Technology, the Fiduciary Duty, and the Unaffordable Legal Services Problem
The concept of a legal profession should have a strong social welfare aspect to it such that its distant goal is to make a community’s legal health as important to it as its medical health, and its lawyers as important to it as its doctors. Technology can do that. Unfortunately it is becoming a more distant and unattainable goal because our law societies are moving us in the wrong direction.
All efforts are aimed at helping the population learn to live with the problem of unaffordable legal services, but there are none to solve the problem. Law society benchers (elected by their fellow lawyer-members of a law society to be its managers) promote the former but not the latter. Efforts to help the population learn to live with the problem are provided by other people. Benchers merely promote them. Thus the time needed remains in control of each bencher and does not involve a risk of failure attributable to a bencher. Therefore benchers can give priority to being practicing lawyers and to fulfilling the personal reasons for becoming benchers. That leaves law societies’ duties to make legal services adequately available in a very poor second place. That conflict plus a refusal to innovate is the cause of the problem.
A program to solve the problem would involve very detailed hands-on management by benchers. It would require a period of trial-and-error learning, and therefore accepting the risk of failure as the price of learning. That makes the amount of time needed unpredictable. And it creates a risk of being associated with a failure, at least at the beginning of such a project. Therefore, there is no such program.
And there is no public declaration by a law society that states, “this problem is our problem and it is our duty in law to solve this problem.” Thirdly, law societies do not do the obvious—to join together in a national effort to learn how to solve the problem by retaining the necessary expertise to develop a strategy. The problem is the greatest threat and impairment ever, to the availability of legal advice services, and the integrity of Canada’s justice system, and to the continued existence of law societies.
But CanLII (the Canadian Legal Information Institute) and the National Mobility Agreement are impressive accomplishments by Canada’s law societies by way of the Federation of Law Societies of Canada. They prove that our law societies can solve the unaffordable legal services problem.
But, such institutions do not change until the fear of the consequences of not changing is greater than the fear of the consequences of changing. Apparently, our law societies do not yet fear the consequences of not changing, even though they have no answer for the angry taxpayer who demands to know:
“Why can’t I have an affordable lawyer of my own? I pay for the justice system where you lawyers earn a very good living compared to me. But I must use the second best ‘alternative legal services’ of clinics, public legal education kiosks in shopping malls, help for self-represented litigants, pro bono and targeted legal services, and various forms of self-help. You say you take this ‘access to justice’ problem very seriously. I don’t believe that. If you were serious, you would be trying to solve the problem. You can’t show me anything that you have done about trying to solve the problem. Would you send your close relatives and friends to ‘alternative legal services’? Of course not; that’s not good enough for them, but it’s good enough for us—yes us, the majority of the population who cannot afford legal services. Why should I give my respect and tax money for your justice system?”
The Access to Justice Research Network (the AJRN & CFCJ), and The Action Group on Access to Justice (TAG, an agency of the Law Society of Upper Canada (LSUC in Ontario)) are ignoring that angry taxpayer. There will always be a need for their alternative legal services, but they shouldn’t be the law societies’ reason for not striving for the problem’s solution. They do not provide the fiduciary duty.
What these groups are doing is commendable. But the young lawyers and law students involved will spend the rest of their careers in a seriously economically depressed profession. The population has never needed lawyers more. If legal services were affordable they would have very good economic futures and careers. What is being done about that?
Given the great power of communication that all people now have to talk about the damage caused to their lives by the lack of a lawyer’s advice, the law societies are inviting their own abolition, or substantial changes in their management structure—see for example, The Clementi Report (U.K., 2004). Its recommendations are briefly summarized in the History of Reforms provided by the U.K. Legal Services Board. Isn’t a similar regulatory oversight agency required for Canada’s law societies? See University of Windsor, Canada, law Professor Noel Semple’s book, “Legal Services Regulation at the Cross Roads: Justitia’s Legions” (Edward Elgar Publishing, 2015). He examines legal services regulation in North America and in other countries. See the Financial Post book review by Mitch Kowalski, that says, “The footnotes alone are worth the price of this book!”
Law society efforts are far from providing an adequate response to the population that pays for the justice system. In return, law societies sponsor “alternative legal services,” which are mostly charity. They do nothing more than help the population learn to live with the problem, which tells everyone that never again will they have a lawyer of their own, in a fiduciary duty, whose duty it is to solve the client’s legal problems affordably. It is also a confession to government that law societies cannot solve the problem and won’t try to solve it. So what justifies their monopoly over the provision of legal services?
