Arizona Task Force Calls for Wide-Ranging Practice Reforms, Including Eliminating Ban on Nonlawyer Ownership

By Bob Ambrogi on October 15, 2019

With the goal of narrowing a growing justice gap in the state, an Arizona task force has called for fundamental changes in the regulation of legal services, including eliminating the ban on nonlawyer ownership of legal practices, loosening restrictions on lawyer advertising, and expanding the ability of nonlawyers to directly deliver legal advice and assistance.

But a dissenting member of the task force took issue with key recommendations, arguing that the solution to the access-to-justice problem is not to create “new industries that will continue to consume the public’s money,” but rather to create a court system that is “simpler and more efficient” for the average citizen.

In calling for elimination of the ban on non-lawyer ownership, the Arizona recommendations are similar to those made recently by a task force in Utah, where the Supreme Court approved the recommendations and ordered that steps be taken to implement a new regulatory structure to oversee alternative legal services providers.

A California task force has also called for such changes.

In its report issued Oct. 4, the Arizona Task Force on the Delivery of Legal Services made a series of recommendations intended to address the state’s gap in access to justice. The most significant would be elimination of the professional-conduct rules that prohibit lawyers and nonlawyers from co-owning businesses that engage in the practice of law.

The prohibition on partnering with nonlawyers “was not rooted in protecting the public but in economic protectionism,” said the report, which went on to say that there is no evidence that such partnerships harm the public.

“The legal profession cannot continue to pretend that lawyers operate in a vacuum, surrounded and aided only by other lawyers or that lawyers practice law in a hierarchy in which only lawyers should be owners,” the report said. “Nonlawyers are instrumental in helping lawyers deliver legal services, and they bring valuable skills to the table.”

In calling for elimination of the ban on nonlawyer ownership, the task force stopped short of making a recommendation on how such entities should be regulated. While Utah is beginning work to create a new regulatory body to oversee nontraditional legal services providers, the Arizona task force said it did not have time to explore in detail the advisability of such regulation. Rather, it recommended that the state should explore that concept going forward.

The task force also called for development of a tier of nonlawyer legal service providers, or “limited license legal practitioners,” who would be qualified by education, training and examination to provide limited legal services, including representation in court and administrative proceedings.

These would be similar to Washington state’s limited license legal technicians and Utah’s licensed paralegal practitioners.

The task force did not recommend specific details of how such a program would be structured. Rather it recommended that the Arizona Supreme Court appoint a steering committee to establish the appropriate parameters. However, the task force recommended that one of the first focus areas for LLLPs should be family law, “as this is where the greatest need lies.”

Other Recommendations

Other recommendations included:

Loosen rules governing lawyer advertising, including by eliminating the prohibition against giving anything of value for referring a potential client – a rule that has limited lawyers’ participation in for-profit referral services. “There is no quantifiable data evidencing that for-profit referral services or even paying for referrals confuses or harms consumers,” the report said.
Promote wider use of unbundled legal services through education and information. Although Arizona has permitted unbundled legal services since 2003, lack of understanding by both lawyers and the public limit their availability, the report found. To counter this, the courts and the bar should promote use of these services through education and public-information programs.
Clarify when law students and recent law school graduates may practice law and what services they may provide.
Clarify rules regarding the unauthorized practice of law.
Formally institute the Licensed Legal Advocate Pilot developed by the Innovation for Justice Program at the University of Arizona James E. Rogers College of Law, to create a new tier of legal service provider that would provide services to domestic violence survivors.
Initiate a document preparer program, proposed by the Arizona Foundation for Legal Services and Education, which would allow lay advocates to prepare legal documents for victims of domestic violence receiving services the foundation’s Domestic Violence Legal Assistance Program.
Expand Arizona’s Legal Document Preparers program in various ways, including by allowing them to speak in court when addressed by a judge.
Encourage courts to establish programs by which nonlawyers located within a court are available to provide legal information directly to self-represented litigants.

One Member Dissents

In an opposition statement that accompanied the report, task force member Peter B. Swann, chief judge of the Arizona Court of Appeals, Division I, took issue with the recommendations to allow nonlawyer ownership and to create a program of LLLTs.

While agreeing with the overall premise that legal services are too expensive and that most citizens are priced out of the ability to secure meaningful justice through the courts, Judge Swann said that the task force failed to examine the barriers inherent in the system – “understaffing, which contributes to delay and cost, and bloated, one-size-fits-all procedural rules that are designed for the most complex cases.”

“The recommendations then take an odd turn: rather than examining the reasons that the system is so difficult and expensive to navigate, the Task Force’s first recommendation is to cast aside ethical rules in an effort to make the practice of law more profitable,” Judge Swann wrote. “Such a proposal would make Arizona unique in the nation, and a leader in the race to the bottom of legal ethics.”

Judge Swann was particularly critical of the task force’s reliance in making several of its recommendations on the so-called Henderson report — the Legal Market Landscape Report written in July 2018 by William D. Henderson, professor at Indiana University Maurer School of Law, for the State Bar of California.

“The fact that a professor has ‘called out’ ethical rules is, to my mind, no more persuasive than the fact that a substantial part of the population has ‘called out’ lawyers as greedy crooks. Both beliefs are no doubt sincere – I submit that neither is correct.”

The task force was chaired by Ann A. Scott Timmer, vice chief justice of the Arizona Supreme Court, and its members included judges, court administrators, lawyers, academics, and members of the public.