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High legal costs block access to justice

Thursday, January 19, 2017 @ 7:00 PM | By Jillian Kestler-D'Amours


Gillian Hadfield doesn’t mince words: millions of people in the United States and Canada don’t have access to the legal help they need and are shut out by a legal system too complicated for many of them to navigate alone.

But the law and economics professor at the University of Southern California says that loosening restrictions on the profession can help bring more innovation into the legal world, and lawyers and judges can be at the forefront of the change.

“Most people are kind of constantly navigating a legally defined environment…and yet the vast majority of people can’t really access very effective help in just understanding and navigating that legal environment,” said Hadfield, author of Rules for a Flat World: Why Humans Invented Law and How to Reinvent It for a Complex Global Economy.

“I continue to try to appeal to lawyers and judges to say, ‘look, you can change this, you can fix this, you can make millions of peoples’ lives better very quickly.’ ”

So how did legal help become so out of reach for so many people in the first place? Hadfield says the biggest obstacle has been, and continues to be, exorbitant legal costs.

This financial challenge “has generally been framed as a problem of poverty or charity or the need for more public expenditure on legal aid or increased pro bono efforts on the part of lawyers,” she explained.

But while significant public funding for legal aid and pro bono work are certainly important, “those are drops in the bucket” when it comes to the demand for legal help, she said.

Hadfield estimates that at the average cost for an hour of legal advice today, “it would cost billions of dollars to provide just even one hour of legal assistance to everybody who’s facing a legal problem.”

Instead, she said high legal costs are directly tied to an inefficient business model that restricts how legal help can be delivered to clients.

In the current system, two factors are most significant: the rule that corporations can’t provide legal services; and the restrictions on profit- and revenue-sharing contracts between lawyers but also between non-legal professionals.

These rules mean that solo practitioners and small legal firms must devote a great amount of time to finding and retaining clients, and charge higher hourly costs for actual legal help, than they may have to if they had a corporation handling the non-legal aspects of their practice.

It also limits the incentive for non-legal professionals to develop effective ways to reach people in need of legal help, from businesspeople conducting market research into what services are most needed in a community, to software developers creating better legal products.

Hadfield said technology could significantly increase peoples’ access to legal help, and it can be as simple as a cell phone application that scans and provides basic information about legal documents, from leases and contracts to a subpoena to appear in court.

“To interpret those documents and give basic information about them, I think that would be a valuable thing,” she said, adding that e-mail, chat and phone systems could also be helpful.

“If you’re facing eviction and your ceiling is falling down, which generally gives you a defence to not paying rent, then can you have a 15-minute conversation or a chat with some legal expert to say, take a picture of your ceiling, get your neighbour to make a statement and sign it and date it and bring those with you to court?”

Hadfield said the biggest challenge to allowing innovation into the legal world is the will to make the necessary changes.

She pointed to the legal system in the United Kingdom as a place where corporate entities can provide legal services and where lawyers can enter into profit sharing agreements with non-legal professionals.

“They allow many more types of legal professionals to exist simultaneously in the market,” she said. “At the same time, they have developed a robust form of regulation for those types of entities.”

Hadfield said in Canada and the U.S., the debate is dominated by fears that allowing innovation into the legal field could open the door to scams, low-quality service, conflicts of interest and virtually anyone selling legal advice without the proper qualifications.

“That completely ignores the fact that you regulate those markets, you regulate those entities, you regulate the different types of service providers, and it’s not a free for all. There is a very thoughtful, regulatory regime in place to license the corporations that are providing legal services and to have oversight of how they’re performing,” Hadfield said.

It’s not at all about deregulation, she said, but the “right regulation.”

“We have the wrong regulations in place. We need the right regulations in place, and the U.K. is leading the way with a very thoughtful model of that,” she said.

Ultimately, she said discussions about allowing greater innovation into the field of law have increased dramatically in both Canada and the U.S. in the last decade, but the will to make meaningful changes is still lacking.

“I suspect that the pressure has to come from people figuring out, ‘hey, why is it that I can’t get some help with this?’ ” she said. “We should not be running a system that makes legal help [out of reach].”