Technology and the Unauthorized Practice of Law

My co-author for this 3-part series on the Fight Against the Unauthorized Practice of Law is Billie Tarascio, owner of Modern Law, a family law firm serving the greater Phoenix area, and Access Legal, a legal technology company that provides cloud based legal document automation for law firms and the public.

As technology becomes smarter and automation more prevalent, lawyers and bar associations have grappled with the question of whether the use of technology constitutes as the unauthorized practice of law (UPL). Layperson legal advocates and paralegals also are often accused of UPL. So what exactly is UPL? And how do lawyers fight against it? This is the first in a three part series where I am joined by practicing attorney Billie Tarascio.

To answer the above questions, we must first define the practice of law. Let’s use my home state of Arizona as an example. In Arizona Supreme Court Rule 31 (a)(2)(A), they define the practice of law as: “Providing legal advice or services to another by:

  • Preparing any document in any medium intended to affect or secure legal rights for a specific person or entity;
  • Preparing or expressing legal opinions;
  • Representing another in a judicial, quasi-judicial, or administrative proceeding, or other formal dispute resolution process such as arbitrations and mediations;
  • Preparing any document through any medium for filing in any court, administrative agency or tribunal for a specific person or entity; or
  • Negotiating legal rights or responsibilities for a specific person or entity.”

This definition immediately seems problematic. What about when a person picks up free forms at the court or purchases legal forms at a bookstore and asks a trusted friend or parent to help them fill out the document. This, technically, appears to be the unauthorized practice of law. What about services like LegalZoom, Rocket Lawyer, or Arizona-based legal document software company Access Legal*? These legal software companies provide documents intended to be filed with the court or used to create contracts and legal rights. But based on Arizona’s definition, couldn’t we infer these examples as the unauthorized practice of law? What about free legal forms offered by large law firms online? What about realtors and title companies that facilitate the sale or refinance of a house? What about online analysis of cases that have been released? Isn’t this preparing and expressing legal opinions? These are all instances where people prepare documents that are intended to secure legal rights.

Perhaps this is why Arizona has created a class of individuals who may prepare legal documents but may not provide legal advice: certified legal document preparers. For companies like LegalZoom and Access Legal, becoming a certified legal document preparation entity seems to offer protection against the unauthorized practice of law. However, if the company and its software behave too intelligently or intuitively, it may be accused of providing legal advice rather than legal information

What is the difference between legal advice and legal information? It seems impossible to answer that tricky question.

Demand and Supply

Normally, we talk about supply and demand. However, in the legal profession, the pendulum has swung the opposite direction with demand driving the supply of alternatives to the traditional law firm approach. Whether it’s accessibility, technology, pricing, or payment, legal service consumers are simply demanding technology and ignoring the supply of traditional law experience.

To take it one step further, many traditional law firms have it backwards: Forming a law practice with an in-person intake process and hourly pricing is already behind the times. To put it simply, practicing law without leveraging technology for document creation, knowledge management, or practice development (aka sales) is not sustainable. Building a practice and expecting that everyone will recognize their legal needs and flock to the firm is naïve. Providing a great supply of traditional law is not going to sway those four out of five consumers (or one in three small to medium-sized businesses) who have a legal need but don’t seek the advice of an attorney.

Consumers are demanding alternatives to the traditional supply of legal services and having UPL thrown up as a block to legal technology as an alternative is failing. The legal technology market is expanding with niche players appealing to the needs of an array of consumers—divorce, DUI, lease solutions, etc.—and copycats of the industry leaders, like LegalZoom, multiple weekly.

Using Only Smart Software

A recent article, “Four Areas of Legal Ripe for Disruption by Smart Startups,” by Bob Goodman and Josh Harder of Bessemer Ventures, identified four types of promising legal tech ventures:

  1. Process automation
  2. Legal research
  3. eDiscovery
  4. Consumer platforms

An example of one of these promising legal tech businesses: Traklight* provides a consumer-friendly, self-guided platform to capture business information, including intellectual property. The software also moves mundane interview questions out of the legal office and onto the web, while educating users on their legal needs. With Traklight, technology becomes the facilitator, and smart lawyers can leverage the power of the infinite cloud. Again, though, such software capabilities raise questions: Is asking basic questions about a business—and providing all those questions and answers to an attorney—the practice of law? Does providing a business strategy and identifying legal matters—but not resolving them—still constitute the practice of law?

Losing the Legal Battle With Lawyers

Eight state bar associations have filed actions against LegalZoom for the unauthorized practice of law. Of those, one has been sent to binding arbitration (Arkansas), and one, in North Carolina, is still pending. The other six lawsuits have either been settled or dismissed, and LegalZoom is still providing documents to every state. In a nutshell, the plaintiffs have argued that LegalZoom’s decision tree makes legal analyses and provides advice, both of both of which are activities specifically limited to licensed attorneys.

Historically, UPL lawsuits have analyzed the extent to which the preparer (or software) acts as a “mere scrivener” by providing clerical services and whether the software makes decisions and provides personalized recommendations. The claims of the provider also matter. A provider cannot claim to provide “legal expertise,” cannot provide legal advice, and cannot promise services comparable to those of a “top-notch lawyer.”

Now, does public opinion matter? The Texas court in Unauthorized Practice of Law v. Parsons Tech Inc., 179 F. 3d. 956 (5th Cir. 1999) found that Parson’s Technology, DBA Quicken Family Law, was practicing the unauthorized practice of law by providing legal templates. The legislature promptly responded by liberalizing laws to specifically exclude such products as the “practice of law.” UPL rules are designed to protect the public interest, not protect lawyers from competition. Arguably, the public benefit from access to information and resources outweighs the harm to lawyers from software like LegalZoom.

Embracing Technology

When you seek help in any profession, there are two issues:

  1. What do you need?
  2. How can you find these services at an affordable price?

Other professions leverage technology. Think about it: artificial intelligence, collaboration platforms, automation tools, document and project management systems, and the list goes on.

The legal industry needs to embrace technology and stop trying to play the UPL card. By and large the millennial generation has rejected credit cards. Why on earth would they prefer a traditional retainer paid by check in advance to a law firm? Simplicity is key.

Half of Americans need legal help in some capacity each year, but only one in five seek that help from a lawyer. Also, small business owners do not wake up and decide to proactively search out legal help. Instead, they seek legal services when an issue arises. As a business owner, I can say that when I have an issue to solve, I take to the Internet and look for a simple, cost-effective, and quick solution. If I can find a solution where I don’t have to talk to anyone on the phone and can just get it done, regardless of the time of day or day of the week, then that’s the solution for me—and I’m not even a Millennial!

To remain competitive and leverage their time, lawyers must not only embrace, but integrate technology into their practices. That being said, ethics still play a large role. We will examine that next time.

* Full disclosure: Both authors, Mary Juetten and Billie Tarascio, are founders of Traklight and Access Legal respectively.

About Mary Juetten

Mary Juetten
Mary Juetten is the founder and CEO of Traklight and the co-conspirator behind Evolve Law. She specializes in helping companies in transition or startup create sustainable, operational, and financial growth. Her financial credentials and legal degrees provide a foundation for consulting on business or practice improvement. Mary created the only self-guided risk management software platform that creates a custom business risk and intellectual property (IP) strategy and automates the client question and intake process for business, IP, and startup or venture attorneys. Mary is an international writer, who contributes to Forbes, the ABA's Law Technology Today, GoDaddy Garage, and the Lawyerist plus wrote KPIs for Small Law Firms for Thomson Reuters; speaker; and mentor. Mary is on the GLSA Board and leads their marketing committee.

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