It has become an unfortunate reality of the modern legal system that an individual's ability to receive justice in this country operates in direct proportion to that individual's ability to pay for an attorney. Despite seemingly prosperous times for the legal community3, many of this country's poorest citizens have been denied adequate representation due to an inability to afford attorney's fees.  This does not just suggest that the poor cannot afford to hire the best, most expensive attorneys.  To the contrary, Attorney General Janet Reno estimated that 60% of the poor and working class have no access to the legal system at all.4

 These financial realities often lead people in low and moderate-income households to attempt handling situations that have legal implications without the assistance of an attorney.5  This sort of self-representation rarely yields adequate results for either for the self-represented party or the courts who must deal with an avalanche of untrained pro se parties.6  An equally unattractive, but frequently used response to a pending legal problem involves ignoring the problem and hoping that it goes away.  For low-income households, the parties who do not to try to handle a legal situation without an attorney often choose instead to do nothing.7

 The types of issues confronted by low-income individuals also contribute to the lack of legal representation.  These legal issues often include landlord-tenant disputes and other everyday issues that dramatically affect quality of life.8  While these issues may be pressing for many households, they are not high priorities for practicing attorneys.  Cases of that sort are often simply not profitable.  Landlord-tenant laws, for the most part, do not contain multiple damage provisions that create a higher recovery for client and attorney.9  In addition, many attorneys would prefer the more steady and lucrative business of the landlord to the representation of a tenant who may not be able to pay.

 This paper will examine the use of managed care techniques to make legal services more affordable and accessible for all Americans.  This inquiry will begin with a detailed examination of the medical model of managed care. It will explain the mechanics of a Health Maintenance Organization (HMO) and how it manages medical costs. 10  The paper will then describe the applicability of managed medical care principles to the practice of law.11  Next, the paper will discuss how a hypothetical Legal Maintenance Organization (LMO) could work.12 Finally, the paper will conclude with a summary of the discussion and goals for LMOs in the future.13

III. Medical Managed Care: How HMOs Have Reigned in Medical Costs.

 One possible solution to the lack of adequate legal representation could be managed care.14  Managed care has controlled explosive costs in medicine. In the 1980s, group health care plan costs were increasing by more than 15% per year.15 While managed care officials cannot claim to have created an actual decrease in health care costs, recent studies have shown that managed care has slowed the rate of health care cost increases.16

 While other methods of providing managed medical care may exist, this paper focuses exclusively on managed care through Health Maintenance Organizations (HMOs).  Generally, an HMO is an "organization, either public or private, that provides comprehensive medical care to a group of voluntary subscribers, on the basis of a prepaid contract."17  The HMO contracts with medical facilities, doctors, and employers to provide medical care at a low fixed cost per-patient.18  The HMO member, of course, is the individual who obtains the health coverage through an employer or otherwise.

The group of medical service providers that is under contract with the HMO forms the member's "network".19  The concept of a network becomes important later to a member who attempts to obtain services.  Except in extreme circumstances, an HMO will only pay for medical services obtained from a member of the plan participant's network.20  Similarly, an HMO will rarely pay for medical services obtained outside the geographic "service area" within which the HMO provides health care for its members.21

 An HMO can control medical costs through a variety of methods.  As mentioned, the organization negotiates with medical service providers to obtain low fixed rates for its members.22  In addition, the HMO requires a member to choose a "primary care physician" to carry out a "gatekeeper" function.23  The gatekeeper then only refers members to specialists when that doctor determines that the medical problem is outside the scope of his or her ability.24

The use of one gatekeeper physician within the "network" of physicians that have contracted with the HMO allows the organization to integrate services and monitor the practices of individual physicians.25 These monitoring techniques can include standard medical procedures for specific diseases, "encouraging" doctors to prescribe cheaper drugs, and reviewing medical records to determine which treatments will be covered by the plan.26  The HMO also only commits itself to providing "medically necessary and appropriate care".27  This term arguably allows plan administrators to refuse to pay for a medical procedure that the doctor believes necessary for an individual patient.28

Additional aspects of HMOs attempt to control medical costs by influencing the lifestyles of the members themselves.  For example, an organization may actively promote a "wellness" programs for its members.  These programs often contain two complimentary aims. First, general health programs attempt to keep members free from disease.29  Second, early screening tests detect health problems before they become life-threatening illnesses.30  These wellness functions prevent the need for more expensive treatment later.31
HMOs provide several benefits for subscribers.  HMO providers have higher specialty-board certification rates than doctors as a whole.32  Some literature also suggests that HMO patients receive better overall medical care than fee-for-service patients do.33  Unlike traditional fee-for-service medical plans, the HMO patient pays few, if any, out-of-pocket expenses.34  In addition, HMO members do not struggle with confusing claims forms or medical bills; HMOs process the paperwork accompanying medical procedures for members.35  Plan members also do not face uninsured "waiting periods" that usually apply to new policyholders with traditional medical health insurance.36  This practice does not subject HMO members to the difficulties that arise when a policyholder becomes ill before the policy itself takes effect.  Finally, the lower cost and broader coverage provides HMO members with more access to medical services than would have been available under traditional health insurance plans.37

