Greedy LawyersUnder the guise of consumer protection, North Carolina has passed new legislation, at the direction of the North Carolina Bar, that imposes restrictions on distributing self-help legal software over the Web.  Rather than protecting consumers, this legislation is a frightened response by the North Carolina Bar to protect their incomes from the impact of advances in Internet technology that provide new ways for people to solve their legal problems at low cost.

The restrictions are so severe that the result is to deprive North Carolina’s citizens of low cost solutions to solving many legal problems, inhibits innovation in developing legal solutions by an emerging self-help legal software industry, stifles competition to attorneys from self-help legal software publishers in the State of North Carolina, and will eliminate any possibility of private investment in self-help legal software development.

The new legislation can be found here:

Also see also previous blog post on efforts by the North Carolina Bar to stifle competition..

Continue Reading North Carolina Restricts the Distribution of Legal Self-Help Software to Consumers

Prof. Edgar CahnHappy Birthday to Edgar Cahn

The University of the District of Columbia, David A. Clarke School of Law is having an 81st birthday celebration for Prof. Edgar S. Cahn, the founding Dean of what was then Antioch School of Law, (founded 1972), the nation’s first clinical law school.

I first learned of Edgar and Jean Cahn (deceased) as a 2L at Columbia Law School in 1964. At the time I was involved in creating a law students civil rights organization, with colleagues from other law schools, (LSCRRC),  and Edgar and Jean helped us establish a chapter at Yale Law School.

At the time  I  was wondering what my alternatives might be for a career in law that would be meaningful and purposeful.  Then I read the Cahn’s ground-breaking article titled: The War on Poverty: A Civilian Perspective [The Yale Law Journal, Vol. 73, No. 8 (Jul., 1964), pp. 1317-1352 ], which introduced the concept of a neighborhood law office dedicated to increasing access to the legal system for all.

This was an idea I could relate to and a way for me to have a career in law consistent with my core values.

In 1964 Edgar became Special Assistant and main speech writer to Sargent Shriver, the new Director of the Office of Economic Opportunity, (“the War on Poverty”),  and Jean Cahn, became a consultant to the Office of Economic Opportunity to create a national legal services program.  When I graduated from law school in June, 1965, Edgar helped me secure my first job in the General Counsel’s Office of the Office of Economic Opportunity, for which I am forever grateful.

Edgar and Jean’s breakthrough thinking continued to shape my thinking and my career for many years thereafter.

In 1996, they co-authored another ground-breaking article titled: What Price Justice: The Civilian Perspective Revisited  [Notre Dame Law Journal, Volume 41 Issue 6 Symposium Article 8 7-1-1966 ]. This criticism of the legal industry could apply today:

“We would contend that – the product we are selling – quality legal services – is virtually unusable for the purpose for which sold. – the production and distribution system we are currently attempting to expand is basically obsolete. – And, the manpower supply is curtailed sharply by unnecessary, nonfunctional protectivist guild restrictions. ”


“If Justice under law is to become a product for mass consumption, rather than a luxury item for the privileged and for private enterprise, we will not bring the price down within general reach by a straight exponential increase in the present supply of legal services as currently rendered the poor – or even the middle class. More neighborhood law firms, “judicare” programs, sliding scales of indigency, expansion of law school enrollment, increase of legal technicians, a massive increase in federal expenditures – none of these will produce more than the appearance of due process where the endless proliferation of rules and safeguards masks our underlying misgivings above the humanity and fairness of the system itself. (p. 940).

These were new ideas I could also relate to.  I owe Edgar Cahn a great debt as much of my own career has been  working on a variation of the ideas he and Jean first introduced  me to in these two landmark articles and many personal conversations. Edgar was my best teacher even though I was never  a formal student in one of his classes. His friendship and support enabled me to make a commitment to increasing “justice” in our society. Edgar and Jean helped me to find my right path.

The Cahn’s criticism of the legal profession, written over 50 years ago, is just as relevant today. Many innovative concepts that can be traced directly to their work:

  • a national, federally funded-legal services program;
  • clinical programs in every major law school;
  • the use of non-lawyers to deliver legal solutions directly to consumers;
  • neighborhood law offices staffed by “incubator” lawyers;
  •  “unbundled or limited legal services”
  • neighborhood court systems
  • online dispute settlement systems accessible without lawyers
  • self-help legal tools for citizens;
  • maximum feasible participation of citizens in legal systems governance  and regulatory systems. (Rather than only lawyers governing lawyers).

