When the Utah Supreme Court started studying the access to justice gap, justices and bar leaders were alarmed to learn that 93% of those using adult courts in the state’s largest jurisdiction were showing up without legal assistance. Let that sink in: 93% were coming to court without a lawyer. It’s a figure host Ralph Baxter’s guests say is common across North America.
With news still fresh of Utah’s groundbreaking order creating a regulatory sandbox to address the crisis involving the delivery of legal services, Baxter discusses the order’s rationale and significance with three key leaders behind Utah’s move: Economics and Law Professor Gillian Hadfield, Utah Justice Deno Himonas, and Utah Bar immediate Past President John Lund.
There’s something wrong when the current legal model serves just ten to fifteen percent of the population, Hadfield tells Baxter. She says Utah’s approach is on solid ground because the bench and bar are cooperating to collect data that will inform its shifting legal regulatory framework.
The four discuss how the model rules of professional conduct, developed for an older and dated model of law practice, are less about ethics and more about controlling business operations. Utah’s sandbox removes many of those barriers while keeping consumers protected.
Hadfield and Lund also note that despite pushback on rule changes — such as relaxing rules on non-lawyer ownership and creating licensing routes for paraprofessionals — the remaking of the rules is bound to increase opportunities for lawyers. Finding ways to better serve that 80% to 90% who need but don’t have lawyers will open up the market, they tell Baxter.
Gillian Hadfield is the inaugural Schwartz Reisman Chair in Technology and Society at the University of Toronto Faculty of Law.
Deno Himonas is a justice of the Utah Supreme Court.
John Lund is a Salt Lake City lawyer and immediate past president of the Utah Bar.
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Law Technology Now
Model for Change: Utah’s Data-Driven Approach to Closing the Justice Gap
Ralph Baxter: Welcome to Law Technology Now. I am Ralph Baxter and I will be your host for today. This is my 11th episode as co-host of the show.
Today, we are going to talk about a really important development in the law. The Utah Supreme Court’s groundbreaking reform called the Legal Regulatory Sandbox, which is designed to help make quality legal services available to everyone who needs them. Utah’s reform is important, not just for the people of Utah, but as an example for other states to follow.
Our guests today are three of the people who really led this process to get to this reform in Utah. We have with us Utah Supreme Court Justice Deno Himonas, who led the process for the court. John Lund, Immediate Past President of the Utah State Bar, who in his role at the State Bar helped lead the process, participate in the process and who will play a leading role in the new agency that has been created to oversee, administer the reform.
And Gillian Hadfield, Professor of Law and Strategic Management at the University of Toronto and one of the world’s leading experts in the regulation of legal services and who was an advisor to Utah in its work.
We are recording this remotely of course because we’re in a pandemic. Justice Himonas is in Salt Lake City, Utah, John Lund is in Carbondale, Colorado and Gillian is in Toronto and I am in my study in Wheeling, West Virginia. Before we get started I want to thank our sponsors.
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So one of the objectives of this show is to explore how we can make law work better for everyone. Utah’s reform is designed to do precisely that. More specifically it is designed to permit creative new approaches that will make quality legal services available at reasonable prices to all who need them.
Today, we are going to examine this new model, why it was adopted, how it will work, and what its potential implications are for other states. So welcome to Law Technology Now Justice Himonas, and John and Gillian.
So let’s start with motivation. What motivated you in Utah and I’ll start with you Justice Himonas to consider this reform.
Justice Deno Himonas: First of all Ralph thanks for having me. I appreciate the invitation and I’m looking forward to the discussion. In Utah for the past five years, we have been single-minded in our effort to really narrow the Access to Justice gap, then we have tried to innovate in a variety of different ways. But that is the touchstone of what drove the core to investigate and ultimately adopt regulatory reform.
Ralph Baxter: So John do you have anything to add to that about Access to Justice challenge?
John Lund: Well, I just think it’s clear. By the way Ralph, thank you also for having me, I’m looking forward to this and Justice Himonas says this quite simply but that really is the driver at when you look at the percentage of people trying to navigate the courts by themselves, much less all manner of other problems they have in their lives that are probably legal problems, they may not even realize.
If you’re regulating barbers and only 15% of people are getting haircuts, you would say there’s something wrong with the way we’re regulating barbers and that’s essentially where we’ve been. So I think that’s the driver.
Ralph Baxter: All right and Gillian you look at this across the whole country. Can you share with our audience a couple of thoughts about this Access to Justice crisis?
Gillian Hadfield: Yeah, so I think this has been a challenge that the legal profession, the judiciary has been aware of for decades that we don’t collect very good data on this, somewhere north of 80% of the population really can’t afford the kind of legal help that they need.
One of the things I think that’s so impressive about the efforts in Utah is a real commitment to collecting data, and I know that as part of the work here, I believe there was a survey done in one of the districts in Utah. Deno, you may remember the numbers better than I do but am I correct that they were north of 90% of people showing up in Utah Court without legal assistance in basic civil matters.
