State tries ‘regulatory sandbox’ to find ways to address lawyer shortage
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The Commission on Indiana’s Legal Future, a group of professionals exploring solutions to the state’s ongoing attorney shortage, offered a bevy of recommendations this summer to help the Indiana Supreme Court confront the issue.
Among several ideas that rose to the top of the court’s approval list was the creation of a “regulatory sandbox,” a safe space that would let the state test approaches that might someday lead to non-attorneys being licensed to perform certain specialized legal services.
“We concluded that this would be a very wise model for Indiana to adopt in order to further assess and implement some pilot projects of the kind that both we and other of the work group members were recommending,” said Kathy Osborn, a partner with Faegre Drinker Biddle & Reath LLP and a member of the Commission on Indiana’s Legal Future.
Identifying the needs
Indiana courts have a particular case management system that lawyers hope will provide special insights into the state’s needs.
The state’s lawyer shortage is well-documented.
The American Bar Association’s 2023 Profile of the Legal Profession shows Indiana has 2.3 lawyers per 1,000 residents, ranking it 44th compared to the rest of the country.
But lawyers will be digging deeper to determine the state’s biggest legal deficiencies.
While other states have individual case management systems across their counties, Indiana has Odyssey, a statewide case management system that should make it easier for state leaders to see where lawyer shortage is most dire and what services are most lacking.
“If you’re looking to measure results and measure data, and, for example, measure the extent to which people go to court without an attorney, then having a statewide database enables that much greater than if we had dozens of independent, separate databases all around,” said Robert Rath, chief innovation officer for the Indiana Supreme Court.
The Commission on Indiana’s Legal Future’s subcommittee focused on business and licensure models recommended the sandbox method as one that can open doors for other innovative routes to help solve the attorney shortage, including allowing certain professionals to provide legal services without being under the direct guide of a barred attorney.
“People with good ideas can raise their hand and we can vet their ideas. We don’t have to automatically say “no” based upon a rule that maybe was written in a way that didn’t anticipate our current circumstances,” said Bill Henderson, a professor of law at Indiana University’s Maurer School of Law.
Much of Henderson’s research focuses on the regulatory sandbox and how it’s been used in other states and countries.
“When the sandbox moves forward, one question we’re going to be asking ourselves is, ‘how does this address the problems that were the basis for the [legal] future commission?’ In other words, it may not necessarily be about market liberalization as much as, ‘how are these reforms or enabling this experimentation going to make the market better and fairer for ordinary people?’” Henderson said.
Osborn pondered the same questions, reflecting on how many Hoosiers go without legal representation because of the attorney shortage, and how that lack of representation prevents residents from becoming economically independent.
“We know that adequate legal protection and representation can be a bar to achieving economic independence,” she said.
Other states’ sandboxes
To form an educated recommendation to the supreme court, members of the legal future commission looked to other states and how they are experimenting with a regulatory sandbox.
“I think it’s true that all of them developed because they had a similar problem to what Indiana is facing,” Osborn said, “and that is not enough attorneys in the state to represent people in the courts, particularly when we look at low income folks or middle income folks, many of whom don’t have access to the pro bono services that we have.”
According to the Libertas Institute, Utah, Arizona, Missouri, and Kentucky are the only states in the U.S. with “all-inclusive” regulatory sandboxes, meaning they are not limited to a particular profession or industry.
Eleven other states have implemented industry-specific sandboxes, including Ohio, whose sandbox focuses on financial technologies that went into effect in 2023.
Many consider the state of Utah, however, to have one of the most prominent sandbox pilot programs related to the legal profession. Launched in 2020, the program was originally scheduled to end in August 2022 but was extended to August 2027.
“The Court’s objectives for regulatory reform are significant and need sufficient time to truly work and create real change in the legal services market in Utah,” Utah Supreme Court Chief Justice Matthew Durrant said when extending the program. “We have already seen innovations in legal services in the short two years. We are eager to see even more.”
Operating under the Utah Office of Legal Services Innovation, Utah’s program is described on its website as a “data-driven experiment” of the Utah Supreme Court and Utah State Bar.
To date, 43 entities—some not lawyer-owned or operated—have been authorized under the state’s program to legal assistance in areas such as immigration, end-of-life planning and personal injury claims.
To qualify for sandbox authorization in Utah, entities must meet the state’s innovation requirement, demonstrating how their company would reach residents who are underserved in the legal market.
Applying entities must demonstrate how a sandbox authorization would help them immediately reach a significant number of residents. National and international companies seeking authorization must serve a proportionally high number of Utah residents relative to their overall consumer base.
Henderson said the innovation requirement is a good one have.
However, committee members are still developing recommendations on Indiana’s program would look like.
The innovation committee has until March 1 to submit proposed parameters to the Indiana Supreme Court.
“Although we’re learning from these different jurisdictions, we only have to solve Indiana,” Henderson said. And we know everybody in Indiana, and we’ve got a grant of authority from the Supreme Court. They want to make things better.”