Victorian Legal Services Board + Commissioner releases new guide on innovative pricing models

New research undertaken by the Victorian Legal Services Board + Commissioner (LSB), through both their complaints and auditing process, has found that a major consumer complaint has been the billing model adopted by lawyers. With many lawyers opting for an hourly rater rather than a value based price. The LSB has found that this creates uncertainty as well as lowering productivity and discouraging the use of products to improve efficiency, for example, technology. As well as this the model creates a pressure on lawyers to hit billing targets, negatively impacting lawyer wellbeing.

Client research has also suggested that this is likely to cause access to justice issues, with many clients avoiding hiring a lawyer due to fears that the costs may spiral and leave them worse off, creating a perception of poor value for money in the legal services market.

The LSB has therefore released research and analysis into two pricing models, the agreed price model (whereby the service is commissioned at a fixed price) and the subscription model (whereby clients pay a recurring stable fee, in exchange for work whenever they need it). The research looks at the benefit of these models in comparison to the hourly rate, as well as looking at how firms may implement these new models.

Read more here. 

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Digging into Algorithms: Legal Ethics and Legal Access

Abstract

The current discussions around algorithms, legal ethics, and expanding legal access through technological tools gravitate around two themes: (1) protection of the integrity of the legal profession and (2) a desire to ensure greater access to legal services. The hype cycle often pits the desire to protect the integrity of the legal profession against the ability to use algorithms to provide greater access to legal services, as though they are mutually exclusive. In reality, the arguments around protecting the profession from the threats posed by algorithms represent an over-fit in relation to what algorithms can actually achieve, while the visions of employing algorithms for access to justice initiatives represent an under-fit in relation to what algorithms could provide. A lack of precision about algorithms results in blunt protections of professional integrity leaving little room for the potential benefits of algorithmic tools. In other words, this incongruence persists because of imprecise understandings and unrealistic characterizations of the algorithmic technologies and how they fit within the broader technology of law itself. This Article provides an initial set of tools for empowering lawyers with a better understanding of, and critical engagement with, algorithms. With the goal of encouraging a more nuanced discussion around the ethical dimensions of using algorithms in legal technology—a discussion that better fits technological reality—the Article argues for lawyers and non-technologists to shift away from evaluating legal technology through a lens of mere algorithms—as though they can be evaluated outside of a specific context—to a focus on understanding algorithmic systems as technology created, manipulated, and used in a particular context. To make this argument, this Article first reviews the current use of algorithms in legal settings, both criminal and civil, reviewing the related literature and regulatory responses. This Article then uses the shortcomings of legal technology lamented by the current literature and the related regulatory responses to demonstrate the importance of shifting our collective paradigm from a consideration of law and algorithms to law and algorithmic systems. Finally, this Article offers a framework for use in assessing algorithmic systems and applies the framework to algorithmic systems employed in the legal context to demonstrate its usefulness in accurately separating true tensions from those that merely reverberate through the hype cycle. In using the framework to reveal areas at the intersection of law and algorithms truly most ripe for progress, this Article concludes with a call to action for more careful design of both legal systems and algorithmic ones.

Reyes, Carla and Ward, Jeff, Digging into Algorithms: Legal Ethics and Legal Access (2020). Nevada Law Journal, Vol. 21, No. 1, pp. 325-377, 2020, SMU Dedman School of Law Legal Studies Research Paper No. 514,
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Legal Services Board of England and Wales research finds that consumers are missing out on legal expense insurance

A new report by the Legal Services Board of England and Wales (LSB) includes calls for legal expenses insurance to be promoted more widely to consumers, in order to widen access to legal advice amongst the public. The report estimates that 3.6 million people in England and Wales experience unmet legal need as part of a dispute annually, with few consumers able to pay for unexpected legal costs out of pocket. The report also found that millions of households have legal expenses policies as part of their insurance plans, however, they are rarely used, with only 7% of people who have not paid out of pocket for legal services having used insurance.

Previous research by the Financial Conduct Authority suggests that around 15 million adults may have legal expenses insurance. However, the LSB has found that as this is often included as a standard feature in home insurance contracts many people may not realise they have it. The LSB’s research found that participants had little understanding of these products and how their use.

The research also demonstrated that amongst the respondents, the majority assumed that legal expense insurance would be more expensive and restrictive than it is in reality, thereby limiting the role that this type of insurance is able to play in managing unexpected legal costs. Most respondents expected the cost to be at least double the average cost of £20-30 per year. Another misconception was that protection was only provided in relation to the product the insurance was sold alongside. In fact, while a product purchased with home insurance might cover housing issues, it will normally also cover legal issues related to employment, injury, contracts and other areas of law.