Justice Deno Himonas: That’s right. So looking at adult courts in the Third District, which is the largest District in Utah including Salt Lake, Salt Lake Summit and Tooele Counties and by adult, of course including small claims court fully 93% of the people were unrepresented.
Gillian Hadfield: Yeah, and that’s what we see across the country. We see that in North America. Now that I’m living back in my home country of Canada, we see this really across the board. And as John points out, there’s something really wrong when your legal services are only available to 10-15% of the population and that’s a challenge as I say that the profession and the judiciary has been recognizing for quite some time but has not until I think at this point this is what’s so important about Utah’s move.
Until now, there’s been a lot of study panels. There’s been calls for greater legal aid. There’s been calls for more pro bono, all of which is very important. But what Utah has done is said it’s up to us on the judiciary and the legal profession to fix this problem and they’ve just taken the first concrete steps forward on that certainly in North America and in many ways. It’s a world-leading model.
Ralph Baxter: So this is so important. I want to start with this so that everyone in our audience who is not familiar with the movements around the country for reform understands what is driving it? This is it and I want to read something that the way the Standing Order that the Utah Supreme Court issued in announcing the change we’re going to discuss because to me, it’s just chilling and it captures a couple of statistics that every American should be concerned about.
The Court wrote, The access-to-justice crisis across the globe, the United States, and Utah has reached the breaking point. As to how affordable and accessible civil justice is to people, the 2020 World Justice Project Rules of Law Index ranks the United States 109th of 128 countries. As to that same factor out of the 37 highest income countries, the United States ranks dead last. This is a problem and it’s a problem that everybody, everyone involved in Justice in the United States, certainly every judge in every Court in the United States recognizes. Just the way we describe it.
All right, so that’s the starting place. I know in Utah you tried to address and you’ve already said it here in our conversation Justice Himonas, you tried to address this other ways. Can you just give the audience a little idea of how you tried to address this problem in other ways?
Justice Deno Himonas: Sure. So as, not just in Utah, but really across the country in elsewhere, we’ve been trying to volunteer ourselves across the gap and by that I mean having lawyers offer pro bono services.
To echo what Gillian said that’s important. That’s something that needs to continue but we just need to recognize as I’ve repeatedly said we cannot volunteer ourselves across the gap. We need market-oriented, market-driven solutions. We’ve also tried through funding Legal Services Corporation and other entities to try to narrow the gap that way, again incredibly important, but we’ve just not dedicated the kind of money to that effort that’s needed.
Jim Sandman, the Immediate Past President of Legal Services Corporation threw out a statistic the other day that just stunned me. That is that we spend more in the United States on our Halloween costumes for our pets than we did on legal services in these civil cases.
So I don’t want to minimize these other efforts. They’re important. They’re just not enough.
Ralph Baxter: Right. Well, you’ve said that about as well as anyone can. I want to read one other quotation from the press release that the Court issued that picks up on what you just said. This is your quote Justice Himonas.
“We cannot volunteer ourselves across the access-to-justice gap”, as you just said. “We have spent billions of dollars trying this approach. It hasn’t worked. And hammering away at the problem with the same tools is Einstein’s very definition of insanity,” which proves you have a sense of humor to go with your leadership. So these are the predicates. We have a problem, we tried a lot of things and to your point about continuing to try them.
I spent a lot of my life in a large law firm and we’re proud of the pro bono work that we did and we should be and so should all of the other lawyers who dedicate their time without cost to helping those who need the help. We don’t want to stop that, but that isn’t enough to get make real progress on the problem that we have.
So you turned to reform of the rules that govern the practice of law in Utah. So help the audience understand. What was it about the rules that you needed to fix or what is about the rules that impeded innovation to help address the Access to Justice problem?
Justice Deno Himonas: From my perspective a couple of things. One is the limitation on who can provide legal advice, really just limiting any provision of legal advice in the United States to lawyers. But I’ve been telling people is it if we were to draw an analogy, it would be like saying only thoracic surgeons could perform any type of work in the medical arena.
Second is, some of the prescriptive business rules that are set forth in the rules of ethics that really stifle the ability to innovate, limit capital. This is something frankly Ralph that Gillian understands probably, not probably Gillian understands and has written about and is the world’s leading expert on, and she is, it was her speech in 2018, May of 2018 were John and I were present that really, really was the place where this whole thing started.
Ralph Baxter: So let’s go to Gillian next. Would you expand a little bit on this — the problem with the way we regulate lawyers in the United States when it comes to impeding innovation and achieving Access to Justice.
Gillian Hadfield: Sure. Actually you just captured it. What we do is we regulate, first of all, we regulate lawyers and we say that all legal services must be provided by somebody who can get a law degree and pass the bar exam and become a licensee. And of course, that makes a lot of sense. It made a lot of sense in the early 20th Century when we developed that because that’s the fundamental format in which legal services are being delivered.
