally, as bad as it already is, there is also no doubt that the situation is poised to get worse: The LSC’s federal budget has dropped almost forty percent in the past thirty years, and the Trump White House, which has already shuttered the DOJ’s Office for Access to Justice, seems intent on defunding the LSC entirely.
So, what to do? Rhode and Cummings roll up their sleeves and provide helpful guidance. In so doing, they spell out what is, in effect, a kitchen-sink strategy, suggesting that we attack the problem from multiple directions at once.
First, they call for more non-lawyer assistance. In their words, we need “more access to justice, not necessarily more access to lawyers, and the profession needs to do more to support options apart from lawyers.” (P. 490.) Here, they observe that the ABA’s “preferred strategy . . . for increasing access to justice has, unsurprisingly, been increasing access to lawyers.” (P. 489.) But this strategy has drawbacks. Practically, it is completely unrealistic: At a time when even the LSC is on the chopping block, there is no political will to supply more publicly-funded lawyers, and, even if there were such will, many low-income individuals distrust lawyers supplied by government programs. Further, they argue, the ABA’s lawyer-centric strategy almost certainly stunts our support and development of worthwhile out-of-the-box options, including streamlined self-help courts, technological innovations like LegalZoom, and the expanded licensure of non-lawyer legal technicians. Accordingly, Rhode and Cummings argue that we ought to soften unauthorized practice restrictions to enable more non-lawyers to assist individuals with routine legal problems, and we should reserve restrictions on unauthorized practice only to those instances when there’s “demonstrated consumer injury.” (P. 491.)
At the same time, recognizing that lawyers are sometimes part of the solution, they call for lawyers to step up and make pro bono work “a higher priority.” (P. 492.) While pro bono assistance has increased in recent decades, it remains pitifully low—only a third of lawyers report meeting the fifty-hour annual goal set by the Model Rules of Professional Conduct, and a fifth of one survey’s respondents reported doing no pro bono work at all. (P. 493.) Moreover, even when lawyers do this work, it is sometimes shoddy: Rhode has previously found that nearly half of public interest legal organizations report dissatisfaction with the quality of pro bono work by firms. Rhode and Cummings thus propose making the current fifty-hour goal mandatory (with a buyout option), encouraging more voluntary pro bono contributions, and demanding greater accountability for the work that’s done to ensure that it is impactful, cost-effective, and satisfies the client.
A remaining corner of the access to justice landscape is occupied by public interest organizations. These organizations have experienced outsized growth over the past thirty years: The number of public interest jobs has increased nearly 300-fold, and the public interest sector’s percentage of the bar has nearly doubled. Meanwhile, these organizations have also changed shape and direction, as more conservative groups have sprung up, while others have shifted their focus, away from litigation and toward education, research, and policy. Compensation, however, remains abysmal. Rhode and Cummings thus call for increased financial assistance and a renewed focus on creating entry-level positions for attorneys who want to pursue this kind of work right out of the gate.
Rhode and Cummings’s essay ends with the famous quote by President Jimmy Carter—that we, in the United States, are “overlawyered and underrepresented.” (P. 500.) Four decades after Carter’s proclamation, Rhode and Cummings show us that Carter’s message still resonates, even while they seek to sow the seeds of future reform.
Many professors reading this review teach professional responsibility courses. These courses cover the law of lawyering, commonly focusing on the ABA Model Rules of Professional Conduct. As revealed in a small survey that I conducted in 2011, many professors do not devote much attention to studying legal malpractice law. The survey revealed that an even smaller percentage cover legal malpractice insurance. As a result, the majority of law students likely graduate without the basic understanding of legal malpractice insurance and without considering the crucial role that insurance plays in a professional’s practice. Professors’ failure to discuss the role insurance plays in helping lawyers function as accountable professionals may contribute to the large number of lawyers who fail to carry legal malpractice insurance. From the standpoint of access to justice, uninsured lawyers may leave injured persons without a remedy because experienced malpractice counsel often decline to sue lawyers who do not carry insurance or have significant assets to cover a malpractice judgment or settlement.
Among practice settings, solo practitioners constitute the largest group of uninsured lawyers. Although some scholars have studied the role that insurance plays in affecting the conduct of lawyers in large firms, no one has studied the issues related to malpractice insurance and solo practice. That is why I especially liked Lawyers Going Bare and Clients Going Blind by Leslie C. Levin. The article provides a fascinating window into the world of uninsured solo lawyers.
