In summary

Californians deserve a consumer-first mentality when it comes to legal services, but innovations designed to provide consumers with affordable access need some form of oversight.

By Kevin Frazier, Special to CalMatters

Kevin Frazier is a student at the UC Berkeley School of Law and the founder of No One Left Offline, kfraz@berkeley.edu.

The assault on “big” has hit nearly every industry. Big Mattress met Casper and others. Big Shaving met Harry’s and other upstarts. Big Hospitality met Airbnb, VRBO and the like. Bigness has become a target for tech. And, in many cases, tech has won, or at least introduced meaningful competition that results in better, less expensive products for consumers. 

In the effort to automate and democratize the practice of law, however, Big Law is winning most of the battles.

Consumers deserve access to more affordable legal services — and they appear to be willing to pay for it. According to a Harris Poll, 82% of respondents preferred alternatives to traditional lawyers when dealing with minor legal matters. Roughly three-quarters of those between age 18 and 54 said that they would prefer an online alternative, as did those with lower incomes. But this potential market, which could introduce novel products while also making legal aid more accessible, hasn’t been able to get off the ground.

There have been, without question, a few rotten apples among legal-market innovators. In California, for example, Frankfort Digital Services, a software that prepares bankruptcy petitions, was found guilty of the unauthorized practice of law while attempting to disrupt the arduous and expensive process of filing for bankruptcy. 

Owned and operated by a non-attorney, the site held itself out as capable of providing expert advice on bankruptcy law. According to the 9th Circuit Court of Appeals, the site violated law because (among other reasons): “The software did not simply place the debtors’ answers, unedited and unmediated, into official forms where the debtors had typed them on a screen; rather, it took debtors’ responses to questions, restated them, and determined where to place the revised text into official forms.”

Clearly, this was not the sort of disruption that will help take down Big Law. The company misled consumers on two fronts: first, it falsely suggested it could offer expertise; and, second, it misled consumers as to how their personal information would be used in the legal process. 

Both these flaws could easily be remedied. Lawmakers could require apps related to legal issues to be reviewed by a panel of lawyers selected by each state’s justice department to verify the legal quality. That same panel could provide a statement for consumers outlining explicitly how their information would be used by the app. These lawyers, vetted and trained by attorneys general of each state, would be asked merely to verify the legal soundness of the app in question; the app’s identity could be hidden to reduce the possibility of the panel rejecting it in an effort to protect its own business interests.

These fixes would make it easier for apps to enter the legal space, although a larger issue is specifying what exactly fits into the “unauthorized practice of law.” This definition has long eluded courts. In one head-scratching example, one California court defined the “practice of law” as “the doing and performing services in a court of justice in any manner depending therein throughout its various stages and in conformity with the adopted rules of procedure,” while admitting that “ascertaining whether a particular activity falls within this general definition may be a formidable endeavor.” 

Surely lawmakers in places as innovative as California can come up with specific frameworks for what is required to ensure that startups are providing competent legal service, without requiring that all their employees pass the bar.

An immediate step Californians can take is to push their legislators to adopt a regulatory “sandbox” for innovative legal apps. Utah created such a measure as a means for companies offering streamlined legal services, like Rocket Lawyer, to get off the ground. 

Freed from traditional regulations, approved sandbox participants need only show that their services do not result in levels of consumer harm above those specified by the state entity overseeing the sandbox. If they succeed in staying below that threshold by providing a net positive consumer experience, they are allowed to continue to practice law. 

Californians deserve a consumer-first mentality when it comes to legal services. It’s time to break up Big Law.

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Kevin Frazier has previously written about affordable legal aid for Californians.

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