But we’ve wrapped around that a set of rules that constrain the way lawyers can organize the delivery of service, basically their business organization rules. So we say to those lawyers you can’t work for a corporation that is providing services directly to the public and you can’t share revenues or profits with any – a technology company, another kind of professional, anybody who’s doing the work of trying to make that delivery service, delivery that service more efficient.
And of course, that’s a point that’s been made repeatedly over the last, again last couple of decades about the impact of our rules of professional ethics when they have now expanded from really being about ethics to being about a business model. I think the real shift and Deno mentions this talk that I gave 10 minute speech at a Conference of Chief Justice’s the western region in Vancouver, Washington and 2018 and to be honest, I’ve been giving this message for a very long time. Hey, let’s change the rules as we know bar associations around the country have been reviewing that.
And I think the shift was to say it’s not enough to just change those rules governing lawyers because there are legitimate questions about consumer protection. So the real problem with our licensing scheme, is it licenses people, it doesn’t provide for the licensing of say a technology company or a legal services company that can use all those economics tools, but that we can still say, okay, how are you doing this we want some oversight about the quality of service you’re providing.
So the key problem is that our existing approach to regulating our legal markets, our markets that provide the help people need to achieve their legal objective has been highly focused on this kind of 19th Century model licensing lawyers and that’s cut us off from all the ways in which we can reduce costs and increase quality with other tools.
Ralph Baxter: That’s a complete description of what the problem is. Most people aren’t aware. These rules are, as you say, practically a century old maybe older. They were created for a different time. Part of the problem with Access to Justice of course that we haven’t even touched on is that there’s so much more law, law is so much more in everybody’s life than it ever was before, it’s in every business’ business. So law is more important and it’s more complicated and the data makes it harder to comply with and meanwhile, we have limited how the people who provide legal service can operate their businesses.
So the capital issue that Justice Himonas referred to limits how able you are to afford investments that you need, the capital issue limits how able you are to experiment with things that don’t work because all progress requires some experimentation and not all of those will work. All of that comes together to produce an outcome that needs to be addressed.
All right, John anything to add on the rules and why we needed to change them?
John Lund: The theme here that I think is important to bring out as we’re talking about rules that are economic fundamentally and created an economic paradigm or create an economic paradigm. If you said to people making movies, you have to have a hard data system. You have to have an actual physical movie in order for it to be allowed and that we’re constrained. Maybe it makes sense if you were trying to sell plastic that people but it doesn’t make sense if you’re trying to open that market.
And we can see what’s happened when without that kind of regulation, the market moves, the technology changes and now movie content is delivered all kinds of ways and in the end, that’s ultimately better for the people that want to consume movies and that’s really the same type of dynamic we are looking to explore with this reform is to relax those economically related constraints without doing damage to the important values that legal services need to have; competency and confidentiality and all of that but make room for these other sorts of economic patterns to develop.
Ralph Baxter: As we will talk about, that’s why as you proceeded in Utah as you will now describe, you didn’t lose focus on those issues of quality and protecting the public, you’re looking for a way to improve Access to Justice without losing that so let’s turn to talking about how you did that.
So my first question Justice Himonas, why do we call this a Sandbox?
Justice Deno Himonas: Well, because that’s we borrowed it from FinTech. The notion that a Sandbox is someplace where in a regulated environment you can go and relax the rules and run certain tests and pilot programs, not sure that if we were branding, branding from scratch, that’s the term that we would have used but it is the term with which people are familiar.
Ralph Baxter: Right, right.
John Lund: By the way Ralph, my wife hates that term, she does not understand why we call it a Sandbox, but I think it’s very apt because it creates that image of a contained environment, a safe observable space where things can be tried. And if they don’t work, what do you do in a sandbox if something didn’t work, you just wipe it down and you start all over again.
And that to me, that that does connote that sense that we’re trying to make space for people to innovate but in a way where we can at least follow it and watch it and control it.
Ralph Baxter: Right and I think both those points are important but it is something everybody will ask if they’re hearing this for the first time, so Utah has done this groundbreaking advance and we call it a Sandbox, why is that and both those are important answers, it is a way of thinking about it that’s been used in very high stakes financial settings. But it’s also it has a connotation that makes sense, right, just the one you described John.
All right, so Justice Himonas a simple question, how will this work? How will the Sandbox work?
Justice Deno Himonas: Well people make application in order to come in and try to present their innovative product. You can be an old-line firm with a new-line product. You can be a new-line developer with an old-line product or with a new-line product. You make application and the innovation office, which John is heading, will evaluate it according to a certain set of criteria, make a decision about whether or not to recommend that that entity or individual and that product should enter the Sandbox and be tested, and if so, under what conditions right.