III. Consumer Complaints Regarding Medical Managed Care: How HMO Has Become a Four-Letter Word.

 Any analysis of the success of medical cost control through managed care must be tempered by a discussion of the utter failure to adequately answer widespread complaints and criticisms of the methods employed by HMOs. One simple complaint stems from the perceived separation of the patient from the family doctor.  Traditionally, individuals and families develop a longstanding relationship with physicians while still retaining the ability to find and go to another doctor.  In order to save costs, however, HMOs place limitations on the ability of an individual to see just any doctor.  If a member's doctor is not part of the provider network, the HMO will probably not reimburse the member for the expense of that doctor visit.38  If the individual's doctor is in the provider network as a specialist, that individual's access to that doctor may similarly be limited.39  This practice generates several complaints from HMO participants.40

Another serious charge leveled against managed care organizations involves the denial of legitimate claims.41  These denials can have severe, and even deadly, consequences for the ailing patients.42  A similar charge involves creating financial incentives for doctors to provide less care to participants.  These incentives take a variety of forms.  For example, a plan can discourage a primary care physician from making referrals to specialists.  This practice can either result in an unqualified doctor attempting to treat a difficult disease without the necessary knowledge and training or, worse yet, a doctor convincing a patient that a specialist is not necessary in a case where the abilities of a specialist are needed.43  Finally, "gag clauses" issued by HMO administrators have prevented some doctors from freely discussing the full range of available treatments with their patients.44

These sorts of abuses have created a public outcry against HMO tactics.  This outcry, in turn, has sparked a response from government legislators and agencies.  After finding "unacceptable disregard for quality of care", the Texas Department of Insurance fined Kaiser Permanente $1 million dollars.45  State legislatures have proposed passing new laws and regulations in order to alleviate the ability of HMOs to obtain cost savings at the expense of the health of the members.  "Nineteen states passed comprehensive managed-care laws or regulations that should address the broad spectrum of consumer complaints."46  States have already passed hundreds of laws concerning managed medical care in an attempt to protect consumers from these practices.47  The controversy has even attracted federal attention.  One hot issue confronting congressional and presidential candidates in this election year concerns support for a "Patient's Bill of Rights" that presumably protects against the sorts of medical decision abuses discussed earlier in this section.48

The managed health industry acknowledges some truth in consumer complaints, but defend the practices as good for the consumer and the industry.  One example involves the use of financial incentives with medical service providers.  HMOs respond that financial incentives have always been present in the medical industry.  The organizations allege that it was the financial incentive for overtreatment created by the fee-for-service insurance system that created spiraling medical costs in the first place.49  HMOs also defend the oversight of treatment by stating that these review boards are staffed with licensed health care professionals, not accountants and bureaucrats worried about the financial bottom line.50

In short, HMOs provide increased access, lower cost, and expanded benefits for its members.  However, HMOs tend to deny legitimate claims, remove some decisions from the hands of the professional who actually treats the member, and create incentives for cost cutting at the expense of quality care.  In order to meet the goals of this paper, any proposed managed legal care system must provide the benefits of HMOs while minimizing or eliminating the drawbacks.

IV. Analyzing the Application of Medical Managed Care Principles to Legal Service Providers: Is the Cure More Harmful Than the Disease?

The concept of a legal managed care organization has not been widely discussed in law journals or other legal literature.  The way that this topic has been addressed, however, is extremely interesting.  Law scholars simply appear to assume that these sorts of organizations will dominate the legal profession in the future.51  This research has uncovered no work that discusses in detail whether medical managed care can be applied to control legal costs.  In addition, no articles have squarely discussed whether the HMO shortcomings could be avoided or eliminated from managed legal care.52  No legal literature exists regarding how a LMO would actually work.  While some practicing attorney groups already refer to themselves as LMOs, it is the opinion of this paper that these groups are more like pre-paid legal plans53 than managed legal care; these legal groups adopt few, if any, managed care techniques into their business.54

The lack of analysis and use of medical managed care principles among attorneys is somewhat surprising.  Nonlawyers, on the other hand, have already begun predicting what life with legal managed care would be like.55

 This paper attempts to fill the void of analysis regarding legal managed care organizations.  However, the author recognizes that the analysis must be fair, careful, and disinterested.  An uncritical application of HMO managed care principles to the practice of law may lead to a cure (managed care) that is worse than the disease (rising legal costs and lack of access to attorneys).56

V.  Nuts and Bolts: How a Legal Maintenance Organization (LMO) Could Operate.

  In order to be successful, a LMO would need many of the same characteristics present in a successful HMO.  First, the LMO would need a diverse client base.  An HMO serving only elderly members with high medical costs could not remain solvent.57  As with other types of insurance, the healthy members tend to cover the expenses of the less healthy members. The same would be true for a LMO.  A legal maintenance organization could not function if it only serviced litigious clients or those individuals who constantly find themselves on the wrong side of the law.58  The problem, however, is that these are exactly the sorts of people that would be attracted to this form of legal insurance because it would cut their personal legal expenses.  An LMO must find a way to serve as large of a population as possible.

