Is the Legal Profession, Is the "ABA-Legal Academy Cartel," as Future Ready for Alternative Business Structures as "Professional Legal Services" Vendors Are?

Readers of Richard Susskind's The Future of Law: Facing the Challenges of Information Technology (OUP, 1998) and The End of Lawyers?: Rethinking the Nature of Legal Services, Revised Ed. (OUP, 2010) can already see forecasted changes in the provision of legal services. From e-commerce sites offering fill-in forms for routine business and personal transactions for the individual to LPOs providing document review and related work for corporations and law firms, a de facto distinction between lawyer services and legal services already exists. The class action lawsuit against LegalZoom for unauthorized practice of law in Missouri might have tested the boundaries of distinguishing between purely lawyer services and legal services not requiring a lawyer but as Mark Giangrande wrote about the settlement of the lawsuit before it went to trial, it "sounds as if the company is buying off the plaintiffs." Mark adds

I can only wonder how this settlement will stop any other enterprising attorney from attempting to shake down the company for cash with a future suit.  We'll see if the settlement extinguishes future claims of unauthorized legal practice

Do note that LegalZoom has sued the North Carolina State Bar in an effort to gain registration for its legal services plan according to the ABAJ report.

On 3 Geeks, Toby Brown's has posed the issue in terms of deregulation of the practice of law. He doesn't use the "nasty" characterization "ABA-Legal Academy cartel," but I will. See Is Practice of Law Already Deregulated? (Sept. 5, 2011). Two comments to that post and Brown's response hit the mark:

Jordan Furlong:
 
I expect that a distinction will soon be made that officially separates a narrower "lawyer services" band from the broader "legal services" category. Something like this already exists in England & Wales, where legislation divides law-related tasks into "reserved legal activities" (generally, lawyers only) and "unreserved legal activities" (generally, anyone and their grandma). UPL as we know it, accordingly, stands a very good chance of being an empty vessel before the end of the decade, maybe sooner.

What we need to acknowledge as a profession is that "the practice of law" as we know it today is something of an historical anomaly: lawyers have long been performing many law-related activities without competition mostly because there wasn't anyone else around to compete. Our exclusivity emerged from the fact we were the only halfway competent entrants in the market, not from a time-tested demonstration of skill so superior that it required a ring-fenced franchise on legal services.

The challenge in addressing this issue is defining the practice of law in a defensible way, carving out those activities exclusive to a lawyer.

In my past experience with a mandatory bar, efforts to provide a useful definition always fell short. I recall one dialog where the only defensible ground for lawyers was appearing before a court of law. Everything else could be done by non-lawyers.

So I suggest caution to those looking for the hard-line behind which lawyers can safely stand. We may find not much space behind that line and much of what lawyers currently do pushed out into the open.

Jerome Kowalski:
 
The fact is that while nobody was paying attention, a host of unregulated and unlicensed providers of legal services (perhaps we may not have a precise definition for the”legal services industry, but as U/S. Supreme Court Justice Potter Stewart said of defining pornography “I don’t know what it is, but I know it when it when I see it”), in the form of legal project outsourcing companies and Internet based providers of legal servicers have already taken significant market share.

And Toby Brown's reply to both:

You are both hitting on the definition of the practice of law issue. The challenge in addressing this issue is defining the practice of law in a defensible way, carving out those activities exclusive to a lawyer.

In my past experience with a mandatory bar, efforts to provide a useful definition always fell short. I recall one dialog where the only defensible ground for lawyers was appearing before a court of law. Everything else could be done by non-lawyers.

So I suggest caution to those looking for the hard-line behind which lawyers can safely stand. We may find not much space behind that line and much of what lawyers currently do pushed out into the open.

See also Toby Brown's follow-up 3 Geeks post, Growing Chorus on the Deregulation of the Practice of Law? (Sept. 25, 2011)

I'm not sure deregulation of non-lawyer required services will be pushed completely out into the open for all legal services but one may say that is already the case with LPOs. Remember the ABA's Ethics Opinion? The ABA Ethics Committee noted that its lacks authority to express an opinion about whether any particular service provider is engaging in unauthorized practice of law, leaving that call to state bar associations. See ABA Ethics Opinion on Legal Outsourcing: Vendor Speak, Legal Processing Outsourcing (Sept. 8, 2008). Quoting from the post, Mark Ross, Vice President of LawScribe takes a moderate position:

The Opinion is simply another newsworthy item relating to the LPO industry, nothing more and nothing less." "My personal belief is that the tipping point is client driven and that clients' perception and attitude to LPO will be influenced by numerous factors, including the current state of the economy, the rising costs of junior US qualified junior associates and litigation generally, the commoditization of certain elements of the legal function, and yes admittedly, increased press exposure to the concept of LPO."

(Emphasis added.)

