February 10, 2015

Open Legal Services— The Nonprofit Law Firm Model Everyone Is Talking About

There is something new in the legal world. A new law firm model has been getting a lot of attention lately, and for good reason. Two recent law school grads figured out a way to bring legal services to those who need them most and still earn a living.

The lawyers of Open Legal Services (OLS) pride themselves on starting a revolution in the legal industry by becoming the first (and so far only) not-for-profit law firm in Utah catering exclusively to those whose income is too high for traditional legal aid agencies, but still are unable to afford “full price” representation from the private bar. Their motto is appropriate: “Open Legal Services—Justice for the rest of us.” The mission of OLS “is to serve clients who earn too much to qualify for free or pro-bono legal services, but who earn too little to afford a traditional private firm.”

Narrowing the Gap

The services provided at OLS help narrow the gap for individuals and families that are unable to obtain legal services. Eighty percent of the nation’s population living in poverty have legal needs that go unmet. For the middle class that number is 40%–60%. In Salt Lake County, where OLS is based, a typical rate for a divorce attorney ranges between $175 and $230 per hour. The average criminal defense attorney charges a flat fee of more than $1,000 for a misdemeanor, while felonies can cost tens of thousands of dollars. According to the OLS website, 53% of Utah residents qualify for their services. These services are priced on a sliding scale depending on income and family size and range between $60 and $145 per hour. A single individual with one child making $24,000 a year (equivalent to $12 per hour full time) would not qualify for help from Utah Legal Services, but would qualify for OLS’s lowest rate of $60 per hour. A family of four earning $47,500 per year would pay $70 per hour. That same family earning $72,000 would pay $115 per hour. According to OLS, “By charging on a sliding scale, the people at the top of our scale subsidize the people at the bottom, thus allowing us to help a wider range of people in need than we could otherwise.”

Open Legal Services does not provide free services. Although it does charge for all work performed, it does so at a much lower rate than other attorneys. Clients who qualify for services fit between 125% and 400% of the federal poverty level. Those whose income levels fall below that scale are eligible for free help from pro bono entities like Utah Legal Services, Legal Aid Society of Salt Lake, or other free legal clinics. These agencies typically are funded through local and federal grants, which are subject to strict eligibility guidelines. Because OLS does not accept grant money at this time, it is not limited in the types of cases it can take.

Solid Legal Representation

In case you’re wondering: yes, Open Legal Services is an actual law firm. Clients are assigned an attorney who works with them on their case, and they do not wait around for two months to do so: “Our attorneys are here because they are passionate, fearless, and determined. We do not provide lesser service, or cut corners. We do away with luxuries, and just provide what clients need: solid legal representation.”

The firm focuses on only a few practice areas to streamline its processes. Right now, it serves clients who need family law or criminal defense services. It takes cases involving divorce, child custody and support (including guardian ad litem), protective orders, and other family law matters. The firm’s lawyers help those accused of misdemeanor and felony crimes, including domestic violence, simple assault, aggravated assault, burglary, possession of drug paraphernalia, retail theft, and DUI/drunk driving. They can also help people looking to expunge their records.

So, what is a not for profit law firm? The firm’s website states that “Open Legal Services is a 501(c)(3) public charity located in the Salt Lake City (SLC) area. Open Legal Services’ attorneys are members in good standing with the Utah State Bar, and are fully licensed and insured. Our lawyers provide affordable legal services to clients who cannot pay for a full-price private attorney, but who may not qualify for free help.” OLS’s leadership comprises a board of directors, which includes several seasoned attorneys, an assistant professor of social work, a risk officer from a government agency, and a director of a local food pantry. In addition to the board of directors, Open Legal Services has a group of benefactors that includes individuals, law firms, and companies who all want to see this project succeed.

An Innovative Solution

“Open Legal Services is an innovative solution to the problem of connecting the supply of lawyers to the demand for affordable legal services. The three pillars of our model are: (1) operating as a nonprofit, (2) charging on a sliding scale based on income, and (3) keeping costs low.” They make it a point to say, “nonprofit does not always mean free services.” For example, many universities and hospitals are structured as nonprofits and charge for their services. Here are some of the benefits they’ve found by forming a nonprofit entity: the firm’s attorneys are eligible for the Public Service Loan Forgiveness Program, they pay less in taxes, and they receive referrals from unique sources—they state they are “often exempt from rules that many courts and nonprofit entities have about where they may send potential clients. Courts, judges, other nonprofits, and even the State Bar can freely refer clients to us.” Furthermore, people are willing to volunteer their time for a nonprofit, the firm’s clients don’t expect mahogany desks and corner offices in a nonprofit, it can offer discounts to clients as well as use discounts and free services for which nonprofits are eligible on things like web hosting, software, and advertising. While it can also solicit donations as a nonprofit, Open Legal Services notes that it does not use donations or grant money to fund daily operations.

Keeping overhead costs low is integral for a program of this nature. “In order to charge less, we have to cost less. We spend only 20% on overhead (everything beyond our lawyers’ salaries), while the rest of the legal industry spends 40% on overhead.” The firm’s desks were $20 at the local thrift store, its electronics were $40 at the University Surplus second-hand store, the firm’s lawyers built all the support documents themselves (client database, website, billing, and so on), and they use free, open-source software like WordPress, GIMP, Inkscape, and others. Since the firm has a great word-of-mouth referral program going, it also doesn’t need paid marketing, which can cost upwards of $100 per click on Google AdWords.

Why is word-of-mouth working so well for Open Legal Services? Legal Aid and public defenders now have a place to send people that earn too much to qualify for their services, traditional attorneys now have a place to send people that cannot afford their services, and courts now have fewer people appearing before them without an attorney. Open Legal Services started in November 2013 with about 20 cases and has been growing steadily ever since. As of this October, the firm has handled 190 cases and climbing.

Open Legal Services counts on donations to meet its operating expenses, and there are a number of direct and indirect ways you can help. In addition to monetary donations, you can purchase items on Amazon through its Amazon Smile program, where Amazon will donate 0.5% of purchases back to the charity of your choice.

OLS was founded by Shantelle L. Argyle and A. Daniel Spencer. Also on staff are attorneys Milda Shibonis, Francis Chiaramonte, and David McNeill. Profiles for each are listed here.