 The solution to this dilemma lies in the delivery of the benefits to consumers.  A LMO may use some advertising to individuals, but would find more success by providing benefits through arrangements with labor unions and employers.  In this way, the arrangements providing legal benefits parallel the offering of medical benefits by employers, unions, and other organizations.59  This can provide a large, diverse group of members for the LMO.60

 The entity that pays the LMO gains from this sort of service.  The employer or union can add legal services to already existing benefits packages61 in order gain a hiring advantage over competitors and it arguably keeps employees from missing large amounts of work time to deal with legal problems.62

 The problem with this proposal stems from the nature of legal representation.  While a medical benefit has little direct impact on the employer itself, a legal benefit can have a significant impact.  An employee of a large company may use the provided legal care to sue his or her employer for millions of dollars. A few lawsuits of this sort would quickly lead employers to drop that particular coverage.  However, employer interference with the member's ability to sue could constitute improper practice of law or interference with the legal rights of the employee.63

In addition, this situation places attorneys in an ethical bind.  Who is the client in this situation?  Is it the employer, the person who pays the bills, or the member, who actually seeks the services and owns the policy?  This creates an unacceptable conflict of interest.

 A necessary compromise may involve a LMO refusing to cover or take cases involving plan members who wish to sue the sponsoring organization (employer, union, or otherwise), individual members of the sponsoring organization, or subsidiaries of such organization.  This prevents the conflict and the accompanying ethical problems64, while removing the incentive for employers to discontinue the legal benefits.  A plan member with this cause of action could then pay for a private attorney and pursue the action that way (or bring the claim pro se).65

 Similar problems develop when two plan members want to sue each other.  This presents somewhat less danger to the viability of the LMO, since neither individual would contribute enough money to really expect to have an impact on the decision making of the LMO itself.  The LMO would still need to remove itself from the conflict because representation of two adverse parties creates too many practical and ethical problems.66  The LMO could look into other methods of resolving member disputes outside litigation, however.  One example could be providing mediation services for members who wish to resolve a legal dispute with each other outside of the courtroom.67  If the dispute progressed beyond that point, however, both parties would need to get outside attorneys.68

 The LMO would obtain its primary funding through provider contracts with individuals, employers, labor unions, or organizations.  The lower direct costs for the consumer will allow more individuals and families to obtain the services of an attorney than the present system.  Lower income and unemployed individuals may not have an employer willing to fund such a benefit or the money to pay for the legal services.  For this reason, LMOs should strive to provide a portion of its services pro bono.69  In addition, increased legal access for the working class may ease the burden on legal clinics and legal aid societies.  This allows clinics and legal aid societies to help even more low-income clients.

Unlike the medical profession, LMOs can supplement contract income through cash settlements, contingency fee arrangements, and through lawsuits allowing the award of attorney fees.70  The profits from these activities may also be divided among all LMO provider attorneys through a profit-sharing program.71

The wellness functions found in HMOs work well with the legal model.  Attorneys often lament the fact that the client did not seek legal representation earlier.  In some cases, a client who does not identify or deal with a potential legal issue early may later face expensive litigation.  In addition, clients may find themselves barred from certain benefits or from causes of action by not acting in time.

 Like an HMO, an LMO benefits when its members prevent legal problems from developing.  Similarly, a LMO also gains when its members deal with small issues before they develop into larger, more expensive issues.  The LMO can facilitate these purposes in a variety of ways.  For example, LMOs can print literature and hold workshops for its members.  In this way, the LMO can provide information that the members can use identify a potential legal problem before the problem develops.  If deemed necessary, an LMO could also schedule regular legal "checkups" where the attorney could discuss issues with the member.72  That way, the attorney may be able to identify and deal with legal issues that the member may not identify.

 The provision of these services still does not guarantee that the client will use them before a problem develops.  However, the members that do use them may come to appreciate and rely on these sorts of services.  Those active members then have the ability to influence less active members to use the available services to the fullest extent.

 A LMO would need to adopt the medical "gatekeeper" function to direct legal assistance.  With the explosion of new technology, this goal can be accomplished in a variety of different ways.  For example, the LMO could operate a website that helps advise members when they need to consult an attorney. This website could ask a series of questions about a situation faced by the member, culminating with a suggestion whether or not the user should seek counsel.73   The site could also provide general legal information regarding a variety of subject areas to help the member focus the inquiry.  This website should not, however, attempt to advise the individual about his or her rights in any other way.

In addition, plan members can also call attorneys for advice.  This sort of access is already offered in traditional pre-paid legal plans.74  Over the telephone, the attorneys can hear the facts and then advise the clients whether additional legal assistance is necessary.  This method also serves the important function of allowing a client to vent his or her feelings regarding a legal problem.

