What to do about unregulated legal services providers

Our jurisdiction is not alone in seeing a growth in unregulated legal services providers. This gives rise to important questions. How should a bar, or other regulator of legal services, deal with such growth? Should the regulator ignore it, and concentrate only on the legal profession which it is mandated to regulate? Or should it consider its mandate more widely,  also to include the protection of the public, and at least offer guidance to unregulated providers? This is a matter of lively debate internationally.

I have been leading a working group within the International Bar Association on this question and arguments on each side have been fierce.

‘Purists’ (and there is no disrespect intended by the titles I shall give to the two groups – they each have plausible cases) feel that the regulator should focus only on its role of regulating lawyers. To do anything else is to dilute the vital role of lawyers and the regulatory protections that lawyers’ clients enjoy. If the regulator strays, the distinction between the regulated and unregulated becomes blurred, to the detriment not only of lawyers but, more importantly, of clients.

‘Accommodationists’, on the other hand, argue that it is unrealistic to ignore the growing role of the unregulated in the provision of legal services and the good that they can do in easing the crisis in access to justice, particularly with the aid of technology. If they are unregulated, the least that the regulator can do is to protect the public by suggesting guidelines or best practices in the area in which it regulates.

Rather like Brexit, I doubt that the two sides will agree with each other soon. But there has been an interesting recent intervention.

Last month the American Bar Association’s (ABA) House of Delegates adopted Best Practice Guidelines for Online Legal Document Providers and urged online legal document providers (OLPs) to adopt them. This is support for the accommodationist side of the argument.

The OLP guidelines are commonsensical: for instance, instructions should be clear and understandable, the forms should be valid for the user’s jurisdiction, the forms should be up to date, and an excessive fee should not be charged. Overall, the guidelines cover: disclosure, transparency and enforceability of forms; the protection of personal information provided by the consumer; and arbitration and dispute resolution. They are obviously only guidelines and not regulation, nor enforceable in any way.

Purists may be comforted by sentences such as: ‘Providers should notify customers that the information customers provide is not covered by the attorney-client privilege or work product protection’, and ‘Providers should notify their customers that their forms are not a substitute for the services of a lawyer, and that customers may benefit from the services of a lawyer in any legal transaction’.

Accommodationists argue that it is unrealistic to ignore the growing role of the unregulated in the provision of legal services and the good that they can do in easing the crisis in access to justice

But the most interesting aspect of the guidelines lies in the commentary attached, where considerable space is devoted to their justification.

First, the facts behind OLPs are staggering. OLPs are a worldwide multi-billion-dollar industry (about $4.1bn in annual revenue) that has created a new market for lower-cost law-related services. One provider, LegalZoom, estimates that it has served four million customers and that its forms may have created one million corporations. Additionally, someone uses LegalZoom’s forms to write a will every three minutes in the US.

This is not the first time that the ABA has produced guidelines for the unregulated. It has previously produced ‘Best Practice Guidelines for Legal Information Website Providers’.

The commentary addresses head on the arguments put by purists against its approach, as follows:

• the ABA is not just a trade association created to protect its members; it is a professional association that must focus on the needs of the public;
• lawyers have substantial and longstanding experience with ensuring that legal and law-related services are delivered in ways that protect the public;
• lawyers are the ones who have to solve, or at least address, any problems that result when OLPs create faulty documents or provide for inadequate dispute resolution mechanisms;
• the public gains when all those providing legal services to the public – lawyers, OLPs and other legal services providers – work cooperatively rather than antagonistically.

You may agree or disagree with these arguments. But it is difficult to disagree with the point that unregulated provision of legal services is on the rise in many jurisdictions and that it can plug the access-to-justice gap. The ABA points out that, at least in the US, efforts to sue OLPs ‘are almost always settled favourably to the OLPs or have resulted in court rulings in favour of OLPs’.

So regulators have to choose between the advantages and disadvantages of being either purists or accommodationists. I favour the accommodationist tendency.

Jonathan Goldsmith is Law Society Council member for EU matters and a former secretary general of the Council of Bars and Law Societies of Europe. All views expressed are personal and do not necessarily reflect the views of the Law Society Council