Episode Transcript
[00:00:00] Speaker A: Imagine a justice system built on rigorous evidence, not gut instincts or educated guesses about what works and what doesn't.
More people could access the civil justice they deserve.
The criminal justice system could be smaller, more effective and more humane.
The Access to Justice Lab here at Harvard Law School is producing that needed evidence. And this podcast is about the challenge of transforming law into an evidence based field.
I'm your host, Jim Greiner and this is Proof Over Precedent.
This week we're bringing you a student voice.
[00:00:38] Speaker B: My name is Andrew Reed and I'm pleased to be joined on this podcast by Nora Engstrom and James Stone. Professor Engstrom is The Ernest W. McFarland professor of Law at Stanford Law School and co director of the Deborah L. Roady center on the Legal Profession.
James Stone is a Harry A. Bigelow Teaching Fellow and lecturer at the University of Chicago Law school and a 2023 graduate of Stanford Law School. Together they are the authors of Auto Clubs and the Lost Origins of the Access to Justice Crisis, which was published much acclaim in the Yale Law Journal last year. To both of you, welcome to the podcast.
[00:01:21] Speaker C: We're delighted to be here.
[00:01:22] Speaker B: To start, I thought the best way that we could jump in would be to for you to paint a picture for the audience.
Let's say I'm a driver in the 1920s and I'm in a car crash and I need legal representation.
What can I do?
[00:01:40] Speaker D: So if you're in an accident in the 1920s, first of all, you're, you're lucky if you get out of it okay. Cars were not super safe back then, nor were roads particularly safe. It was, it was quite a fraught experience driving in the early 20th century. But say you did get in an accident and you survived and you needed to file some kind of action against the other driver.
If you were a member of an auto club like AAA and thousands and thousands and thousands of American drivers were members of auto clubs at the time, there were over a thousand automobile clubs, offshoots of AAA around the country. At that time, you would have had your own personal car lawyer to call. So you would call AAA and a staff lawyer who is an expert on all legal issues related to cars would be your guy for everything you needed, whether that be advice on what to do or even to file a claim on your behalf, to settle a claim on your behalf to represent you in court. The auto clubs differed on exactly how much legal representation they would give, but, but plenty of them would represent you all the way, sort of to the end of, of a case. So if you were an auto club member. That's, that's what you had. If you weren't, you were kind of out of luck. I mean, you could hire a lawyer, but it's obviously often difficult to find one, especially if the damages weren't paid big enough to get somebody involved in taking a case on. Contingency fee and insurance laws were also, there were not compulsory insurance laws in the 1920s. The first one showed up in Massachusetts in 1925. And so a lot of property damage cases would have been out of luck without some kind of legal aid.
[00:03:31] Speaker B: Let's flesh that out a little bit. So how exactly how much would I pay for this lawyer? Was the lawyer any good?
How did they, how did the lawyers, were they licensed lawyers or were they just employees of the auto clubs?
[00:03:47] Speaker C: So the answer to whether they were licensed lawyers or employees of the auto clubs is yes. And yes, they were employees of the auto clubs, but they were fully licensed lawyers. And at least the Chicago Auto Club, which was the auto club, we've been able to find the most information about.
By all accounts, these were good lawyers. So these, these were folks who were quite respected in the community and had quite a bit of experience.
You also asked about dues. Dues were $10 per year. Adjusted for inflation, that's only about $170. And for that, $170, as James said, you got these kind of wraparound legal services as well as the AAA stuff. So with your membership, again, 10 bucks per year, you got towing assistance, you got roadside assistance, you got mechanical help, they would replace your flat tires, you would, they would test members brakes and members headlights. But you also had the lawyer to call for criminal matters or civil matters. And for civil matters, whether you were on the plaintiff side or the defendant side. And again, as James said, this is a world without comprehensive legal insurer or without comprehensive auto insurance. And so it's really taking the place of multiple kind of products and services in one and doing so at really remarkably low cost.
[00:05:12] Speaker B: It sounds like a great system.
What, why don't we still have that?
[00:05:17] Speaker C: So that was kind of the question that motivated our research.
