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Legal Practice Should Make Room for Alternative Service Providers

Jan. 17, 2023, 9:00 AM

There’s a subset of legal services that nontraditional legal service providers can and do perform for consumers at far lower cost. This subset consists of nonlitigation matters that are relatively routine and may be needed, or at least be useful, to the average person sometime in their lives.

They include preparation of health-care directives, powers of attorney, wills, creation of LLCs for small businesses, requests for business licenses, preparation of residential leases, and registration of copyrights.

These services often include the filing of the requisite documents with relevant governmental agencies. Millions of Americans have used such services over the last 10 years, and consumers are using such services more because of their convenience.

Advances in technology and methods have facilitated the emergence of alternative services providers in other professions as well. For example, as discussed in North Carolina Dental Board v. FTC (2015), North Carolina’s dental board sought to restrict non-dentists from providing teeth-whitening services to the public, contending that they constituted “the practice of dentistry.”

Similarly, accountants have found that many of their clients have turned to web-based tax preparation services that provide cheaper and easier options using interactive software provided online.

State Courts

The issue for the legal industry, and ultimately state courts, is whether to make room for these services by not treating them as unauthorized law practice.

Each state defines for itself what specific conduct is to be deemed the practice of law, which only licensed attorneys may provide. State courts may enforce these requirements on nonlawyers by injunctive relief, and unauthorized practice can also be prosecuted as a misdemeanor. Such a regime makes perfect sense as a means of regulating the legal industry and protecting the public.

As part of this regulation, licensed lawyers are subject to professional discipline for violating the legal ethics rules that govern the practice in their state. There’s no reason to abandon that basic regulatory framework for the legal profession.

But the profession should be sufficiently self-aware of its inefficiencies to look with favor at this modest re-drawing of boundary lines that provides consumers with less-costly options. Even under traditional standards, the demarcation line for these types of services as being within or outside the practice of law are not entirely clear.

Even before the computer age, legal forms for all sorts of legal transactions could readily be purchased, without controversy. The purchaser could ask for a form for a promissory note, a residential lease, sale of property, or a will, and then simply fill in the blanks and use it, all without consulting a lawyer.

Similarly, much of the work of the current web-based service providers begins with such legal forms—often, customized for a particular state—and goes from there by enabling consumers to complete the forms via interactive software features, often with spell-check features and fixes of internal inconsistencies. The difficult area is when legal advice is provided in connection with such forms.

In that regard, some providers also provide a link to individual attorneys, so that consumers have an option to personally consult with a lawyer for an added fee. If the consumer exercises that option, presumably those individual consultations do create attorney-client relationships because legal advice from an attorney is being sought and given.

In those instances, the lawyer should be bound by the ethics rules in providing such advice, however limited the advice might be.

Make Room for Alternatives

The legal industry should extend the benefit of the doubt in allowing such service providers to compete, so long as they provide clarity to the consumers as to precisely what they are offering and what they are not offering.

If consumers of legal services are to be provided with nontraditional choices, the consumers should be allowed to make informed decisions.

Accordingly, the nature and limitation on of those services must be prominently and unambiguously explained on the web site so that the consumer is made fully aware that they will not receive the important benefits of an attorney-client relationship.

The consumer should know that they will not have the protection of attorney-client privilege or the security that comes with retaining a licensed lawyer who can be disciplined for an ethical violation committed in handling their matter. Consumers should also be advised about the service provider’s liability insurance in the event of negligence.

But with these provisos, the legal industry should be tolerant of these competitors, and perhaps look for ways they too can leverage technological advances and the growing acceptance of virtual platforms to reduce their own overhead and provide less-costly services.

There is still plenty of profitable work left for skillful lawyers in matters that are well-suited to their abilities and training.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

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Author Information

Arthur D. Burger is chair of the professional responsibility practice group of Jackson & Campbell P.C. He represents law firms and lawyers in matters related to legal ethics, legal malpractice, and the law relating to lawyers.