Steve Brooker, Head, Policy Development and Research at the Legal Services Board, said: “While legal expenses insurance is not a fix-all, it has the potential to protect more people from unexpected legal costs and is cheaper and covers more issues than many consumers think. People often need legal help when they are at their most vulnerable, for example when facing a housing or employment issue. Legal expenses insurance can provide consumers with the peace of mind that the cost of legal advice and representation will be covered. We see legal expenses insurance or similar products as one of the ways to enable more people to access legal services free at the point of need. The insurance industry has a role to play in better promoting legal expenses insurance to consumers and building stronger confidence in these products.”

Read more about the report here, or access the full report here.

 

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Florida makes moves towards ABS licencing

On the 28th of June 2021, the Florida State Supreme Court’s Special Committee to Improve the Delivery of Legal Services (formulated by the Bar Board of Governors in November 2019), released their final report on changes in the legal sector.  The report is calling for further study on allowing some nonlawyers to have an ownership interest in law firms and fee-splitting with non-lawyer entities, as well as calling for the creation of a legal “lab” to allow testing of innovative ways of providing legal services.

Former Bar President John Stewart, chair of the special committee, said the report is a recognition that the legal marketplace is changing and an attempt to allow the legal profession to help design and control those changes, which it now is largely unable to do. Saying: “This committee and this report is part of the profession and the Bar being the architect of the changes that are happening in the legal profession and the legal services marketplace, before outside forces dictate changes we may not want. We don’t think change should happen for the sake of change or because people think there should be change. We think change should happen because of data.”

The committees work focused on the risk of the development of an unregulated market where bad actors can take advantage of the public. This led to calls for the creation of a sandbox, whereby services can be tested to better understand public protection goals. Members of the committee also discussed the impact of reforms on low-income consumers, suggesting that regulatory reform could improve access to justice within the state.

The only firm recommendation of the report was the formulation of the legal lab sandbox project, the lab, titled the Law Practice Innovation Lab Program, under the committee’s conceptual outline would be overseen by a Supreme Court commission and would run for at least three years. It would be based on a similar program in Utah. Ontario, British Columbia, and the United Kingdom.

The report included calls for further study into a range of regulatory reforms including lawyer advertising; referral fees; fee-splitting; entity regulation; regulation of online service providers; and regulation of nonlawyer providers of limited legal services including paralegals and other limited licence professionals.

Read more about the report and access the full report here.

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State Bar of California publishes digital annual report

The State Bar of California has published its second digital annual report. The report was conceptualised following the significant changes in the legal industry brought on by the COVID-19 pandemic, creating rapidly changing policy goals and public protection requirements.

Donna S. Hershkowitz, Interim Executive Director of the state bar had said “Despite the onset of the challenges brought on by the coronavirus, Californians deserve access to a legal system that serves them with integrity and fairness. The State Bar quickly adapted to ensure that our essential work protecting the public continued. The publication of this report is one of many initiatives we are undertaking to support our strategic goals of transparency, accountability, and proactive communication.”

The 2020 report highlights changes implemented by the State Bar to address the pandemic including:

  • The establishment of a fully remote call centre to maintain service to the public.
  • Shifting examinations to remote administration
  • The creation of a new licensing programme for law graduates to start practice before passing the bar exam
  • Transitioning the State Bar Court to remote proceedings
  • Distributing $11.75 million through the Client Security Fund.

Read the full report here.

 

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Law Society of Ontario launches contingency fee reforms

On the 1st July 2021, the Law Society of Ontario launched new requirements regarding contingency fees.  The new rules are designed to enhance transparency and fairness for clients, improving consumer protection and access to justice. As well as this the hope is that the changes will assist legal practitioners with client communication, reducing their administrative burden. The reforms focus on ‘no win, no fee’ contingency fee services, which have historically led to confusion amongst consumers and potential clients over potential costs.

Law Society Treasurer Teresa Donnelly has said: “The contingency fee reforms are intended to benefit the public by helping simplify and standardize the information that individuals receive if they need to engage a lawyer or paralegal to assist them in a legal matter which may result in money being awarded. These reforms also benefit lawyers and paralegals through the creation of standard documents and specified information that must be shared with potential and current clients. This reduces the administrative burden on them.”

Requirements set out in the reforms include:

  • a lawyer or paralegal who offers representation on a contingency basis must provide the potential client with a copy of the Law Society’s ‘Contingency fees: What you need to know’ consumer guide
  • a lawyer or paralegal who markets legal services on the basis that clients may be charged contingency fees must disclose the general maximum percentage of contingency fee clearly on their website or, in-person if they do not have a website
  • the use of a mandatory standard form Contingency Fee Agreement, which uses plain-language 

Read more about the reforms here. 

