Law isn’t healthcare, and healthcare isn’t law, but there are some parallels.
Both doctors and lawyers are licensed by state government, but they’re licensed by difference branches of that government. Doctors are licensed by the executive branch, while lawyers are licensed by the judicial branch.
Back in the day only doctors could own medical practices, and only lawyers could own law practices. Fast forward to today, and many (maybe most) medical practices are owned by entities other than doctors. Lawyers, however, are still the only people allowed to own law practices (with the exception of D.C). But this seems to be changing incrementally.
Allowing outside investment into law firms has been one of the goals of reform groups like the Institute for the Advancement of the American Legal System for a while now. Consider this from one of their advisory board members:
How can we expect thoughtful innovation within law, with or without technology, when we freeze out those who specialize in what lawyers most need assistance with? I imagine a world where instead of doing their own bookkeeping or invoicing, lawyers could instead partner with a recent MBA graduate or a marketing major in their community to round out and complement each other’s skillsets. And why stop there when there are so many talented individuals from other areas of expertise who should also have a say? Imagine, if you will, a social worker and a computer scientist joining to help create a law firm which is not only highly profitable, but where each of them benefits equally as owners.
Again, our professional regulation as it currently stands does not allow this. People are dying in legal waiting rooms because lawyers are refusing to allow them to gain access to the treatments they deserve.
In Florida, where I live, a proposal to experiment with letting non-lawyers own a piece of a law firm was outright rejected by the state bar and the state Supreme Court.
Board members noted that the medical profession’s experience over recent decades, in which practices can be structured so that persons and entities other than physicians can profit from the practice, has improved neither consumers’ access to medical care nor the overall quality of care.
Hyperbole about people dying from lack of legal care aside, it’s interesting to me the parallels drawn between medicine and law in both sides of the argument. And let’s be clear - the real business scenario here is not one where a social worker has enough capital to invest in a law firm in a meaningful way. What the advocates for outside investment are really talking about is allowing private equity investment into firms.
An aside: I think it’s worth considering that what has dramatically expanded access to medical care is not private equity investment into your local ENT’s office, but the rise of Medicare, Medicaid, and to a lesser extent Tricare for the post-WWII, Korea, & Vietnam veteran population.
And is private equity the solution here? Consider this piece by Cory Doctorow on the fruit that private equity investment in healthcare has borne:
Doctors who sell their practices to PE companies are lured in with promises of administrative relief from experts who'll handle billing, scheduling and compliance. But PE firms exercise fine-grained control over these doctors, violating rules that say medical practices must be run by MDs.
Take National Spine, a PE-backed chain owned by Sentinel Capital Partners that bought up 40+ pain-management clinics across the country. Doctors saw their caseload explode from 16 patients/day to 25. Medicare billings also exploded, with "unnecessary and often worthless" back braces being charged at up to $1,100 each. Patients were given $1,800 "medically unnecessary and often worthless" urine tests. National settled these claims for $3.3m in April 2019, without admitting guilt.
As I alluded to in the title, maybe comparing healthcare to law isn’t so straightforward as apples-to-apples. There’s no national “Lawcare” insurance for people over 65 in the U.S. The people who can’t or won’t pay $250 / hr for a lawyer to handle their divorce now won’t magically start paying that to H&R Block if they take over the divorce law market.
But two things can be true at the same time:
The overly paternalistic instincts of state bar associations are hindering the expansion of legal access, one facet of which is de-regulation through permitting non-lawyer ownership; and
Private equity could very well be a snake in the grass.
If you were expecting me to have some sort of strong take here, sorry! I don’t think we know enough, and maybe we can’t know enough to make the right call. I do think if we’re going to think about legal access expansion in the terms of how access to healthcare expanded over the last hundred years, we need to think in terms of insurance. But that’s another topic for another day.