If you ask most individuals why lawyers have a monopoly on the provision of legal services and why lawyer regulation exists, I suspect they would answer that lawyer regulation is necessary for “client protection.” Assuming this is correct, it is ironic that most U.S. jurisdictions do not require one of the most basic kinds of protection. Unlike lawyers in many other countries,1 most U.S. lawyers do not have to carry malpractice insurance, which could protect clients in the event of lawyer error.
Although several U.S. states have recently examined the issue of whether malpractice insurance should be mandatory, only two U.S. jurisdictions currently require lawyers to carry professional liability insurance. Oregon has had this requirement since 1977, and Idaho has had this requirement since 2018. Professor Leslie Levin’s article on The Politics of Lawyer Regulation: The Malpractice Insurance Example, which will be published soon in the Georgetown Journal of Legal Ethics, is a case study that examines and compares the mandatory malpractice insurance initiatives in these and other states. Her thorough and insightful article makes a compelling read, not only for those who are interested in the malpractice insurance issue, but also for those who are interested in other lawyer regulatory issues and wonder why some reforms succeed, whereas others fail.
Professor Levin’s article begins with an excellent roadmap. As it explains, the first part of her article describes the history of lawyer regulation in the United States and explains why lawyers continue to play such a significant role in their own regulation. The second part of her article examines the institutional actors involved in lawyer regulation, including the courts, the legislatures, and bar organizations. This section discusses the reasons “why courts often regulate in ways that favor the legal profession’s preferences and why legislatures are (somewhat) less likely to favor lawyers.” This section also highlights differences between mandatory and voluntary state bar organizations as well as factors that influence their decisionmaking. The third part of her article recounts the history of the debate over malpractice insurance requirements and some of the arguments against it. This section includes a discussion of the ABA’s Model Court Rule on Insurance Disclosure and the limitations of disclosure. The “roadmap” describes the remainder of the article as follows:
Part IV of the article looks closely at how Oregon (forty years ago), and six other states (California, Idaho, Nevada, New Jersey, Texas, and Washington), have handled the regulation of uninsured lawyers relatively recently. The article discusses the political culture of the states, the historical context in which the insurance issue arose, and the role played by the state courts, the legislature, and the bar. Drawing on the case studies, Part V then identifies some factors that seemingly affect whether states will adopt public-regarding laws concerning LPL insurance. These factors include whether the organized bar supports it, the applicable lawmaking or rulemaking process, the mandatory or voluntary nature of the state bar, the views of the leadership, and the opportunities for lawyers opposed to the measures to directly lobby against the law. In the Conclusion, the article briefly considers when states are likely to adopt public-regarding laws governing lawyers. Itsuggests some areas for further research and some possible ways to ensure that the public interest receives appropriate consideration in debates over lawyer regulation.
There are several reasons why I like Professor Levin’s article. There were many places where her article provided information that may not be widely known within the field. For example, many readers, including myself, may not know the history of voluntary and mandatory state bar associations, including the early leadership role of the Chicago Bar Association.2 Professor Levin’s article also provides a useful primer on public choice theory, interest group theory, and regulatory capture for those who don’t know as much about these theories as they would like. Although many professional responsibility experts will be familiar with the points in the third section of the Article, which summarizes the ABA’s actions and regulatory debates, it is helpful to have this material collected together in one spot.
The fourth section was one of my favorite parts of this Article because of the manner in which Professor Levin combined her extensive research about Oregon and the six states that have recently considered the issue of mandatory malpractice insurance (i.e., Idaho, California, Washington, Nevada, New Jersey, and Texas) with political science research and classifications. One result is a “State Comparisons” chart that includes information about the active lawyer population in each state, whether the state bar is mandatory or voluntary, the state’s current approach to the malpractice insurance issue and the date of its most recent consideration of this issue, and whether the state has a political culture that is moralistic, individualistic, traditionalistic, or a combination of these categories.4 as well as other kinds of lawyer regulation reform initiatives.5 I hope it prompts jurisdictions to ask what procedures or tools6 they should use to help ensure that lawyer regulation is adopted for agreed-upon purposes, such as client protection, rather than lawyer protectionism.
