David McNeill, J.
In Utah courts, more than half of all hearings involve at least one party without an attorney. This represents a massive untapped market opportunity that I will explore in this article.
Introduction to Me
I am not an attorney. I am married to an attorney, and as the assistant director of Open Legal Services, I work for and with attorneys. But my background is in science and business. As a business person, I am used to reading astonishingly expensive market research reports about everything from intravenous catheters to private colleges. To my surprise, I find very little research on the legal industry in general and even less about the legal market in Utah in particular. For the past year, I have been gathering data and studying the legal industry in Utah, and I offer the following "report" free of charge.
Introduction to the Legal Market
A market is one way to allocate resources where supply (attorneys, in our case) transacts with demand (clients) at a specific price. Free markets allocate resources very efficiently; however, they do not necessarily allocate resources fairly or equitably. Thus, we choose to intervene in certain markets to provide important goods and services to a wider range of people than would receive them in a totally free market. Two examples of such market intervention are the publicly funded criminal defense system and Legal Aid.
The two main ways to measure the size of a market are: (1) Dollars
Typically, market research focuses more on the total number of dollars in a market than on the total number of people. My analysis primarily uses people to measure Utah's legal market because: • Data about the people in the legal market is much easier to obtain.
• Dollars represent the existing market, not the potential market.
With so many people going unrepresented in Utah's courts, the dollars currently spent on legal services completely miss the size of this potential market.
• As the Futures Commission recommended, the Utah Bar needs to fulfill its mission to "serve the public" (i.e. people).
The questions guiding my research are about allocation of attorneys to the people that need their services: (1) Supply: Where are Utah's attorneys located, and what services do they provide?
(2) Demand: What geographical and practice areas have unmet needs?
Where are Utah's attorneys?
The Utah State Bar provides a directory of all attorneys licensed to practice law in Utah. To capture this information, I wrote a little program that reads and downloads all of the attorney listings on the bar directory website to a spreadsheet. Don't worry, I promise not to spam you now that I have your street and email addresses. According to the Utah State Bar directory: • 9,359 attorneys are active and paid (i.e., are in good standing to supply legal services in the Utah market).
• 1,213 (13%) list an address outside of Utah.
• 8,144 list an address within Utah.
• two list no address.
Using these addresses, I counted the number of attorneys located in each of Utah's twenty-nine counties. I am using counties to approximate geographical markets because it is easy to get data on the county level. Metropolitan areas would represent geographical markets better, but someone would have to pay me to tackle that more complicated analysis. • Eleven counties have fewer than ten attorneys.
• Piute County has no attorneys.
• Sixty-seven percent of the active attorneys in Utah are in Salt Lake County.
• Eighty-nine percent of the active attorneys in Utah are along the Wasatch Front (Weber, Davis, Salt Lake, and Utah counties).
Density of Attorneys
It is hardly surprising that Salt Lake County contains the most attorneys because it contains the most people. Thus, to learn more about regional markets, I calculated the per capita density of attorneys using population data from the United States Census Bureau. • The counties with the fewest people are Daggett, Piute, Rich, and Wayne counties with fewer than 3,000 people each.
• Salt Lake County has the highest population at 1.1 million people or 37% of Utah's entire population.
• Statewide, the ratio of attorneys to people is 1:368.
• The two counties with the highest density of attorneys are Salt Lake (1:203) and Summit (1:226).
Broad Market Opportunities: Where are the most people with the fewest attorneys?
The number of people per attorney, while interesting, does not indicate the magnitude of market opportunities. For example, Daggett County literally has only one attorney for all 1,109 of its people (and of course that one attorney is a prosecutor), while Uintah County has a similar density ratio but with thirty-four times more attorneys and thirty-four times more people. All else equal, the market opportunity is better in Uintah County than in Daggett County because the maximum reachable market is larger. In addition, a larger market offers more room for attorneys to specialize.
I think the best way to quantify the size of market opportunities is to mathematically combine both the attorney density and the total number of people because the best market opportunities are in the counties with the largest populations and the lowest attorney densities. If you are interested in the mathematical details of how I combined these two metrics into what I call the Market Opportunity Index, I am happy to tell you over lunch sometime. • Salt Lake County scores at the bottom of my Market Opportunity Index because it has the highest density of lawyers.
• Daggett County also scores at the bottom of my Market Opportunity Index because it has the smallest population.
• The greatest market opportunities are in Utah, Davis, Weber, and Washington counties because they each have a relatively low attorney density and a relatively large population.
Although Salt Lake County scores at the bottom of the Market Opportunity Index, its legal market may not be quite as saturated as it appears for the following reasons: • Salt Lake is the focal point for government, immigration, and patent attorneys.
• Many companies are headquartered in Salt Lake and thus have corporate counsel there.
• Some attorneys prefer to have their offices in Salt Lake County but drive out to serve clients in nearby counties.
This analysis reveals broad market opportunities but does not provide specific information about practice areas and pricing.
What practice areas have the most unrepresented people?
I must credit the Utah courts for tracking self-represented parties in civil cases for over a decade. The courts kindly shared their data with me for fiscal year 2016. The data shows: • 98,279 parties represented themselves.
• The top four categories with the greatest number of case filings (and the greatest number of self-represented parties) are:
- Debt Collection
- Eviction - Protective Orders
• These four categories account for 92% of the self-represented parties in civil cases.
• In debt collection cases, 99-9% of petitioners are represented by an attorney, while only 1% of respondents are represented by an attorney.
• 17,678 people getting divorced represented themselves in fiscal year 2016 (7,032 petitioners plus 10,646 respondents).
• If every one of the 8,144 licensed attorneys in Utah took two of these self-represented divorce cases and seven debt collection defense cases per year, there would still be people facing these types of cases without an attorney.
Pricing: Where supply meets demand
I am still shocked that the majority of people getting divorced in Utah are not represented by an attorney. Why is the immense demand for this and other types of legal services going unmet? One answer is pricing.
As a side note, I am always happy to join attorneys in hating on the billable hour, and I think clients also dislike being billed by the hour because to them the total cost is more important than the marginal cost. We all need to work harder at thinking outside of the billable hour box, but for now hourly rates are still the primary way that attorneys price their...