"single red figure among blue group of pawns"Our Allied Legal Professionals: A National Framework for Program Growth report provides a comprehensive overview of the discussions held during our 2022 convening, including agreement on best practices, differences in program approaches, and insights gained from current programs. 

In previous posts, here and here, we explored key recommendation areas crucial to allied legal professional programs, encompassing aspects like establishing suitable titles, defining roles and responsibilities, ensuring competent representation in court proceedings, and the extent of attorney involvement. Now, we will conclude this blog series by examining further interdependent elements that play a pivotal role in implementing successful ALP programs.

8. Fee Sharing

States are encouraged to create Allied Legal Professional Rules of Professional Conduct—and amend attorney Rules of Professional Conduct—to allow for fee-sharing and co-ownership between attorneys and ALPs. The introduction of these new legal service providers brings up regulatory issues similar to those in attorney regulations, including restrictions on ownership and fee-sharing under the ABA Model Rule of Professional Conduct 5.4. 

Presently, most states either don’t allow for law firm ownership interest between ALPs and attorneys or haven’t addressed this issue in their program design. However, in states like Washington, Utah, and Arizona, co-ownership and fee-sharing arrangements offer a way for ALPs to integrate into established law practices and for law firms to benefit from lead generation through ALPs. The patchwork approach to regulating ALPs across states currently leads to complexities and inconsistencies. For instance, in Oregon, the Rules of Professional Conduct for ALPs allow for fee-sharing and partnership with attorneys, but this is void due to the Attorney’s Rules of Professional Conduct, which disallow sharing fees with nonlawyers—including ALPs. This suggests a need for aligning the regulations between attorneys and ALPs to facilitate co-ownership and fee-sharing.

9. Regulatory Requirements

States are advised that if they decide to impose similar regulatory requirements on ALPs as they do on attorneys, these requirements should not exceed those placed on attorneys. There’s no supportive data indicating a need for increased protection beyond that offered to attorneys, and excessive requirements can be financially burdensome.

Various regulatory requirements, such as client trust account requirements, malpractice insurance, contributions to client security funds, and continuing legal education requirements, are often deliberated during the ALP program design. States typically take one of two routes: applying the same regulations to ALPs as attorneys (as seen in Oregon) or imposing stricter requirements on ALPs than attorneys (as evidenced in Washington, which uniquely requires ALPs to carry malpractice insurance). 

It’s worth noting that not all states require attorneys to comply with all listed regulatory measures. Malpractice insurance is mandatory only in a select few states. Imposing this requirement exclusively on ALPs, as in Washington, is aimed at offering ALP clients additional protection. However, data does not substantiate the need for this enhanced safeguard. Moreover, the cost of malpractice insurance can be prohibitive, particularly for solo practitioners and small firms, posing a significant hurdle to the widespread adoption of ALPs.

10. Program Costs

States are urged to uphold their commitment to ALP programs for their entire intended operation duration. This dedication also includes securing initial seed funding—possibly through bar membership fees, grants, or other sources—which is pivotal to the program’s success.

When forming ALP programs, states tend to ask specific questions regarding the cost of creation, maintenance, sources of funding, and the timeline to become self-sustaining. Currently, active ALP programs are funded by the state bar membership fees from both ALPs and attorneys. The portion of attorney membership fees used to fund these programs is minor (around 1% of the total budget). The ultimate objective is for these programs to become self-sustaining. Oregon projects its ALP program to be self-sustaining within seven to eight years of implementation.

The overall expenditure to fund an ALP program is not overly burdensome. As the number of ALPs in each state incrementally grows each year, more program costs will be counterbalanced by ALP license fees. These programs should be considered akin to startups—they will require time to mature and become self-sustaining. It’s crucial to recognize that this investment aids in bridging the access to justice gap.