Once a member describes the legal situation to the primary legal provider, that provider can direct the work to be done in the most efficient manner.  If either a paralegal or an attorney can resolve the issue, it should be resolved by the paralegal.  This program removes the incentive for the attorney to perform tasks in an inefficient manner in an effort to maximize billing.  The LMO can consider requiring that certain tasks only be done by a paralegal or secretary, though it should be careful which tasks are designated in that way so not to create the unauthorized practice of law or ineffective legal representation.75

This gatekeeper function encourages efficiency of service; because the primary legal provider is familiar with the needs of the client, that attorney can offer more consistent and efficient assistance to that client.  Clients, of course, should be given the option of changing their primary legal provider periodically.  This avoids conflicts between provider and participant, while still retaining the advantages found in HMOs.

Limitations on legal service providers may not be as offensive to the public as limitations on doctors for several reasons.  First, the "family doctor" archetype is not as prevalent in the legal industry.  To be sure, some individuals and families have one lawyer from whom they receive all legal advice and referrals.  When compared to frequent doctor visits, the relative infrequency lawyer contact suggests that this bond may not be as strong.  In addition, the fact that legal services are rarely covered by an insurance policy removes any sense of entitlement for the receipt of these services at the expense of a third party.  While some individuals perceive a "right" to medical care, those people are not as likely to believe that a "right" to legal care exists outside the already existing constitutional protections for criminal defendants.

An LMO can also adopt the oversight function used by HMOs.  This oversight function can prevent the filing of frivolous claims simply for harassment purposes or to extend a lawsuit and collect increased attorney's fees.76  A review committee can also suggest better, more efficient ways to handle the cases of its members.  For example, a committee may state that if detailed depositions and document production have already been arranged, an attorney in a given case may not need to use written interrogatories or other discovery tools that would likely cover the same information.  The review committee can also periodically review the work of its provider attorneys and require advanced education or certification.  These actions can serve to provide members the best quality legal representation available.

The same oversight function, however, may also allow LMOs to deny or discourage necessary and legitimate procedures.  LMO interference into a case where such procedures were needed could lead to attorney discipline in addition to liability in a malpractice suit.  In addition, the attorney who is directly involved in a given case is in a much better position to know what procedures are necessary in any review board.  Because the proposed LMO structure provides no protection against these sorts of abuses, the use of an oversight function must be limited to the sort of informal oversight that already exists in law firms and legal organizations.  If this proves to be an impossible standard, a review board must be prevented from holding direct oversight and veto powers over the practicing attorney.  The alternative creates an unacceptable possibility for abuse.

Despite the potential good that can be gained from legal managed care, other problems will also persist.  An LMO may attempt to prioritize some cases over others by profit potential.  The goal of providing complete coverage for people who would not otherwise have access to an attorney can be frustrated by such efforts.  An LMO must be required, by statute or otherwise, to equally represent all of its clients' legal needs and not just those that may yield a profit.77

While an incentive to resolve cases quickly may be a benefit in some situations, this incentive may also lead to early settlements and sloppy legal work.  This may result in the LMO failing to adequately address the needs of the client.  The fear of disciplinary action and malpractice suits may alleviate this problem.78  In addition, the LMO can partly base attorney compensation on client satisfaction and positive results achieved by clients.  As long as the incentive for good legal work and the fear of potential liability outweigh the incentive to cut corners, LMOs should be able to avoid this problem.

 To the extent that these managed care problems cannot be avoided, they must be weighed against the perils of not having any legal assistance.  An ineffective lawyer may not cause as much damage as an ineffective doctor may cause.79  In addition, a client may always use the ineffective assistance of his attorney to have a conviction overturned or to recover damages.  This option mitigates the damage that can be inflicted by a LMO.  Medical decisions, especially those involving permanent conditions or life-and-death situations, sadly cannot be as easily remedied in this way.  In a strange way, incomplete or shoddy representation may be better than no representation at all.  And in the end, an individual still has the ability to walk into court and make the argument pro se... and may be successful in that regard.80

 VI. The Vision Thing: Conclusions Regarding the Future of LMOs.

 Though no legal group has closely applied medical managed care techniques to the provision of legal services, this paper suggests that it can be done.  LMOs will have problems, and the service will not always be perfect.  But the potential benefits from expanded access to the legal system and managed care benefits appear to outweigh those concerns.  Used correctly, LMOs can benefit this society.

