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March 16, 2008

Wisconsin's State Bar Plans to Cut Access to Affordable Legal Services

[The following is an op-ed piece by James Turner (Executive Director of HALT), published in the Madison Capitol Times on March 13, 2008.]

The Wisconsin Supreme Court is considering a new definition of the practice of law that could force consumers to hire a lawyer to deal with even the most routine legal needs. If the court approves this State Bar proposal, instead of being able to use an affordable legal document assistant, an income tax preparer, or a real estate agent, Wisconsinites would have to shell out the hundreds of dollars an hour that lawyers charge.

HALT (Help Abolish Legal Tyranny), the nation's largest and oldest legal reform organization, is urging the court to reject the lawyers' naked power grab and, instead, encourage the development of innovative ways to expand the availability of affordable legal help. Our view is supported by the U.S. Justice Department, which also opposes the proposed rule. After complaints about their original proposal were filed with the Supreme Court by consumer advocates like HALT and many Wisconsin businesses, the State Bar added an exception for service providers that are licensed by the state.

We agree with the Justice Department that this new exception "would still prohibit non-lawyers from performing services for which legal expertise is unnecessary" and believe that it would only confuse consumers and deter meaningful competition from non-lawyers.

How do the lawyers defend their monopolistic proposal? They say it is really to protect the public from scam artists, particularly "notarios" who falsely claim to be attorneys and prey on the Latino community. But after two years of beating the bushes, the State Bar could produce only six complaints by consumers about non-lawyer legal service providers. During this same time frame, consumers filed over 2,000 complaints against Wisconsin attorneys.

What makes the lawyers' proposal all the more appalling is that it comes in the midst of a legal access crisis in Wisconsin. As a blue-ribbon panel found just last year, more than "half a million Wisconsinites -- people with families, many of whom have jobs, own homes, and pay taxes -- must contend with significant legal troubles without any legal help because they cannot afford the professional legal help they need." Instead of responding to this access crisis, Wisconsin's organized State Bar wants a new rule that would make it all but impossible for consumers to get help when they can't afford to hire a lawyer.

There is a better way to both serve and protect legal consumers. For many years HALT has argued that the unauthorized practice of law is claiming to be a lawyer when you're not. We believe that the defining characteristic of the practice of law is the establishment of an attorney-client relationship. In recent years, the U.S. Justice Department and the Federal Trade Commission have endorsed this common-sense view. The Wisconsin Supreme Court should too, by defining the practice of law as only including activities that require specialized legal skills where an attorney-client relationship is present.

James C. Turner is the executive director of HALT (Help Abolish Legal Tyranny),, a nonprofit public interest group dedicated to promoting simple, affordable and accountable justice for all.

February 20, 2008

Launch of New Website by HALT Featuring Works of Fred Rodell

[Here is the text of an email circulated by HALT, the nation's leading law reform organization, announcing a new website and blog featuring the works of Fred Rodell, a Yale Professor who debunked the legal profession and accompanying myths.]

Sixty-nine years ago, a young Yale law professor rocked the legal establishment with a scathing indictment of the American civil justice system entitled Woe unto You, Lawyers! Almost overnight, Fred Rodell became the nation's leading debunker of legal myths, and the target of untold ire from thin-skinned lawyers. And his provocative observations are as accurate today as they were seven decades ago. Here is just a sampling.

Rodell's 1936 article Goodbye to Law Reviews opens by explaining: "There are two things wrong with almost all legal writing. One is its style. The other is its content. That, I think, about covers the ground." The article proceeds to take on the entire profession: "[I]t is pretty hard to find a group less concerned with serving society and more concerned with serving themselves than the lawyers."

In Woe, Rodell's critique is cultural: "In TRIBAL TIMES, there were the medicine-men. In the Middle Ages, there were the priests. Today there are the lawyers." But the effect of the mystifying process is to exclude ordinary people from the legal process: "[L]aw deals almost exclusively with the ordinary facts and occurrences of everyday business and government and living. But it deals with them in a jargon which completely baffles and befoozles the ordinary literate man."