It’s quite a legacy. Even though it is Edgar Cahn’s 81st Birthday — which often marks a lifetime of achievement — Edgar continues to innovate with the TimeBanking concept which seeks to build caring communities through the exchange of time and talents – another breakthrough idea that is expanding worldwide.

Edgar — The best is yet to come!.



Legal Start-Ups and the ABA Commission on the Future of Legal ServicesThe American Bar Association Commission on the Future of Legal Services was created last year by then ABA President William C. Hubbard to explore ways to meet the legal needs of the underserved. The Commission does its work by holding public hearings on an issue, creating discussions and conversations among different stakeholders, issuing Issues Papers, soliciting comments on these papers, and depending on the issue  —  proposing new rules or policy approaches sometimes approved by the ABA’s House of Delegates where they become “official”. Some policies will be adopted by State Bar Associations which govern the conduct of lawyers and which regulate the legal profession and the legal services industry. As discussed below I believe that the ideas discussed within the Issue Papers will have an immediate impact on the ability of some “legal start-ups” to raise investment funds for their companies.

Issue Paper on Unregulated LSP Entities and “Legal Start-Ups”.

An Issues Paper was released  by the Commission on the Future of Legal Services on March 31 which solicits comments from the public and the profession on an approach to impose a regulatory regime on “non-regulated legal service providers entities” such as independent legal technician and document preparers serving the public directly, on-line automated legal document preparation service companies, legal software publication companies, and other “non-lawyer” entities that provide legal solutions to consumer. Many “legal start-ups” fall within the scope of the Issues Paper. The Issues Paper can be viewed here.  The deadline for submitting comments is April 28, 2016.

The way the paper is written it could include in its concept of an “unregulated LSP entity,” legal software application providers (“legal software publishing companies”)  that provide legal solutions directly to the consumer as an alternative to the services that could be purchased from a lawyer. Examples might include: automated document assembly companies, legal expert systems developers, intelligent calculators, legal decision tools, intelligent data bases, consumer- centric legal analysis tools, and automated legal advice applications.  New rules could apply to many legal software publishing entities from larger companies such as;; and to smaller publishers and providers such as http://www.neotalogic.com,; and  Our market research indicates there are hundreds of these new entrants to the legal service marketplace offering legal software applications that enable consumers to do legal tasks themselves.

There are also important developments within the courts, government agencies, and the national legal services program designed to provide software powered legal solutions for use directly by consumers.

All of these entities provide “software only solutions” – not services, so as a category I consider them to be “software publishers”.  [ Disclosure: I am the CEO of SmartLegalForms, Inc., which is a legal software publisher ].

Services vs. Legal Software Applications

My colleague, Marc Lauritsen, has written extensively and in-depth about how regulating legal software publishers would be unwise, and probably unconstitutional as a prior restraint under the First Amendment of the Constitution. His analysis of the wisdom and the right of the state regulation of legal software publishers and software developers can be found in these law review articles:  Liberty, Justice, and Legal Automata, 88 Chi-Kent L. Rev. 917 (2013)  and Are We Free to Code the Law? – August 2013 Communications of the Association for Computing Machinery . Other commentators have cautioned about extending the regulation of legal services beyond the legal profession itself.

The Role of Private Capital in Legal Service Innovation

One bright spot in the move towards innovation in the delivery of legal services has been the interest by private investment and the venture capital community in legal start-ups.  See: Legal software application development is a capital intensive process. Very few solos and small law firm have access to capital that can be dedicated to creating new applications that translate into low cost solutions for the under-served.  It is for this reason that most innovation in the delivery of legal solutions to consumers has been outside of law firms and within private companies or the public sector. (except within Big Law firms where internal capital resources are available). Capital is the fuel of innovation.

Regulation is a Barrier to Innovation: Bye Bye Legal Start-Ups

I predict that if the ideas proposed in the Issues Paper are translated into policies and regulations the impact will be to dry up sources of investment capital for legal start-ups. The regulatory constraints that are being discussed to protect the consumer, would make it impossible for one category of legal service provider – legal software companies that serve the public directly – to operate a sustainable business. These requirements include among others:

  • registration by the legal software publishing company in every state that the company serves in;
  • waiver of “as-is” liability in Terms and Conditions Statements;
  • enabling consumers to sue the publishing company in the state where the consumer lives;
  • prohibitive insurance coverage to cover potential claims;
  • requirements that legal software companies disclose whether a lawyer is involved in the production of the software product, the name of the lawyer, and the jurisdiction where the lawyer is licensed to practice;

If I were a venture capitalist thinking about investing in a legal software publisher that intends to serve the public directly, I would be hesitant to invest now because these ideas are being floated by the Commission  and could become a reality in the not to distant future.