They come to the court and the court will make their presentation and if the court agrees, then these guys are up and running and in fact John, I think we’ve already approved five, right, we announced this just a couple of weeks ago and five are already up and running.
So if you prove your worth in the Sandbox and by that, I mean you don’t harm the consumer, right, the consumers know worse off as a result and arguably better off as a result, there will be a pitch made to allow them to exit the Sandbox and to offer these legal services without running afoul of the unauthorized practice of law. In other words, they’ll be authorized to offer them as without necessarily having to be a lawyer.
Ralph Baxter: Right, so the rules that predated this reform continue in effect, if you’re going out to practice traditional law in Utah, the rules are as they were, but if you’ve got an idea that you wouldn’t be able to do Under the current rules because you’re using people who are not licensed to practice law for example, as part of the delivery team, that would be one example, then you can apply for approval to proceed in that way and then the innovation office will examine you and decide whether or not you qualify. And if you do let you go, right.
Justice Deno Himonas: Yeah, yeah. John can speak to it at much greater length about what’s going on. He’s the one that has had the boots on the ground, but at the 130,000 foot level Ralph, that’s what’s happening.
Ralph Baxter: So let’s get closer to the ground with John. Now John, you have been appointed to be the Head of the Innovation Office.
John Lund: Right. It’s a group of 11 people appointed by the court. We have a certain budget. We have some staff. We have an executive director and we have to date received 18 applications. So we are beginning our process and I can describe that in more detail for you Ralph, how we’re kind of assessing people but it’s a give-and-take with the applicant to try to learn as much as we can about what they’re doing, what model of service they’re contemplating.
Again, you use non-lawyers to give advice so you are going to have non-lawyer investment, all those kind of questions and really drill into that and then use that information to decide where we think they fit on a spectrum of risk. There’s very simple proposals like there’s a fellow doing consumer bankruptcy law that just wants to have 10% ownership of his firm be given to his paralegal because she’s apparently a critical part of the team.
Odd as it is, he can’t do that under the current laws, right. So he needs to utilize this permission to be able to do that. So we’ve assessed each of those against a risk structure, which I can talk about in more detail if you like and then we make that recommendation to the court.
The other piece of it is they aren’t necessarily cut loose in the Sandbox. The real pieces that they’re permitted to operate in the Sandbox with certain conditions primarily give us data on what’s happening with your model. Tell us about error rates, tell us about consumer complaints, tell us about the total number of services you’re providing, lots of specifics and that’s because this is an opportunity to study those and develop data, and we’re very interested actually in having outside researchers look at that data and answer the question independent of our office, is this effective at providing services to consumers.
Ralph Baxter: Which is a huge part of this model that’s appealing to me and I’m sure everyone else who has participated in deciding it. Instead of a prescriptive model that tells you before you begin how you must do things, you examine a proposal that wouldn’t fit the rules as they are and if you determine that this is safe enough and should be approved, then they proceed as you say subject to reporting and you staying on top of what they’re doing and with each of these you will gather data.
Now you will have real information about how this works and over time as you proceed, that’ll become substantial and there will be a lot of learning that comes from it. Let me just pause here for a second for a word from our sponsors and then we will continue.
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Ralph Baxter: All right, we are back. We are talking today about Utah’s groundbreaking Legal Regulatory Sandbox, and before that we took our break, we were just talking about how this process will permit Utah to gather data and that data will be available for others who are studying regulatory schemes that we have around the country to use for the purposes of further consideration of how we might regulate the legal services.
I want to go back to what qualifies people to be within the Sandbox. First of all, this is a decision that is administered by the innovation office but must be approved by the court before it’s official right?
John Lund: No different than lawyers, the bar processes lawyers, figures out character and fitness, make sure they can pass the bar but ultimately recommends to the court that they be licensed, and then there’s a motion and the court considers whether to grant the motion to authorize those people to practice law, really the same thing is happening in parallel here with these entities that are coming to the Innovation Office.
Ralph Baxter: And so I’d like to ask you to say a little something more about the criteria you apply to evaluate them and one of which in particular I’d like you to comment on, one of the questions obviously is this safe enough for you to take the chance of letting it go, letting it proceed in a way that’s different from what the rules would permit normally and the measure for that how safe is it is to what? What is the comparative when you evaluate it?
John Lund: The comparison is to what they are otherwise going to be able to have in the way of legal services for that particular problem. And in many instances, given the Access to Justice gap that we’re talking about, their alternative is DIY resources on the website or talking to somebody they think knows better than they do but it’s certainly not, we’re not comparing these proposals to the model of a fully funded law firm being the alternative that the person has if they don’t use this model because of course that’s not often the case that that’s the opportunity they have is to it simply go hire a lawyer.