1 Law student, University of Iowa College of Law (J.D. expected May, 2001). The author would like to thank Professor Nicholas Johnson for his assistance and patience.  Both qualities were greatly appreciated.  The author would also like to thank the other participants in the Economics of Law Seminar: Armikka Bryant, Scott Finlayson, Allyson Jones, Evan Seamone, Dan Seufferlein, and Molly Vakulskas.  Each class member contributed insights on this topic that were incorporated into this paper.  The author encourages anyone reading this paper to read the works of these other participants as well.  These papers can be found on the Economics of Law course website.  http://www.uiowa.edu/~cyberlaw/elp00
  Finally, the author would like to acknowledge the assistance of Marty Sutcliffe and James R. Parmelee.  Ms. Sutcliffe, another law student at the University of Iowa, provided a valuable independent view of the topic.  Mr. Parmelee, a Pre-Paid Legal Associate, suppliedd the bulk of information regarding pre-paid legal plans used in this paper.  More information about his services can be found at the following web address. http://www.lawsmart.com/prepaidintro.cgi?Assoc=jrparm

2 This paper was completed in accordance with the Economics of Law Seminar course requirements.

3 A recent article notes that the "private legal industry generates revenues of approximately $100 billion each year."  Thomas E. Baker, Tyrannous Lex, 82 IOWA L. REV. 689, 693 (1997).

4 See Janet Reno, Essay: Law Day 1997; A Legacy of Public Service, 26 CAP. U.L. REV. 227, 229 (1997).

5 See AMERICAN BAR ASSOCIATION, LEGAL NEEDS AND CIVIL JUSTICE: A SURVEY OF AMERICANS; MAJOR FINDINGS FROM THE COMPREHENSIVE LEGAL NEEDS STUDY 17 (1994).

6 See Ray Rivera, Living Without Lawyers: Courts Struggle to Help Many Do-It-Yourselfers; Courts Seeing More People Go Lawyer-Free; Do It Yourself Justice: But Lawyerless Ranks Also Clogging Up Courts, SALT LAKE TRIBUNE, Feb. 5, 2000, at D1.  "[A] growing number of people [without lawyers] are tackling complex custody, contract and probate issues, befuddling court clerks and judges and clogging up a system not designed for amateurs."  Id.  According to this article, at least 30 percent of individuals who are not represented by attorneys make mistakes on simple tasks: these pro se litigants use the wrong forms, file the wrong number of copies, make mistakes regarding the method and timing of motions, misunderstand waiting periods, and err when setting hearing dates.  Id.  If these private parties consistently make mistakes on small procedural matters, one can only imagine the confusion that results when the same private parties attempt to argue and resolve complex legal issues without the assistance of counsel.

7 See AMERICAN BAR ASSOCIATION, supra note 5, at 17.

8 See id. at 17-20 (discussing the types of legal issues not resolved with the assistance of counsel and the reasons for the omission).

9 See Economics of Law Seminar Course Discussion with Nicholas Johnson, Professor of Law, University of Iowa Law School, Sept. 7, 2000.  During this class, Professor Johnson was discussing the concept of "private attorneys' general".
  Briefly, the term refers to the actions of attorneys to seek and punish violations of certain laws that Congress has created with multiple or punitive damages.  These additional damages create an incentive for an attorney to enforce this area of law where it may previously have been unprofitable to do so.
  Double and treble damages cannot often be found in landlord-tenant law.  Some property laws do, however, attempt to deal with the apparent unprofitability of tenant cases by allowing attorneys to recover "reasonable attorney's fees" in a suit against a landlord.  See TEX. PROP. CODE ANN. § 92.109(b)(2) (providing for attorney's fees in a suit to recover a security deposit from a landlord).

10 See infra Part III.

11 See infra Part IV.

12 See infra Part V.

13 See infra Part VI.

14 The author concedes that there are many other possible solutions to this problem.  Some of those alternative solutions may be superior to the one suggested here.  This paper only attempts to examine one potential solution.

15 See Bruce D. Platt and Lisa D. Stream, Dispelling the Negative Myths of Managed Care: An Analysis of Anti-Managed Care Legislation and the Quality of Care Provided by Health Maintenance Organizations, 23 FLA. ST. U.L. REV. 489, 491-92 (1995).

16 See id.

17 See Encyclopedia Britannica, Health Maintenance Organization (visited Oct. 17, 2000) http://www.britannica.com.

18  See What Is An HMO (Health Maintenance Organization) (visited Sept. 27, 2000) http://www.hmopage.org/hmohow.html.

19 See Introduction (visited Oct. 17, 2000) http://mahmo.vh.shore.net/MAHMO/hmos.html (discussing the development of a network).

20 See What Is An HMO (Health Maintenance Organization) (visited Sept. 27, 2000) http://www.hmopage.org/hmohow.html.

21 See Introduction (visited Oct. 17, 2000) http://mahmo.vh.shore.net/MAHMO/hmos.html (defining "service area").

22 See id.  (discussing the fixed rate).

23 See Introduction (visited Oct. 17, 2000) http://mahmo.vh.shore.net/MAHMO/hmos.html (describing this requirement).

24 See What Is An HMO (Health Maintenance Organization) (visited Sept. 27, 2000) http://www.hmopage.org/hmohow.html

25 Id.

26 See U.S. News and World Report, Are HMOs The Right Prescription? (visited Oct. 17, 2000) http://www.usnews.com/usnews/issue/971013/13hmos.htm.  These practices are obviously controversial and unpopular with consumers.  These practices will be discussed in more detail infra Part III.