“Legal Start-Ups” – Speak Out

If the authors of the Commission’s Issue Paper did not intend that “unregulated LSP entities” should include legal software publishers, I suggest that they make this clarification now. If they authors intended  that”unregulated LSP entities” include legal software publishers and legal application develolpers then this is alarming.

If you are a legal software publisher that serves the public directly with a legal solution, I suggest that you make your views known by commenting on their Issues Paper directly.






AVVOAvvo – the world’s largest online legal directory –  now enables lawyers to offer legal services directly to consumers through their platform. Beginning last year, Avvo  offered the opportunity to consumers to get legal advice by telephone for a flat fee of $39.00 per telephone call.

Now Avvo has launched a “law store” that offers many fixed fee legal services from legal document review to no-fault divorce that ranges in price from $149.00 to $995.00. The legal fee is passed to the lawyer through the Avvo platform and Avvo charges the law firm a marketing fee for connecting the firm with a client. [For a detailed discussion of how this service works see Robert Ambrogi’s blog post on this subject at LawSites].

Today’s legal consumer’s want legal services from their lawyers on demand. In a previous post I discussed the coming Uberization of Legal Services a trend that now seems to accelerate with the launch of this service.

Consumers want from their lawyers:

  • fixed and affordable fees;
  • the opportunity to have more control over the relationship between lawyer and client;
  • purchasing just the legal services they want and no more- often called the “unbundling of legal services”;
  • speed and convenience;
  • transparency.

Solos and small law firms need help in identifying prospects and converting them to clients without spending a fortune on client acquisition.

The new Avvo Legal Service offers these benefits to both the consumer on the demand side, and the law firm on the supply side.

The Avvo Business Model

Avvo is evolving into a classic platform business model like UBER, Facebook, Airbnb, and eBay:

A platform is a plug-and-play business model that allows multiple participants (producers and consumers) to connect to it, interact with each other, and create and exchange value.” –Platform Thinking.

It’s important to note that the single most important attribute of a platform business: a platform does not partake in any transactions or interactions with its customers. This differs greatly from the traditional “pipe” model, where businesses ( e.g., the law firm) transact directly with customers, and and services flow from law firm to client. In the Avvo model lawyers still deal directly with their clients, but the entire relationship, including the payment of legal fees, is facilitated by the platform technology.

The platform business model can help with two major problems facing solos and small law firms: (1) liquidity; and (2) efficiency. By providing a large source of potential clients with legal issues that must be solved quickly, solos and small law firms can convert dead time into revenue. The platform can also provide on-line tools to law firms that enable them to provide legal services efficiently and still maintain reasonable profit margins. Solos and small law firms are challenged to develop these on-line tools and applications on their own. The platform provider can provide these tools at a cost which is much less than the firm can develop on their own.

We know from our experience in working with solos and small law firm’s through our own DirectLaw Virtual Law Firm Service that the pain point for many law firms is client acquisition.  Most law firms don’t have enough clients. Marketing directly to clients online —the pipe business model — has proved to be a challenge. Now comes AVVO with its huge base of consumer traffic. Avvo claims that over 8 million visitors to its web site a month with 50% having an urgent legal problem. Solos and small law firm can tap into this huge potential market with no up-front cost. Prospects and clients acquired through the Avvo platform through the consumption of fixed price legal services can result in building trusted relationships with clients that lead to the purchase of additional legal services outside of the Avvo platform. Law firms should think of the Avvo on-line fixed fee legal service as a way to market their full-service practice.

Solos and small should explore testing out the new Avvo Service as another low cost route to market. Lawyers typically wait until early adopters in the legal profession try out a new service or technology first before leaping in with both feet. Here is a good example where being early, getting good reviews, and becoming experienced with providing services over the Avvo platform can cause higher platform visibility resulting in more powerful market positioning.

access_to_justivceOne of the obstacles to the development of innovative software solutions that automate part of the legal service delivery process resulting in lower, more affordable legal fees is the absence of capital. Traditional methods of legal service delivery based on hourly billing rates out of reach for low and moderate income clients.  Capital investment is required to create innovative web-based software solutions that can enable low and moderate income clients to either solve legal problems on their own as pro-se litigants, or to enable law firms to offer legal solutions at a more affordable price point.

The major obstacle to making more capital available to law firms, is the prohibition on investment in law firms by non-lawyers enshrined in the ABA’s Model Rules of Professional Responsibility and replicated in the state rules of professional responsibility that regulate lawyers in their state. [ See Rule 5.4 – Professional Independence of a Lawyer ].