To put the issue of uninsured lawyers in perspective, the article opens by discussing mandatory insurance for lawyers. Unlike other common law countries, in the United States, only two states now require that lawyers in private practice maintain a minimum level of malpractice insurance. With this background on insurance requirements, Professor Levin’s article examines the profile and perspectives of lawyers who “go bare,” drawing on data derived from a 2011 survey of uninsured New Mexico lawyers and more recent surveys of insured and uninsured lawyers in Arizona and Connecticut. The data paint an interesting portrait of uninsured lawyers and their conduct. Most notably, the results address the role that cost plays in lawyers going bare. The results reveal a “disconnect” between what some lawyers know about cost and the reasons they indicate for not carrying insurance. Although New Mexico lawyers most frequently cited cost as the reason for not carrying insurance, 40.8% of New Mexico lawyers never applied for insurance. (P. 1290.) This suggests that the lawyers may not have actually known of the relatively low cost of insurance (around $3,000 per lawyer for minimum levels of coverage). This amount appears to be relatively low, assuming that you are a lawyer with a profitable practice.
A number of respondents in the survey reported that insurance was unaffordable because they were running their practices on a shoestring, practicing law without support staff and without a dedicated office. By contrast, a significant percentage of uninsured lawyers reported that the cost of insurance was not prohibitive and that they would purchase insurance if the state required them to do so. (P. 1291-92.) From the standpoint of client protection and accountability, this group of lawyers may be the most troubling, despite their claims that they could afford to hire counsel to defend a claim. Evidently, these lawyers make an economic calculation, weighing the cost of insurance, the value of insurance protection, and the likelihood of a plaintiff will successfully recover on a malpractice claim.
Some lawyers refuse to carry insurance because they believe that insurance makes them more attractive targets. Others reported not carrying insurance because they practiced in areas, such a criminal law, in which their civil liability exposure is limited. (Pp. 1293-94.)
As a professor who directs a post-graduate incubator program that is designed to train recent law graduates pursuing solo and small firm practice, the insight I found to be the most interesting is the finding that a lawyers’ early practice experience may affect the likelihood that lawyers will opt to carry malpractice insurance later in their career. The results suggested that lawyers who were insured in their early careers were more likely to carry insurance later in their careers. (P. 1296.) As noted by Professor Levin, the lawyers who were covered by insurance when they first enter private practice may come to view insurance “as a necessary part of doing business.” (P. 1296.) This observation points to the value of requiring insurance in post-graduation incubator programs.
One factor that may influence lawyers’ decisions to purchase insurance is a state requirement that lawyers disclose that they do not carry insurance. Professor Levin’s article systematically examines insurance disclosure requirements canvassing the different approaches states take, as well as the possible impact of those approaches. Interestingly, the data does not clearly indicate that disclosure requirements create an incentive for lawyers to purchase insurance (though the disclosures still may have other benefits). (P. 1308.) At the same time, Professor Levin explains that there is no evidence to support the arguments that disclosure requirements stigmatize uninsured lawyers and contribute to an increase in frivolous lawsuits. Id. Professor Levin concludes by urging that states develop more effective disclosure regimes to inform the prospective clients before they contact lawyers.
Rather than relying on enhanced disclosure requirements, Professor Levin recommends that state high courts seriously examine the issue of uninsured lawyers. (P. at 1330.) After Professor Levin’s article was written the Illinois Supreme Court took that challenge addressing the special risks of lawyers who go bare. On January 25, 2017, the Court adopted revisions to Rule 756, requiring that uninsured lawyers periodically self-assess their knowledge of ethics and firm practices. In the same year, the Supreme Court of Idaho took a big leap on the insurance front. On March 30, 2017, the Idaho high court adopted See rule amendments requiring attorneys in private practice to carry minimum levels of insurance.
Moving forward, Professor Levin’s work can inform the work of other regulators formulating new approaches to address concerns related to uninsured lawyers. Thanks to Professor Levin, these regulators can use empirical data and her recommendations in charting a course to enhance public protection.
Anthony Sebok, Selling Attorney's Fees, U. Ill. L. Rev.