27 See id.

28 Id.  This controversial topic shall be discussed with other HMO consumer complaints infra Part III.

29 See What Are HMOs? (visited Oct. 17, 2000) http://mahmo.vh.shore.net/MAHMO/hmos.html.  This effort can employ a variety of different programs, including nutrition programs, smoking cessation assistance, weight reduction assistance, CPR training, and even discounts at health clubs.  Id.

30 Id.  The services provided under this wellness function may include "routine physicals, mammograms, blood pressure tests, and cancer screenings.  HMOs also cover prenatal and well-baby care."  Id.

31 See Aetna U.S. Healthcare, Frequently Asked Questions (visited Sept. 27, 2000) http://www.aetnausch.com/help/faq_healthplan.html (stating this principle).

32  See Myths (visited Oct. 17, 2000) http://mahmo.vh.shore.net/MAHMO/myths.html (noting that the HMO can also require network providers to meet rigorous standards).

33 Id. (citing diabetes treatment studies reported in the Journal of the American Medical Organization as support for this assertion).

34 See What Is An HMO (Health Maintenance Organization) (visited Sept. 27, 2000) http://www.hmopage.org/hmohow.html (noting this fact); see also What Are HMOs? (visited Oct. 17, 2000) http://mahmo.vh.shore.net/MAHMO/hmos.html (adding that while ordinary insurance only covers 80% of most medical payments, HMOs usually have "minimal or no co-payments and do not require members to pay deductibles."

35 See id. (citing this benefit).

36 See id. (citing this benefit).

37 See id. (citing this benefit).

38 See How Does an HMO Work(visited Sept. 27, 2000) http://www.hmopage.org/hmohow.html for possible restrictions on this ability.

39 Id.

40 See CNN (visited Oct. 27, 2000) http://www.cnn.com/HEALTH/specials/HMOs/HMO.Debate.2/9811/right.wrong/index.html (discussing these complaints and their effect on the industry).

41 See generally http://www.hmopage.org for examples of such charges.  This site also includes pages like the "Managed Care Atrocity of the Month" and the "Managed Care Hall of Shame" that include real stories of illness prolonged and medical difficulties suffered by HMO members due to asserted denials of legitimate claims.

42 For a graphic example of these consequences, read Death By HMO by Dorothy Cancilla.  Information about this book may be found at http://www.deathbyhmo.com.

43 See Jeffrey W. Stempel, Symposium: Embracing Descent: The Bankruptcy of a Business Paradigm for Conceptualizing and Regulating the Legal Profession, 27 FLA. ST. U.L.REV. 25, 98 (1999).  Mr. Stempel provides one example where an HMO created a situation that encouraged less specialized care when it was, in fact, medically necessary.  Mr. Shea, a member of an HMO named Medica, made several visits to his primary care physician complaining of "chest pains, shortness of breath, muscle tingling, and dizziness."  Id.  During these visits, Mr. Shea discussed his "extensive family history of heart disease."  Id.  Despite these warnings, the primary care physician refused to refer Mr. Shea to a cardiologist.  Id.  When the symptoms did not improve, Mr. Shea offered to pay for the specialist himself.  Id.  At that time, the primary care physician "persuaded Mr. Shea, who was then forty years old, that he was too young and did not have enough symptoms to justify a visit to the cardiologist.  A few months later, Mr. Shea died of a heart failure."  See Stempel, supra, at 98.  Mr. Shea did not know that Medica created incentives that rewarded doctors who did not make referrals to specialists, and that even docked physicians a portion of their fees if those physicians made "too many" referrals.  Id.

44 See U.S. News and World Report, Are HMOs the Right Prescription? (visited Oct. 17, 2000) http://www.usnews.com/usnews/issue/971013/13hmos.htm.

45 Id.

46 Id.

47 See id. (stating that 182 laws on managed care had been passed in "this year" [presumably the year 2000], as compared to 100 in 1996.)

48 For more specific information regarding the federal legislative response to these healthcare complaints, see the debate over the proposed Patient's Bill of Rights (last visited Sept. 27, 2000) http://www.cnn.com/HEALTH/9907/12/patients.rights.

49 See Myths (visited Oct. 17, 2000) http://mahmo.vh.shore.net/MAHMO/myths.html (asserting that the realignment of financial interests to preventative care and wellness programs are in the best interests of the industry, doctor, and patient. These answers do not adequately explain, however, why undertreatment of medical ailments is necessarily better for the patient than overtreatment of those same ailments.)

50 Id. This does not state, however, that the review board consists of practicing medical health professionals.  The medical training of a review board mitigates against the charges that care decisions are being decided by nonprofessionals, but does not address the complaint that care decisions are being decided by individuals other than the treating doctor.  In addition, it is hard to imagine that the review board or the "plan doctor" would be willing to put the potentially expensive needs of an individual patient over the "wellness" of the HMO itself.