There has been little innovation within solo and smaller law firms to develop client-centered, web-based applications that provide a low cost solution to low and moderate income clients. Instead innovation is centered in the vendor community that provides tools to law firms, usually as a SaaS service for a monthly subscription fee. A good example is our own DirectLaw virtual law firm platform that provides a client-centered document automation application, and other tools that enables a law firm to unbundled legal services for a fixed fee to clients online. While the value of innovation outside of the law firm, within the vendor sector of the legal industry, is not to minimized, it is the lawyer within the law firm that has the most nuanced view about what their clients need and want. The lawyer within the law firm also has the primary interest in figuring out how to develop and manage the delivery of legal services so that for certain kinds of legal problems a scalable, volume-based business model can be implemented.

Innovation requires capital. It is capital intensive to develop software applications and new delivery systems for legal services. Solos and small law firms that serve individuals and families do not have access to capital. Whatever innovation is taking place in the delivery of legal services is happening outside of the legal profession in organizations like LegalZoom financed by venture capital, or the within legal aid programs funded in part by the Technology grant program within the Legal Services Program, or outside of the United States. [See also, blog post from Lexicata – How Law Firms Can be More Like LegalZoom ].

There has been much controversial discussion with the legal profession on modifying the ownership rules that apply to law firms, with little result. For example, the American Bar Association created last year a Commission on the Future of Legal Services to address the access to justice problem, under the under the leadership of then ABA-President William C. Hubbard.   The Commission convened a National Summit on Innovation in Legal Services, in May, 2015 where private investment in law firms as a prerequisite to innovation was on the agenda. But I have yet to see any progress on this issue within the American Bar Association. Unlike other countries, private investment in law firms as a way to develop new ways of serving a latent market for legal services is dead on arrival when it reaches the ABA’s House of Delegates, although 80% of the U.S. population can’t afford the cost of legal services and is unserved by the legal profession.

The evidence we have seen in the United Kingdom, where the legal profession has moved towards de-regulation, and where capital can flow freely into law firms, suggests that the United States will remain a laggard in innovation in the delivery of legal services until this problem can be fixed. In the UK, LegalZoom is taking advantage of this de-regulation by becoming an ABS [ Alternative Business Structure ].  As a private company, operating in the UK, LegalZoom can offer legal services directly to the public. LegalZoom plans to use this opportunity to develop and experiment with new end-to-end legal services for consumers with the idea that in the far distant future these innovations can be imported into the U.S. legal market.

The bottom line is that you can’t really innovate without access to capital – it is the fuel of innovation. For solo and small law firms that serve people, rather than large corporations, capital is not available for innovation unless the lawyer or law firm has generated capital from their practice and makes a conscious decision to invest in software automation and web-based solutions.

An example of a law firm that has accumulated capital because of litigation against the mortgage servicing companies and the banks in the robo-signing scandal during the U.S foreclosure crisis, is IceLegal, P.A., a small law firm based in Florida. IceLegal under the leadership of Thomas Ice,  is launching its own access to justice initiative at:  The firm has also created its own LegalYou video channel for educating pro-se litigants.  This is a project of the law firm (not of a private company), and will  provide low cost legal solutions to Florida residents. If LegalYou is a success it will serve a new latent market ignored by most of Florida’s law firms. LegalYou is the exception rather than the rule.

One would think that Internet-savvy, recent law school graduates would be motivated to serve a latent market for legal services by developing innovative solutions, but handicapped by large student loans they are forced into career roles that provide sufficient cash flow to amortize those loans. Risk-taking is not an option for them.

A Proposal Safe Harbor for Law Firms Serving Low and Moderate Income Clients

To increase the flow of capital to law solos and small law firms who wish to serve just low and moderate income clients with automated legal solutions I propose that:

  • The American Bar Association amend Rule 5.4 to permit private investment in just those law firms that serve low and moderate income clients exclusively.
  • Personal injury and other contingent fee practices would be excluded from this exception as capital is self-generating for successful firms in these practice areas.
  • To comfort to those who are concerned that the independence of the lawyer is compromised by this proposal, the law firm must remain at least a 51% owner of the law firm. Private investors can be minority shareholders only.
  • It is relatively easy to create an income generation screen to capture just low and moderate income clients for the law firm, and exclude those of higher income. The data from this intake process can be archived and audited to comply with the exception to the rule.