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Law Society of Saskatchewan releases new podcast on law librarians and their role in access to justice

The Law Society of Saskatchewan has released a new podcast examining the role of law librarians in improving access to justice by providing public access to legal information.

The podcast features Alan Kilpatrick, Co-Director of Legal Resources at the Law Society of Saskatchewan, Shaunna Mireau, Past-President of the Canadian Association of Law Libraries, and Kim Nayyer, Associate Dean of the Cornell Law School and President of the Canadian Association of Law Libraries.

Listen to the podcast here. 

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Singapore Ministry of Law offers free mediation services for couples and wedding vendors impacted by COVID-19

The Singapore Ministry of Law (“MinLaw”) has introduced a new free mediation programme for parties such as couples and wedding vendors who have been impacted by new COVID-19 restrictions. The MinLaw COVID-19 (Wedding) Mediation Programme first took effect on 8 May 2021 and was introduced in recognition of the fact that many parties had to either cancel, reschedule or downsize events, altering the goods and services provided. However, some have been unable to come to a decision around the provision of the services through direct negotiation.

MinLaw has suggested that by undertaking mediation parties may encounter such benefits as higher rates of settlement, time and cost savings, improved relationship between parties and confidentiality. MinLaw’s programme will require both parties to agree to mediation, with mediation facilitated by a neutral trained professional in a non-adversarial and confidential setting, and via videoconference where applicable. Mediators will facilitate the discussion and help parties work towards a mutually acceptable solution.

Read more about the programme here. 

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Singapore to expand permitted categories for third party funding

The Ministry of Law (MinLaw) has approved changes that will be implemented on the 28th June, which will see the third-party funding (TPF) framework widened to allow for the inclusion of domestic arbitration proceedings, certain proceedings in the Singapore International Commercial Court (SICC), and related mediation proceedings.

The new funding options offer businesses an alternative option to generate funding, as well as helping to increase the competitiveness of Singapore’s international commercial dispute resolution market, benefiting both legal practitioners and buyers of legal services.

With effect from 28 June 2021, the categories of proceedings for which TPF is permitted will be extended to include:

  • Domestic arbitration proceedings;
  • Court proceedings arising from or connected with domestic arbitration proceedings;
  • Proceedings commenced in the SICC, for as long as those proceedings remain in the SICC;
  • Appeal proceedings arising from any decision made in the proceedings in paragraph 3c; and
  • Mediation proceedings relating to any of the proceedings above.

MinLaw has suggested that the reforms will be particularly welcome against the backdrop of the COVID-19 pandemic, which has limited many claimants access to funds, creating extra financial constraints. The ministry feels that alternative funding options may present a partial solution to these issues.

Read more about the changes here.

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Top jurists call for regulatory change to increase access to justice

During the 9th June ABA discussion on regulatory change, Vice Chief Justice Ann A. Scott Timmer of the Arizona Supreme Court stated that despite decades of efforts to encourage practising lawyers to perform a minimum of 50 pro bono hours annually to increase access to justice, minimal results have been achieved.

Timmer is part of a growing list of top jurists calling for regulatory change to expand access to justice. Instead of relying on pro bono work to increase legal access, for instance, regulatory changes could lead to nonlawyers handling some routine legal matters. She and chief justices from Utah, Michigan and Texas discussed some of these changes in the inaugural Redesigning Legal Speaker Series, which is intended to provide a forum to explore the legal profession’s regulatory changes underway and the challenges they face. Three ABA entities — the Center for Innovation, the Center for Professional Responsibility and the Standing Committee on the Delivery of Legal Services — have teamed up with the Institute for the Advancement of the American Legal System at the University of Denver and Legal Hackers to organize what is planned as a quarterly series.

The debut program, Redesigning Legal: Leading from the Bench — Expanding Access through Regulatory Innovation, also featured Chief Justice Bridget McCormack of Michigan, Chief Justice Nathan Hecht of Texas and Chief Justice Matthew Durrant of Utah, and showcased how supreme courts in Utah and Arizona have ushered in regulatory change to expand access to justice.

In Arizona, legal paraprofessionals can now practice in four distinct areas. The state Supreme Court also eliminated model rules that prohibit the sharing of legal fees with nonlawyers.

In Utah, 23 pilot programs have been approved in the state’s seven-year “sandbox” approach, Durrant said. They range from a solo practitioner giving his sole paralegal 10% ownership in the firm to law students at Brigham Young University providing counsel to domestic violence victims.

Hecht, who is also chair of the Conference of Chief Justices, said courts are rethinking their roles because jurists realize pro bono efforts are not sufficient to provide access to the courts for many Americans. McCormack added, “We are going to forge forward in Michigan because this is now the time in the process to try. And the big winner could be the public.”

Read more here.

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