Let’s stop glossing over the hard questions.
In contemplating the prospects for serious change in the legal services ecosystem, those of us in the U.S. face a massive institutional impediment—really, a wicked problem—that we seldom discuss: Regulation of lawyers and legal services is principally a state-by-state endeavor.
In the United States, we operate in a constitutional orbit of legal services regulation which is constituted by fifty different state regulatory structures and schemes. California, for example, is free, indeed is expected, to configure its rules and regulations for myriad legal services issues, including the requirements for admission to the profession, rules of legal ethics and professional responsibility, and the schemes for appearance in court on behalf of clients.
To be sure, there are some common rules—think of the ABA’s Model Rules of Professional Conduct, standards for law school accreditation, and the Uniform Bar Exam. Nonetheless, the decision of whether to accede to generally applicable standards and, further, the decision to adopt rules tailored to what are perceived as local needs, are decisions made fully by state decision-makers functioning under the rubric of a self-regulating profession. As a practical matter, self-regulation consists of lawyer rules made by lawyers, which, through a byzantine committee process, is given the force of law by the highest court in the state, a court composed entirely of lawyers turned jurists.
Most legal professionals and legal scholars take this system largely for granted. Yes, of course, American lawyers believe, the structure of legal services regulation should be a state-by-state matter. This is, after all, part of our glorious federalist system. State rules for a profession defined by the borders of fifty separate states.
This view is incongruous with the way matters work, by and large, elsewhere in the world, where choices about legal services regulation are made by central authorities. More troublingly, it is out of sync with what has long been, and increasingly is, a national, and even international, system of legal practice of the rule of law. The substantive rules are often of national import, and purposively so. Think of securities regulation and antitrust, and many other examples. Federal statutes and administrative regulations govern for the most part transactions and rules of conduct and liability. And even where there are pertinent state laws (hearing the echoes of Erie v. Tompkins from my 1L year: “there is no general federal common law”), rules become transplanted in ways that we expect through the common law method.
Legal services in the United States can and should be viewed through a wider prism than about the current structure of regulation is designed to do. This is so for three overlapping reasons:
- First, the impact of globalization makes the balkanization of legal services, with regard both representational and structural rules, seriously anachronistic.
- Second, the profound impact of technology makes our scheme of bar federalism inflexible and maladapted to these changes–do 50 state supreme courts need to sign off on whether a piece of code designed to simplify a legal problem is really the unauthorized practice of law or impermissible fee-splitting?
- Finally, we have a serious access to justice crisis in the United States. See, e.g., Post 140 (discussing work of Prof. Becky Sandefur and related data). The crisis is uniformly bad across the nation; further, it fosters a near-universal cynicism that courts are only for the rich and powerful, which undermines faith in representative government. Balkanization dramatically impedes seriously our ability to respond to this crisis.
The explanations for the persistence of our bar federalism are several. There are pockets of American constitutional law that undergird the authority of the states to regulate the legal profession without federal interference. But the emphasis here should be on “pockets,” neither deep nor frequent.
One searches in vain for a blockbuster Supreme Court case or line of doctrine in the federal courts insisting that federal regulatory actions, whether through statutes or administrative regulations, would run afoul of, say, the 10th Amendment or another textually grounded limit on federal power. On the contrary, federal authority over myriad elements of the economy, including professional services, has been confirmed in various areas and over at least a century’s time. Can we seriously imagine that Congress lacks the authority to establish regulatory standards that apply with full force to lawyers in their practice of law? Or admission to the profession? Or the parameters of legal ethics? Or non-lawyer investment in law firms? Or . . .?
The constitutional argument against federal intervention is mostly a red herring. States undertake their schemes of self-regulation viz. state constitutional power (rarely explicit; mostly through something that might be viewed charitably as a “penumbra”) without federal intervention not because the feds cannot intervene, but because they will not intervene.
Moreover, we could make an even stronger point in this regard, and that is the U.S. Constitution actually imposes restrictions on our balkanized system of state-by-state legal services regulation. The Dormant Commerce Clause and the 14th amendment’s Privileges and Immunities Clause would seem to constrain at least some elements of lawyer regulation that are palpably protectionist, in effect if not in purpose.
The Supreme Court waded into this thicket in New Hampshire v. Piper, 470 US 274 (1985), a case in which the Court considered residency requirements for lawyer admission. In Piper, the Court held that the state’s bar on nonresidents practicing law in this state, assuming they met all the relevant admission requirements, was an unconstitutional abridgment of a privilege of citizenship under Article IV, Section 2 of the U.S. Constitution. The Court rejected New Hampshire’s claim that being an “officer of the court” compelled the conclusion that nonresident lawyers be disqualified for admission. Justice White’s opinion for a seven-member majority was striking in its declaration that the lawyer has an important role “in the national economy.” This echoes the statement four years earlier in Goldfarb v. Virginia State Bar, 421 U.S. 773 (1975), that the “activities of lawyers play an important part in commercial discourse.”
Nonetheless, neither of these doctrinal edifices, designed to promote free mobility and open trade in a nation whose constitutional framers prized these values, have created serious obstacles to states marching to the beat of their own drummers. We still live in a system in which states have enormous latitude to set restrictions on lawyer mobility and the system therefore remains balkanized.
The ambition of national rules and standards, whether enacted by federal authorities (Congress and agencies or even the federal courts) raises complex questions, and I am not ready to tackle the large, complex question of whether a comprehensive national solution to deficiencies in the operation of legal services and the access to justice problem is warranted in this third decade of the 21st century. I will say, albeit equivocally, that some uniformity constructed by national decision-makers is warranted, given that the balkanization of today is letting us down. More promising, to me, is the development, by committed state courts and other stakeholders, to common standards and, as a critical first state, the crafting of coherent criteria for the development and analysis of data and measurement of performance. We are far from that now.
And the reason we are far from that world—and thus even farther still from regulatory standards sufficiently comprehensive and well suited to a nation with decreasing borders and truly unique needs and expectations for civil, criminal, and administrative justice—is that we labor in this dense and under-examined underbrush of highly localized, often idiosyncratic state regulatory structures.
Our paean to Justice Brandeis’s famous description of the “laboratories of democracy,” New State Ice Co. v. Lieibmann, 285 U.S. 262 (1932), a clarion call from nearly a century ago for American federalism’s great virtue as a mechanism for experimentation, ignores the import of this analogy. A laboratory is a place where we can experiment with different elements and options, always evidence-based and following where the data leads, with the aim of coming up with a solution that is of appropriately wide and general applicability. It is not the Texas and Florida or Massachusetts access to justice problem that we are mainly concerned about; it is the American access to justice problem. And we should seriously interrogate our devotion to bar federalism that stands in the way of the welcome laboratory of experimentation and fruitful sandboxes that will hopefully lead to meaningful reform.
We need to drill down into some of the particular components of this system of bar federalism, in order to illuminate the contours of the problem and suggest new ways of thinking about its character, its persistence, and the possibility of overcoming its grip on our professional consciousness.
In Part II, I will consider some of the values of federalism that undergird our bar federalism and therefore help sustain this system in the face of criticism that it is in tension with constitutional doctrine and, more practically speaking, is anachronistic in light of changes in our society and the needs of consumers. I will likewise consider some of the pathologies that emerge from this persistent scheme. In Part III, I will sketch some promising pathways to reform, one that seeks to accommodate the benefits of bar federalism while ameliorating its deficits.