The fiduciary duty tells the client, “your legal problems are now my problems; so go home, rest, and take care of your health.” That is a very important part of a lawyer’s services to a client and of the justification for the monopoly. That’s gone. Alternative legal services and current access to justice efforts do not provide that.[i] Rich people will have it, but not the majority of Canada’s population.
Therefore, a law society public declaration is required. Because: (1) of that substantial loss that is the fiduciary duty that accompanies the delivery of legal services by a lawyer; and, (2) to avoid accusations of a lack of transparency concerning its policies and practices as to the availability of affordable legal services, a law society should publicly state: (1) people must get used to living with the problem of the unaffordability of legal services; (2) because the law society is not able to perform its duty to bring about innovations in regard to the way the legal profession provides legal services so as to make them affordable; and, (3) although it is expected that the matter of the affordability of legal services will be relieved by the development of various commercially-provided legal services [see below], such services will not be accompanied by the law society’s enforcement of the quality of such services and of a fiduciary duty.
As a result of such law society “failure to perform,” the legal profession’s methods of providing legal services are fixed. But the medical profession and nearly all other producers of services as well as goods are not so immovable and resistant to change for the greater welfare of the community. If this state of affairs is to be legal, legislation such as Ontario’s Law Society Act, s. 4.2, should be amended so as to reduce the duties and responsibilities of law societies, and therefore, their purpose, power, and prestige.
But there won’t be such public declarations of law society policy. In effect, they state that the law society will not aid its members to compete with, and out-perform the movement away from the professional, duty-bound provision of legal services, and to the commercial marketing of legal services. But law societies have the future of the legal profession in their hands, particularly so that of the young lawyers in their membership.
Instead, the specialized staff, materials necessary, principles of database management, and methods of production needed to make legal services affordable for the majority of the population, will be developed by “the fast food-law” outlets such as, LegalZoom, RocketLawyer, LegalX, and the more multi-purpose Avvo.com. Their use of technology for legal advice could become highly sophisticated.
That should happen within the context of the law firm and not by way of highly commercialized legal services. If law societies provided strong leadership, the legal profession itself could make it happen. The practice of law is not a business, and business is not the only agency that can make it as cost-efficient as necessary, and make legal services as affordable as required.
Consider this quotation from one of Canada’s most influential law journals:[ii]
“But will the automation of legal services be the death knell for lawyers? Technology has disrupted a number of other industries to the detriment of established players and the labour force. Wikipedia has destroyed the encyclopaedia industry; YouTube and Netflix have changed the way individuals watch television; Airbnb has significantly disrupted the hotel industry; and Uber is in the process of upending the taxi industry. Such disruption comes at a cost, borne by those who failed to innovate.” [footnotes omitted]
That is the cause of the unaffordable legal services problem—the failure of law societies to innovate.
Technology that creates support services will highly specialize every factor of production as do all industries in competitive markets and as the medical profession does. That provides the greatest competence and cost-efficiency possible. No doctor’s office provides all treatments and remedies for all patients as does a lawyer’s office for all clients. Doctors, and producers in competitive markets, use support services methods. The “parts industry” is a huge and very sophisticated support service for the automobile manufacturers. The medical services infrastructure is made up entirely of mutually interdependent support services. There are no “generalists.” In contrast, the legal profession uses a handcraftsman’s method of production without any specialized support services (except for the vendors of law books and electronic research services). Therefore the unaffordable legal services problem is inevitable. Law societies should have been sponsoring a similar transition to support services production, at least for the general practitioner–the practitioner whose greater contact with the public than that of other lawyers determines the reputation of the legal profession amongst that majority of taxpayers that pays for the justice system.
But instead, the victims of the transition to highly commercialized methods of producing legal services will be the lawyers and law students now working in a very economically depressed profession. As Jordan Furlong states, “The agile lawyer will rise as permanent, full-time, salaried employment vanishes. … Law is one of the later markets to experience the rise of temporary, contract, outsourced, and flex-time workforces.” Such a lawyer is “agile” in providing flexible availability for multiple short-term engagements helping other law firms with peak-period work volumes and special projects. Can that create a highly career-oriented specialized lawyer, or a low-paying, hand-to-mouth existence of part-time piece work? How should we characterize Lawyers on Demand (LOD), and, Deloitte Conduit Law LLP? (See the Financial Post review of the creation of Deloitte Conduit by Mitch Kowalski (March 24, 2016)).