First off, we were really surprised as we dug in or just how many auto clubs there were and how popular there they were. In 1929 we found, for example, there were 1100 or so AAA affiliated auto clubs that were handling some 30,000 civil claims. So this is not like a little drop in the bucket. This is a really big deal.
And so once we realized just kind of how significant they were, it became really an Interesting question to see.
You know, why is it today, you know, I'm a proud member of aaa. I love to go to AAA when I have, when I need some sort of update to my driver's license or to my car registration.
But I certainly can't go to my AAA for a lawyer. And why is that? And, and that's where James and I really uncovered what we think of. It's interesting and somewhat explosive story about how the organized bar in the 1930s under the pressure of the Great Depression, the Great Depression was hard on lawyers just like it was hard on other professionals and other workers across the United States. The organized bar really turned on the auto clubs and other, what they were calling corporate legal service providers and essentially sued them out of existence, decimated them. Using what we think is a pretty strange argument based on kind of this notion that any lawyer that works for a non lawyer owned entity is incapable of providing high quality legal services. So we really were able to trace the litigation that was brought starting in about 1930 that in very short order sued auto clubs, you know, not, maybe not entirely out of existence, but certainly made it so, kind of made it so that there are impoverished version of themselves.
Let me try that last bit again if I could. So what we found, so we had this question of, you know, we, we belong to, or at least I belong to AAA and how is it now that my AAA membership doesn't give me a lawyer? That was a question that we turned to. And what we found is, is under the shadow of the Great Depression as lawyers, just like all other professionals and workers, were struggling to find work, they really turned their ire on auto clubs and other corporate legal service providers and decided that essentially life would be better for lawyers if they could get these corporate providers out of the way and so that they would no longer be competing with lawyers, traditional lawyers, for, for the ability to provide legal services. And so they brought a series of cases, making a series of what we thought of. We see a very strange arguments which ultimately decimated the auto clubs.
[00:08:18] Speaker B: Can you just briefly tell us what is the difference between sort of a traditional lawyer operating under the traditional law firm model versus what you called corporate legal services?
[00:08:32] Speaker D: The, the main difference is, is really the sort of how the, how the entity for which the lawyer's working is defined.
So if the lawyer is working for an auto club, that's not a law firm, it's a corporation or some kind of organization, whereas a lawyer working for a law firm is working for, you know, a partnership of lawyers.
And that was the distinction that the bar, what's the word that the bar kind of targeted in trying to sue the auto clubs and other group legal service providers out of existence.
[00:09:07] Speaker B: Why did they feel like auto clubs and group legal services were a threat to them? Was it just because these group legal services, these auto clubs, they were providing legal services in a way that was more efficient and less, thus less costly?
[00:09:28] Speaker D: There were a number of reasons we think that the bar was, went after groups like auto clubs. One, as you say, had to do with efficiency. So for example, the Chicago Motor Club, which had maybe around 60,000 members in the 1920s, had somewhere between six and ten full time lawyers on staff. And each of those lawyers was handling hundreds and hundreds and hundreds, perhaps upwards of a thousand cases a year.
That was an enormous sort of economy of scale that the, that the auto clubs were able to provide. These were experts who could handle very specific car related legal issues with the kind of efficiency that comes from specialization and so on. In that respect, the bar had kind of, with general practitioners were outmatched.
Additionally, the bar, if you look at writings at the time in bar journals and even sometimes arguments made in litigation, the bar felt that its professional identity was perhaps under threat. These organizations which specialized in other things, occasionally advertised the services they offered and were sort of equated with corporate aggrandizement of some kind or aggregation of some kind maybe is a better word, were viewed as maybe cheapening something about the legal profession.
And in this way, again, the bar felt both a professional and financial stake in the outcome of the sort of corporate legal service provider question.
[00:11:18] Speaker B: One of the, one of the most fascinating parts of this piece was you quote one of the heads of a Florida bar association as saying the layman will soon be handling all legal matters and the profession will sink into innocuous dissuaded. I'm wondering if you can talk more about sort of the culture behind the provision of legal services and the idea that maybe there's something sort of sacred about providing services and providing them in certain forms that we don't want corporations encroaching on or in this case auto club. Can you just talk a little bit more about that? Because I found that particularly compelling.