Ralph Baxter: Right and that’s conceptually I think a very important point because again the casual observer often overlooks the starting place as we talked about a moment ago, more people than not don’t have Access to Justice at all. And so these to be approved here you need to deliver something that improves on the status quo. It doesn’t have to be the ideal, although it may be, it may be better than okay.
So they operate, this new entity operates or this old entity with a new way operates in a Sandbox until a place at which you prove it to go out of the Sandbox, is that the model?
John Lund: Right and we are moving through this and learning as we go but yes, there does seem that in the concept, there’s a point out there. Let’s take the fellow that’s got 10% ownership to his paralegal. After we’ve collected data from that office for a period of time and gotten comfortable with what’s happening in that office, we may be at the point or he may be at the point where he would like us to seek authorization from the court to be allowed to permanently do that or exit the Sandbox and no longer be subject to the same flow of data and oversight that he would be continuing to be in the Sandbox.
So that would be seeking to exit the Sandbox and be granted if you will a more permanent permission to do that. I mean, it would still obviously be subject to him keeping himself well licensed and whatever other conditions would be there, but it would be I think and I don’t want to speak for the court on this or Justice Himonas, but I think the concept would be if that person is allowed to exit the Sandbox, but then two years from now, the court just decides the whole Sandbox Innovation Office thing was not a good idea and we don’t want to do it anymore, that person who’s been allowed to exit the Sandbox is not going to be told you have to sell 10% interest in your ownership. Your paralegal has to be divested. They’re going to be allowed to continue in that model if they were allowed to exit.
Justice Deno Himonas: Indeed I think that’s explicit in the Standing Order if I recall.
Ralph Baxter: It is.
Justice Deno Himonas: Right.
Ralph Baxter: It is.
Justice Deno Himonas: Yeah, we don’t want people, I mean you can understand somebody is going to be loaded to make a gigantic investment and have risk it in two years if the court changes or people change their mind. So I think that kind of assurance is really necessary.
Ralph, do you mind if I just touch on something that you mentioned and that John’s mentioned, one of the criticisms have been that well you’re relegating a lot of these people to kind of second-class legal status because they’re not getting lawyers. They just say that’s really a red herring, right. There’s, a lot of people don’t need lawyers for their problems. There’s a lot of evidence that non-lawyers can provide better advice for a lot of these problems or lot of these issues as well.
So I think to quote Becky Sandefur, “everybody deserves legal advice, not everybody needs a lawyer.”
Ralph Baxter: Right, right. So you’re taking a very important step in our way of thinking about legal service. I have for some time realized that what we’re talking about is legal service. We are not talking just about lawyering, right lawyering is at the heart of a lot of this but not at all of it. Everybody in a big law firm knows that the projects you do, no matter how sophisticated they are and how high the stakes are can be subdivided into parts and many of those parts are for one thing or not the practice of law. They are Bates stamping documents in the old days or whatever people do.
And we know that people can become expert in how certain courts work a lot of things without going to law school. So what we’ve got to do is have a way that the people who need the legal service whatever that looks like can get it from whomever is qualified to do it, and you’ve created the Sandbox that enables you to examine other alternatives and see if they are good enough, reliable enough, safe enough for the consumer, and if so, you can approve them in a different mix.
And I just want to bring out for our listeners that you’ve got a two step process, it’s one thing to qualify to be in the Sandbox, then you watch them you observe them, they report their data. At some point, you’re persuaded that they’re reliable to go on and I assume once you let them out of the Sandbox, even though there’s still subject to regulation and so on that will even further permit them to have the certainty that they can make more investment and build it even better because they know they are somewhat permanent.
John Lund: Ralph, if I may, there’s a bigger picture there and I may be stealing some the Gillian’s thunder on this but we’re going to start to see patterns. Once somebody has demonstrated that the model of having a paralegal have a certain percentage ownership in the firm is safe, we aren’t necessarily going to need to continue to test that and study that every time all over again and that’ll be up to the court obviously, but it shines a light on the potential here that we start to develop standards around these things that are actually expandable beyond just Utah, if we start to build the data to demonstrate that follows.
Ralph Baxter: Yes Gillian, that’s a hugely important point. Why don’t you comment on that and more broadly how this kind of arrangement that Utah has adopted can become a source of information and learning as other states follow it.
Gillian Hadfield: So let me give you my take on what we mean by a Sandbox here. I think of it is, it’s a Sandbox for the regulator, for the regulator to experiment and to discover what works what’s necessary and of course, every entrepreneur who’s offering a new type of product which because of our existing rules is pretty much the case with everybody here. They’re also experimenting everybody who puts a new product out there is always experimenting is the market going to like it or not.
It’s really important to recognize about the shift in the regulatory approach here is it’s, as you’ve emphasized Ralph, from a prescription, oh, you can’t have corporate ownership by anybody other than a licensed lawyer to an evidence-based approach to say well, of course we care that we are making people better off and not worse off relative to what they would have in the alternative and that’s so new. We don’t have very much data about what the risks are, what works and what doesn’t what kinds of protections work.
