Small Law Firms, Solo Practitioners, Technology

Lawyers Fail The Middle Class -- Would Non-Lawyer Ownership Of Firms Help?

A new take on why non-lawyer ownership can improve the profession.

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Save the Middle ClassIt’s perhaps trite in an election season to declare anything as failing the middle class. Every candidate from city comptroller to POTUS is falling all over themselves to explain how they’ll right the ship for the beleaguered middle class. Those poor middle-class folks — why can’t they have it easy like the poor? No one ever talks about those folks.

In all seriousness, while the political fascination with the middle class is a function of naked pandering to an amorphous, elastic group of voters who range from just below the poverty line to anyone pulling down less than three million per year, there’s really something to be said for the idea that the legal profession is uniquely screwing over the middle class.

It’s not as though the middle class avoids legal dilemmas. And yet legal services are arranged to address the needs of wealthy interests willing to pay the high billables that make the world go ’round and — to a powerfully underfunded extent — the needs of the poor. And unlike politics, lawyers are more likely to publicly decry the struggles the industry faces in closing the justice gap for the poor than to pander to the middle class. That’s to their credit… but it leaves the middle class both unable to pay for services and unable to qualify for help in the uncomfortable middle ground that befits their name — the occasional “low bono” success story is the exception that proves this rule.

LegalZoom General Counsel Chas Rampenthal recently posted an article on Medium (previously published at Law360) highlighting this gap in the industry and making the bold proclamation:

The way law is “required” to be practiced – in law firms that are exclusively owned and controlled by lawyers – is the largest impediment to real consumer progress.

Really? Well, we’ve already noted that lawyer-owned firms are overly beholden to banks for lines of credit, leaving Biglaw firms vulnerable to insolvency in ways that corporations able to stir up capital elsewhere wouldn’t be. Rampenthal takes another angle and notes that other legal communities have noted that customer complaints about lawyers often have more to do with the way lawyers conduct business than their legal advice. It’s a well-worn complaint that a solo practitioner spends half or more of his or her time doing tasks unrelated to the actual practice of law, but it’s true and has profound implications for potential clients.

If the only effort to provide economies of scale is in the service of wealthy clients, the middle class will continue to lose out as those best positioned to provide legal advice to the middle income brackets are saddled with so much overhead that they can’t reach a price point most in the middle class are willing to — or even can — pay. And creating something like a “nationwide firm for the middle class” is going to require funding mechanisms and a structure that only non-lawyer ownership can provide.

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Not to mention a national branding. Beyond pricing, a major problem for the middle class is failing to recognize legal problems when they first arise. Lawyers don’t help the situation when they pride themselves on solving “emergencies” and eschew the sort of advertising that could let people know that their problems could be resolved a lot easier if they saw a lawyer beforehand. Preventive care isn’t just for medicine, folks! But a solo or small firm can’t create that sort of broad awareness or stay afloat with just a high volume of such low-revenue services. That’s going to take scale.

The consequence of unaffordable pricing for middle class legal needs? Well, Rampenthal says we’re seeing it right now:

In a 2013 American Bar Foundation study, nearly two-thirds of adults reported experiencing a “civil justice situation,” with the most common issues revolving around employment, finances, insurance and housing. Nearly half resulted in a significant negative consequence for the consumer.

An overwhelming majority of these consumers are facing their difficult legal situations without any help. Ask any courtroom employee, judge, clerk or stenographer: The number of self-represented litigants is staggering. In Utah, for example, 83 percent of divorce cases, 87 percent of protective order cases, and 98 percent of eviction cases have self-represented litigants. And in New York, 97 percent of child support cases, 99 percent of eviction cases, and 99 percent of consumer credit cases have self-represented litigants.

And here I thought we owed this boom in self-representation to sheeple finally waking up to the fact that all our courts are maritime courts with fringed flags that cannot bind us!

Obviously there’s a lot of reason to fear blowing up the time-honored structure of the legal profession and letting corporate raiders take the helm. Rampenthal shares that concern, but responds:

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As a practicing lawyer, I too often lie awake at night thinking about the what-ifs.

But the time has come to put a little less focus on the what-ifs of the future. Let’s not let them overshadow our present state of “what is.”

A whole segment of the populace is unserved. Swaths of lawyers are unemployed or underemployed. Technology may be making it easier for small firms to compete with Biglaw for work, but that also moves smaller firms farther and farther away from serving the middle class (assuming they could do so affordably under the current model in the first place).

In that world, is it time to try something bold to address the problem? This article makes a good case.

Why have lawyers forgotten about the middle class? [Medium]

Earlier: Should Non-Lawyers Own Firms? Do They Already?
Do You Really Want To Be A Public Interest Lawyer?
Were We Wrong About This Law Firm? Probably, Yeah.

Joe Patrice is an editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news.

Photo via Getty Images

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