Responsive Law has recently released a report card grading each of the fifty states in regards to Barriers to Affordable Legal Help. Responsive Law has this brief summary of the report card in its press release:
The report card grades all 50 states and the District of Columbia on how their regulations regarding the practice of law restrict consumer access to the legal system. Unfortunately, the news is not good, with no state receiving a grade higher than a C.
The report card graded three areas:
barriers to affordable help from lawyers (45% of total grade),
barriers to affordable help from non-lawyers (40%), and
support for self-represented litigants (15%).
The good news for South Dakota is the report gives the state a C, which puts the state at the head of the class. Of course there are plenty of areas to improve upon for South Dakota to better serve the legal needs of its residents. Ronald Nielson over at the LiveFree blog gives a pretty good explanation of why the report is important and why no state received a higher grade than a C. But for now I want to focus purely upon the South Dakota grades.
The South Dakota report card can be viewed here. As noted above, there are only three areas graded, with one overall grade then established:
- Barriers to Lawyer Help (45%): Grade D, SD ranks 28/51
- Barriers to Non-Lawyer Help (40%): Grade B, SD ranks 8/51
- Treatment of Self-Represented Litigants (15%): Grade C, SD ranks 27/51
- Overall Grade: C, SD ranks 14/51
Barriers to Lawyer Help – SD gets a D
Most of the grade in this category comes from whether the state allows competition of ownership within the state. Specifically it grades if non-lawyers are allowed to own a law firm. Allowing non-lawyers to own a law firm would allow competition and innovation within the industry. That competition would then allow the prices of certain legal services to become lower, and more affordable to the average SD resident. The report points out that most law firms consist of few lawyers, and therefore legal services are tailored for the client. A more innovative approach would be to allow non-law firms to hire lawyers and offer their legal services to clients.
An appropriate place where this might work in Sioux Falls, SD, is Sams Club. Sams Club already offers a plethora of products and services for small business owners. Just think if Sams Club would be able to keep a lawyer on hand that could do basic Articles of Incorporation or basic contracts. Too often new small business owners go to a law firm and pay hundreds of dollars for this very basic legal service that could easily be offered at rates where a firm (such as Sams Club) could still make money and legal customers could save money. Theoretically in a competitive industry Sams Club could hire a lawyer that would provide a service drawing up Articles of Incorporation and other basic legal contracts for their clients. That simple change would allow new businesses to spend more of their startup money on actually getting their business going, instead of paying lawyers to fill out standard legal forms. This method would also give clients the ability to utilize a lawyer at prices they can afford.
I looked at SD codified law and confirmed that lawyers in SD must be the only owners of a law firm. The South Dakota Rules of Professional Conduct, which is an Appendix to SDCL Chapter 16-18, includes Rule 5.4: Professional Independence of a Lawyer. Here are a few take-out from Rule 5.4:
(a) A lawyer or law firm shall not share legal fees with a nonlawyer…
(b) A lawyer shall not form a partnership with a nonlawyer if any of the activities of the partnership consist of the practice of law.
…(d) A lawyer shall not practice with or in the form of a professional corporation or association authorized to practice law for a profit, if:(1) a nonlawyer owns any interest therein, except that a fiduciary representative of the estate of a lawyer may hold the stock or interest of the lawyer for a reasonable time during administration;(2) a nonlawyer is a corporate director or officer thereof or occupies the position of similar responsibility in any form of association other than a corporation; or(3) a nonlawyer has the right to direct or control the professional judgment of a lawyer.
Basically Rule 5.4 means that nobody but a lawyer can own a law firm. I don’t think there is any better example of protectionist policy creating a codified monopoly than this. In guise of being independent, the legal industry has ensured there can be no competition within their industry. That is one of the reasons even basic legal services cost much more than they should. South Dakota appears to deserve its D grade in this area.
Barriers to Non-Lawyer Help – SD gets a B
South Dakota actually did good in this category. Half of this grade has to do with whether consumers are allowed to use non-lawyers for various areas such as preparing certain legal forms, legal advice in certain areas, real estate closings, certain contract negotiations and free advice from family and friends.
The other half of the grade comes from how strictly the state enforces regulations from the first half of the grade. South Dakota’s B grade appears to come from this paragraph included in the report:
South Dakota is one of only 19 states where the attorney general, rather than the bar, enforces unauthorized practice regulations. While these regulations still prohibit services that could be helpful to consumers, the attorney general is less likely than the bar to use them to protect the bar from competition.
I didn’t realize the AG’s office had this role in South Dakota. That is good to hear. Technically it still makes me a bit nervous that a lawyer is in charge of this area. But at least the Attorney General is elected by the people, so if the AG’s Office misuses the oversight of unauthorized legal practices there can be a change made during the next election.
Treatment of Self-Represented Litigants – SD gets a C
This area of the report card looks at how user-friendly the court system within the state is for people who choose to proceed without a lawyer. The Justice Index, released by the National Center for Access to Justice, is the basis for this score. I really think this is an area the states Judicial Branch should focus on (instead of the misguided judicial reform known as PSIA). As the Justice Index notes in its section on Support for Self-Represented Litigants:
In our states, more than 80% of the litigants appear without lawyers in matters as important as evictions, mortgage foreclosures, child custody and child support proceedings, and debt collection cases. Making courts user-friendly for these self represented litigants is imperative if we are to keep the promise of equal justice for all.
This isn’t about people trying to represent themselves in murder trials or nominating petition hearings. Rather it is about the ability of the average person to be able to deal with basic court cases that most likely impact the poorer residents within the state. Perhaps Chief Justice David E. Gilbertson should look at this area and work with the legislature to find ways to make the court system more user-friendly to the average SD resident.
Overall Grade – SD gets a C
Overall SD getting a C isn’t too bad. As I noted before, that puts us at the head of the class. It would be interesting to see the debate in Pierre if a bill were introduced to remove the protectionist ownership of law firms from codified law. I feel that change above anything could bring down the costs of legal services in SD. That reduction in cost would do a lot to provide affordable legal help to the resident of SD.