By a “legal product” we mean an online consumer-facing digital application (software), for sale or free, that substitutes for the work of an attorney. A legal product offers a legal solution to a legal problem through software and automated processes.
A key difference between a product and a service is that a product can be produced and distributed at scale, while services are delivered on a one to one basis
There are software applications that automate a law firm’s internal work processes that are supported by other organizations that are not the focus of this proposed organization.
There is a need for a focused organization for digital applications that offer online legal solutions directly to consumers.
Examples of “legal product” providers include online document forms providers, (the largest category today), applications that appeal parking and traffic tickets, legal advice bots, applications that submit damage claims to airlines, applications to apply to expunge a criminal record, and applications that change your name or gender marker and other automated legal advisors. The list of these “legal products” is growing at a fast rate.
Consumer-facing legal applications that solve legal problems offer a scalable method of closing the access to justice gap, as the one-to-one services model is too expensive for the average consumer.
There is significant market demand for more affordable, easily accessible legal help.
Many types of providers have now entered this marketplace: online legal document providers, online legal application providers, and virtual law firms to name only a few. The regulatory framework has not kept up with these technology developments. On one hand non-lawyer application providers may violate “unauthorized of practice of law” statutes, and on the other law firms that wish to offer legal products to their clients may find themselves in violation of many rules of professional conduct.
It is time for this growing industry of online legal document providers and other consumer-facing online legal application providers to have its own trade association to establish a best practices framework to enhance and promote consumer protection standards and to provide new pathways to closing the access to justice gap.
The industry should self-police its providers with a self-imposed “best practices” framework that enhances consumer trust in the quality of its products.
There are now literally hundreds of online legal document providers and consumer-facing legal applications providers, both in the United States and internationally, generating millions of legal documents and smart legal solutions a year without the assistance of an attorney. It has been reported that the size of this market I snow in the billions.[i]
Online legal document providers and consumer-facing application providers now include:
- Courts; New York Courts; California Courts
- Packaged software, such as Quicken/Nolo’s Will Maker ; and see Make Your Own Online Will. .
- Online legal form sites, such as US Legal Forms, SmartLegalForms, CompleteCase.com., Willing.com, FormSwift, RocketLawyer; LegalNature, and LawDepot.
- Nonprofit and governmental sites, such as LawHelp Interactive;
- Legal document sites in other countries such as LawOnline, MoreThan and LawPath.
- Corporate filing services such as BizFilings.
- Legal expert systems developers such as Neota, CALI/A2J Author, and Josef.
- Prepaid legal plan providers such as LegalShield (http://www.shakelaw.com/ ); and CLC Legal Services.
- Insurance companies such as MetLIfe’s Wills Center.
- Automated legal advice bot developers. See for example: LawDroid LegalRobot, and DoNotPay;
- Virtual law firms. See for example Director of Virtual Law Firms at: DirectLaw.
Some Relevant History on this Subject:
In 2012,The American Bar Association’s eLawyering Task Force , of which I was co-chair, proposed a set of best practice guidelines for legal document providers which can be downloaded here.
At that time there was little interest by the American Bar Association in imposing a regulatory framework on non-lawyer providers of legal solutions and online legal document providers. so this project was abandoned.
Fast forward, seven years later and we now have a growing industry of not only non-lawyer legal document providers but also legal software publishers offering online legal applications that solve a person’s legal problem at a fraction of the cost of paying a lawyer’s fee. This industry is reported to now be a multi-billion industry.
[ Source: WILL MCKITTERICK, IBISWORLD INDUSTRY REPORT OD5638: ONLINE LEGAL SERVICES IN THE U.S., 4 (2014) ]..
This marketplace has now captured the attention of the organized bar.
State actions will have the most direct impact on consumer-facing legal application providers.
The State of North Carolina, at the urging of the organized bar in that state, recently passed a regulatory scheme that makes it difficult for online legal document providers to operate without expanded legal liability. [Blog post on North Carolina Regulatory Scheme ].
The States of Tennessee and Washington now have in the works similar legislation based on the North Carolina scheme. [See blog post on Tennessee legislation ].
American Bar Association Action
Last summer, the New York State Bar Association proposed a regulatory scheme to be adopted by the American Bar Association. It was withdrawn because of resistance by other ABA Sections, but is now being proposed as Resolution 10A — “best practice” guidelines for approval at the Annual Meeting of the ABA in San Francisco in August, 2019.
Resolution 10A builds on two prior ABA resolutions: 2016’s Resolution 114, which urged providers to include clear and conspicuous information on finding a lawyer, and 2003’s Resolution 103, which offered an earlier set of best practices for legal information web site providers.
There is some speculation that the real purpose of these “ABA Best Practices” guidelines is to spur the states to pass their own form of legislation, as North Carolina has done, and now under consideration in the States of Tennessee and Washington. If other states followed this pattern, it will be the death knell of the emerging consumer-facing digital application industry.
