Limited and Open Government

Solicitors in the Sandbox

John Croxton is a Policy Research intern with the Libertas Institute, a free-market think tank in Utah. He is currently studying for a Master’s degree in Economics at George Mason University.

It’s no secret that the legal system often treats poor or neglected citizens more harshly than our ideals would suggest. A 2017 survey found that 86 percent of civil legal problems reported by low-income Americans received “inadequate or no legal help.” 

Fully 94 percent of criminal convictions in state courts come from coercive plea bargains, in which prosecutors threaten maximum sentencing on multiple charges to force cases closed rather than allow defendants to go to trial. Despite theoretical guarantees of fairness under the law, in practice, the system can fail those it’s meant to protect.

In 2018, the Utah Supreme Court took a major step toward expanding access to the legal system, launching a working group whose report on “Narrowing the Access-to-Justice Gap” was unanimously approved. The report proposed tearing down regulatory restrictions on legal practices, including the creation of a regulatory “sandbox” to test innovative new legal services and frameworks without being incautious in rolling them out. The sandbox will provide a valuable test-bed to provide legal services benefiting all Utah residents in time.

Since launching the sandbox in the fall of 2020, the Court has approved a number of participants for the sandbox, including LawHQ, which will allow consumers to easily join mass litigation against spam calls and texts; 1Law, which will create low-cost services for filling out court forms and giving legal advice; and LawPal, which plans to give consumers an automated service for writing legal documents in divorce, custody, eviction, and property seizure cases. 

These moves will increase the competition for affordable legal services, broadening access and lowering prices from the current high rates. Related measures like allowing non-lawyers to have a stake in law firms will increase entrants into the space and allow consumers to choose among different offerings. 

The legal industry is, perhaps unsurprisingly, one of the most heavily regulated business sectors in America. Any serious effort to modernize its creaking infrastructure is welcome — and may have a wide range of knock-on benefits in social trust and decreased corruption.

The regulatory sandbox approach builds on past successes worldwide, having proven its value with the fintech sector leading the way. Sandboxes allow new business models to experiment within their limits, giving them the chance to grow and serve new consumers while allowing regulators to tailor their measures with a fuller understanding of benefits and drawbacks.

Libertas Institute has been a key backer of such sandboxes in recent years, including the recently passed general regulatory sandbox for the state of Utah. The possibilities are tantalizing. Just as China used Special Economic Zones to boost its growth path from an early developing country to an industrial behemoth, Utah could embrace this opportunity to combat the secular stagnation of recent years with a bold plan for growth.

The appeal of a general sandbox lies in broad-based, persistent innovation across sectors, including sectors that nobody’s yet realized will be transformative. The best way to capture the fruits of tomorrow’s economy is to prepare for the unexpected.

As Utah’s legal world benefits from a wave of consumer-targeted improvements, legislators must keep the state’s next great prize in mind.