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January/February 2020

Future Proofing

Adjusting Your Game Plan to Fit Our Changing Rules

Dan Pinnington and Reid Trautz

In February 2016, the ABA House of Delegates passed the ABA Model Regulatory Objectives for the Provision of Legal Services encouraging state supreme courts to use these objectives when reviewing lawyer regulation within their state and to explore expanded legal services delivered by “nontraditional providers.”

For several years it seemed that state bars largely ignored this encouragement. However, state review and modification of nontraditional provider regulation picked up steam last summer, especially with the release of 16 regulatory reform options from the California Bar’s Task Force on Access Through Innovation of Legal Services (ATILS).

To help lawyers track potential regulatory changes, the ABA Center of Legal Innovation launched a helpful new website with a long but explanatory name: This website catalogs innovations in state regulatory frameworks that have the potential to lead to innovation in the delivery of legal services that focus on increasing consumer access to justice. The website provides some valuable information about the changing regulatory landscape.

Several states have taken steps to allow very limited representation by nontraditional providers. Arizona allows document preparers, and New York has court navigators in the housing courts in the five boroughs of New York City. Washington created a system of limited license legal technicians—essentially independent paralegals—to help in family law matters, with the option to expand to other areas of the law in the future.

Utah is the most recent state to move forward with regulatory changes as described in the August 2019 report Narrowing the Access-to-Justice Gap by Reimagining Regulation.

Pulling no punches, the report states:

“The potential benefits for access to justice from legal disruptions are significant. If legal services can be provided to litigants and those with potential legal problems in a much more cost-effective way, then true access to justice becomes possible for millions of people who currently get no help and do nothing. Technology, especially online legal services, exponentially increases the potential to improve access to justice. But it also simultaneously increases the risk of legal and practical harm to users if those services are not of sufficient quality. However, the potential benefits are too large to pass up, so changing how legal services are regulated to both open the door to innovation and protect litigants and other users in responsible ways is critical.”

The report recommends loosening restrictions on lawyers while creating a new entity to regulate nontraditional legal service providers using a novel “regulatory sandbox” to test other delivery methods. It took the Utah Supreme Court less than a week to adopt these recommendations and direct their prompt implementation.

For decades, notaries in the Canadian provinces of British Columbia and Quebec have been able to offer services well beyond those of a traditional notary—they can provide services on noncontentious matters such as real estate transactions and the drafting of wills and powers of attorney, leases and other documents. They may not get involved in litigation or argue cases before a judge.

As was the case in the U.S., alternative business structures were strongly resisted in the Canadian jurisdictions that considered them in recent years. But there have been other changes in Canada that have increased access to legal services through nontraditional providers. In 2007, Ontario became the first province in Canada to regulate its paralegals through licensure, allowing them to practice independently without supervision by a lawyer in defined areas such as small claims court, traffic court, tribunal work and minor criminal matters. As an access to justice initiative, earlier this year the Law Society of Ontario approved a registration system that enables lawyers and paralegals who are employees of charities and not-for-profit corporations to provide professional services to the public. There is also some discussion in Ontario about allowing paralegals and others to assist the public with certain family legal services, including areas such as process navigation, completion of some forms and possibly other areas outside the courtroom context. The Law Societies of Alberta, Saskatchewan and Manitoba are working collaboratively to explore innovation in legal services.

In the U.S., California is the elephant in the room. With about 13 percent of all lawyers in America, members of the bar will speak up, and what they say will likely have a significant influence. However, there will be other strong and persuasive voices in California, especially the technology companies and their angel investors in Silicon Valley. Undoubtedly, they will push for changes in who is permitted to deliver legal services in California. Moreover, from an internet perch in California, these new providers may be able to deliver legal services throughout the country.

The California Bar recently created the Task Force on ATILS to review the current state of legal service delivery to the public and deliver a report by January 2020. The task force has proposed 16 new regulatory options to the bar and the public that it believes would improve delivery of legal services.

Some are alternate proposals in degree and would do the following:

  • Provide a safe harbor to certified/approved entities (such as technology companies or law firms that partnered with technology companies) to allow nonlawyers to deliver legal services using artificial intelligence or other technologies that perform the analytical functions of a lawyer. Those approved entities must be regulated by the bar or a similar new entity (funded by regulated service providers) and have privacy protections similar to the attorney-client privilege and client confidentiality.
  • Permit nonlawyers to own or have a financial interest in a law firm and permit lawyers to share fees with others provided there is no real interference with a lawyer’s professional judgment in delivering legal services.
  • Make changes in lawyer advertising rules similar to those recently made to the ABA Model Rules.

Reid attended the public hearings that occurred in August and was struck by the determination the task force appears to have with respect to making changes to the existing regulatory structure. How far these recommendations go and how quickly they will be reviewed by the California Bar Board of Governors and the state supreme court remain unclear. And with over 170,000 licensed lawyers in California, any changes there will likely be felt across the U.S. and beyond.

As the re-regulation of lawyers and new regulation of nontraditional providers begin to gather steam, we encourage all lawyers to continue to track these changes, especially those in your jurisdiction. Take time to consider and discuss these changes within your firm and bar, and discuss how your firm can adapt to take advantage of the opportunities these changes will create.

Dan Pinnington

Dan Pinnington is the president and CEO of Lawyers’ Professional Indemnity Company and was the driving force behind the innovative practicePRO claim prevention initiative. He is a past editor-in-chief of Law Practice and was chair of ABA TECHSHOW 2001. [email protected]

Reid Trautz

Reid Trautz is the director of the Practice and Professionalism Center of the American Immigration Lawyers Association. He is a long-standing member of the ABA Law Practice Division, serving as chair of ABA TECHSHOW 2012, and currently he serves as co-chair of the Futures Initiative. [email protected]