So when I think about John and his colleagues in the Sandbox, I really think about it that they’re the ones with the toys to play with to really explore. Okay, we initially throw the funnel wide, pretty much anybody is doing anything, we haven’t seen before has to register.
They have to agree if they want to come in and play that they’re going to share some data and participate with the court and the office, The Innovation office in exploring that.
But that’s going to generate is John is pointing out, the evidence that we need to say, you know what, now, we used to think that if there was any non-lawyer ownership in the firm, it was going to massively distort the way lawyers behave but you know what, they’re still under all their ethical duties, they’re still professional, they perform. Well, we don’t need much oversight there. We still need the licensing lever to say, hey if we discover there’s something wrong, we can step in.
And I think that’s what’s going to be so valuable about this initiative. I think there is two things that’s going to be super valuable about this initiative for jurisdictions really around the world. One is generating that data and those best practices. So John is going to be able to talk to other regulators, who are looking at this in other jurisdictions and say well we discovered the 10% ownership by a paralegal. Don’t worry about that one as long as you’ve got your professional regulation in place for the lawyers involved.
Here is data that we’ve seen about what kinds of protections are helpful. So I think that’s going to be one thing that comes out of this.
The other jurisdictions, which is already happening are going to be looking to Utah to say, how does this work? How do you build it? We’ve already got a model out there that other jurisdictions can look at and we’ll have evidence to show. I think the other thing that it’s going to contribute to the world is if we can motivate entrepreneurs and companies and nonprofits and civil society organizations to come in and experiment in Utah, right, then they can gain that scale and all that has to happen is Arizona or Colorado or California or Florida or Illinois or Ontario just needs to say hey, we kind of like what you’re doing, you built it in Utah, maybe Utah wasn’t a big enough market to justify that investment on its own but these other jurisdictions can pretty easily say we like that too, you can start supplying that service.
And so I think Utah is providing an opportunity for those companies and those entrepreneurs to make those initial investments and to explore for themselves, oh, what can we provide at a reasonable price with good quality into the market? I hope we’re going to see both of those things.
Ralph Baxter: I do too. And that’s so helpful and it demonstrates for our listeners why this story is much bigger than Utah as important as Utah is, this has implications really for the regulation of legal service throughout the United States and beyond.
A couple of quick more questions before we run out of time. You’ve already mentioned that this is up and running, you have some number of entities that have applied for permission in the Sandbox, some are up and running. John, what plans do you have? What do you see ahead for the Innovation Office now that you’ve taken on this role?
John Lund: Well, the first task at hand is to be assessing the applications that are coming in and giving the court guidance and recommendations about what to do with them and then as we have active participants in who’s ever Sandbox it is, we will be monitoring and gathering the data. The participants have maybe a monthly reporting requirement and they have a quarterly reporting requirement that we anticipate a data flow coming from those people.
In addition to Gillian’s point, we are looking for innovators and innovators in all spectrum of models. So far, we haven’t had a total non-lawyer come in and tell us that they want to do something with just AI and they don’t have any lawyers connected to their model. Maybe somebody will, we hope they will, we perceive that as probably a little riskier thing then something that’s got lawyers embedded in it. But we’d like to see those different models and have a chance to try them out.
So that’s the heart of what the Innovation Office is charged with doing.
Ralph Baxter: This is so encouraging to hear you just say that, it’s wide open but subject to very careful standards that you will apply, you and a balanced set of people that have been appointed by the court to populate this Innovation Office and all are subject to the supervision of the Supreme Court of the state. So there’s plenty of reason for the public to be confident that their interests are being looked after but yet the door is open for ideas that are better ideas and let’s see where we go.
All right, one of the other elements of this story and I mean, it’s a great story and it’s so encouraging, one of the elements of the story that is noteworthy is that you got it done that you got reform approved.
A lot of states have tried this and not been able to get past their own in fighting really within the bar. So, how did you do this in Utah? Who wants who wants to go first?
Justice Deno Himonas: I think John is the person to take that one.
John Lund: Well, I think all three of us have a take on that. I would say that, Deno and I were inspired by Gillian and we collectively have a passion for this that has carried us forward. We had a great team, including Gillian, and many other notable folks from across the country participating, we still have a great team. Deno has been a wonderful advocate with his colleagues on the court. They have shown courage in the face of lots of question marks and a willingness to really give us the space.
Analytically, we’re just looking for space to try things, and that’s I think become an important element of this other regulatory reform has been let’s just change it and let ABSs happen and that’s a lot more daunting to people than let’s give space for that to be allowed and watch it and see what comes of it.
So, I think the Utah Court System is part of our solution here. I think we’re right sized. We don’t have elected judges, we have appointed judges, we have a common judiciary across the state. There’s not this balkanization within the state and it gives us that environment and there’s a piece and I’ll stop at this is we’ve really had good support from our bar.