Finally, Rodell points out the basic hypocrisy of the Law: "The last thing any court will ever admit, even when it is being quite practical about what it decides, is that practical considerations have anything to do with the decision."

As a leader in the legal realist movement, Fred Rodell stuck to his guns for the next four decades (including a stint on HALT's Advisory Board), arguing that we should simplify, demystify and open up our civil justice system. Rodell was a true pioneer of the legal reform movement, one of the first to identify the structural failures of our civil justice system and to stridently challenge the legal establishment. But since his death in 1980, his thinking has not received the serious consideration that it deserves, and his key writings have disappeared from print.

That is why we at HALT were so excited to begin working with San Francisco legal reform advocate Alex Kline and Fred Rodell's family to revive these visionary legal reform lessons on the Internet. In addition to introducing Rodell to a new generation, we want to provide a meeting place for those who share an appreciation of his ideals, criticisms and reform objectives. We want to provide a forum where they can put their heads together and work to implement his ideas in practical ways. Rodell taught at Yale Law for over forty years, and we hope that his students will find their way to this site and use it as a place to re-connect, brainstorm, and formulate action plans to bring about the changes he advocated.

Today we are launching to make Woe and Goodbye available to all, along with, a forum for renewed critique, debate and thinking.

Let the fun begin.

James C. Turner
Executive Director, HALT, Inc.

February 17, 2008

Routine Legal Services: The Internet is Fast Replacing Lawyers

[This article was written by guest blogger Ralph Warner, founder and CEO of Nolo. He is also the author of the blogs Retire Happy and The Legal Humor Blog.]

In JFK's America, if you had a legal problem, you either hired a lawyer or went without help. Because the majority of middle-class people couldn't afford lawyers' pricey hourly rates, for the most part, lawyers represented the wealthy, the upper-middle class, and business interests. Things began to change in the mid-1960s when, as part of Lyndon Johnson's War on Poverty, federally funded legal services (legal aid) programs were established for the very poor. Now it was just the 100 million people in the middle who were legally disenfranchised. In the early 1970s, this huge unmet legal need helped produce companies like Nolo -- publishers who produced step-by-step workbooks designed to allow self-helpers to accomplish routine legal tasks at a fraction of the fees charged by lawyers. Especially in California and other states populous enough to support state-specific publishing ventures, the educated and energetic could now affordably do their own divorces, guardianships, deeds, wills, and even form a corporation or a non-profit.

But self-help law books were far from a comprehensive solution to America's legal access gap. They didn't hold hands, give fact-specific advice, and were difficult to use for people without good language and form-drafting skills. Part of this self-help law gap was filled by independent paralegals (legal document preparers). These non-lawyer entrepreneurs typically rely on self-help law books like Nolo's to help their customers prepare paperwork for routine legal actions for about 25% of the fee charged by most lawyers. But, because of the aggressive turf-protection tactics of the legal profession (enforcing archaic statutes that make it illegal without a license, as one example), non-lawyer providers have been kept out of many markets, and forced to operate on the margins in others. The result was that even ten years ago millions of Americans still had little, or at best spotty, access to affordable legal services.

Enter software.

Starting with tax preparation and will-making products published by companies such as Intuit, H&R Block, and Nolo, software successfully married legal expert systems to the personal computer. By first prompting the user to answer basic screening questions (Are you married?, Do you have minor children?, etc.) and then following up with queries that met the user's situation, software could both greatly simplify and expedite routine legal paperwork, and then print out the result, ready to file.

More recently, legal software has become widely available online. Now companies with national reach, such as Legal Zoom, Nolo and The Company Corporation, offer to help consumers complete an extensive menu of legal tasks, such as making a will or living trust, filing for divorce, or forming a corporation or LLC for far less than what lawyers typically charge. And when you combine low prices with the fact that web-based software is increasingly well-designed, online help is excellent, and trained back-office people are standing by to help with technical glitches, it's easy to see why the online law business is taking off -- so much so that my educated guess is that upwards of 250,000 legal tasks will be accomplished online this year. And assuming that, as compared to hiring a lawyer, the consumer saves $1,000 per transaction, this amounts to consumer savings of $250 million.

