Lawyer cartel fights uberization of the law: Column

By Tom Gordon - usatoday.com Posted on November 19th, 2015

Imagine that at tax time you’re required to either fill out your 1040 without help or pay a CPA hundreds of dollars to do it for you. There’s no H&R Block, and while TurboTax exists, it’s under constant siege by state regulators for being an unlicensed accountant.

That’s analogous to the situation that most Americans face whenever they have a legal issue. For even simple matters, they have to either do it themselves, hire a lawyer for over $200 an hour or use software that can do the job well but which the lawyer cartel is trying to put out of business.

Responsive Law’s Report Card on Barriers to Affordable Legal Help, which will be released Thursday, grades each state on how restrictions created by lawyers make legal help expensive and inaccessible for its residents. No state received a grade above a C. The two factors most responsible for the low grades are restrictions on who can provide legal services and restrictions on the corporate structure of law firms.

For a basic will or uncontested divorce, a consumer could be well served by a competent professional other than a lawyer. However, in most states, only lawyers are allowed to provide these services. State bars have used vaguely worded restrictions on the “unauthorized practice of law” to bring legal actions against everyone from major companies like LegalZoom to small mom-and-pop operations.

The worst offender in restricting competition is Florida, which received an F in the category of Barriers to Non-Lawyer Help. The Florida Bar has a $1.97 million annual budget dedicated to enforcement of unauthorized practice restrictions that it has used to pursue charges against people like Katie Vickers, a senior citizen who helped a fellow parishioner at her church with completing workers compensation forms.

Fortunately, at least one state has made some progress in allowing access to alternatives to lawyers. Washington recently began licensure of limited license legal technicians — people with paralegal training who will be able to provide legal help directly to consumers in certain family law matters at a more affordable rate than lawyers.

In every state, non-lawyers cannot run a law firm or invest in one. Thus, companies likeCostco and Target cannot employ lawyers to provide services to the public. Similarly, a lawyer cannot raise money from non-lawyers to fund a plan to provide consumer legal services more affordably. As a result, there is no H&R Block of law firms, where people can find reasonably-priced legal help nationwide.

Australia and England stand in stark contrast to the U.S. In England, consumers can choose from a wide range of licensed service providers besides lawyers for legal help. In Australia, consumers can call a national law firm and get affordable consumer advice by phone.

The greatest barrier to such innovation in the U.S. is lawyers’ use of their monopoly power to prevent it. Unfortunately, in most states the bar uses this power without supervision from the elected branches of government, leaving consumers with little recourse against this cartel. However, the U.S. Supreme Court ruled last term that professions could be in violation of antitrust law if they use their governing power to restrict competition. Prohibiting innovation and competition in legal services is not just bad for consumers; it now may be illegal.

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