- See, e.g., Council of Bars & Law Socys. of Europe, Responses to the CCBE Questionnaire on Professional Indemnity Insurance Comparative Table (OCTOBER 2014), https://perma.cc/9AJR-254J (contains EU Member States requirements); Jennifer Ip & Nora Rock, Mandatory Professional Indemnity Insurance and a Mandatory Insurer: A Global Perspective, 10 LAWPRO MAG. 2 (2011), https://perma.cc/2J7E-7A6Z (citing Table 1, infra, and referring to mandatory legal malpractice insurance requirements in Australia, Canada, Hong Kong, Malaysia, Singapore, and the UK); LawPro, Table 1: Professional Indemnity Insurance Requirements Around The World, 9(4) LAW PRO MAG. 8 and web supplement (Dec. 2010), https://perma.cc/5W7P-XFQH and https://perma.cc/KX8L-W5XB (listing Asian, Australian, Canadian, EU, and UK jurisdictions that require malpractice insurance; LAWPRO, which published this Table, is the mandatory insurer for lawyers in Ontario, Canada).
- The Chicago Bar Association, along with the ABA and the City Bar of New York, was established during the 1870s “in part to raise the status and competence of lawyers.” The Chicago Bar Association continues to be interested in lawyer regulation issues and play a leading role. For example, in October 2019, the Chicago Bar Association and the Chicago Bar Foundation launched their Task Force on the Sustainable Practice of Law & Innovation “to help shape a better future for our profession, the public, and the justice system.”
- Professor Levin’s article explains that political culture is distinct from political ideology, citing the politically diverse states of Utah and Minnesota, both of which have been characterized as “moralistic” states. Her article offers the following explanation of these “political culture” terms:
In the moralistic political culture, which is found in Oregon and some other Western states, politics is viewed as a positive activity in which citizens have an obligation to participate, and “[g]ood government is measured by the degree to which it promotes the public good.” Moralistic states have higher levels of political participation and are more likely to adopt political reforms and innovations. Individualistic political culture, which is associated with some of the Rocky Mountain, Midwest, and mid-Atlantic states, is based on a more utilitarian view that politics should work like a marketplace and places a premium on limiting government intervention into private activities. “Traditionalistic” political culture, found mostly in the South, accepts the inevitability of a hierarchical society and tries to limit the role of government to maintaining the existing social order. While the political cultures are changing in some regions, they have proved to be a good predictor of public policy variations among the states. (Footnotes omitted).
- Although Georgia is not included in Professor Levin’s case study, the State Bar of Georgia’s Professional Liability Insurance Committee examined whether Georgia should require mandatory malpractice coverage or disclosure. This Committee developed four options for consideration by the Board of Governors. Because of the COVID-19 virus, however, this State Bar of Georgia committee postponed its planned March 2020 vote on these proposals.
- The IAALS [Institute for the Advancement of the American Legal System] Unlocking Legal Regulation Knowledge Center webpage includes links to a number of lawyer regulation reform initiatives in the United States and elsewhere. Although many of these initiatives may be familiar to readers, such as the initiatives in Arizona, California, and Utah, the IAALS Knowledge Center webpage includes links to less well-known initiatives such as those in Connecticut and New Mexico. The IAALS webpage is a useful source for up-to-date information about these initiatives, such as the March 2020 California Task Force Final Report and Recommendations; in May 2020, the State Bar trustees voted to create a working group to consider the development of a regulatory sandbox approach that would be analogous to that currently being implemented in Utah. (For more information about the California and Utah initiatives, see the IAALS Knowledge Center. I addressed these initiatives in a Nov. 2019 presentation: click for slides and materials.)
- Regulatory objectives and evidence-based lawyer regulation are tools that jurisdictions could consider, short of removing lawyers from the lawyer regulation process.