The shadow legal services market is growing in all directions.
As the bright new day of legal artificial intelligence (AI) dawns—or lawyers’ long professional nightmare of legal AI descends, your choice—the number, scope and utility of AI- and software-driven tools available to anyone with a legal problem is quietly exploding.
Those lawyers and others who want to join this market need to think seriously about the risk of being found to violate the law barring the unauthorized practice of law (UPL). There are concrete steps they can take to mitigate those risks. We’ll explore those in this column.
The Emerging World of Consumer Legal Help
Today, ordinary people can get wills and contracts customized to their personal needs drafted for a fraction of what human lawyers charge.
Services can draft or help people fill out court forms to defend themselves in a collection or divorce case. Other services will review a legal document—say, a lease or employment agreement—and provide a detailed evaluation of its terms and its legal meaning and effect.
Yet other consumer tools can answer legal questions in plain English—What sentence is my son facing for his DUI arrest last night? Can my landlord refuse to return my security deposit when I move out?
And these services can be cheap or free—in any case, they cost less than a human lawyer.
Legal Tech, We Have a Problem
But there’s a problem. Several, actually.
First, of course, these services and tools have to get it right.
Some big brains—human and digital—are cracking that one, as you read this. Some lawyers and public-interest legal organizations, including legal aid groups, are working hard to develop and road test services like this to get the answers right and be as user-friendly as a cheerful and empathetic legal aid lawyer.
So are for-profit businesses, some owned and run by lawyers, some not.
I predict the competence problem will be addressed directly, and AI tools will rapidly become competent at “simple” legal problems and move on to more complex and individualized problems. I expect this will happen sooner than most lawyers believe.
Do You Want to Go to Jail?
Second, bigger problem: all of this could be illegal, and even criminal.
For a hundred years or so, every U.S. jurisdiction has had laws and court rules on the books that say that only licensed lawyers can engage in the “practice of law.” Then they define the scope of what that covered as the “practice of law” in broad, sweeping terms.
For example, one formulation defines the practice of law as “the application of legal principles and judgment with regard to the circumstances or objectives of a person that require the knowledge and skill of a person trained in the law.”
Yes, that is a bit circular. Welcome to the law governing UPL.
Local Variations
Your mileage will vary. UPL laws varies significantly among the jurisdictions. The sweeping breadth of some states’ laws is narrowed a bit in other jurisdictions. And every jurisdiction has all kinds of statutory, case law, and rules-based exceptions. “Patchwork” is a polite way to describe the crazy quilt of UPL law.
Indeed, several public-interest groups have launched challenges to various forms of UPL prohibitions in New York, South Carolina and North Carolina, on First Amendment grounds, but these each involve efforts by nonlawyer humans to provide legal help in the face of UPL prohibitions.
AI and UPL
So, riddle me this unauthorized practice bar exam question.
Suppose an AI tool is trained—successfully—to learn, understand and explain everything about landlord and tenant law and eviction. The maker of this AI embeds it in an app that sells its services for $25 per consultation. The app is heavily advertised outside the county courthouse. And let’s assume the app asks for and analyzes the user’s specific lease terms, payment history and current economic situation, and then provides the user a script for what to file and say in court. Maybe it even provides the user with a paper or pleading to file on their behalf in court. Is that UPL?
Well, if you follow the mainstream approach of most UPL laws, this app is giving legal advice to the user about their specific factual situation—their lease, their payment history, maybe even the landlord’s failure to fix the plumbing. Worse yet, it’s preparing them to represent themselves in court—wait, that’s what lawyers do!
Few UPL laws require that a human be involved. Very few consider whether the activity is done for compensation.
And to be clear, this is not a new problem. Connecticut and New York both prosecuted Norman F. Dacey for UPL for simply publishing his book, How to Avoid Probate!, essentially a forms book that guided readers through forming trusts. (Spoiler alert: Dacey lost one and won one.) And Parsons Technology Inc. lost its UPL battle in Texas courts over its publication of Quicken Family Lawyer—just selling the will-writing software was held to be UPL—until the Texas legislature amended Texas’ UPL statute to specifically say software-driven tools were not UPL. That law remains on the books.
Still, for decades now, there hasn't been much meaningful UPL enforcement of people selling legal help in form books. Nobody has dared to try shutting down TurboTax.
Enter AI
That brings us to the problem. As the bright new day of legal AI dawns, innovators are trying to use technology—software, bots, AI and other tools—to bring legal help to consumers who need it and are often willing to pay for it. But they are faced with the yawning uncertainty of whether what they are doing is illegal, whether they will get sued or whether they may even be prosecuted as criminals for doing so.
In this author’s opinion, shared by many who work in the field, UPL is one of the two biggest impediments to innovation in legal services—the other being the ban on fee sharing with nonlawyers.
So let’s assume you are an innovator—lawyer or not—exploring the use of AI to deliver legal help to consumers without lawyer involvement. You know that UPL enforcement could be a risk to your service. How can you mitigate your risk in providing an AI- or software-driven service that provides legal help?