[00:12:11] Speaker C: Well, so there's lot of debate, you know, so, so really important for folks to understand is the restrictions that were created to restrict auto clubs. This restriction on what we'll call corporate law practice. It exists today, right. It appears in Rule 5, 4T, the Model Rules that, that govern in almost every state.
And so we continue to have this Restriction that is born of traceable to these battles from the 1930s.
And so there's this question of, well, are, right? And right now, as we speak, various states are considering Whether these restrictions, whether 5, 4d and other restrictions on corporate law practice are a good thing or a bad thing. Right.
Are these restrictions necessary to ensure that legal services are offered with competence and fidelity? Or alternatively, are lawyers perfectly capable of providing high quality legal services even if they work for a non lawyer owned law firm?
So that's a battle that is live right now. It is playing out in multiple states. A couple states, Utah and Arizona, have relaxed rule 5.4. And so one of the things James and I are doing is very much wading into a live and we think urgent debate.
So a question is in some of this debate that's playing out in the states is, you know, where are the roots of this restriction? Are the roots of this restriction really built on protection of the public, on the need to ensure high quality legal services?
And are, is, are these restrictions, do they have rotten roots? Are they really, is this just a story of lawyers protecting lawyers, Monopoly protecting monopoly, and not, you know, recently the DOJ wrote in a letter that restrictions on law practice can only stand if they are, quote, rooted in the protection of the public and not in the protection of lawyers from competition.
So it's that kind of question of what explains why the bar went after these kind of arrangements. And in going after these arrangements, was the bar motivated by a desire to protect the public or were they worried about their own bottom line? And so one of the things that James and I, I think were quite startled to find is this real proof of the bar's motivations. It's one thing to kind of look at the suspicious timing, and that's what a lot of folks had done before to say, hey, you know, this crackdown happened in 1930 and happened in the shadow of the Great Depression. That makes us a little suspicious that the bar was worried about its own economic welfare. You know, hmm, that timing sure does look bad for the bar. It's another thing to really kind of find the receipts, which is to say bar leaders see saying we're doing this because we don't want to share what we think are rightly lawyer profits with corporations or other entities. You know, this money for car accidents should go just to lawyers. It shouldn't be shared also with auto clubs. And again and again we found, you know, we kept saying there, these bar leaders keep saying the quiet part out loud. And the words of one bar leader the, the aim of the crackdown was to ensure that lawyers were not to be driven. Quote from the banquet table at which for centuries he has had a distinguished place.
So part of our research was to show where the DOJ and others are saying the roots of these restrictions really matters. We can show you the roots. We can show you with the bar leaders own words, that the crackdown on auto clubs and other similar, similar legal service providers was not altruistic in its orientation.
[00:16:24] Speaker B: Okay, that's what I want to talk about next. Can we talk a little bit about the crackdown? What exactly did that look like? You said that the bar associations were filing lawsuit after lawsuit against the auto clubs. But why, why were they winning? What, what laws did they have on their side?
[00:16:43] Speaker D: So the bars campaign in the 1930s, though certainly a real explosion at the start of and through the Great Depression, was also the culmination of the sort of seeds of, of kind of regulatory straitjacket that the bar had had sowed in the 1920s and earlier.
So in the 1920s, especially in the, in the areas in which industrialization was sort of most palpable, places like New York, California and Illinois, bar associations had already started to face competition from corporations that hired lawyers to represent clients and also from just other people who were offering to do sort of cooperation, quasi legal work for people, but who did not have law licenses. And as you saw this kind of proliferation of legal aid taking innovative or different forms, the bar started to play around with different arguments and strategies for tamping down the competition.
So for example, in the 1920s, local bar associations, often in California and in New York, actually I think even a little earlier than 1920 in New York, the, the, the bar had sought to, to pass statutes, state statutes prohibiting unauthorized practice or prohibiting corporate practice of law.
And those laws, when the, when throughout the 1920s, when bar associations tried to get these laws passed, they would either be passed with exceptions written into the laws for a lot of these popular group legal service providers like auto clubs, or they just wouldn't pass. They just wouldn't. The, the, the legislatures weren't, weren't going to have it.
So the, the bar failed when it turned to the legislatures. It did not, it did not root out the competition that it was facing.
