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Larry Ribstein is waiting for the Steve Jobs of law.

I previously blogged about a class action against LegalZoom.com in Missouri, in which the site is accused in engaging in the unauthorized practice of law. Update from the WSJ Law Blog:

Last week, Missouri federal judge Nanette K. Laughrey partially rejected LegalZoom’s motion for summary judgment and set the case for trial on August 22.

In a statement issued yesterday, LegalZoom said that if the plaintiffs win at trial, it could dramatically impact the  availability of self-help legal books and forms in Missouri.

“If the plaintiffs are successful, we believe it is going to become a lot more expensive for small businesses and individuals to obtain basic legal forms,” Chas Rampenthal, Legal Zoom’s General counsel, said in the statement. “Missouri would become the only state in the nation to take away a consumer’s right to access online legal document software.”

Access to justice is a big plus here, that the cartel apparently does not appreciate.

Here is the statement from the Plaintiffs’ counsel:

“The state licensure of attorneys was established to protect the public from those untrained and uneducated in the practice of law,” Butsch said. The preparation of wills and other legal documents “may seem simple to a layman, but they aren’t,” he added. “There are consequences of signing a will . . .and those consequences can be great and they can’t be properly communicated by a company over the internet.” . . .

Butsch noted that there is now a glut of legal talent in the market, with many law graduates unable to find full-time employment. That fact, he said, has made customized legal help from practicing lawyers increasingly affordable. “I know quite a few lawyers who offer a quality legal service at very good rates,” he said.

What pretenses! There are lots of unemployed lawyers, so they can charge low fees! But don’t these lawyers, presumably with massive debt, need to charge fees to pay off the money invested? Seriously. And at one point, didn’t bar associations impose mandatory minimum fees? Rubbish.

Update: 4 more questions from Larry Ribstein:

• Exactly who are these good lawyers he’s referring to, or at least where can Missouri consumers find them? How do consumers know they’re good apart from Mr. Butsch’s say-so?
• Even if they charge “very good rates” by current standards, wouldn’t competition lower these fees?
• Is he confident that lawyers are doing a better job than the internet of communicating the consequences of signing a will?
• If a company like LegalZoom used the internet to communicate these risks, would he promise not to sue them for unauthorized practice of law?

Interesting piece from WSJ about Law Schools’ attempts in introduce more practice into the classroom.

Looking to attract employers’ attention, some law schools are throwing out decades of tradition by replacing textbook courses with classes that teach more practical skills.

Indiana University Maurer School of Law started teaching project management this year and also offers a course on so-called emotional intelligence. The class has no textbook and instead uses personality assessments and peer reviews to develop students’ interpersonal skills.

New York Law School hired 15 new faculty members over the past two years, many directly from the ranks of working lawyers, to teach skills in negotiation, counseling and fact investigation. The school says it normally hires one or two new faculty a year, and usually those focused on legal research.

And Washington and Lee University School of Law completely rebuilt its third-year curriculum in 2009, swapping out lectures and Socratic-style seminars for case-based simulations run by practicing lawyers.

A few elite players also are making adjustments. Harvard Law School last year launched a problem-solving class for first-year students, and Stanford Law School is considering making a full-time clinical course—which entails several 40-hour plus weeks of actual case work—a graduation requirement.

More from Ribstein, Bainbridge, and Mazzone.

A must-read post from Larry Ribstein about allegations that LegalZoom.com is engaged in the unauthorized practice of law in Missouri. Here is the gist of the suit:

Specifically, the plaintiffs allege that LegalZoom, a do-it-yourself online legal document service that launched in 2001 and was co-founded by O.J. Simpson lawyer Robert L. Shapiro, is engaged in the unauthorized practice of law. The case asks whether, under Missouri law, LegalZoom’s server-based decision-tree software is providing services that really ought to be performed only by chin-stroking counselors-at-law licensed by the Missouri state bar.

U.S. District Judge Nannette Laughrey, sitting in Jefferson City, Missouri, will rule on LegalZoom’s legality within the next few weeks, or she could kick the question over to a jury to decide after trial, which would begin in late summer. Either way, the case will produce what appears to be just the second court ruling ever on the legality of legal self-help software. The first one, by a federal judge in Dallas in 1999, ruled that the Quicken Family Law software package did violate Texas law, but the ruling was set aside on appeal after Texas amended its laws to permit such products. (Definitions of law practice vary from state to state; California and Arizona, for instance, have provisions authorizing nonlawyers to prepare legal documents under specified circumstances.)

How exactly is the practice of law defined in the Show-Me State:

Missouri’s statutes define law practice as, among other things, “the drawing or the . . .  assisting in the drawing for a valuable consideration of any paper, document or instrument affecting . . . [legal] rights.”

I have no doubt a lawyer, seeking to protect his rents, drafted that overly broad, restrictive statute.

On its face that language certainly sounds broad enough to cover what LegalZoom does. But in 1978 the Missouri Supreme Court effectively narrowed that language when it reviewed a case in which Missouri bar authorities sought to punish the sellers of a divorce kit that consisted of nothing but blank legal forms and instruction booklets for filling them out. The court ruled that merely marketing such materials did not amount to practicing law absent “personal advice as to legal remedies or the consequences of flowing therefrom.”

Accordingly, the opposing parties in Janson v. LegalZoom now attempt to describe LegalZoom’s service in words that tend to squeeze it either into or out of this precedent’s safe harbor. In legal filings, the plaintiffs say LegalZoom “prepares customized legal documents, tailored for the use of individual customers.”

Not at all, responds LegalZoom. Rather, it “provides an online platform for customers to select and create their own legal documents.”