While the initial focus of these regulatory schemes are online interactive document providers, I would predict that there will be attempts to constrain the development of legal expert systems and automated legal advice applications for the same reason – fear of replacing lawyer work with software applications.
The impact of these of these regulatory schemes are three-fold:
- Online legal document providers and consumer facing legal application developers will find it difficult if not impossible to operate in these jurisdictions because of increased cost and exposure to unlimited liability.
- Investment capital for these start-up enterprises will dry up because of regulatory uncertainty.
- Consumers will be deprived of low cost or free alternatives to solving their legal problems further aggravating the access to justice problem in the U.S.
A Conflict of Interest?
There is a problem with the American Bar Association proposing best practices for non-law firm solution providers as it is arguable that a primary purpose of the ABA is to protect the economic interests of its members at the expense of consumer interest in low cost legal solutions.
Law is both a profession and a business. State bar associations and the American Bar Association are both professional associations and trade associations. A “trade association” protects the economic interests of its members. This exists in any profession where money is exchanged for the profession’s services.
The legal profession should not be the “regulator” of online legal document providers and legal application providers. The definition of what constitutes the “unauthorized practice of law” should not be solely in the hands of lawyers, as often this definition is used to limit competition to lawyers and is a constraint on innovation by preventing the emergence of technology-driven alternatives.
[See for example the Florida Bar’s attack on TIKD ]
Developing policies and regulatory schemes should be a collaborative project involving industry interests, consumer’s interest, law firms that want to offer legal products to their clients, and the organized bar.
The ABA Task Group working on “Best Practices for Online Legal Document Providers” consists of representatives of many interested sections of the ABA and is lead by the New York State Bar — the proponent of Resolution 10A.
Included in this lawyer-dominated Task Force is a representative from LegalZoom and a representative from an organization called ResponsiveLaw.
But LegalZoom is not representative of an online legal document provider as its business model is to add a professional review of the document generated by a person and the option for legal advice from an attorney is incorporated in the business model in a Pre-Paid Legal Plan.
Responsive Law is the nation’s leading advocate for the consumer interest in the legal system. It has done an excellent job in expressing the consumer’s point of view, but it doesn’t adequately represent the interests of vendors, publishers, and providers of online consumer-facing applications,
This lack of representation taints the work of this ABA Task Force as its work is not fully informed by perspectives other than the interests of the organized legal profession which is still dedicated to the concept of one-to-one service and biased towards protecting the income of its members, particularly solos and small law firms who are directly impacted by these developments.
The Need for a Separate Organization.
Now is the time to create an Association for the Advancement of Legal Product to promote these ideas so they can flourish.
Marc Andreessen is famously quoted as saying that “software is eating the world”. The legal profession is not immune from the impact of consumer-facing legal software on the way it provides services to its clients and the way consumers will solve their legal problems.
Many solo and small law firm attorneys that I talk to seem oblivious to these technology developments and believe that the one-to-one service model will persist forever despite consumer preferences for alternatives.
Acceptance of legal software products by consumers will require:
- Building consumer trust in legal products;
- Resisting regulatory approaches which constrain development and limit capital investment.
- Enabling law firms to deliver legal products without violating professional rules.
The goals an Association for the Advancement of Legal Product (or something like it) might be:
- To provide a unified and consistent voice for online legal document and consumer-facing legal application providers.
- To promote online consumer facing legal applications as a means towards increasing access to the legal system.
- To collaborate and cooperate with Bar Associations and other policy-forming bodies to form policies and guidelines relating to using consumer-facing legal software in the delivery of legal solutions to the general public.
- To define standards and best practices for providers,
- To provide educational resources to attorneys and the broader legal community on consumer-facing legal applications and the technical, legal and ethical issues relating to using these applications.
- To establish protocols for developing consumer-facing legal software applications that enhance the quality and safety – from a consumer viewpoint – of these products.
- Organize for collective action to enforce through the courts established standards of interstate commerce, First amendment publication rights, and deter anti-competitive behavior.
It will be difficult, if not impossible for individual providers to affect policy making bodies. Real change may require litigation in the courts which requires collective action and financial resources.
This is a call to action for organizations and individuals for are interested in the protecting the concept of consumer-facing legal digital applications that substitute for the work of an attorney.
It’s time for change.
Contact me if you are interested in working on creating this new organization.
Tp keep up to date on developments in the regulation of legal products and online legal document providers you can subscribe to our newsletter using the form on our home page.
I was the founder and CEO of one of the first online legal document providers in 2001 now known as www.smartlegalforms.com and also www.directlaw.com, a company that provides a virtual law firm platform and online legal documents to law firms. I sold my interest in both companies almost two years ago but remain an advisor. I am the CEO of LawMediaLabs, Inc.