And so in the 1930s, the bar decided to use some of the arguments that it had, it had built up. Actually, let me go back.
Having failed at the, failed in the legislatures, the bar started to build out arguments under its ethics rules to suggest that what group legal service providers were doing violated Legal ethics. So in 1928, the Bar, the, the ABA issued its Canon 20, its 28th cannon, which essentially said that it was a tantamount unauthorized practice for a lawyer to work for a lay intermediary between the lawyer and the client.
Essentially what is Now Model Rule 5.4D that had no legal binding legal effect when it was instituted in 1928. But the BAR then relied on that in the 1930s and turned to the courts and argued to state courts that what group legal service providers were doing violated ethical rules for attorneys.
So that's the, the, the general approach that the Bar took.
And not only did they, did they pursue this new sort of definition of a kind of unauthorized practice, but they also, where they'd failed in the legislatures, were able to win in the courts. And their argument basically went, if you're a state supreme court, you are the, you should be the sole arbiter of, under the state constitution of the practice of law in the state.
So as a result, yeah, it's true that these were not popular laws that the Bar had tried to pass in the 1920s to outlaw group legal services.
No matter, it's not up to the legislatures at all. It's up to the courts. And state supreme courts accepted this argument.
And the Bar was where the bar had failed in legislatures, they met with wild success in the courts. And in every state the bar was able to sort of win on this theory.
[00:21:21] Speaker C: And I think it's important to note just how flimsy the argument is. Right. So as Dean said, you know, they try planning and it's like go to the legislature. It turns out auto clubs and auto clubs kind of brethren are popular with the voters and the legislature. If they're going to restrict corporate law practice, they create carve outs that essentially let the exceptions follow the rule. And so the bar's efforts to crack down on corporate law practice, including auto clubs, is thwarted. So then they say, okay, plan B is we'll go to courts. And they start coming up with these arguments that just, I mean, it's kind of spaghetti at the wall arguments for what's wrong with corporate law practice. And the main thing they seize upon is, you know, corporations are not natural persons entitled to practice law and so can't practice law through natural persons.
Again, what we're talking about is cracking down on lawyers providing legal services based on the fact that the lawyers are working for an intermediary, not a law firm.
That is a pretty thin read to build your argument on.
And so they have this just bizarre little syllogism as one academic pointed out, that argument is like saying it's akin to saying that a truck driving company cannot run the business of trucking because the company cannot obtain a license to drive trucks. It just doesn't make sense. But notwithstanding it kind of flimsiness, it was, as James said, wildly support, like wildly successful court swallowed the argument kind of hook, line and sinker.
[00:23:05] Speaker B: There's a lot more to say about this, and I want to talk in a second about the consequences of these lawsuits filed against the auto clubs. Not for the clubs themselves necessarily, but for their, their clients. But before we get into that, one of the things that I was struck by in your article is this case out of Massachusetts in 1935, where as I understand it from the article, Massachusetts, their legis, its legislature tried to explicitly authorize the provision of legal services by auto clubs. And the Massachusetts supreme. The Massachusetts high court struck down that law and said, quote, legislation forbidding the.
Let me start this over.
The Massachusetts Supreme Judicial Court struck down that law holding, quote, legislation forbidding the practice of law by corporations or associations is permissible, but legislation permitting the practice of law by such persons would not be constitutionally competent.
What is going on there? Because I was just floored when I read that.
[00:24:24] Speaker C: Yeah, it's a pretty bizarre one way ratchet for sure. What the Massachusetts Supreme Court said in this in re opinion of the justices is as long as the legislature is restricting access to legal services, no problem.
If the legislature starts expanding the excess to legal services, that would create constitutional challenges.
It's. It's bizarre. It is really hard to accept and especially when you view it under this very sharp swing that had always been thought that the legislature had a role to play in regulating lawyers. You know, that's what was thought in 1910 and 1920. And then we have this.
When they're losing in front of the legislature, they carve out this inherent powers doctrine saying only the high court can do it.
As Merrick, a D.C. bar leader, wrote in 1936, There has grown up a very general conception that the highest court in a state ought to have complete and unfettered power and authority to deal with all phases of the practice of law.
