How Goes the Fight Against UPL: Is Technology Winning?

When I co-authored a Clio article with Billie Tarascio in 2017, I was not a practicing attorney and Arizona had yet to adopt its groundbreaking alternative business structures (ABS) and paraprofessional laws. In The Fight Against UPL: Winning with Technology, we stated that lawyers were losing the battle by tagging technology use as the unauthorized practice of law (UPL), and further, this protectionism was not serving the client nor the profession. We encouraged lawyers to accept technology and leverage it for clients’ benefit and to improve their firms. Finally, we cautioned the profession to stop equating legal technology with UPL and take a closer look at clients’ needs.

Fast-forward five years, add in a pandemic, and we’ve experienced a seismic shift in the legal industry in the three areas below:

  • Technology leaders inspired client-centered change;
  • Legal advice victory over UPL by Upsolve; and
  • Alternative business structures became a reality.

Client-Centered Change

Founded in 2014, Evolve Law’s slogan was the Darwin quote, “It is not the strongest of the species that survives, nor the most intelligent. It is the one that is most adaptable to change.” In the years leading Evolve Law, we constantly had to remind lawyers that technology did not replace legal services, but instead it allowed them to better serve their clients. At several events, there were healthy debates about the need for innovation and technology for the actual delivery of legal services, not just the use of software for administrative functions. And of course, there were discussions about the line between providing education or legal information versus legal advice which is discussed in the next section.

In my experience, many attorneys do not look for innovation outside the profession and much emphasis is placed on the workflow from a lawyer’s point of view, rather than the client’s. In other industries, the client or customer is at the center of any process, and all technology or innovation is evaluated based on their needs.

Legal practice management company Clio has been a trailblazer within the industry for a decade, with a stated mission to transform the legal experience for all. Just before the pandemic, CEO Jack Newton authored a book titled The Client-Centered Law Firm. This approach has caught on particularly over the past years as lawyers had to adapt to remote work and delivery of legal services.

As we all experienced, during the pandemic, technology became critical to communication with clients. Clio’s Legal Trends Report identified that 79% of clients expect a response to their inquiry within 24 hours.  The report also noted that clients preferred to meet virtually instead of in-person. However, the pandemic has greatly impacted the work-life balance for many lawyers, particularly those who serve clients outside of regular business hours. Burnout and resignations are at an all-time high. Jack Newton commented below on how the current situation impacts both firms and technology adoption:

An important concept for lawyers to embrace is that of antifragility, a term coined by Nassim Nicholas Taleb to describe systems that thrive in the face of adversity and other stressors. The 2022 Legal Trends Report demonstrates clearly that a subset of law firms — what I describe as antifragile law firms — showed themselves not only to be resilient to the stressors of the pandemic, but that they were able to thrive, growing everything from revenue to employee engagement. Cloud-based technology has proven to be a foundational component of the antifragile law firm, as it affords law firms the flexibility to rapidly adapt to changing environmental circumstances, to enable within-firm collaboration, and to deliver an effortless, cloud-based experience to their clients.

Upsolve Victory over UPL

In some cases, access to justice is hampered by a lack of awareness around what legal services are needed. The average person does not always understand when they can use a lawyer to help solve their issues. Education or information needs to be provided first in order for a potential client to understand options. In some cases, companies or firms that use technology for tirage, such as online questionnaires or chat bots, are accused of UPL when they are just trying to close that education gap for potential clients.

Taking this a step further, when technology is used to help clients complete basic forms, it sets off UPL red flags. In the accounting world, services like Turbo Tax allow the user to complete their taxes without consulting with a professional accountant. An example in the legal world is the nonprofit Upsolve’s battle to allow its technology to be used for free by clients facing bankruptcy or debt collection. Touted as Turbo Tax for bankruptcy filings, Upsolve is funded by the Legal Services Corporation, charitable foundations and individuals.

Recently, Upsolve won the right to have its justice advocates, who are not lawyers, provide legal advice to low-income New Yorkers as they complete the check boxes on a one-page form that helps the debtors avoid default. The judge mentioned that this program will help “alleviate an avalanche of unanswered debt collection cases while mitigating the risk of consumer or ethical harm.” The attorney general of New York is appealing the ruling, citing UPL.  It begs the question, what would be the value of denying these debtors access to a free program? There is no harm here and only upside for those seeking assistance.