And, interestingly, the migration of basic legal tasks from lawyers to internet-based corporations is still at an early stage. Provisional patents, trademarks, copyrights, deeds, living trusts, and divorces are just starting to be offered by affordable online services -- and many more such as bankruptcy, and many types of business contracts are in the pipeline, something which almost guarantees that online legal providers will experience at least a decade of rapid growth in the process of becoming a billion-dollar industry.

But what of lawyers who offer personal legal services? Are they about to become an endangered species? Hardly. In large part that's because, as discussed, since lawyers never found a way to affordably meet the needs of America's middle class, it wasn't their business to lose. Or, put another way, millions of Americans can now afford to draft legal documents who even 40 years ago would have gone without. And then there are two other key lawyer-friendly trends. First, the world of American business has become ever more rule-bound. 50 years ago, your average Main Street business, Mom & Pop real estate investor, or small non-profit could get by with occasional legal advice. Today, the plethora of employment, intellectual property, landlord-tenant, and other laws mean they are all but tethered to a lawyer.

Second, the increasing size and affluence of the upper-middle and wealthy classes in America has meant that far more people can afford the hand-holding and customized advice lawyers offer. The result is that large numbers of people who learn about their legal task from a book, or even do basic drafting online, also consult a lawyer. (Nolo has designed its lawyer directory specifically to meet this need.) So, especially as lawyers learn to charge fixed fees for the review of documents created online, internet legal providers and lawyers may yet learn to happily co-exist.

January 18, 2008

Special Needs Trusts for the People

A few years ago, I taught a "distance learning" estate planning course for Barnes and I created an online curricula, assigned reading in the designated textbook (Nolo's excellent Plan Your Estate, by Denis Clifford and Cora Jordan), and answered questions via an email bulletin board. The course was fun, but I kept getting questions about special needs trusts about which I was clueless.

Intrepid instructor that I was, I turned to the textbook (Plan Your Estate), confident I would be enlightened. At the time there was one small paragraph on the subject, to this effect: Special needs trusts are too complex to do yourself. Get a lawyer. Hmm. Every Nolo book has statements like this when the author believes self-help is inappropriate for the circumstance. Fair enough. However, since I was teaching the Barnes and Noble course, I had to do better than that, so I set out to research the topic. But before I continue, I should bring everyone up to speed about what I'm talking about.

Special needs trusts are devices that allow people with disabilities to enjoy the benefits of gifts, inheritances, and personal injury awards without running afoul of the stringent resource limits imposed on recipients by the Supplemental Security Income and Medicaid programs. The property in the trust can be used for a variety of purposes beneficial to the disabled person (for example: vacations, college tuition, caretakers, periodicals), as long as the trust property isn't spent on items already provided by those government programs.

The first thing I learned from my research is that special needs trusts are commonly thought to be so complex that only a lawyer should draft them. And the complexity is thought to be so great that it's okay for lawyers to typically charge $1500 and up for the pleasure. The next thing I learned (and this won't come as surprise to those who know the history of Nolo) is that the type of special needs trust most needed by the populace, and most often prepared by lawyers in the field, is not at all complex and can easily be done without a lawyer's tender ministrations.

The simple type of trust is where a third party, for instance a parent or grandparent, leaves property directly to the trust rather than to the child. In this way, the trust owns the property and the child continues to receive the government benefits. The reason this type of trust doesn't need a lawyer's tender ministrations is that since the trust property never belongs to the beneficiary in the first place, it is virtually impossible for the government to break the trust, unless the trust has language that gives the trustee the wrong type of discretion. "Aha," the lawyers might say, "it's just that type of technicality that requires a lawyer to do the drafting." But the language that makes a special needs trust airtight is just a few sentences that are the same type of boilerplate that is found in wills, living trusts, and other estate planning documents -- documents that people have been preparing without lawyers for the past half-century.