(forthcoming 2018), available at SSRN
The humble fee-splitting rule—Rule 5.4(a) of the Model Rules of Professional Conduct and its substantial equivalents in various states—plays an outsized role in structuring the delivery of legal services in the United States. The rule provides that, with limited exceptions, “[a] lawyer or law firm shall not share legal fees with a nonlawyer.” The fee-splitting rule is substantially the same even in jurisdictions with quirky rules of professional conduct, such as California, New York, and Texas. The only exception is the District of Columbia. Historically the concern of the fee-splitting rule was mostly payments to nonlawyers for referrals of cases, or the use of “runners” or “cappers” to solicit personal-injury clients. It featured prominently, however, in the debate in the early 2000’s over the proposal to allow multidisciplinary practices (MDPs), such as partnerships between accountants and lawyers. The acrimonious MDP debate ended with lawyers doubling down on the claim that the practice of law is a profession, not a mere business, and that avoiding the sharing of fees with nonlawyers is an essential firewall protecting lawyer professionalism. (Insert snark here about how an industry with total revenues of $86.7 billion—the 2017 AmLaw 100—can claim with a straight face not to be a “business.”)
Tony Sebok’s article, Selling Attorneys’ Fees, begins on familiar ground. The inability of law firms to obtain equity investments from nonlawyers limits their sources of capital to firm revenues and debt financing. This leaves them strapped for the cash that might catalyze Silicon-Valley-style innovation in the delivery of legal services and makes them vulnerable to economic downturns. One of the motivations for the ABA’s Ethics 20/20 Commission was to consider whether regulatory innovations might enhance the delivery of affordable legal services. However, the proposal to permit certain types of alternative business structures, which would have required relaxing the fee-splitting rule, went down in flames. The Illinois Bar Association filed a formal resolution opposing changes to the fee-splitting rule, and the Ethics 20/20 Commission responded by tabling any consideration of alternative business structures.
The first question Sebok addresses concerns the application of the fee-splitting rule to law firm financing transactions. If the policy underlying the fee-splitting rule is protecting the independent professional judgment of lawyers (and Sebok shows that this is the best constructive interpretation of the rule), then one would think the rule would focus on the extent of control exercised by a third party. That is sometimes the way the rule is applied, but not always. Here is an illustration from the Hazard, Hodes & Jarvis Law of Lawyering treatise, which Sebok uses in his article: Three lawyers would like to construct a law office; each is required to contribute $50,000 to the project. Lawyer A borrows $50,000 on a line of credit with a bank. Lawyer B obtains $50,000 from a wealthy friend, in exchange for a promise to pay 10% of his net legal fees. Lawyer C takes $50,000 from a recent settlement of a client’s matter and plows it back into the construction costs. Which of these lawyers has violated Rule 5.4(a)?
If the answer depends on whether attorneys’ fees are literally shared with a nonlawyer, then Lawyers A and B both violated it. There is plentiful authority, however, supporting the conclusion that making interest payments on an ordinary commercial line of credit with a bank does not violate the fee-splitting rule. One of the many contributions of Sebok’s article is to show that the covenants in loan agreements with banks grant a significant degree of control to the lender over the operation of the law firm. If the concern underlying Rule 5.4(a) is preventing outsiders from meddling in the representation of clients by lawyers, Lawyer A may be in trouble also if she accepts covenants potentially granting control to the lender. As for Lawyer B, one might rely on the principle that it is permissible to pay a fixed interest rate to a lender, one not contingent on the outcome of any given matter, but there are some state bar ethics opinions prohibiting these sorts of fixed-rate contingent advances. The prohibition becomes more uniformly applied where the return to the lender is calculated as a percentage of the proceeds of a litigated matter handled for a client. Further complicating the analysis, law firms commonly engage in factoring transactions, in which they sell their accounts receivable to a nonlawyer, in exchange for a discounted cash payment. A recent U.S. District Court decision in Massachusetts followed the well-established rule that selling accounts receivable – which, after all, necessarily are comprised of attorneys’ fees – to a nonlawyer does not violate the fee-splitting rule.