51 See Russell G. Pearce, Law Day 2050: Post-Professionalism, Moral Leadership, and the Law-As-Business Paradigm, 27 FLA. ST. U.L. REV. 9, 12-13 (1999) (Pearce predicts that comprehensive legal insurance plans offered by LMOs will become part of most employee benefit plans and will remain options for individuals that can afford them. Id. He adds, however, that LMOs make services affordable by limiting "consumer control of the delivery of services". See id. at n.21.); Ted Schneyer, Professional Discipline in 2050: A Look Back, 60 FORDHAM L. REV. 125, 126 (1991) (stating that in the future, individual clients are protected from attorney misconduct by the "internal security offices" of the LMOs, which can simply drop offending attorneys from their network).

52 At least one article discusses the perils of unquestioning deference to business principles and in the practice of law.  See Stempel, supra note 43, at 100.
Unfortunately, lawyers cannot be smug about the degree to which the doctors have surrendered to the dark side of the business paradigm's force.  Law's turn to test the intestinal fortitude of the profession is coming or may already be upon us.  I refer to the increasingly prevalent insurance company attempts to control attorney professional judgment in liability insurance defense assignments.  It is almost perfectly congruent with the managed care evil to which the doctors seem to have succumbed.
  The author of this paper shares Mr. Stempel's concerns about problems developing from application of managed care principles to the profession of law but still believes that a LMO can retain most of the managed care benefits inherent in the medical model while minimizing the problems found in the HMO system.

53 These services provide a broad range of legal services in exchange for a low monthly fee.  Depending on the monthly charge, these services can be somewhat limited.  More complex services that are not covered by the monthly fee can usually be obtained from the plan's attorneys at a discount.  See http://www.prepaidlegal.com for a good example of this sort of service.

54 One example can be found at the "LMO Legal Group" website.  See LMO Legal Group, Small Business Plan (visited Sept. 27, 2000) http://www.yathlete.com/ppl/small.htm.  This service provides legal services like document review, telephone consultations, and trial defense benefits for clients covered by a monthly fee.  Id.  The plan limits each of these benefits, but additional services can be obtained at a discounted price.  Id.  These practices are consistent with those offered by pre-paid legal plans.  However, the business does not provide wellness, gatekeeper, or review functions normally associated with managed care.  Id.

55 The best example is the proposal of newspaper columnist Mike Royko.  In excruciatingly funny detail, Mr. Royko describes how an LMO would work.
  The system [of inaccessible and/or expensive legal services] demands change.  We should have a system of National Legal Care that would assure all Americans a lifetime of the finest legal care.  The lowliest purse-snatcher should be assured of legal care equal to that of the wealthiest Wall Street swindler.  And at reasonable prices.  Or no price, for those who don't have money, or prefer spending their money on fun things.
  This could be done by breaking up the big law firms and assigning lawyers to Legal Maintenance Organizations.  Then all Americans could have their choice of which LMO they want to belong to.
  To cut down on waste, the government could establish a bureaucracy - or require states to do it - that would decide how much a lawyer could charge for any service and to reject needless meetings, phone calls, briefs, motions and other bill-padding practices.
They could also set limits on how much lawyers could earn a year and how much they could spend on ties and tasseled loafers.
  The bureaucracy could also set other professional quotas, such as how many lawyers can specialize.  That could force many lawyers who chase ambulances to instead settle family disputes over who inherits grandpa's ... flat.
  And who would administer this new, fair, Comprehensive Legal Care system?  The answer is obvious.  A panel of impartial doctors.
Mike Royko, Americans Deserve Lawyer in Every Pot, CHI. TRIB., Dec. 15, 1993, at 3.

56 One classmate astutely cautioned against an uncritical application of HMO principles to the practice of law. He said that many citizens hate both HMOs and lawyers for good reasons; due to that, he cautioned that any combination of these entities should be performed only if such combination is coupled with the utmost effort to remove the negative aspects of both the HMO and the practice of law. See Conversation with Evan Seamone, September 14, 2000.

57 An insurance maxim warns against insuring objects subject to simultaneous loss.  See Encyclopedia Britannica, Insurable Risk, (visited Oct. 18, 2000) http://www.britannica.com.  The possibility of numerous large payouts occurring all at the same time can bankrupt an insurance provider.  The same holds true for HMOs.  If all members required large amounts of expensive care, there would be no profits or incentive to operate that sort of organization.

58 Insurance companies refer to this phenomenon as "adverse selection".  "Adverse selection occurs when those most likely to suffer loss are covered in greater proportion than others."  Encyclopedia Britannica, Underwriting Principles (visited Oct. 18, 2000) http://www.britannica.com.

59 The Iowa Code of Professional Responsibility Section DR5-107(A)(1) prohibits an attorney from receiving compensation for legal services from anyone other than the client without the knowledge and consent of that party.  These rules are pattered after the Model Code of Professional Responsibility.  This rule only allows LMOs from operating through payments from employers or unions for the benefit of that organization's employees or members with the express consent of the plan members.