Our bar leadership has been ultimately willing to have good conversations with us about this and again support the idea that we should at least try things.
Justice Deno Himonas: We both heard Gillian’s speech, but if it were not for a bar leader, a bar president saying I recognize the interest of the public comes first, and I’m going to put those interest first and I’m going to lead, right, I’m going to be the thermostat not the thermometer. This doesn’t happen.
John will not take the credit that he deserves for it. But I think it’s what we’re seeing in other states is well, right there are leaders within the bar community in those states where this is starting to take off and that is not a sufficient condition, but it’s certainly a necessary condition I think at least initially and I don’t know Gillian, maybe you have a different take than I do.
Gillian Hadfield: No, so number one, moral courage and conviction. I think from both Deno and John on this and their colleagues in the bar and on the bench. You have to let those numbers sink in that we started with. And as I say, I have been saying for many years on my colleagues others, Becky Sandefur, Deborah Rhode, many of us have been saying look, it’s just shameful that as a profession we allow this to continue and yet somehow the politics and dynamics of the bar and the relationship with courts.
So I think there’s absolutely no way you end up here without the moral courage and conviction that both Deno and John and colleagues showed.
I think the other important move here was most of the discussion about changing the rules and Alternative Business Structures, ABS, that John referred to which the UK introduced law in 2007 introducing in 2012, for many people in the conversation in the US, for many lawyers in the conversation that kind of meant, well, you’re just going to take away the rules and then it’s just a wild west right, who’s going to protect consumers against the scam artist and the person who’s taking their money and giving them poor quality service.
So I think a key move here is this was not just change the rules. In fact, I’ll be honest when I made that proposal in 2018, I said, okay all these years trying to get lawyers to change their rules. Forget it. Just build a regulator because there’s a legitimate consumer protection question here, build an evidence-based, risk-based regulator that will license and regulate oversee alternative providers.
And that was the key move. It was really the vision from Deno and John I think to say hey, you know, we should really expand that much more broadly and get everything onto a level playing field and let’s shift from regulating by belief or bias or stereotype right, let’s get away from saying oh shareholder ownership non-lawyers, we are going to distort the behavior of lawyers because the shareholders would be whipping them to cut corners and fall down on their obligations.
Instead of regulating from that stance, let’s regulate from the stance of okay, nobody’s got services right now. Would it be helpful for them to have a paralegal who’s done a thousand forms last week. I mean think about what’s happening right now with the pandemic and the rules around Ralph you mentioned at the beginning the — what I said that’s called as law-thick environment. Okay, we got rules all over the place about benefits you’re entitled to, eviction relief you might be entitled to, we lawyers know how complicated all that stuff is going to look, it’s gobbledygook to a lot of lay people.
Well, would it be helpful to have somebody who’s just been trained to really understand what’s in those forms, explain them over the phone, over a chat window. Could we build a little AI that would give that and connected of course, keep track of it, but I think that’s — the key thing was to again moral courage, conviction. We have to solve this problem. Deno said more than once I’ll die on this hill. I’m glad you didn’t have to and the shift to regulate on the basis of facts, regulate on the basis of evidence regulate on the basis of risk.
Ralph Baxter: So that’s the brilliance of this. You’ve set up the situation and you reference a regulator and the time hasn’t permitted us to get into this. But that’s what the Innovation Office is. It’s a regulator subject to jurisdiction by the State Supreme Court and for our listeners in almost every state, the State Supreme Court has the ultimate authority on these things and but we’ve got a new regulator here, so you can decide situation by situation whether this is something that is safe for the people of Utah, not decide in advance, but decide by the facts in front of you and over time, we’ll have a lot more experience.
So we’re running out of time here. I want to ask Gillian one last question and then I’ll give you each a chance if there is anything else that I haven’t asked you to say that you would like to say, but Gillian looking ahead now, we have these all the rest of the states and the District of Columbia and other U.S. Jurisdictions, what’s your prognosis? Are we going to see more reform anywhere in the near future?
Gillian Hadfield: I think we are. The conversation has shifted in the last few years and in really a very surprising way to be honest after having been in these battles for a very, very long time and seeing a lot of task force and studies and so on just end up with recommendations not going anywhere.
Arizona has already made a move. They have really adopted changes to their professional conduct rules, and they are exploring the Regulatory Sandbox idea looking specifically to the Utah model. California, after some very strong lobbying efforts on both sides, managed to rescue their effort to explore Sandbox and frankly, there’s a real thriving legal technology industry. I talked to a lot of these legal entrepreneurs that many of them come in wanting to help the ordinary person and then discover they have to pivot and use their AI instead of reading eviction notices. They got to use it to review commercial contracts because that’s the only market they can operate in.