It is then but a small step to recognize the permissibility of factoring unmatured attorneys’ fees, as distinguished from payments due for services already completed. (“Unmatured” here means that a definite obligation to pay the lawyer a specific amount has not yet accrued; in a contingent-fee representation, for example, the client may have agreed to pay 1/3 of the gross proceeds, but until judgment or settlement, the precise extent of the client’s obligation has not yet been established.) As Sebok notes, “attorneys are factoring unmatured contingent fees today” (P. 32.), courts are aware of the practice, and have allowed the existence of this practice to pass without comment. Interestingly, one New York decision he cites inverts the “core values” objection to fee-splitting and contends that a formalistic application of the fee-splitting rule treats lawyers worse than other similarly situated businesses. (P. 33.)
But the factoring of unmatured fees would violate what Sebok calls the Direct Relation Test (DRT), which is his attempt to make sense of the incoherence in fee-splitting cases and ethics opinions. The DRT prohibits the payment of legal fees to a nonlawyer if and only if the nonlawyer’s profit or loss is directly related to the success of a lawyer’s representation of a client. (P. 21.) “Direct” here means something like “linked to the result in a particular case or small subset of cases.” Courts and bar associations therefore have a choice: Either prohibit factoring of unmatured fees, thus applying the DRT, or permit this common practice and junk the DRT.
It is impossible in this short comment to do justice to the sophistication and subtlety of Sebok’s argument. His resolution of the dilemma is ingenious. If I understand correctly, the DRT is not implicated in the factoring of unmatured fees because what the attorney sells to the buyer is a peculiar type of property—a lien on the proceeds of the lawsuit. The lien creates an equitable assignment of property (the client’s cause of action) in favor of the nonlawyer. Because the property interest never passes into the hands of the lawyer, the lawyer seller is not sharing fees with the nonlawyer buyer. (Pp. 38-39.) If courts and ethics committees analyze the fee-splitting rule in this way, however, it becomes possible for clever lawyers and financiers to draft around the rule’s prohibitions. Non-recourse loans, for example, can be reworked as the purchase of a property interest in an unmatured fee. It is therefore impossible to hold onto a principled interpretation of the DRT, because a return to an investor that is directly related to the attorney’s performance may fall outside the fee-splitting rule. Regulators may be tempted to respond by overcorrecting in the direction of a highly formalistic interpretation of Rule 5.4(a) that would prohibit a form of financing commonly engaged in by contingent-fee lawyers.
One solution to the dilemma identified by Sebok would be to focus not on the nature of the property interest conveyed, but on the effect of the transactional structure on the lawyer’s exercise of independent professional judgment. (He suggests this reading when he notes that one of the most important sticks in the bundle of property rights is control over any portion of the interest.) Briefly, the question would be, is there any circumstance under which the lawyer would do better financially by taking actions that adversely affect the client’s matter? That is one way to synthesize many of the state ethics opinions he cites, and is consistent with the policies underlying the rule. But regulators have a distressing tendency to veer erratically between formalistic and functional or policy-sensitive interpretations of Rule 5.4(a). Furthermore, as Sebok has shown, the possibility of control and interference by third-party financiers is much more pervasive than lawyers may realize.
At the end of the day, Sebok’s proposed resolution is a kind of unjust-enrichment revision of the rule, under which “non-lawyers may not benefit from gains generated by legal resources that were enabled by the non-lawyer for the use of an attorney on behalf of her client.” (P. 51.) The client’s recovery is supposed to depend on the lawyer’s “knowledge, skill, experience, and time expended.” (P. 51, quoting Texas Bar Op. 576.) If a third-party financial investment helps the attorney maximize the effect of her skills, that is fine; the client then benefits directly, and the investor indirectly. What is impermissible is for third parties as well as clients to benefit directly from their investment. The direct benefit would somehow convert them into “officious intermeddlers,” in the language of many old champerty cases.
I am not entirely persuaded that the functional approach to the interpretation of the fee-splitting rule should be abandoned. To my mind, a focus on the “productive or generative” relationship between the nonlawyer’s financial contribution and the lawyer’s provision of professional services is getting far afield from Rule 5.4(a)’s emphasis on the lawyer’s independence. It’s true that some aspects of third-party financing of litigation are best explained in terms of the nonlawyer’s motivations. Sebok himself has written the definitive article rationalizing the law of champerty and maintenance along these lines. Whether in the end courts and bar associations follow Sebok’s suggested interpretation, there is no doubt that this article is by far the most comprehensive and ambitious treatment in the literature of an important, if under-appreciated feature of the law governing the legal profession.