ABS In Real Life

In 2020, Arizona’s Supreme Court paved the way for lawyers to partner with people who aren’t lawyers (PALs). The new laws and fee splitting ethical rules did not change anything as far as UPL in the new alternative business structures (ABS). Each ABS has a compliance lawyer to ensure that all the ethical rules, including UPL, are followed.

In Arizona, the PALs can have both an economic interest and decision-making authority in firms and companies that offer legal services. The ABS options include traditional law firms, large and small non-law firms, and nonprofit organizations, all from within and outside Arizona. Often incorrectly referred to as a sandbox, similar to Utah’s actual experimental approach, Arizona’s legislation and ABS licenses are permanent.

In 2021, my partner Allen Rodriguez (who is a PAL) and I launched Singular Law Group PLLC in Arizona as one of the first ABS traditional law firms. Our mission is to improve access to justice with affordable legal services provided using technology. Our plans include free legal checkups for both personal and business clients that help close the education gap and allow our attorneys to focus on providing legal advice. We automated the workflows and use a customer relationship management system and an LPM, plus accept payments using a variety of credit card processing. We will meet our clients online at their convenience or in person if desired.

Below Allen describes how, by launching firms with leaders that are not lawyers, access to justice is improved while avoiding the UPL.

Before the ABS structure, I would have to sell attorneys on the concept of automation, sell them the deployment strategy and also sell the implementation (usually in one package) of a technology stack that could improve the client experience. That work can be expensive depending on the type of firm and the services they provide. This is often a hurdle that many attorneys do not want to overcome and ultimately the end user (client) suffers. By being able to participate in an ABS, lawyers can make a significant investment in client experience, automation, and efficiency by partnering with a technologist who can own all of the non-billable areas and help law firms grow. This structure also allows lawyers to make these investments through equity and have no out of pocket expenses which significantly reduces any financial hurdles for making these investments. Finally, this also creates alignment for growth in a law firm in that the lawyers are solely focused on great legal outcomes for clients while the technologist is busy running operations and technology that enable attorneys to focus on billables and strategy. With this type of alignment, a firm can use these technology-based automations/operations to deliver high-quality legal work at lower costs to more people, thus directly contributing to better access to justice and more profitability for themselves.

Losing Ground

Unfortunately, the past five years have not all been positive with access to justice efforts. Notably Washington state terminated its limited licensed legal technician (LLLT) program in June 2020. LLLTs that are currently practicing can continue to offer legal services, but new licenses will be issued only to those already in the program. In California, a law was passed in September to limit the state bar’s efforts around legal paraprofessionals and alternative business structures, which will seriously hamper any regulatory sandbox activity or expansion of the paralegal’s scope.

In early 2020, the ABA House of Delegates passed what is commonly described as the innovation resolution (115), encouraging states to solve the access to civil legal services gap with innovative regulations.  It appears that both Utah and Arizona are following Resolution 115 with the creation of ABS regulations and increased scope for paraprofessionals. However, at the August 2022 ABA meeting, Resolution 402 was passed reaffirming that sharing fees with ‘non-lawyers’ is not consistent with the “core values of the legal profession.” There was a reference to Resolution 115 indicating that the fee splitting prohibition should not hamper innovation. The rationale for Resolution 402 cites concerns about ethics, independence and control. This appears to translate into a fear of UPL and certainly is at odds with the new laws in Arizona. In fact, in April 2021, when the chief justice of the Arizona Supreme Court, Robert Brutinel, addressed the ABS committee, he talked about the need for innovative services to address the justice gap. He explained that the ABS committee’s role is to facilitate licensing by helping applicants, not blocking the process.  As the compliance lawyer for an ABS, I can say that there is no UPL as my PAL partner is not involved in the delivery of legal services.

In conclusion, there is significant progress but the mixed messages from the profession may confuse lawyers and clients alike. I encourage lawyers and the ABA to focus on delivering the highest levels of legal advice, often said to be working at the top of a law license, rather than trying to block access to all legal services, particularly basic assistance supported by technology.

About the Author

Mary E. Juetten is a mediator, lawyer, and accountant who specializes in leading companies in transition or start-up phases and helping create sustainable, operational, and financial growth. She is the founder of Trakight, the only self-guided software platform legal checkup program for intellectual property issues, and co-founded Evolve Law, a law firm strategic planning consultancy.

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