In case you're wondering, there are some situations where the lawyers are right and it's worthwhile to pay a lawyer to draft a special needs trust. This is when the money going into the trust belongs to the beneficiary from the get go. The reason why this is more complex than when property goes directly to the trust is that you are transferring the recipient's property to the trust to make him or her eligible for government benefits. Understandably, broke state governments are suspicious of these transfers and do everything in their power to break them. And if they are broken, the money will be considered a resource that will force the beneficiary to spend down the money before he or she can once again be eligible for SSI and Medicaid.

Anyway, back to my story. Part of my research disclosed that the hundreds of thousands of parents of children with disabilities who would benefit from a simple special needs trust couldn't afford to pay for one (or maybe just wouldn't because they didn't trust lawyers). Since this type of simple trust is easy to draft, involves less choices and variables than do wills and living trusts, and can be explained in plain English, I decided to write a book on the subject (Special Needs Trusts: Protect Your Child's Financial Future, by Stephen R. Elias (Nolo)). The book is now in its second edition and doing well.

I expected to be attacked by the special needs trust cartel when the first edition came out, but no such luck. Maybe I'll take on the more complex type of trust in my third edition, just to get the goat of all those lawyers who grossly overcharge their clients for the simple type of special needs trust.

January 2, 2008

Independent Paralegals Improve Access to Justice

Paralegals who directly help consumers prepare their own divorce, estate planning, name change, and guardianship papers have been around for a long time. Usually, these paralegals gain their expertise from having worked for lawyers or having attended formal paralegal schools. Yet many lawyers have sought to drive these independent paralegals out of business by charging them with "unauthorized practice of law"--a criminal offense in many states. While some of us believe that a thriving independent paralegal industry would vastly increase access to the justice system for the many millions of people who can't afford lawyers, others--especially many lawyers--believe that only lawyers can be trusted to help people with their legal problems.

In October 2007, a Massachusetts statewide commission examining barriers to access to justice recommended that independent paralegals be allowed to speak on behalf of low-income parties embroiled in certain civil matters. According to the Massachusetts Lawyers Weekly, the Massachusetts Bar Association predictably shot the concept down, arguing that poor people deserve legal representation just the same as rich people and that non-lawyer paralegals could not be expected to deliver competent representation. Their answer to the access problem? More court-based assistance to self-represented litigants, more lawyers, and more pro-bono legal services.

This reminded me of an experience I had in California some 20 years ago. I was a member of an ad hoc California State Bar committee (called the Public Protection Committee) that was charged with investigating what role California independent paralegals might play in facilitating access to justice for people who couldn't afford lawyers. We held three public hearings in addition to collecting a ton of information from consumer protection agencies, courts, and other entities that could provide us with a factual basis for making recommendations.

At one of the hearings, a lawyer employed by the Los Angeles legal services program testified that under no circumstances should non-lawyers be allowed to help people fill out the paperwork necessary to fight their evictions. She went on to say that her agency turned away 40,000 eviction cases every year because there weren't enough lawyers to help. I asked her why it wouldn't be better to authorize independent paralegals to assist in these cases. With considerable passion she responded that allowing non-lawyers to help the poor would create a two-tier justice system--which was unacceptable to her--and that the only appropriate way to help the Los Angeles poor fight their evictions was to petition Congress to authorize more money to hire more lawyers. I was so shocked that to this day I vividly remember every detail of the encounter.

Our Committee--four lawyers and four non-lawyers--went on some months later to unanimously recommend the repeal of the California unauthorized practice laws and the creation of a system in which independent paralegals could help people with their legal paperwork. Not unexpectedly, the California State Bar president immediately showed up on local TV condemning our report and literally calling us "brain dead" for thinking the Bar association would ever agree to such a "cockamanie" scheme.

