The South Carolina Supreme Court ruled this week that LegalZoom’s services do not constitute the unauthorized practice of law. As reported by Greg Lambert at 3 Geeks, LegalZoom’s press release celebrates the news, while also taking pains to note that the company’s documents have been reviewed by the state Supreme Court and that it frequently refers its customers to licensed lawyers for more complex work.
What interests me more than the outcome of the case, however, is that a lawyer (and he’s not the only one) felt compelled to spend time and money challenging LegalZoom in the first place. Think about the practical results that would have followed had this lawsuit succeeded.
A source of legal materials that, by most accounts, is at least adequate for the needs of its customers would disappear from the state, leaving those customers once again with the prospect of hiring a lawyer they know they can’t afford or seeking a lesser alternative (along with a chilling effect on any other business inclined to try the same thing). Would lawyers have reduced their fees in response, to become more affordable to the low-income market segment that LegalZoom serves? If so, it would have been history’s first recorded instance of a supplier lowering, not raising, its prices in response to reduced competition. If there’s a net social benefit here, I’m not seeing it.
What, exactly, are efforts like this designed to achieve? “The protection of the public interest” is the standard justification — even though the public has an equal if not overriding interest in having tools and processes with which to exercise its legal rights, is already protected by the right to sue an incompetent or fraudulent provider in court, and is comprised of adults who presumably can make informed decisions about their own lives with their own money. There’s a subtle but importance difference between “protecting the public interest” and “serving the public interest,” and we’re supposed to be pursuing the latter more than the former.
The likelier explanation, of course, is that these efforts are really trying to protect the interests of lawyers. But I think they’re actually achieving the opposite. Whenever we reflexively oppose “non-lawyer” legal service providers, we’re saying: “There is no place for anyone in this market except lawyers.” But that sentiment is not based in reality. If you believe it, then you ought to take a step back and consider just how incidental lawyers already are in in this market — how far we’ve drifted from the centre of the legal system and towards its periphery. And every time we try asserting our indispensability in the face of reality, we just accelerate that drift.
The American Bar Association, the Canadian Bar Association, the UK’s Legal Services Board, the World Justice Project, Stanford Law School, the Canadian Department of Justice, and the Canadian Action Committee on Access to Justice in Civil and Family Matters are among the groups that have released studies over the past several years demonstrating what a small and shrinking segment of the legal market is actually served by lawyers. A good example is the Department of Justice study from 2007, which asked thousands of Canadians if they’d had a “justiciable problem” over the past three years, and if so, what they did about it:
- Slightly less than half dealt with it themselves.
- About a fifth did nothing.
- About another fifth got non-legal help (e.g., unions, government, friends or family).
- Less than 12% got legal help.
Given that this survey was published a year before the financial crisis, I don’t see how that 12% figure has improved since then. And it’s not an outlier: the UK survey found a similar result, as only about 16% of small businesses with legal issues turned to a lawyer to help them. According to the ABA, courts across the United States report between 60% and 90% of family law matters involve at least one self-represented litigant. The legal market, viewed in its entirety, is like an iceberg, 85% hidden below the surface. Lawyers have concerned themselves only with the small fraction above water. Everyone else is down there on their own, holding their breath.
We normally use facts like these to illustrate the “access to justice” crisis, and we convene panels in which we sternly lecture the profession and the courts about our moral failure: “Your access to justice is bad and you should feel bad.” And that’s fine. But what these facts should also illustrate is something that we ought to take just as seriously: the “lawyer irrelevance” crisis.
With a few exceptions (principally criminal defence work), lawyers are simply not relevant to 80% to 85% of all individuals and businesses with legal issues. We’re off the table: we’re briefly considered and quickly dismissed. We need to recognize and absorb the fact that a huge amount of legal activity already takes place entirely without our involvement.
And that was the situation before the market began bringing forth new options for legal solutions. We were already peripheral before barriers to non-lawyer entry began falling, before legal technology began making such impressive strides, before LegalZoom was bringing in $200 million a year, before the legal startup sector received $458 million in outside funding last year. One startup I spoke with last month was just the latest to tell me that that its product was designed to “take lawyers out of the equation.” When you consider how few equations we’re already in, this ought to bring us to immediate attention.
