Regulation of Legal Service Plans

Legal service plans, widely regarded as the key to better availability of legal services for Americans of moderate incomes, have not yet found their proper place in the legal and regulatory framework. Uncertainty about regulatory requirements threatens to hold up progress. This article presents the results of a three-year study of alternative approaches to the regulation of legal service plans. It analyzes the inherent dangers of various types of plans and suggests ways of providing adequate protection for consumers while preserving maximum freedom and flexibility for experimentation with new delivery systems. Specifically, the authors recommend the existing and time-tested system of insurance regulation as the most suitable model for plans having a significant risk-carrying element, subject, however, to appropriate amendments to accommodate the unique features of some kinds of plans, such as bar-sponsored nonprofit organizations, and with special procedures to ensure close cooperation with disciplinary authorities as far as the conduct of lawyers is concerned.
A volume containing all the principal and background papers prepared in this study, including a modified version of the present article, will be published by the American Bar Foundation as Legal Service Plans: Approaches to Regulation .