I recently attended the excellent CodeX FutureLaw 2014 Conference, which for the first time, had a solid discussion on the implications of legal ethic to potential innovations in the law. Serving as the bearer of bad news from the ABA was Will Hornsby.

Will summarizes the ABA’s position on UPL–in short, this is an issue for the states, not the ABA to decide.

Two fundamental regulatory obstacles limit online legal service models – the unauthorized practice of law and the ability to capitalize legal services. What we all need to realize clearly and at the beginning of this conversation is that the practice of law and the rules and laws that pertain to these issues are regulated in the US at the state level. This is the difference between the US and the UK and Australia.

As Prof. Rhode noted, some states basically conclude that the practice of law is what a lawyer does, and therefore anyone doing what a lawyer does is committing the unauthorized practice of law when it is done by someone who is not a lawyer. Many states define the practice of law to include the selection of forms, which is an integral part of some online models. Regardless of the breath of the state definitions, they generally preclude the delivery of legal services by corporate entities that are not law firms.

So, if you have a model that is delivering legal services, the question is how do you do so in a way that is not the unauthorized practice of law. There seems to be two paths. First, you can proceed on a state-by-state basis. That path can further be divided into court challenges and legislative changes. So, for example, LegalZoom recently prevailed through the courts in South Carolina. Decades ago, the owner of Quicken Family Law lost in the Texas courts and lobbied the state legislature, successfully, to redefine the practice of law in a way that carved out its model. The second path is through federal courts, in anticipation that the issue may come before the US Supreme Court and result in a decision that accommodates your model as the law of the land.

Why hasn’t the ABA solved this problem? Prof. Rhode indicated the ABA “punted” on the issue when it gave thought to the creation of a model definition of the practice of law many years ago. (Call me a cynic, but I suspect she would have been critical of the definition advanced by the ABA had it come up with one.) What the ABA may have learned from that endeavor was that the states were not interested in a model rule. They, instead, embraced the definitions they have in place and showed no interest in a uniform definition, let alone a more liberal one. Simply put, no one can lead when others are not willing to follow.

Bill also explores what happens if the practice of law is no longer limited to lawyers.

But, be careful of what you wish for. What happens when the practice of law becomes unregulated and anyone can provide legal services? It is not likely a niche online legal service provider fills that space. Instead, the insurance industry become the resource for estate planning documents, no doubt giving discounts to customers with advance directives that prohibit resuscitation. Financial institutions provide incorporation services for their customers as they now provide trusts. Realtors assume the function of land conveyances. All this low-hanging fruit that had been a profit center for lawyers and is transitioning to online legal service providers is likely to be assumed by industries that will have collateral economic advantages. They will do it cheaper and on a larger scale than any of today’s online providers. As we confront the ethics battleground, it needs to be done strategically, with great precision, down a path that avoids the minefields.

I don’t know that everyone would agree that these are minefields.

Also of note are two new articles.

First, The Great Disruption: How Machine Intelligence Will Transform the Role of Lawyers in the Delivery of Legal Services, by John McGinnis and Russell Pearce. Here is the abstract:

This Article argues that machines are coming to disrupt the legal profession and that bar regulation cannot stop them. Part I describes the relentless growth of computer power in hardware, software, and data collection capacity. This Part emphasizes that machine intelligence is not a one-time event that lawyers will have to accommodate. Instead, it is an accelerating force that will invade an ever-larger territory and exercise a more firm dominion over this larger area. We then describe five areas in which machine intelligence will provide services or factors of production currently provided by lawyers: discovery, legal search, document generation, brief generation, and prediction of case outcomes. Superstars and specialists in fast changing areas of the law will prosper — and litigators and counselors will continue to profit — but the future of the journeyman lawyer is insecure. Part II discusses how these developments may create unprecedented competitive pressures in many areas of lawyering. This Part further shows that bar regulation will be unable to stop such competition. The legal ethics rules permit, and indeed where necessary for lawyers to provide competent representation, require lawyers to employ machine intelligence. Even though unauthorized practice of law statutes on their face prohibit nonlawyers’ use of machine intelligence to provide legal services to consumers, these laws have failed, and are likely to continue to fail, to limit the delivery of legal services through machine intelligence. As a result, we expect an age of unparalleled innovation in legal services and reject the view of commentators who worry that bar regulations are a significant stumbling block to technological innovation in legal practice. Indeed, in the long run, the role of machine intelligence in providing legal services will speed the erosion of lawyers’ monopoly on delivering legal services and will advantage consumers and society by making legal services more transparent and affordable.

Second, Legal Information, the Consumer Law Market, and the First Amendment, by Renee Newman Knake (I reviewed an earlier draft of this):

If legal information is speech within the meaning of the First Amendment? If so, to what extent may government constitutionally regulate the creation and dissemination of legal information, particularly by lawyers? The answers to these questions hold significant implications for lawyer regulation, the consumer law market, and First Amendment jurisprudence.

I will have a lot more to say about this topic after I finish an article I’m working on about this topic.