Creating this exception opens up the opportunity for smaller law firms to take advantage of crowd-funding opportunities, the angel investor community, and the new SEC rules that permit crowd-funding investment. Further, the rich relatives and friends (if they exist) of a young lawyer could fund the new lawyer’s law firm, and get a return on investment, without the lawyer risking disbarment because of violation of the 5.4.

An argument can also be made that enabling law firms that serve primarily corporate entities can create capital on their own without additional incentives and should not be able to take advantage of this safe harbor. Most large law firms represent corporate entities (banks, insurance companies, health care organizations, drug companies,  manufacturers, financial organizations) whose legal positions are opposed to many consumer interests.  These firms should have to use their own capital to become more efficient so as not to tip the balances against the consumer even more than it is.

One would think that this modest proposal to enable innovation designed to increase access to the legal system for clients who can’t afford the high cost of legal fees would be an idea that that American Bar Association and state bar associations might entertain or even discuss.

However, given that the structure of regulation of the legal profession is controlled by the legal profession, this idea will probably be dead on arrival.


client-centricThe American Bar Association Standing Committee on the Delivery of Legal Services, with the ABA Legal Access Job Corps Task Force and the Institute for the Advancement of the American Legal System (IAALS) is convening a national conference in Denver, Colorado on August 14-15, 2015  titled: Client-Centric Legal Services: Getting From Here to There.  The conference will have special value to practitioners who provide personal and small business legal services, bar leaders, judges and court administrators, legal educators, Access to Justice Commission members and staff, and incubator directors and law school clinicians. The focus of the conference is to explore new law firm business models that can enhancement engagement, re-define lawyer value, and pivot practitioners into 21st Century problem-solvers.

So what are client-centric legal services? 

The concept of client-centric legal services is part of a consumer revolution that puts the purchaser at the center of a commercial transaction shifting power from supplier to consumer. Power in the legal profession has always been on the supply side, but the legal profession is not immune from the consumer revolution and the demand by consumers for more transparency, information,  and control over the lawyer-client relationship. Consumers want fixed fee pricing so they can control their legal expenses and when possible be a co-producer of legal services to keep legal fees reasonable and manageable. This translates into “unbundled legal services” or “limited legal services”, powered by online delivery systems.

Internet based applications that either enhance the client’s understanding of their legal rights, or enable them to represent themselves with the assistance of an attorney, are examples of client-centric legal services.

A short list would include:

A law firm web site that consists of information only about a lawyer’s practice and biographies of the law firm’s lawyers is not client centric because it is solely focused on the supplier and provides no tools that empower the client as consumer.

Here are good examples of client-centric law firm web sites: The Rosen Law Firm in North Carolina – a family law firm; and The Baker Law Firm – an estate planning firm also in North Carolina.

Large law firms and their corporate clients are not immune from these developments as Big Law seeks to provide tools that enable corporate legal departments to service their internal clients more effectively.

For example Seyfarth and the Littler, Mendelson law firm  are developing expert systems applications on the NeotaLogic platform that can be used by their clients to more efficiently access legal advice at low cost. See Human Resources Compliance Application.

Prof. Stephanie Kimbro, author of The Consumer Revolution: The Lawyer’s Guide to the On-Line Legal Marketplace   predicts that:

“The client-centric law firms that are transparent in their business practices and provide communication and delivery methods that clients expect from professionals in any industry will be the firms that survive in our quickly changing legal marketplace.”

To learn more about creating client-centric law firms, register for the Denver conference, here.

FTC Disclosures:
I am a speaker at the ABA Denver Conference and I am also a liaison member of the ABA Standing Committee on the Delivery of Legal Services, and the company I am CEO of- DirectLaw – provides a virtual law firm platform for solo and small law firms that enables these firms to deliver legal services online.

The unberization of the legal professionThe legal profession will not be immune from the rise of the uberized economy. Consumers want to purchase only the legal services they need. This means that the trend towards offering “unbundled” or “limited legal services” will continue to accelerate as the most economical way for consumers to purchase legal service is by the “task”, rather than the hour.

Think of “task rabbit for legal services” – legal services at the click of a button on your smartphone.

The new virtual marketplaces connecting lawyers with clients for the purchase of specific legal tasks will also accelerate this trend. These legal marketplaces are a response to the inefficiency of bar-sponsored legal referral programs (the subject of another blog post to come), and the desire of consumers to have a more transparent way of selecting attorneys to solve their legal problems. The last few years has seen the ascendency of these legal marketplace platforms.

