Legal innovation initiatives are on the chopping block in California

REUTERS/Robert Galbraith

(Reuters) – Lawmakers in California have moved to shut down two experimental programs investigating whether looser regulations on legal services in the state could make them more affordable and accessible.

The California Senate’s judiciary committee on Wednesday amended the state bar’s annual funding bill to severely constrain two state bar working groups that were pursuing the changes.

One of the working groups is examining modifying ethics laws to allow non-lawyers to share legal fees or own law firms, as part of a regulatory “sandbox” program, but has yet to issue any recommendations. The other has recommended allowing specially trained non-lawyers called paraprofessionals to provide limited services in areas such as employment and consumer debt.

Ruben Duran, chair of the state bar’s board of trustees, said those projects are intended to further the bar’s mission of protecting the public and increasing access to justice.

“We have conveyed our concerns to [state lawmakers] that, as written, the amendments may have the effect of halting these programs altogether,” Duran said.

A hearing on the amended bill is scheduled for Tuesday.

State Senator Tom Umberg, who chairs the judiciary committee and who introduced the amendments, said Friday that the state bar needs to focus on improving its attorney discipline system.

“It is essential that the Bar focus the use of licensing fees and other resources on its core mission of discipline and protection of the public,” Umberg said is a statement.

But legal innovation advocates who support a paraprofessionals program and the adoption of a regulatory sandbox say lawmakers are capitulating to lawyers who oppose new competition.

“I think there’s a sense among some folks among the trial bar that these reforms—while they would be good for consumers—would not be good for the bottom line of some lawyers,” said Tom Gordon, executive director of Responsive Law, a nonprofit organization that advocates for affordability and accessibility in the legal system.

Utah adopted a legal regulatory sandbox in 2020, and Arizona began allowing nonlawyers to co-own legal services businesses the same year. Those states and Washington already have legal paraprofessional programs or are piloting them.

Camila Lopez, co-founder of the Los Angeles-based legal technology company People Clerk—which helps litigants prepare lawsuits in small claims court in California and New York City but does not offer legal advice—said loosening regulations would allow her company to expand its scope and better serve the wide swath of people who don’t qualify for legal aid but who can’t afford a licensed attorney.

“California is supposed to be leading the way on these issues, but we’re now trailing behind Utah and Arizona,” she said. “It’s extremely frustrating.”

Read more:

Proposal to let non-lawyers provide some legal services inches forward

California bar bungled attorney misconduct cases, new audit finds

California bar advances “regulatory sandbox” plan

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