So there just becomes this very tight grip of law practice in supreme courts. Going as far as Massachusetts provides this one way ratchet, it's fine as long as the legislature is restricting people's access to legal services.
[00:25:59] Speaker B: In a second, I'm going to ask you whether or not that's still the state of play such that if in 2025 Massachusetts wanted to authorize its automobile clubs to, to provide legal services, whether they would be permitted to do so by the Massachusetts high court. But before we go there, what was the impact on clients? What was the impact on the people who were receiving these legal services? Were they able to get services elsewhere? Were they, did they just go unserved after these auto clubs legal departments were shut down?
[00:26:41] Speaker D: We lack good records on exactly what happened to each individual auto club member's case.
But what we can say, I think, is generally speaking, the vast majority of the cases that auto clubs were handling were probably left unlawyered after this.
For somebody who was in a car accident and had some property damage, but not much, or had a fine that they needed to contest, there wasn't enough money at stake for a general practitioner to get involved.
And so these were not going to be lawyered cases in large part.
So we think that a lot of the legal needs that auto clubs were meeting probably still existed, but were just going to go unmet in the aftermath. And we can chart a direct line from that to the present day, when the vast majority of people with legal needs end up not being able to find affordable legal help to meet them.
[00:27:58] Speaker C: So that's, that's absolutely right. I mean, we're writing this piece against a backdrop, and I'm sure many of the folks who listen to this podcast are well aware of the statistics. But right now, in our state courts, in three quarters of cases, at least one side lacks a lawyer. We don't have great data to look at time trends to see how this has, has compared to the past. But by all kind of all evidence, I have a piece in Stanford Law Review online called the making of the A2J crisis, where I try, along with my co author, to amass the best evidence to look at time trends. And it's what we can say is like, it's worse. How much worse? Exactly how much worse? Little hard to say. But it appears right now that access to justice crisis is worse than it's, than it's ever been. And so the question then becomes, when we look at the fact that 3/4 of individuals in state courts right now are kind of, you know, muddling through without any kind of legal representation, is that inevitable? Did it have to be that way? When we look at the fact that only 1/3 of Americans have a will, even those with $2 million in estates, 20% of those don't have a will. When we look at this just massive yawning gap between the needs, the legal needs of Americans and the services available to Americans. When it comes to basic requirements, when it comes to writing a will, when it comes to getting a divorce, when it comes to getting a domestic violence restraining order, the fact that folks really are on their own when they're faced with these challenges, does it have to be that way?
And the answer, I think that we found is no. Because, you know, one of the things we found when we were writing about auto clubs is you could walk into a bank and get a will.
Just like auto clubs would give you a lawyer, banks would give you a lawyer, your bank would give you a lawyer to write a will. And that too, was shut down in the same moment in the same restriction on corporate law practice and the same use of the inherent powers doctrine. And so it used to be that people had more access to legal services than they do now. And so the access to justice crisis, I think it's important to note, is not inevitable. It was a construction. It was construction.
You know, the bar that I am a member of as part of our profession, it created these barriers that continue to restrict access to legal services.
[00:30:39] Speaker B: That's what I want to talk about now. You, you, you mentioned the continued restrictions on legal services.
Have there been any attempts at loosening those restrictions recently?
Is the inherent powers doctrine, is that still a limitation on trying to loosen those types of restrictions?