To name just a few of these new legal marketplaces, look at:

  • Avvo  – “Get legal advice from a top-reviewed lawyer on the phone – $39.00 for 15 minutes.”
  • Bridge.US – “Top attorneys and easy-to-use software that make immigration delightfully simple”
  • DirectLawConnect – “FInd a fixed fee online lawyer in your state now.”
  • Fixed – “The easiest way to fix a parking ticket”
  • Hire an Esquire – “Legal staffing redefined online.”
  • LawDingo – “You won’t believe how simple and affordable it is to get a lawyer;s help.” “$50 for a telephone consultation. Other projects for a fixed fee.”
  • LawGo – On Demand lawyers for a fixed fee in personal and small business matters.
  • LawGives – “Get free quotes and consultations from trusted lawyers in 100+ cities”
  • LegalHero – “Law Done Better. Experienced attorneys for your business at clear, upfront prices. ”  “No hourly rates. No retainers.”
  • LawKick – “Find the right lawyer at the right price”
  • LawNearMe – “Law Near Me offers an attorney referral service to help you find the legal representation you need in a variety of areas.” “ZocDoc for lawyers”
  • LawZam -“Free legal consultations by video-conference.”
  • LegalZoom – “Find an attorney you can trust for your family for $9.99 a month”
  • PrioriLaw – “lawyers hand-picked for your business.”
  • RocketLawyer – “Legal Made Simple”
  • SmartUpLegal – “Quality Legal For Startups and Business.”
  • UpCounsel – “Hire a great attorney for your business. Fixed fee projects”

Some seek to link consumers with lawyers who charge their regular hourly rates, but the marketplaces that will scale are those that offer limited legal services for a fixed fee, ideally powered by technology to keep legal fees low. These new vertical marketplaces will serve what Richard Susskind has called, “the latent market for legal services.”, but in the fullness of time, the “limited legal services” approach will move up the value curve serving small business and eventually larger business entities and more affluent clients.

Not all will survive as many cannot generate the traffic to justify the fees charged to lawyers or consumers to participate in a particular platform. Survivors will be those platforms that can generate consumer traffic and which can scale their offerings. A likely winner could be AVVO as it leverages its huge consumer traffic and large lawyer data base into delivering legal services for a fixed fee.

Some larger law firms will adopt this independent contractor labor model using contracted labor to perform tasks for their clients. This is already happening in the United Kingdom. See: Lawyers on Demand; RiverviewLaw; and Peerpoint from Allen & Overy

The services that will scale the most will be smart legal software applications that can do a task for the fraction of the fee that a lawyer can charge for the same work.

As the idea of offering limited legal services goes mainstream, powered by these new marketplaces, consumers will benefit through more affordable, accessible, fast, and transparent legal services.

The legal profession, particularly solos and small law firm practitioners, will not benefit as much as the consumers they serve. Here are some of the negative consequences:

  • A downward pressure on legal fees;
  • More competition for solos and small law firm practitioners;
  • Lawyers will have less or no social structure to support collaboration and cross-communication with peers;
  • Newly admitted lawyers will lack the training and professional development structure for them to really learn how to practice law. (as law schools don’t really train lawyers to practice law).
  • Less organizationally sponsored fringe benefits for lawyers.
  • Loss of control of a client base, as clients are attracted and owned by the new legal marketplaces;
  • Reduction in the size of the legal profession as it becomes harder to make a living as a lawyer, with a consequent reduction in the number of law schools – particularly those that turn out lawyers for solo and small practice but continue to teach the a purely doctrinal approach to law and law practice.

Recent litigation in California where California judges have ruled that the issue of whether drivers for Uber and Lyft are independent contractors or employees will have to be decided by a jury suggest that the rules that apply to the new ‘sharing economy” are not so clear. It will be interesting to see at some point in the future whether a group of lawyers -so-called independent contractors- might sue their platform provider or an AxiomLaw, on the theory that that the platform that they are using exercises so much control that they are really employees and entitled to the benefits of being an employee. See generally:  1099 vs. W-2 Employee Classification Infographic from Hire An Esquire.

Surely, the legal services industry is continuing to evolve driven by Internet-based innovations.


Marc Andreessen quipped in 2011: “Software is eating the world”.

We are already seeing how Andreesen’s prediction is working its way through the legal profession.

Predictive coding continues to make inroads in eDiscovery demonstrating that software analysis is more accurate and faster that hordes of associate lawyers clicking on documents on screens. Companies such as Recommind are leading the way.

Last week I attended  Conference at Georgetown Law School, co-sponsored by the ABA Journal, called: From Revolution to Evolution: Digital Tools in Legal Practice where a variety of new legal applications were discussed that replace the labor of an attorney.  In the hands of an attorney , this software results in faster, cheaper, and better legal work.