Consider what’s going on in the market right now:
- Australia approved “non-lawyer” law firm ownership a decade ago, England & Wales has issued 300 Alternative Business Structures licences since 2012, and Ontario will soon become the first North American jurisdiction to grapple with this option (aside from Washington State, which has already approved limited-license legal technicians).
- Computers can now do the following things: draft commercial contracts, review contract provisions, assess electronic evidence for relevance, answer legal and regulatory questions interactively, predict the outcome of negotiations, and partition marital assets in a divorce. What will they be able to do in another five years, or ten?
- Self-represented litigants are receiving growing levels of institutional support: courthouse kiosks provide them with guidance, lawyers unbundle services to support them through limited-scope retainers, and startups create systems and programs that maximize their ability to get the results they want. Self-representation is becoming normalized.
So let’s say that lawyers serve about 15% of the total potential market, and make a decent living doing so. As a lawyer, you might be satisfied with that: let the other 85% take care of itself, or use one of these alternatives. You’ll continue to serve the highest-level, most lucrative market segment, the small chunk of the iceberg above the water. So what if lawyers are peripheral to the entire market? We’re central to the richest part of the market, the one you care about, right?
Right. But what happens when all these “non-lawyers,” all this technology, all these self-represented litigants and their supporters, get better at what they do? What happens when, in addition to being cheaper than lawyers and faster than lawyers, they start to become almost as good as lawyers? Do you really think they’re not going to look up through the water at the tip of the iceberg and think, “I’d like a piece of that?”
This is what I mean when I talk about lawyers becoming increasingly incidental. A huge amount of legal activity already takes place without us — and what the foregoing should make clear is that that amount is growing. The ability of the legal market to function adequately and competently without the involvement of lawyers is increasing. Deprived of access to the best and most valuable asset available to assist them — lawyers — people have started to look for substitute assets, and where they can’t find such assets, to create them. Those substitutes are now here, and filing UPL lawsuits against them isn’t going to stop the process that spawned their development.
Because too often, that’s how we’ve been responding to what the market is telling us: with hostility, or with arrogance. I’ve lost count of the number of lawyers who’ve chuckled at warnings about “non-lawyer” providers, saying (sometimes literally), “Ka-ching! Every time a client tries to use one of these companies, it just means more business for me when they come looking for help to straighten out the mess they made.” What a selfish, unprofessional attitude we’ve developed: comfortably serving our 15% of the market, blocking the other 85% from accessing whatever help they can get, and smugly feasting off the problems of those for whom even these efforts went wrong. And we wonder why people are looking for alternatives?
But here’s the thing: I don’t believe that lawyers are doomed to the periphery of the market — after all, we used to be central to it. There was a time when we were intrinsic to the enforcement of legal rights and the execution of legal procedures, essential to a functioning market in legal services. But over time, we allowed ourselves to become optional, to become something close to a luxury good — content to serve the most well-heeled clients with the most interesting cases in the most convenient manner. We’re meant to be stewards of the entire legal system, but we’ve confined ourselves to our small gated grounds and let the rest of the property manage itself.
But that is not irreversible. I’ve met too many concerned, creative and compassionate lawyers, and I’ve seen too many praiseworthy change efforts already within the legal profession, for me to give up on lawyers as a universal legal solution. I believe that lawyers can and should serve more than 15% of the market. I believe we can because the tools and the procedures are now available to enable us to offer high-quality legal services more efficiently, effectively, and affordably. And I believe we should because we are still (for the moment) the most valuable and effective resource available for the resolution of legal problems, and it’s wrong for those resources to benefit only a select few.
Maybe not everyone needs the skills and expertise of a lawyer. But everyone deserves the opportunity to find out if they do. Let’s stop fighting the needs of the 85% and start figuring out how we can serve them instead.
Jordan Furlong delivers dynamic and thought-provoking presentations to law firms and legal organizations throughout North America on how to survive and profit from the extraordinary changes underway in the legal services marketplace. He is a partner with Edge International and a senior consultant with Stem Legal Web Enterprises.