October 05, 2011

Oral Testimony of William A. Bolger - Center for Professional Responsibility

Oral Testimony of William A. Bolger,

Executive Director of the National Resource Center

for Consumers of Legal Services

The Commission next heard from William A. Bolger, Executive Director of the National Resource Center for Consumers of Legal Services. Explaining that his Center provides research and education to legal services plans Mr. Bolger recounted the preventive nature and consumer perspective of legal service plans and their origin in the early ‘70s by labor (a bargained-for benefit) and consumer groups. There have also been large commercial plans. Plan lawyers generally serve individuals in the personal injury, real estate, family law and wills and estates areas. Additional services such as income tax preparation are, at times, available by contract with outside providers. He presented, as an example, the AFL-CIO legal services plan, a twelve year old plan that is the largest, with its free initial consultation, phone call follow-up, 30% discount on services, and lawyers in all fifty states. Plan lawyers oftentimes work in association with other professionals. For instance, in the personal injury area the lawyer works with experts in trial preparation, in a real estate transaction the broker may be the coordinator for the mortgagor, surveyor and appraiser as well as the lawyer, and in domestic relations mediators and counselors provide needed services. The National Resource Center has supported open competition in legal services such as the use of independent paralegals (after full disclosure) and legal advertising, evidenced by its filing an amicus brief in the Bates vs. State Bar of Arizona case. Because of its quasi-trade association role the Center hears about consumer complaints which generally deal with dissatisfaction with lawyer effort, and questions regarding lawyer loyalty and confidentiality. In a follow-up comment on consumer perception he said the typical plan consumer does not analyze how the lawyer is paid. (Some plans pay the lawyer a per capita per client amount while others pay an hourly rate; in a staff plan the lawyers are hired by the plan.) He commented that disclosure is not very useful if the client is bringing in an emotional load. "You can tell them three times and they don’t understand…they can sign three things and they don’t understand because they’re not paying attention. And I don’t know what the solution to that is. I guess the reason I’m making the point is that full disclosure isn’t going to solve the problem. It’s something that probably has to be done in terms of disclosing relationships between different parties. But there are perception problems that can be … very difficult to overcome." He is not sure that from the perspective of lawyers serving middle class individuals the profession is really at the point where a change to the partnership rule is necessary.

Professor Daly asked Mr. Bolger whether he preferred the captive law firm (Model 4) or the fully integrated professional services firm (Model 5). It’s very early, he thinks, for multidisciplinary efforts, comparable to when legal services plans first came out; in that instance well-intentioned legislation ended up really hamstringing efforts later on because it was prepared before the issues were clear. He presented the example of the H&R Block - Hyatt Legal Services affiliation where Hyatt Legal Services, aspiring to be a national law firm, contracted for management services (office leasing, support staff, equipment, administrative systems) from Block and the back office arrangement did not work. The lawyer training and retention problems, in particular, sank the effort as it appeared that Hyatt couldn’t afford to pay the lawyers enough or offer them enough advancement or prestige to retain them - they’d rather have an inadequate income on their own with their own shingle up than an inadequate income from Hyatt (Hyatt subsequently evolved into a successful commercial legal services plan that was sold last year to MetLife). Acknowledging that people are interested in getting an economic service from a competent lawyer no matter the practice setting, Mr. Bolger said the legal profession is not marketing or structuring its services properly so it’s been put on the defensive by people who have more freedom to design and market their services. The blending of services might increase use of law services but it’s a risk. Ms. Katz asked Mr. Bolger where he saw the need and opportunity and he identified family counselors, financial planning to structure investments or arrange assisted living, and tax preparation. Elaborating further on his statements regarding the limited value of disclosure, especially in highly emotional situations, Mr. Bolger said this can be the fault of the lawyer in terms of presentation or of the system where the pile of documents is so high they are not read. Consumers are also concerned about confidentiality issues. In the situation of the employment-based legal services plan, particularly the employer-paid or the union-paid one where there are trustees, many clients simply do not believe the lawyers will hold things, such as a drug problem or a child being arrested, confidential. Some legal service plans have negotiated for a lower lawyer contingency fee percentage in personal injury cases. Maintaining that it was difficult to speak for all legal services plan because they are so varied (they are more varied than health plans), Mr. Bolger responded to the Chair that there’s no reason a plan wouldn’t seek to include in the plan panel lawyers who are members of MDPs (assuming the rules were relaxed). It would likely be marketed as a plus that the firm has in-house social workers or financial planners or whoever.