One panel, that I was honored to participate in featured Kingsley Martin from KMStandards and Noah Waisberg from KiraSystems formerly DiligenceEngine. Both demonstrated software applications that expedited the document review process in transactional work and rationalized the document creation process. Like predictive coding in eDiscovery these software tools will replace some of the work of associate lawyers in larger law firms leading to a smaller employment force that works more effectively. As Mr. Martin points out — legal software can be good, and lawyers can be good, but lawyers using legal software are best.

The day before this conference,  Georgetown Law School, under the leadership of Tanina Rostain , held their Iron Tech Lawyer competition, for the third year in a row.  Law students show case legal expert systems that have created using the NeotaLogic legal expert systems platform .This student work is impressive as I witnessed software applications generating legal advice to complex questions with more accuracy that your average lawyer and at the speed of light.

We are still at the beginning of the beginning of these developments, but the pace of change is likely to be more rapid than we think. If you want to become more aware of an impending tsunami of legal disruption read John O. McGinnis and  Russell G. Pearces’ law review article in Fordham Law Review, titled, The Great Disruption: How Machine Intelligence Will Transform the Role of Lawyers in the Delivery of Legal Services

On the other end of the legal spectrum from Big Law, there is an estimated $40 billion latent market for consumer legal services yet to be served by lawyers. In 2013, two-thirds (66%) of a random sample of adults in a middle-sized American city reported experiencing at least one of 12 categories of civil justice situations in the previous 18 months. The most commonly reported kinds of situations involved bread and butter issues with far-reaching impacts: problems with employment, money (finances, government benefits, and debts), insurance, and housing.  Most consumers handle these problems on their own, or do nothing.  Moderate income people rarely seek assistance from lawyers to deal with these legal problems. Either legal fees are too high or they do not understand their problems to be legal.  80% of the U.S. consuming public can’t afford legal fees.  This is the often discussed Justice Gap in America that is the subject of an ABA Presidential Commission on the Future of Legal Services and a National Summit on Innovation in Legal Services to be held at Stanford Law School next week on May 2-4, 2015. [See Agenda and Schedule Here. ]

Figuring out ways to have more lawyers serve this latent market at affordable prices has proved to be a challenge. My own view is that scalable solutions must be software solutions. There is ample evidence that software alone can solve the legal problems of everyday consumers. Last year 600,000 users assemble legal documents and resolved their problems without lawyer assistance in over 40 states with the support of the U.S. Legal Services Corporation through Law Help Interactive and legal services programs in those states. This number will continue to increase. Other private legal software companies, such as ShakeLaw, continue to enter the market that offer pure software solutions to the resolution of legal problems at low or no cost.

I often hear lawyers say these solutions are inferior. Last week I also attended in Chicago, an American Bar Association School on UPL and participated in a panel on UPL and new technology. I argued that since the legal profession wasn’t serving 80% of consumers anyway so we should continue to experiment with legal software solutions. There was push back from this group, with some participants arguing that automated legal advice could be the unauthorized practice of law. I argued that in the interest of access to justice we should have a safe harbor that encourages legal software development for consumers, if there were sufficient warnings to the consumer they were not dealing with a lawyer, but a software application.

One state, Texas, has famously passed such an exception to their definition of the practice of law which reads:

In this chapter, the “practice of law” does not include the design, creation, publication, distribution, display, or sale, including publication, distribution, display, or sale by means of an Internet web site, of written materials, books, forms, computer software, or similar products if the products clearly and conspicuously state that the products are not a substitute for the advice of an attorney.’

I pitched to this group of UPL officials the idea I would like to see this exception to the definition of the practice of adopted in every state. My rationale is that it would remove a potential barrier to innovation and encourage the development of Internet-based software applications that could help close the Justice Gap. The response was underwhelming.

ibm_watsonDespite these constraints, legal software will continue to eat away at the lawyer’s market share. Where there is demand, entrepreneurs will find a way.  IBM’s Watson has demonstrated that it could beat the two world Jeopardy champions- not a trivial matter.



More relevant a team of law students at the University of Toronto students has created ROSS on the Watson platform to conduct legal research.  ROSS is not only for lawyers. It can be used by consumers to do their own legal research.

Lawyers who deny the power of these software applications to solve legal problems, and the exponential rate of change, have their heads in the sand,



H&R Block launched an experimental and innovative service in Texas in January to assist immigrants in completing H&R BlockUSCIS forms. The forms were powered by software and H&R Block’s role was to provide a service to assist users in completing the forms within their offices– , but no legal advice was to be provided.

It didn’t take long for the organized immigration bar to shut this service down.