[00:31:00] Speaker C: So absolutely. Right now, we are in the midst of a revolution, I think, in the structuring of the legal profession. We have so many states, I, I hesitate to say how many because it changes every day, but about, you know, at least a dozen states are actively considering right now whether to relax the rules that say only lawyers can provide legal services, and that the lawyers who can provide legal services have to work either for themselves or for law firms. So it's the general UPL rules, unauthorized practice rules, and then these corporate restrictive rules. State legislatures are looking in a variety of states. We have state court challenges in a couple states. We have state supreme courts. We have access to justice commissions. There is a swirl of activity. And so we really are having this moment of reckoning of is the status quo was constructed in the 1930s. It has more or less endured until basically now. But right now, stuff is up for reevaluation, and it's up for reevaluation in red states, and it's up for reevaluation in blue states, and it's up for reevaluation in purple states. But we think it's really important to know a few facts as folks work to relax the rule. And one of those is why the rules exist. And this article goes a long way to showing that. Another important question is, can non lawyers offer legal services in a way that is competent, that is, in a way that protects clients and the public? So there is this moment of reckoning, and in this moment of reckoning, it's really important to establish some facts, right? And one of those facts is why did these restrictions come to be? Were these restrictions created because, you know, corporate law practices were abusing customers, were abusing clients, were eating, engaging in shady practices and generating a lot of consumer complaints? One of the things James and I found by looking back in the historical record is, you know, actually auto clubs by all accounts were providing really good legal services. There weren't complaints, business was booming. So. So we're able to shed some light on that question. Another question is what are the roots like? Why were they, why was the crackdown? Why was Rule 5.4 created in the first place? That's important to know when knowing whether it should continue to exist. Obviously the autoclub story sheds light on that. Another important fact to try to get to ground on is, you know, some states are looking to relax unauthorized practice rules to allow some non lawyers to provide legal advice.
What do we know about non lawyer provision of legal advice? Is it quality advice? Is it good advice? Or is it problematic? Is it shady? Is it spotty? I have a piece coming out with a co author Natalie Knowlton called Unauthorized Practice Assessing Available Evidence, where we compile the very best evidence we can find going back a hundred years and looking also, you know, at the United States, also across the world, in places that have relaxed restrictions to try to kick the tire on that idea to assess can non lawyers provide high quality legal services? And spoiler alert is we find that they can. But there is right now just a swirl of activity across the United States. And so we're trying to contribute to that activity by showing again in this piece, you know, how did these restrictions come to be?
And also were auto clubs that were providing corporate law practice that show us what a world without 5, 4D looks like, were they providing high quality legal services? And here we can show that they were.
[00:34:51] Speaker D: I think I would just add briefly that one of the amazing things that we found looking at this time is that in the absence of the complicated regulatory architecture that now exists around the provision of legal services, you saw all sorts of imaginative forms that legal services took. You saw things like auto clubs, banks offering wills, radio stations, having a lawyer give legal advice to people who called in.
And one thing that we hope our paper can do is to sort of reinvigorate people's imaginations as to the different forms that Legal Services could take and which may well be salubrious. I think we might be. We may have been the world that the bar created is incredibly restrictive, and we hope to show that it may not well be that that most restrictive form of Legal Services is necessary to protect everyone with every kind of legal need.
[00:35:59] Speaker B: I think that's all the time we have. I want to thank Professor Nora Engstrom and James Stone for coming on the podcast and sharing their knowledge with us.
So thank you to both of you.
[00:36:11] Speaker A: Proof Over Precedent is a production of the Access to Justice Lab at Harvard Law School.
Views expressed in student podcasts are not necessarily those of the A J Lab.
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Here's a sneak preview of what we'll bring you next week.
[00:36:36] Speaker E: Just Our physical environments do affect how we feel and can also affect how we recall information, but surprisingly little innovation has gone into the way that interrogation rooms are designed. Pretty much as long as they've existed, they look like how they look in the movies. It's a pretty drab room, usually with two hard chairs, a small table, no natural lighting, almost exclusively fluorescent lighting. And occasionally there will be a mirror on the side. But beyond that there's really nothing else to the rooms.
[00:37:05] Speaker C: Yeah. Why does it that matter though? Don't. I guess, don't police departments do that for a purpose?
[00:37:14] Speaker E: They do it for a purpose. To start with, like your first question, why does it matter? I'm not sure that it does, but I'm just curious about there's been literally no innovation. Maybe there is something that matters. Maybe there is a better room design that could get more accurate information out. But as far as the actual why do police do it? Why are these rooms designed the way that they are? Originally, the justification was to enhance privacy. I think that kind of makes sense. You don't want a room that a bunch of people can hear what's happening when you're trying to get sensitive information out and to limit distractions as well, which also I think intuitively makes a lot of sense. But there's a lot of rooms that could achieve both of those goals without being so drab and simply just terrible to be in. And I was just curious about maybe if there's another way to design a room that is also private and doesn't cause distractions, but could be maybe less stress inducing and might be less likely to lead to false confessions.