He wasn't far off the mark. It took another 10 years before the California legislature (with no help from the Bar Association) authorized independent paralegals to provide the same kind of assistance our committee had recommended earlier. There are now many hundreds of registered independent paralegals in California (called Legal Document Assistants) that help people prepare the forms they need to handle their own legal work. For more information about Legal Document Assistants, visit the California Association of Legal Document Assistants' website. Independent paralegals are also authorized to prepare legal forms in Arizona and Florida (and perhaps a couple of other states)

What's my point? That lawyers fight tooth and nail to maintain their monopoly and that legal consumers in Massachusetts probably will have a long and rocky road ahead before the Massachusetts powers-that-be finally accept the obvious facts: there are lots of legal tasks that don't require a law school education, and access to justice in Massachusetts would be vastly improved by bringing non-lawyers into the mix of legal service providers.

December 10, 2007

HALT Opposes the Wisconsin State Bar's Proposed Regulation of the Unauthorized Practice of Law

This article is posted with permission from HALT, the nation's oldest law reform organization.

HALT Submits Comments Rejecting the Wisconsin State Bar's Proposed Regulation of the Unauthorized Practice of Law

HALT believes that consumers should have access to a continuum of legal services provided by both attorneys and qualified non-lawyers that meet the full range of their legal needs. On behalf of HALT's 50,000 members nationwide and 1,200 members in Wisconsin, HALT urged the Court to reject the State Bar's Proposed Supreme Court Rule Chapter 23, Regulation of Unauthorized Practice of Law.

The Wisconsin Supreme Court should recognize that lawyers alone cannot provide all the legal services consumers need. Study after study has shown that lawyers have priced themselves beyond the reach of average Americans. According to a 1996 ABA study, some 38 million low and moderate income American households simply cannot afford to hire a lawyer. Lawyers' fees of $100 per hour or more mean that the traditional source of legal services is out of the reach for many Americans. Wisconsin's own Access to Justice Study Committee stresses in Bridging the Justice Gap: Wisconsin's Unmet Legal Needs that more than "half a million Wisconsinites ― people with families, many of whom have jobs, own homes and pay taxes ― must contend with significant legal troubles without any legal help... because they cannot afford the professional legal help they need." Access to Justice Commissions around the country are also expressing great concern about this growing accessibility crisis.

Instead of responding to the access crisis, Wisconsin's organized Bar has asked the Court to adopt a new draconian rule that will make it all but impossible for consumers to get help when they can't afford to hire a lawyer. The Bar's sweeping new definition of the practice of law ― "the application of legal principles and judgment with regard to the circumstances or objectives of another entity or person(s)" ― covers every legal service imaginable. "Giving advice or counsel, ...selection, drafting or completion of legal documents, ...representation of another entity or person(s) in court, ...negotiation of legal rights or responsibilities on behalf of another, ...or any other activity determined to be the practice of law by the Wisconsin Supreme Court" would all become the exclusive domain of licensed Wisconsin attorneys.

Continue reading "HALT Opposes the Wisconsin State Bar's Proposed Regulation of the Unauthorized Practice of Law" »

November 16, 2007

You Can Fight Your Foreclosure and Win

On November 15, 2007, an article in the New York Times, written by Gretchen Morgenson, reported that an Ohio Federal District Court refused to approve of 14 foreclosures because the company filing the cases couldn't prove that they were the owners of the mortgage. Since the federal courts won't hear cases brought by parties that have no interest in the case, the court dismissed the case without prejudice, meaning the company seeking the foreclosures could take their case to state court.

Mortgages today: Often no papertrail. The reason the company bringing the case couldn't prove ownership arises out of how mortgages are treated these days. After the mortgagor (the borrower) signs the paperwork, the mortgage is frequently sold (assigned) over the computer to a wall street investment firm --which proceeds to divide the mortgage into different "packages" which are resold as "securitized debt" investments. All of these sales and resales occur electronically. As a result, there isn't any papertrail.

Mortgage servicers often cannot prove the right to foreclosure. When the time comes to foreclose on a property, the foreclosure is brought by a "servicing company" (for instance, Countrywide). In roughly 40% of foreclosures, the servicing company is unable to produce a paper trail that ties it to the original mortgage owner. And without an adequate paper trail, the servicing company cannot prove that it has a right to pursue the foreclosure.