Ribstein [who for purposes of full disclosure has agreed to join Legal Zoom’s “legal advisory counsel”] makes a number of important points (and really points he has been making for a decade, long before this new position). Most salient, is how the Bar is attempting to fight back against technology, rather than embracing it.

Cases like the one in Missouri represent the last gasp of a dying approach to the transmission of legal information — the exclusive reliance on one-to-one customized personal communication of information in the Internet and computer age.  In the long run markets and superior technology will win this battle — they always do.  In the short run, millions of ordinary consumers are locked out of low-cost ways of contending with an increasingly regulated and legalized society.

Lawyers should have to demonstrate in the marketplace and explain to consumers why they should be consumers only way of getting legal information. This isn’t even about replacing lawyers.  LegalZoom at least gives consumers the views of the lawyers who helped develop the product as to how legal documents should be prepared, which the consumers can then compare with the work of a lawyer they may have gotten from their brother-in-law or the Internet.

From an “Access to Justice” perspective (certainly the buzz word of the day), these types of service allow those without means to afford an expensive cartelized attorney the ability to protect their rights and property interests.

Moreover, lawyer licensing has a greater effect on availability of legal services for low-income people or those involved in smaller transactions.  Forcing these economically marginal clients to buy Cadillacs when they only need Chevrolets may cause them to rely on self-help, and thereby reduce the quality of services these clients actually receive.  The impact has been ameliorated somewhat by exempting legal assistance for the poor from unauthorized practice laws.  But since these exemptions leave the least sophisticated and therefore most vulnerable clients exposed to supposedly unqualified practitioners, they suggest that lawyer licensing is more concerned with protecting lawyers’ profits than with protecting the public.

Attorneys should recognize the trends, and try to incorporate these technologies into their practice to make them better able to serve their clients–don’t fight the future; the future always wins (even if you don’t win the future). In fact, as Ribstein argues, these types of technology can actually create lawyer jobs!

And in Practicing Theory I show how the development of these products could open up new, high-end design-type jobs for people with legal skills to replace jobs that could be replaced by machines.  Although I don’t view lawyer protectionism an appropriate regulatory goal, it’s worth noting that this isn’t about whether machines will replace lawyers.  Rather, it’s about whether new technologies will channel legally trained people toward more socially productive activities.

I initially used LegalZoom.com to incorporate the Harlan Institute in Pennsylvania. I found their services exemplary. In fact, I originally wanted to call it the Harlan Institute for Constitutional Studies, but one of the Legal Zoom employees tipped me off that in Pennsylvania, if you put the word “studies” in the name, you needed approval from the State Department of Education (which they never gave). That is the type of thing I thought an online service would miss, and I would need a lawyer to know the ins and outs of local law. I eventually reincorporated with a Pro Bono Law Firm (that we could never have actually afforded) in the District of Columbia for some other reasons, but I would highly recommend LegalZoom.com for people looking for high quality level services at a great price.

Stay tuned. Lawyers will soon get desperate, and I predict they will eventually lose.

The TImes reports about a new service, called LawyerUp, that allows someone in a pinch to obtain an attorney quickly and easily in 15 minutes or less.

How does it work?

The service’s personal plan, aimed at young people, costs $4.95 a month. Those who do not have a subscription can pay a flat fee of $100 for the first call, which the company calls its “pay-in-a-pinch plan.” For all clients, an operator checks contact information and processes the lawyer’s initial fee of $250 on a credit card for the first hour of service.

…

Lawyers do not pay to sign on to the roster, or for the client calls. Legal ethics rules frown on arrangements in which lawyers split fees with nonlawyers, and especially when lawyers pay people to round up clients — a practice known as using runners. A Connecticut lawyer who signed on, Patrick Tomasiewicz, said that when he got the call from the company, his main question was whether he would need to pay LawyerUp. The company satisfied him that its structure avoided runner issues.

Lawyers, who are usually resistant to these types of changes, are somewhat tepid.

The legal profession tends to be wary of innovation, he noted, adding that he had found the LawyerUp process to be far less questionable than many forms of legal advertising he sees on billboards and late-night television. “I don’t have my name on a cab,” he said.

No one has called him yet, Mr. Tomasiewicz said. “It may pan out for us. It may not.”

Ralph J. Monaco, the president of the Connecticut Bar Association, seemed a bit ruffled in an interview when asked about the company, calling the name “so tasteless.” He said he fretted that it might create a relationship that an unscrupulous lawyer could use to gouge the new client.

Does that mean lawyers like Mr. Tomasiewicz should worry about getting involved? “I don’t think so,” Mr. Monaco said. “I would want to see how it’s put into action.”

I think this is an extension of what Professor’s Ribstein and Kobayashi had described as Law’s Information’s Revolution. This is a legal information service, almost as if a commodity. A client needs legal services, and doesn’t really care where it comes from. With a single phone call, the client can be connected with a willing attorney. I include a lengthy string cite from my Article on FantasySCOTUS that explores this.

See Richard Susskind, The End of Lawyers? Rethinking the Nature of Legal Services 31 (2009) (“In summary, a commoditized legal service is an IT-based offering that is undifferentiated in the marketplace (undifferentiated in the minds of the recipients and not the providers of the service). For any given commodity, there may be very similar competitor products, or the product is so commonplace that it is distributed at low or no cost.”); Larry Ribstein, Law’s Information Revolution (noting that technology could be used to “create legal knowledge,” and “reengineer[] the underlying idea of what legal research entails.”). Michio Kaku  Physics of the Future: How Science Will Shape Human Destiny and Our Daily Lives by the Year 2100 (2011) (“When technologies become widely dispersed, such as electricity and running water, they eventually become utilities. With capitalism driving down prices and increasing competition, these technologies will be sold like utilities, that is, we don’t care where they come from and we pay for them only when we want them.”).