Commercialized law could force the lawyers remaining in private practice to become like architects and engineers in that they do their work for large institutions and construction companies. Law societies are passively aiding that transition. If it continues, the general practitioner will go the way of the shoemaker’s shop—gone forever. A summary of the statistical decline of the number of lawyers in private practice is provided in a recent article by CanLII’s former President, Colin Lachance, “Law’s Reverse Musical Chair Challenge,” (Slaw, June 16, 2016). Canada’s law societies appear to be awaiting the fragmentation of legal services as is described in the Suskinds’ latest book (see below, at pp. 66-71). But that most probably will end the sole practitioner and the general practitioner.
TAG put out a paper on technology’s uses for its “Access to Justice Week,” “Connect, Create, Communicate 2016” conference in Toronto on October 17-21, 2016. The conference topics concerned helping the population learn to live with the problem. None dealt with solving the problem. Nor does the paper, entitled, “Draft Guidelines for Using Technology to Advance Access to Justice.” See also: (1) “Background Paper: Developing Guidelines for Using Technology to Advance Access to Justice,” (distributed to those who registered to attend); and, (2) the technology “Event Review” concerning October 18th. Neither paper deals with any of the facts and observations set out above. Their use of the terms “disadvantaged groups,” and, “disadvantaged users,” implies that they include that majority of the population that cannot afford a lawyer’s advice. Clearly, LSUC’s TAG is not to concern itself with solving the problem, nor the consequences of not solving the problem.
If matters remain as they are now, the unaffordable legal services problem will never be solved. But matters won’t remain as they are. The competition of the commercial market for legal services will bring affordability, albeit at an uncertain cost to quality, and the loss of the fiduciary duty, and without a law society to enforce both. Nor will it be accompanied by compulsory professional insurance to compensate client losses. Except in unusual circumstances, such a buyer-seller relationship involves no duty to one another other than honesty and legality. Therefore, the growth of such commercial services does not justify law societies’ not striving to make legal services affordable.
Contrary to the duties of a law society set out in legislation such as Ontario’s Law Society Act, s. 4.2, current law society performance implies that the duty to make legal services adequately available does not include their affordability. But “adequately available” has to mean solving the problem; not merely helping the population learn to live with the problem. Is affordability to be provided only by way of the fragmentation of legal services to commercialized services and not by law societies?
But commercialized services and alternative legal services don’t yet provide for example, a lawyer for serious criminal charges, extended negotiations, and civil litigation, or to argue the complexities of the legal analysis produced by the Canadian Charter of Right and Freedoms. That has to be made affordable because, inter alia, self-representation can substantially increase the probability of wrongful convictions. Alternative legal services cut costs by cutting competence by moving towards a simplicity of services. But the law now always has to move towards greater complexity. If lawyers’ legal advice services were affordable, they would be overwhelmed with work.
In the following article I, Ken Chasse, develop these ideas and observations. It provides a “support services solution” to the unaffordable legal services problem: “Access to Justice—Unaffordable Legal Services’ Concepts and Solutions” (open access SSRN pdf. download). Reflecting similar views of: (1) law society performance; (2) the fixed, unchangeable methods of the legal profession; and, (3) of the beginnings elsewhere of support services for legal services, is this book: Richard & Daniel Suskind, The Future of the Professions: How Technology Will Transform the Work of Human Experts (Oxford University Press, 2015). It states (p. 71): “… our research suggests that traditional lawyers will in large part be replaced by advanced systems, or by less costly workers supported by technology or standard processes, or by lay people armed with online self-help tools.” Dan Pinnington has written a very good book review (Slaw, November 7, 2016). He describes this book as a, “must-read for anyone who wants to gain insights into where the legal profession is going.” And, “for anyone seeking a clearer picture of the future of legal services.”
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[i] Lawyers’ legal labour provided pro bono does involve a fiduciary duty to the client, whereas other alternative legal services don’t. However, the amount of such labour provided, albeit commendable, is but a very tiny exception in comparison with what the problem requires, and pro bono legal services cannot be made available for long and complex cases. They require too much unpaid time. But those cases are generated by all income levels of society. If targeted legal services generate a fiduciary duty, it is only for the very limited work provided by the lawyer.
[ii] Anthony J. Casey, Anthony Niblett, Benjamin Alarie, & Albert H. Yoon, “Artificial Intelligence, Big Data, and The Future of Law,” volume LXVI, Number 4, Fall 2016, University of Toronto Law Journal 423 at 427.
A related part of the problem is the sheer depth and complexity of modern caselaw.
To a lawyer, an elegant series of arguments built on a deep tree of citations to decisions are a good thing, if expensive to produce. To a computer scientist, it’s a convoluted workaround to a bug, the kind it costs a lot to fix (;-))
The sheer complexity of the law is a drag on lawyers, some of whom notice it, others who think it normal. But both have to do the kind of drudge-work a primitive AI could do better, before they get to the skilled part of their job. If they coulod do less, they could handle more cases quicker, bill less per individual case and still make more money in total.