What the judge said. In the district court case, the judge pointed out that foreclosures typically go unchallenged. Here are the judge's words (in footnote 3) in response to the argument that the foreclosures should be allowed to continue:

"Plaintiff's, 'Judge, you just don't understand how things work,' argument reveals a condescending mindset and quasi-monopolistic system where financial institutions have traditionally controlled and still control, the foreclosure process. Typically, the homeowner who finds himself/herself in financial straits, fails to make the required mortgage payments and faces a foreclosure suit, and is not interested in testing state or federal jurisdictional requirements, either pro se or through counsel."

Judicial foreclosures: Consider an "inadequate paperwork" challenge. In about half the states (mostly in the Eastern half of the U.S.), foreclosures must proceed through a state court (unlike this district court case, which is unusual). In those state court foreclosures (called "judicial foreclosures"), the homeowner should consider challenging the foreclosure on the basis of inadequate paperwork. Although challenges of this type will benefit from legal representation, it is also possible to assert your rights as a self-represented person and ask the judge to rule on the adequecy of the paperwork.

Non-judicial foreclosures: Tougher to challenge. In the other states--mostly in the West and including California -- foreclosures proceed outside of court ("non-judicial foreclosures"). In these cases, your only option for stopping the foreclosure is to proactively seek an injunction in state court. This typically involves filing a complaint, a motion for a preliminary and permanent injunction, and a temporary restraining order. This is difficult to do without a lawyer unless you can find the requisite forms online or in a law library, and you have the grit to take the law into your own jaw.

Whether you are dealing with a judicial (court) or non-judicial (outside of court) foreclosure, a good place to start if you plan to fight the foreclosure is Represent Yourself in Court, by Paul Bergman and Sara J. Berman-Barrett (Nolo).

November 1, 2007

Self-Help Law Comes of Age

Once upon a time, in nineteenth century America, a perennial best seller was Every Man His Own Lawyer, by John G. Wells. By the time the twentieth century rolled around the lawyers had taken over and the very idea of handling one's own case in court was decried as a foolish and dangerous act -- as in "he who represents himself has a fool for a lawyer."

In 1971, Nolo Press published the first edition of How to Do Your Own Divorce in California, now in its 30th edition. After a rocky start, the Sacramento Bar Association put Nolo on the map by warning would-be consumers against using a book to do their divorce -- as in "doing your own divorce is like doing your own brain surgery."

Well, not quite. The attack alerted the public to the existence of an alternative to hiring a lawyer and the book flew off the shelves. Even then lawyers had priced themselves out of the vast market of working men and women, many charging in excess of $100 an hour .

While there were a few other self-help law publishing precedents -- How to Avoid Probate, by Norman Dacey comes to mind -- only Nolo Press in Berkeley, led by owners Ralph Warner and Toni Ihara, went on to create a publishing firm dedicated to self-help law. In my humble opinion, the Nolo Press imprint is one of the great law-related inventions of the twentieth century and it was--and is--a great privilege to be a part of it.

As the idea of self-help law grew through Nolo's publications on wide variety of legal subjects, so did the imaginations of court innovators. In the early 1990s, the Maricopa County Superior Court (think Phoenix) opened up the nation's first courthouse self-help law center, an entire floor of the courthouse dedicated to people handling their own family law cases. Over the next several years, court administrators and presiding judges from all over the country were invited to the Center to attend two- day trainings on how to create self-help law centers.

Today, the result is clear. Virtually all states now have self-help law centers in some or all of their courts. And an entire page of one website dedicated to lawyers and court officials who want to further the self-help law movement lists a dizzying variety of resources addressed to the needs of the self-represented litigant.

We can now see the day when courts will be as comfortable servicing self-represented litigants as they are servicing lawyers. While this will be a huge jump forward, there will still be the artifacts of the past that will have to be dealt with--such as unnecessarily complex rules of court and appellate practice, unauthorized practice of law barriers against skilled paralegal practice, and a court system that favors litigation over mediation and conciliation.