Here is a report from Crystal Williams, Executive Director of the American Immigration Lawyers Association to the Board of Directors of AILA about their efforts to make sure that H&R Block would not compete with the immigration bar:

“H&R BlockAs many of you are aware, this large national tax preparer had been advertising an “immigration document service,” apparently as a pilot program in Houston. After some quiet diplomacy, H&R Block has agreed to cancel the program and remove any advertising related to it.  They are in the process of removing what is out there on it.  If, after another week, you or other members still see anything at a physical site, on the internet, or elsewhere about it, please let me know.”

“In addition, we had a meeting with another large national accounting firm that had been contemplating something similar, and it appears that they too will not be pursuing it.  We will continue to work on this issue with other firms that seem poised to cross the UPL line.  Chapter chairs, please feel free to share this with your members.”

It’s not clear where there is any UPL violation, as the Immigrant Assistants were simply helping users navigate through the software rather than provide any legal advice.  It is well documented there is a huge demand for legal assistance and that the immigration bar only serves a small proportion of the total demand as most immigrants can’t afford the fees that immigration lawyers charge. For this reason that there is well documented fraud abuse by “notarios”, as scam artists move to service immigrants with services that are over-priced, fraudulent, and inadequate.

On the other hand, we have a Fortune 500 company that attempts to provide a needed service to fulfill this gap in service with the idea that evaluation and assessment would in the fullness of time result in a limited and valuable service that is software-powered, not unlike the tax preparation service that H&R Block provides to millions of Americans. Rather than permit this experiment, the organized bar moved quickly to intimidate Block into shutting this service down.

ftcNo wonder there is little innovation in the delivery of legal services to consumers. No wonder consumers hate lawyers. Non-lawyers helping pro se litigants navigate through intelligent and smart software is hardly the practice of law, and it is, as Prof. Renee Knake argues, a protected First Amendment right.

Where are you —  U.S. Federal Trade Commission?

Surely there must be opportunities to experiment in the use software technologies to close the access to justice gap in America without interference by the organized bar. Regulation of legal services is too important to be left only to the lawyers. It is time to think about alternative schemes to regulate the delivery of legal services that involved interests other than protecting the income of the legal profession – despite the continued claim by the legal profession that their only interest is protecting the public from harm. There is little evidence to support that claim.


Ifedarbt’s no secret that the Federal court system is broken, Understaffed and overworked Federal U.S. District Court judges rarely hold trials any more – encouraging the parties to settle and keep their conflicts out of the Federal courts. Trials when required by the parties, take forever to be scheduled. Justice delayed, is no justice at all.

Traditional arbitration can be arbitrary.

A clause which often appears in an agreement to arbitrate states that:

“The Arbitrators and Umpire are relieved from all judicial formality and may abstain from following the strict rules of law. They shall settle any dispute under this Agreement according to an equitable rather than a strictly legal interpretation of its terms.”

Traditional arbitration in commercial disputes claims to offer benefits of speed and cost lower than a jury trial. But if the outcome of an arbitration is often arbitrary, the benefits of traditional arbitration are limited.

Now comes FedArb – a new hybrid model, part private court, part arbitration tribunal as an alternative  to traditional arbitration.

Founded by  Abraham D. Sofaer, a retired Federal Judge,  FebArb provides as arbitrators  —  retired Federal Judges  with a new set of rules modeled on the Federal Rules of Civil Procedure . These rules, and FedArb reliance on experienced judges, and commitment to follow precedent, bring principled decision-making back to the arbitration process.

Based in Palo Alto, the heart of Silicon Valley, FedArb provides its services through an on-line platform that is designed to ensure that all of the parties stick to deadlines and that disputes are resolved as quickly as possible. Fixed fee arbitration is also an option that is designed to limit the cost of resolving complex disputes.

FedArb has been growing slowly as traditional arbitration organizations are entrenched in arbitration contracts and corporate general counsel are risk adverse and are reluctant to try alternatives, despite the apparent benefits in speed of resolution, lower costs, and the potential for more just and principled outcomes.

Innovations in ADR are likely to move faster in the consumer market space. Modria demonstrates that there is a huge demand for speedy resolution of disputes outside of the courts, and that efficiencies and speed can be greatly enhanced by moving the entire process online.

The future of dispute settlement and conflict resolution is likely to be outside of the court system as innovators such as FedArb and Modria find new ways to resolve conflicts expeditiously and at a lower cost than traditional methods of dispute settlement.


*Disclosure- the author of this block post, Richard S. Granat, is a shareholder in FedArb.