And the advantage in access to justice would be significant..
As much as the use of technology can lower fees for legal services such use can also be justified for the rise in fees. For instance, the initial cost for the technology could be reason for those supporting ABS as they do that outside or non-lawyer investment in law firms is imperative. Not only is there the initial costs but what about the upkeep and maintenance of the technology. In order to compete will law firms require an update of technology annually? How will such cost be covered and by whom?
Is there any incentive to keep the cost of legal services down or to make them affordable. For instance, the Code of Conduct for the Danish Bar and Law Society requires that: “A lawyer shall make every effort to find a solution to the client’s case at the lowest possible cost, taking into account the client’s wishes and instructions.” Do the Codes of Conduct in Canada have any such stipulation. If they do, how is such requirement enforced? Or, does such a requirement work to ensure affordability?
Also affordability can also be relative given the nature of economic conditions. A decrease in full-time employment and stagnant wages also contribute to making legal services even less affordable for a growing number of people.
I agree with you (and I suspect most others would too) that the general problem around the affordability of legal services relates to the handcraftsman’s method (as you call it) of producing legal services.
While I admire your passion for the subject there’s a few things I can’t agree with:
First, claiming the law is not a business is the kind of thinking that has got us into this situation in the first place: i.e., law is special; the normal rules of business don’t apply. These sorts of attitudes are why lawyers and law firms haven’t innovated to bring down the cost of their business (along with a billing model which disincetivizes this behaviour in the first place). Of course why would they look at how process or technology could improve their practice – these are the sorts of things businesses do, but they’re not a business after all, so how could it possibly help them? The law is special, remember; there’s nothing to learn from anyone outside the profession.
Second, while I agree that the law society has to do more to solve the problem, the answer isn’t to have it become a big, monopolistic provider of legal services. What the law society should be doing is creating the right conditions in the legal marketplace for solutions to materialize. It can do that by introducing more competition and allowing more capital to flow into the industry. More “fast food law” as you so condescendingly refer to it. Your solution has a very Communist era “centralized means of production” ideal to it. We all know how that ended up. While capitalism has its failings no one can deny how good it is at solving problems when there’s money to be made. Which you acknowledge there is. In that sense more competition/capital in the industry can produce win-wins, as long as appropriately regulated.
Finally, it’s wrong to suggest the only way to cut costs is to cut quality. These are not mutually exclusive goals. There’s countless examples in other industries where through process and technology both cost and quality have improved. There’s also plenty of examples in the legal industry of innovation where the incentives are right – just look at how CLOC is reshaping in house practice.
However I acknowledge that to accept the last two points you essentially have to accept the first. That why I think this is where we need to start.
There are certain areas of law (not all) and compliance which the client or person can undertake if they have contacted the appropriate government authorities who enforce that piece of legislation and take preventative action. ie. understand about applying for a building permit, etc. Or the client is literate/motivated enough to research authoritative documentation on the Internet? From the layperson’s perspective is:
*What matter in my daily life I must ensure I follow the “rules”?
*Which govn’t authority (municipal, provincial or federal) can help me /give me the correct info.?
*Is the information written in plain language? Does the govn’t authority ensure straightforward instructions and forms, are provided?
Above self-assessment is preventative action by a person. This is the start of a person interacting with “law” or the legal system. It isn’t just about litigation or a problem that the person unintentionally or intentionally created.
The “experts” at this front-end service delivery, is whole array of service providers in the chain of a business process that exists as part of compliance to a piece of legislation.
Lawyer sometimes need to be brought in sooner, rather than near the end, during development of completely new / innovative or significantly redesigned service/business process/product of an organization. Is this cutting costs/bank accounts for lawyers? Is this reducing quality? It’s adding business value to the client service owner and it’s risk mitigation for them.
In fact, govn’t with technology and Internet access provide useful information for the public, has had a significant role to assist the public cope in the area of prevention to meet legal compliance. Every year, govn’t is getting better and better at it ..on the compliance side with the internal pressure to maximize taxpayers dollars in service delivery. (Maybe the courts are slightly different, slower paced)
Hence, concern that lawyers will be replaced by technology/artificial intelligence, even without litigation, seems abit of a red herring since even some well-educated lay public have problems distinguishing between “statute” and “regulation” on the ‘Net.
