California Legal Industry Reform

One of the first states to examine the access to justice gap, California is on the cusp of legal industry reform. The Golden State is currently researching and developing reform options. Before long, California may be putting legal industry reforms into practice.

“[L]egal regulators face a challenging environment in which the cost of traditional legal services is going up, access to legal services is going down, the growth rate of law firms is flat, and lawyers serving ordinary people are struggling to earn a living. … The legal industry is at an inflection point.”

What Legal Industry Reforms Are Being Considered in California?

Several legal industry reforms are being considered in California. The state’s Closing the Justice Gap Working Group is researching reform options and developing recommendations in the following areas:

  • A regulatory sandbox, similar to what is already established in Utah.
  • Lawyer advertising and solicitation rules.
  • Certified Lawyer Referral Service statutes and rules of the State Bar.
  • Amendments to rule 5.4 of the California Rules of Professional Conduct regarding attorney fee sharing with nonlawyers.
  • Amendments to rule 5.7 of the California Rules of Professional Conduct regarding the delivery of nonlegal services by lawyers and businesses owned or affiliated with lawyers.

The Working Group is examining the pros and cons of these options, and may ultimately recommend multiple reforms. These considerations follow two years of research by the Task Force on Access Through Innovation of Legal Service, created by the California State Bar Board of Trustees in 2018.

No matter what legal reforms end up shaking out in California, the goals are consistent: to close the access to justice gap and strengthen the state’s legal services industry.

When Will Legal Reforms in California Be Implemented?

The Working Group will submit its recommendations to the California State Bar by September 2022. A reform timeline will follow.

Why Is Legal Industry Reform in California Necessary?

Reform of California’s legal industry is necessary because the old ways aren’t working. As seen in other states, Californians often forgo legal help because they can’t afford or access a lawyer.

A 2019 California Justice Gap Study found two main problems persist when it comes to Californians and legal help: a knowledge gap (not knowing a problem has a legal solution or how to find legal assistance) and a service gap (the legal services system can’t serve all who seek/need assistance). The result? For 85 percent of their civil legal problems, Californians’ legal help is either insufficient or nonexistent.

But it’s not just consumers who are hurting. Increasingly, lawyers are hurting, too—especially those who serve people as opposed to corporations.

This is detailed in the 2018 Legal Market Landscape Report commissioned by the California State Bar. As the report says, “[L]egal regulators face a challenging environment in which the cost of traditional legal services is going up, access to legal services is going down, the growth rate of law firms is flat, and lawyers serving ordinary people are struggling to earn a living.”

Because of this, “The legal industry is at an inflection point.”

How Does Law on Call Fit in to California Legal Reform?

Law on Call will be available in California if and when the state allows nonlawyer-owned entities like ours to practice law. We hope to see that change come into play within several years.

Is California the Only State Pursuing Legal Industry Reform?

No! At least a dozen states are considering legal industry reform and researching the access to justice gap.

In Utah, the legal regulatory Sandbox is up and running, and Law on Call has been in operation there since Winter 2021. In Florida, legal reform is inching closer to implementation. And in Arizona, lasting legal reforms are already in place—Law on Call has submitted an application to form an Alternative Business Structure in the state.

Legal industry reform is just beginning.