I think that it would be fantastic if California quickly follows suit. Florida is looking at this. So I’m optimistic. I think it’s going to go fast because we kind of — it’s a little bit of The Emperor’s New Clothes, right, you kind of pulled back and said look, it’s safe. It’s not crazy. You can do it. You can make people better off. So I think that I’d like to think the Domino’s can follow quickly.
Ralph Baxter: Well I’m with you. I hope that is so, it should be so. So John, Justice Himonas, Gillian anything else you would like to say to our audience before we close.
Justice Deno Himonas: Well, I’ve learned never to follow Gillian or John or Rebecca Sandefur because nothing I say will sound nearly as intelligent as them. So I’m going to just shut up at this time Ralph.
John Lund: Well that just shows you how politic lies and ultimately sensible Justice Himonas is. I’m not quite that sensible. So I’m going to say one thing. This is not at the expense of lawyers, okay. This is — I truly believe to the benefit of lawyers. It is a false dichotomy to say finding these solutions that involve other people other than lawyers is somehow and now they are going to be at the expense of lawyers.
There are opportunities here. We are driving cost curves down. We are talking about growing the demand, we’re talking about opening whole new areas about where the skills of applying — of being a lawyer can be applied and it to me, it’s no different than the blockbuster thing.
We have Netflix and Amazon Prime now and that’s how we get our content but there’s still plenty of producers and there’s still plenty of actors and there’s still plenty of writers and those fundamental skills that are the same type of things that lawyers do are going to be there.
And doctors didn’t somehow know they will get run out of business because the healthcare industry stratified and there’s lots of different service providers. So I would not be — I don’t know that I’m a person with all sorts of moral courage as been alluded to but I would not be advocating so strong for this if I thought it was going to be at the expense of our profession because I believe very strongly in the quality that lawyers bring to the table as well.
Gillian Hadfield: Let me just as an economist endorse that. I think in many ways lawyers have been acting against their own interest for many, many years. When you talk about 80-90% of the population navigating their legal problems along, that’s massive demand and the problem is our existing delivery models are too expensive because they’re highly inefficient.
I think about our recent graduates, young people from law schools for example, how much better that they would now have an opportunity to become an employed lawyer at a legal provider. Somebody else is running the business. They’re just getting paid a salary, think about all the people, the lawyers who would prefer and have a happier life to be on salary and let somebody else worry about technology and billing and so on. I have never doubted for a moment that five years into this, lawyers would look back and say what took us so long to figure out this is where our own interests lie as well.
Ralph Baxter: Well, That’s a beautiful place to wrap up. I couldn’t agree with you more. Thank you so much for taking the time to participate today. We will try to get this message out to as many people as we can. And one thing that strikes me listening to this conversation and having to gotten to know each of you in the last few years really drawn by this issue that you worked on in Utah. Utah couldn’t have had a better trio and you weren’t alone and I know that and I know there were a lot of other people who worked on this, but you were all so principled about the way you look at it and you are so clear.
So there is not a single person who will listen to this podcast and not follow everything each of you said and I am sure that helped get this though. So thank you so much for joining us. I want to say a couple of things here as we close.
As I said right at the beginning, this really is a very important development and as we have said throughout this conversation, we have a genuine crisis on our hands in the United States in Access to Justice and Gillian said it is shameful and it is. And I have no doubt as someone who has been a lawyer for 45 years and practiced under these rules, I have no doubt that part of the problem, only part but part of the problem is the restrictive and prescriptive nature of the way we limit who and how methods are available to our people to deliver legal service.
It’s not the only part of the problem but it is a very important one and what makes it so compelling is it’s one that can be fixed. Every state could do what Utah has done. If it has, as Gillian said, the courage and the conviction and the vision and the leadership to get it done, this is a step of progress that we can make.
One of the other realities of this that is I think important to everyone in our country is that the people who need the legal service that they are not getting, the most have no voice. There is no lobbying group for them and then they don’t have means and so there they are, and there they are without legal service and without a champion and this is one of the things I want to close with.
I want to encourage everybody who is listening to us to get involved in this issue. This is not an issue for lawyers only. Any citizen, any resident can become involved in each of our states in the discussion about how we regulate legal service and how we address this crisis in Access to Justice.
There is no single right answer. This answer is pretty compelling as we just heard, but there is no single right answer. The issue isn’t do one thing or another, it’s find a way to change the rules so they don’t block Access to Justice on the part of our people, permitting these outmoded rules to continue to inhibit affordable, quality legal service to our people is inconsistent with our American dedication to justice for all. And I hope everybody will get involved. So thank you all for listening.
If you liked it, which you should have because these people were great.; if you liked it, please, please note us on Google or Spotify, wherever you get your podcast and please recommend us to your friends, including those who are not lawyers because we have messages here we like to communicate with people who are not lawyers.
And until next time, this is Ralph Baxter for Law Technology Now,
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