For a more "bang the drum" reaction, see Pangea3's ABA Blesses Legal Outsourcing in August Ethics Opinion. Was this the "tiping point" where TR Legal started to take LPO seriously enough to crunch numbers for an additional revenue stream, one that eventually led to acquiring Pangea3? Hell if I know but TR Legal did acquire Pangea3 in Nov. 2010. See Thomson Reuters Acquires Pangea3: Gives Thomson Reuters a leadership position in fast-growing legal process outsourcing market press release with its "dateline" tag, "NEW YORK and MUMBAI, India, Nov. 18, 2010." That was followed a scant two or so months by TR-Pangea3's on-shore LPO hiring ad. See Barred in Any US Jurisdication, TR Legal Still Wants to Hire You [for LPO work]. See also the ABAJ's initial coverage, Vendor or Competitor? Pangea3 Purchase Pleases Some, Worries Others and the ABAJ's follow-up story, Thomson Reuters Hiring Attorneys for New LPO Outfits in Michigan, Texas:

When we reported Thomson Reuters’ acquisition of Indian legal process outsourcing company Pangea3 in the February issue, the publishing giant hadn’t yet disclosed where it would build document review centers in the U.S., aimed to mirror those overseas. ... The company is hiring lawyers “barred in any U.S. jurisdiction” to “build multiple document review project teams” in “anticipation of establishing a document review facility in Ann Arbor, Mich. ... [and] a Carrollton, Texas [facility]. When we inquired about the number of lawyers to be staffed in Ann Arbor and asked whether any other U.S. facility locations have been planned, Thomson provided a vague response. "As we've mentioned, we see a multishore, 24/7 operating structure as key to supporting Pangea3 customers in all parts of the world. We're working on this now, and will keep you posted as things progress," a company spokesman wrote in an e-mail."

Let's give credit where credit is due. TR Legal, Professional, whatever, certainly knows how to commodize legal publications with at best marginally qualified editorial staff, so extending this business model to LPO is a no-brainer even if it turns a vendor into a competitor.

Outside of LPO, I would hope some routine legal services require some sort of standalone licensing or certification. I'm thinking in terms of state professional licensing, not ABA, perhaps something akin to the regulation of the insurance industry, for providing legal services to the masses. The gist behind LLB's two-part series of "Providing Routine Legal Services to the 'Masses' in the 21st Century" posts, listed below, is that many people need affordable legal services for fairly routine matters that do not require a lawyer but cannot obtain them outside of the e-Commerce market because of the current unauthorized practice of law standard.

In Brown's second 3 Geeks post, he calls attention to a recently published Brookings Institution monograph, First Thing We Do, Let's Deregulate All the Lawyers (Aug. 2011) by Clifford Winston, Robert W. Crandall and Vikram Maheshri. A big hat tip for the cite. Just ordered the work to see where the authors stand on this issue and the arguments they make. Do check out Brown's current 3 Geeks posts. Hopefully he will be following up on this topic with additional posts.

Bread and Butter Distinctions. The issue may be framed as what is the "bread and butter" work that requires licensed attorneys to perform and what "bread and butter" legal services work does not require a lawyer? It's going to be difficult to draw a bright line test. Certainly representing a client in litigation is one area where a licensed attorney is needed in most matters. Personally I cringe when pro se patrons come to our little county law library for non-criminal court matters because we are restricted in the assistance we can provide. I believe those restrictions on law librarians are sound but wish some sort of "right" to counsel existed in civil matters. Not likely, and legal services agencies staffed by attorneys are overloaded with work.

However, in terms of routine document creation matters, even routine court filings, affordable legal services by way of qualified and licensed legal assistants working independently of law firms and eCommerce sites  could be viewed as an alternative business structure for the provision of legal services if licensed by state agencies. The ABA-legal academy cartel might not like it but a vendor-turned-competitor like TR Legal (or any other major "professional legal services" vendor) can see the revenue generation potential based on the H&R Block storefront model for legal services not requiring attorney staff. The storefront model for attorneys didn't work but a legal services model could. WEXIS could hire qualified legal assistants who have access to WEXIS online resources for standardized work product creation specific to state legal requirements that are pretty boilerplate but difficult for the average person to understand in sufficient specificity...

And this might not be a "bad thing" since the market for licensed routine personalized legal service at an affordable price is huge and needed by folks who can't afford an attorney. There is market for this. H&R Block has proved the concept for storefront tax prep. Quicken has proved the concept on the Web by way of apps. I do not see how the ABA-legal academy cartel can stop progress. "Bread and butter" business structures will eventually be bifurcated into those which require a JD and those which do not. Consumers will have the option to retain JD-expertise for the latter. However, like the example set in tax prep, individual and even some corporate structures  who already do not need to toil for hours over tax formalities or hiring an accountant to do the work, will find  that similar routine legal matters provided by legal services products and services which do not require a lawyer "cost effective." This will trump the two current options: lawyers or legal DIY. [JH]

Providing Routine Legal Services to the "Masses" in the 21st Century:

• Part One: Internet-Based Legal Document Prep Services
• Part Two: A Prescription for Allowing Main Street-Based Services Provided by Licensed Legal Assistance Practitioners