1972, May, Pg. 1. Pre-Paid Legal Services a new concept of availability INSURED.

• Author: by Howard M. Kirshbaum

1 Colo.Law. 1

Colorado Lawyer

1972.

1972, May, Pg. 1.

Pre-Paid Legal Services a new concept of availability INSURED

1Vol. 1, No. 7, Pg. 1Pre-Paid Legal Services a new concept of availability INSUREDby Howard M. KirshbaumHoward M. Kirshbaum, Denver, is a partner with Zarlengo and Kirshbaum. He is Chairman of the Subcommittee on Legal Services for Persons of Moderate Means, CBA Committee on Availability of Legal Services.Lawyers have long recognized a great gap between need for legal services to society's "poor" and the availability of these services. Canons of Ethics(fn1) and oaths of bar admissions(fn2) exhort attorneys to close this gap in their private practice. In Colorado, staff-oriented, governmently funded programs such as Legal Aid and Colorado Rural Legal Services actively serve "qualified" indigents. Bar associations in Denver, Loveland and elsewhere have developed programs utilizing volunteer lawyers to provide legal services without cost to qualified indigents. Judicare programs in Wisconsin and other states combine the concept of central funding to pay participating attorneys with the principle of the indigent's right to choose an attorney from private practice rather than from a small staff of specialists.(fn3) The problems for which such programs were developed are relatively well defined and familiar.

Recently attorney and lay attention has focused on another pernicious gap: the disparity between need for and receipt of legal services by persons of moderate means who do not qualify for free legal advice but cannot afford current market prices for many necessary legal services. It is beyond argument that many individuals are deterred from seeking or utilizing the services of attorneys because of real or feared inability to pay for such services.(fn4) A person of moderate means is defined arbitrarily as an individual with a gross annual income of from $4,000 to $12,000. For him, the cost of obtaining an attorney's services in connection with wills, agreements, tenant problems, zoning issues, traffic and other misdemeanors, business or employment counseling and similar matters makes such services luxury items in his budget. One can only speculate as to the resultant social damage to a society which permits basic legal services to be considered luxury items.

Lawyer Referral Service, one early bar association response to the problem, fills only limited needs and does not purport to

2be a mechanism for reduction of costs of legal services. Contingent fees and long-term payment plans---responses of practicing attorneys---do not satisfactorily meet the need. The organized bar has begun to realize that the profession itself must initiate programs to ensure that those with modest incomes are not deterred by high costs from seeking the legal advice necessary for successful achievement in today's complex and competitive society. These "near poor," with steady employment or small businesses, are in dire need of economical means by which to obtain the services of practicing attorneys in matters other than legal catastrophes. National, state and local bar associations are slowly realizing that they must deal with this potent social issue rather than ignore it.

History of ConcernReginald Heber Smith squarely posed the problem in 1949: "The creation of adequate facilities which will assure competent legal advice and assistance to the millions of persons of moderate means has emerged as one of the greatest post-war problems confronting the organized bar."(fn5) Smith urged development of programs similar to the English Legal Assistance Plan, which sought to guarantee access to attorneys for all citizens in civil or criminal matters through a program funded by Parliament and administered by the Law Society. While other writers occasionally sallied forth to discuss this issue,(fn6) the organized bar basically ignored the problem throughout the 1950's.

Events began to shake this convenient lethargy. Labor union members with moderate incomes took measures into their own hands, and various types of "group practice" programs began to appear. These programs typically consist of groups of employees serviced by a small number of selected attorneys---"closed panel" attorneys who were traditionally chosen because they were already known to the union leadership or members. The attorneys were soon performing general counseling and advocacy functions. Relying on canons of ethics, state legislative provisions and even constitutional arguments, bar associations generally opposed local group legal service programs, claiming the activities connected therewith constituted unauthorized practice of law, barratry, and an unpardonable threat to the right of bar associations and legislatures to regulate the practice of law. In three fell swoops, the United States Supreme Court destroyed the basis for most such opposition. In N.A.A.C.P. v. Button,(fn7) the Court held two Virginia statutes, designed to restrict N.A.A.C.P. activities, unconstitutional as unduly interfering with protected modes of expression and association. In Brotherhood of Railroad Trainmen v. Virginia,(fn8) the Court held that Virginia courts could not, under the guise of regulating legal practice, prohibit unions from furnishing lists of attorneys to members injured on the job. In Union Mine W. of A., Dist. 12 v. Illinois St. Bar Assn.,(fn9) the Court held that First and Fourteenth Amendment rights permitted unions to hire attorneys for the purpose of assisting members in asserting and processing workmen's compensation claims.

These decisions forced a re-examination of the proper role of bar associations in meeting accelerated demands for legal services at prices affordable by people of moderate means.(fn10) In 1964 the California State Bar Committee on Group Legal Services published a plan to make the services of area private attorneys available to members of a small Los Angeles culinary union through the mechanism of a pre-paid insurance plan.(fn11) The American Bar Association Special Committee on the Availability of Legal Services commissioned Professor Preble Stolz of the University of California School of Law to study the applicability of pre-paid insurance principals to the provision of legal services.(fn12) His format involved the "open panel" concept of freedom of choice of attorney, a marked difference from the closed panel premises of group practice plans. Recognizing that any such plan was "more a plan for pre-paying or budgeting the expense of

3legal services than a device for pooling the risk of heavy loss through insurance,"(fn13) he distinguished his proposal from both the Blue Cross---Blue Shield structure of the medical profession and traditional casualty insurance concepts. While conceding that his panel plan could not match the economic efficiencies of group practice programs, Stolz concluded that significant savings in the cost of legal services could be realized without sacrificing important professional policy concerns.

In February 1968 the American Bar Association by formal resolution agreed to conduct experiments with pre-paid legal cost plans. In May 1970 it established a Special Committee on Pre-Paid Legal Costs Insurance, now termed the Special Committee on Pre-Paid Legal Services and endowed with a full-time staff assistant. In 1971 this activity resulted in the inauguration of this nation's first operative bar association-sponsored program of pre-paid legal costs. Major symposia on pre-paid legal services plans have been held or planned in Los Angeles, New Orleans and Washington, D. C. No policy position has been promulagated by the American Bar Association. Nevertheless, several state and local bar associations are...