In response to all the above comments, please read the paper cited in my last paragraph above: “Access to Justice-Unaffordable Legal Services’ Concepts and Solutions,” at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2811627
I speak from the experience of having solved a smaller version of the same problem:
1. Just as a bicycle cannot be made to perform like a motor vehicle by adding a motor or any other improvements, the problem of unaffordable legal services cannot be solved by adding competition or any other improvement to the current method of producing legal services. The method itself is irretrievably obsolete. That is why I cited the “support services method” examples of the medical services infrastructure and the auto parts industry.
2. As to law society involvement, I mean Canada’s law societies should be sponsoring the innovations that would bring about such necessary change in the methods of production. That is what the law requires that they do. In 1997, after 30 years of very bad management, LSUC was removed as the manager of Legal Aid Ontario (LAO), for the very same reasons: (1) conflict of interest; and, (2) refusal to innovate. There are 3 authoritative reports that made that recommendation and the Legal Aid Services Act 1998, carried it out. If there were no conflict of interest, there would be no problem. Law society benchers don’t want the problem, but they don’t want to do what is necessary to solve the problem. That is the source of the conflict of interest—personal interest versus serving public interest, as is required, for example, by Ontario’s Law Society Act, section 4.2.
And John Smith, there is no reference to a, “communist era … ideal,” in anything that I have written. The law societies are required to maintain legal services as adequately available. They aren’t doing it, and they are not trying to do it, which is what I’ve stated in everything that I’ve written. Read the full article I’ve cited in my last paragraph; a blog article has to be short. There is nothing in either warranting your words of criticism such as, “condescendingly,” “monopolistic provider,” or that I stated that, “The law is special, remember; there’s nothing to learn from anyone outside the profession.” And nowhere have I stated that the way to cut costs is to cut quality. To the contrary, that is the law societies’ answer to the problem by way of promoting “alternative legal services.”
3. Saying “the practice of law is not a business,” does not mean that lawyers can ignore business methods. It is a reference to the fiduciary duty upon a lawyer in the service of each client. That is not part of the buyer-seller relationship of business. Just as professional insurance, and law society enforcement of quality of service, professional conduct, and the fiduciary duty are not part of business.
And as to capital flow into business, as LSUC’s Alternative Business Structures Committee has concluded, the ABS solution has proved itself incapable of solving the problem because it is not an investment problem. It is a social welfare problem, but such investors are not in the social welfare business. They want to control the market for routine legal services because that is where the quick and easy money is. That is where the fast-food legal services businesses are, and they will continue to use the same strategy as software’s ability to provide legal advice as well as legal information improves. That will end the need for the general practitioner. The Suskinds’ latest book (cited in my last paragraph above) explains that, as do the examples in the quotation from the University of Toronto Law Journal article (see the text accompanying end note [ii]).
4. As to providing automating software for routine legal services, the profession acting as a whole can do that itself by appointing a single bargaining agent for all lawyers in private practice in Canada. That would maximize their bargaining strength with all providers of such software. The Federation of Law Societies of Canada is an existing example of such an agent. It is the sponsor of CanLII, and other national and joint accomplishments. In contrast, the ABS proposal would minimize lawyers’ bargaining strength by enabling investors to bargain with each law firm separately as to the terms of financing such automation. Much cheaper it would be to increase annual fees comparatively small amounts to finance such automation. Also, an investor is an owner and therefore a controller. The fiduciary duty will be suppressed by the profit duty owed to the investor.
Read the full article: Access to Justice-Unaffordable Legal Services’ Concepts and Solutions,” at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2811627.
Ken, why not take action in court to generate the actions you want?
The persistent errors being made are conflating outrageously unaffordable litigation services with extremely affordable small firm solicitor services, working to sacrifice small firm solicitor services to the maw of giant corporations without doing anything about the ruinous time and cost of litigation, and myopically failing to see that allowing giant corporations to take over would, inevitably, result in anti-competitive consolidations and tragic loss of our independence.
I agree that law societies should be heavily involved in preserving our independence, in driving a stake through the heart of attempts to allow non-lawyers to own us (and therefore to dictate to us), and in identifying ways to improve access to justice where the problem really lies. Many of those ways have already been identified. Instead, the LSUC is doing nothing of real value to bring down the ruinous time and cost of litigation (it would require significant government involvement but we could lobby for it), but instead is allowing the ABS Task Force to beaver away at trying to sell off our souls (and soles) in the interests of the few at the expense of the many.
If you correctly see ABS as the worst idea to hit the profession in a 1,000 years, and if you would like to see the LSUC devote its time and resources toward real solutions to real problems including technological solutions, badger the benchers.