This view that the employer is also a client of the LMO, however, creates problems where the interests of the employer conflict with that of the client.  This problem, and one potential solution, is discussed infra note 64 and accompanying text.

60 Insurance plans of any kind depend on the "law of large numbers".  This law states that in "large homogeneous populations it is possible to estimate the normal frequency of common events such as deaths and accidents."  Encyclopedia Britannica, Insurance (visited Oct. 18, 2000) http://www.britannica.com.  Larger samples allow more accurate predictions.

61 Though unlike other benefits packages, legal representation cannot easily be cut off as soon as the individual leaves the employment or the membership of the sponsoring organization.  If, at the time of termination of the employment or membership, the individual has an active case being pursued by the LMO, the LMO cannot simply stop pursuing the individual's claim.  The Comment to Section 1.5 of the ABA Model Rules of Professional Conduct prevents lawyer-client agreements with terms that "might induce the lawyer improperly to curtail services for the client or perform them in a way contrary to the client's interest".  The LMO would be required to pursue the active claim to its conclusion.

62 Some classmates have even suggested allowing LMO attorneys to visit clients at the workplace.  This suggestion benefits members by providing easier access to legal advice.  This suggestion also benefits employers by preventing longer employee absences due to legal consultations.
  Any attempt to introduce an LMO attorney into the workplace, however, must be coupled with protections insuring the independence of the attorney and the privacy of the communications.  See Smart Computing, At-Work Privacy (visited November 9, 2000) http://www.smartcomputing.com/editorial/article.asp?article=articles%2Farchive%2Fg0804%2F20g04%2F20g04%2Easp (describing the breadth of workplace privacy limitations and some techniques used by employers to invade that privacy).

63 See discussion infra note 64 and accompanying text.

64 IA. CODE OF P.R. EC 5-14 ("A lawyer should never represent in litigation multiple clients with differing interests."); EC 5-23 ("[T]he lawyer who is employed by one to represent another must constantly guard against erosion of professional freedom.").

65 Admittedly, this scenario creates the very situation that LMOs attempt to avoid: self-representation or an inability to afford adequate representation.  But with the use of a LMO, the member can at least save money on all other legal costs.  That way, the savings could be used in a lawsuit against the employer.
  And, in this situation, it is important to consider whether limited representation (without allowing the ability to sue the sponsoring organization) is better than no representation at all.  Under this proposal, plan members at least have the opportunity to make that decision.

66 See id.

67 This paper will not discuss mediation or Alternative Dispute Resolution in detail.  A link will be provided here to Evan Seamone's paper on mediation when one is available.

68 See IA. CODE OF P.R. EC 5-20.  This provision allows a lawyer to act as impartial arbitrator or mediator in matters involving present or former clients upon full disclosure of the present or former relationships.   Following the dispute resolution effort, however, the lawyer may not represent any of the parties of the mediation or arbitration in that dispute. This rule does not prevent future representation of either client in situations not involving the original dispute.

69 "Every lawyer, regardless of professional prominence or professional workload, should find time to participate in serving the disadvantaged." IA. CODE OF P.R. EC 2-27.

70 Though the presence of contingency fee arrangements could help ensure the solvency of a LMO, this method of paying for legal services will not be discussed in detail.  For those that are interested in this topic, two ELS seminar participants have prepared papers discussing different aspects of the contingent fee.  Links to the papers of Dan Seufferlein and Molly Vakulskas will be placed here when they are available.

71 Ethical rules prevent fee-splitting with non-attorneys.  See IA. CODE OF P.R. DR 3-102(A).

72 These "checkups" could possibly take place at the workplace or location of the sponsoring organization.  See supra note 62 (discussing this possibility).

73 See http://www.legalopinion.com for a model of a website that offers the type of services suggested in this paper.

74 These plans are discussed supra note 53 and accompanying text.

75 See IA. CODE OF P.R. DR 3-101(A) (stating that a lawyer "shall not aid a nonlawyer in the unauthorized practice of law"); DR 6-101 (prohibiting an attorney from handling a legal matter without adequate preparation or neglecting a client's matter).

76 This function allows an LMO to further the goals of professional responsibility.  See Iowa Code of P.R. DR 7-102(A)(1) (prohibiting an attorney from taking action that would serve solely to "harass or maliciously injure another.")

77 See IA. CODE OF P.R. EC 7-1 ("The duty of a lawyer, both to the client and the legal system, is to represent the client zealously within the bounds of the law....").

78 See IA. CODE OF P.R. DR 6-101(A)(3) (stating that a lawyer shall not neglect a client's legal matter).

79 Chekhov made the point more cynically; he stated that lawyers may only rob you, but doctors may rob you and kill you too.

80 Compare this LMO member to an HMO member who has had a medical procedure denied by a review board.  This patient cannot simply perform the surgery without the doctor.