A bill was introduced in the North Carolina legislature that would narrow the definition of the “practice of law” to exclude sell-help legal materials, including books, software, and legal information. [ See House Bill 663 ]. The text of the amendment is:
“(b) The phrase “practice law” does not encompass any of the following:” … (2) the design, creation, assembly, completion, publication, distribution, display, or sale, including by means of an Internet Web site, of self-help legal written materials, books, documents, templates, 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. “
The bill was reported out favorably of the Senate Committee on June 24, 2014, and will be voted on by the North Carolina Senate on July 9. The North Carolina Bar Association is opposing passage of the bill. The real reason for this opposition is protecting lawyer’s incomes at the expense of easier access to the legal system for consumers.
Texas has had a similar exemption from the definition of the practice of law for years with no demonstrable harm to the public.
It is well documented that 80% of the U.S. consumer public can’t afford the high cost of legal fees, so self-representation, a constitutional right, is one way for consumers to get access to the legal system. [ North Carolina Const. Art 1 § 18: [ "All courts shall be open; every person for an injury done him in lands, goods, person, or his reputation shall have remedy by due courts of law, and right and justice shall be administered without favor, denial, or delay." ].
Self-representation enables consumers to resolve their legal problems at low cost. The U.S. Legal Services Corporation has endorsed this approach and funded over 40 states to enable citizens to assemble their own state-specific documents powered by a national document server managed by LawHelp Interactive.com. The Legal Services Corporation has also supported state-wide legal information Web sites. North Carolina also maintains a state-wide legal information Web site to provide tools to self-represented litigants and a legal forms site sponsored by the North Carolina Administrative Office of the Courts. North Carolina has also automated three sets of interactive forms using the National HotDocs Server designed to enable a self-represented litigant to a pro se litigant appeal an eviction or file for custody in court without a lawyer.
These are the software and legal information tools that the North Carolina Bar seeks to restrict by not clarifying that the provision of self-help legal publications, interactive software, intelligent Web advisors, and other emerging software-powered tools are not the “unauthorized practice of law.”
Instead of making it easier for citizens to exercise this constitutional right, the North Carolina Bar wants to make it more difficult.
A growing body of academic scholarship suggests that the major obstacle to access to the legal system for those who cannot afford legal services is the legal profession itself. Afraid of competition from new forms of legal solutions enabled by the Internet and more powerful software, the unauthorized practice of law committees of state bar associations target non-law firm Internet legal form web sites, non-lawyer legal document preparers, and other innovative means of enabling access on the theory they are protecting the public interest from harm.
The North Carolina definition of the “practice of law” is so broad it is arguably unconstitutionally vague and includes within it almost any act that results in creating a legal document. [ See Act ]. Categorizing self-help legal information materials as “the practice of law” is a slippery slope.
In a recent article from Professor Deborah L. Rhode, from Stanford Law School, & Lucy Buford Ricca, Director of the Center on the Legal Profession, Stanford Law School, titled: Protecting the Profession or the Public? Rethinking Unauthorized-Practice Enforcement., where the authors conducted a national comprehensive review of unauthorized practice of law enforcement, they conclude that:
A third problem is the lack of focus on the public interest. Although bar leaders and case doctrine insist that broad prohibitions on unauthorized practice serve the public, support for that claim is notable for its absence. Outside a few contexts such as immigration, foreclosures, and trusts and estates, it is rare for customers to assert injury, or for suits to be filed by consumer-protection agencies. As noted earlier, three-quarters of jurisdictions reported that fewer than half of their complaints came from consumers or clients, and two-thirds of respondents could not recall a specific case of injury in the last year. Of those who did identify a case, almost all involved immigration. So too, the vast majority of UPL lawsuits filed against cyber-lawyer products are brought by lawyers or unauthorized-practice committees and generally settle without examples of harm.
More directly relevant Professor Renee Newman Knake from Michigan State Law School argues in: Legal Information, the Consumer Law Market, and the First Amendment,
“The economic arguments for liberalizing lawyer regulation to facilitate the free flow of information support the First Amendment analysis. Perhaps one state will bravely implement a regulatory structure to expand access to legal information without intervention by the U.S. Supreme Court. If not, as this Article has shown, many of the restrictions governing the organizational form of law practice and the distribution of legal services are constitutionally vulnerable to the extent they constrain the creation and distribution of legal information…”
Marc Lauritsen writing in Chicago Kent Law Review, in an article titled, Liberty, Justice and Legal Automa , (See also, Are We Free to Code the Law?) , concerned that the obstructionism of the organized bar will chill innovation when access to the legal system has become critical, asks whether we are free to code the law.
“It is in the enlightened interest of lawyers, as well as the best interest of society in general, to enable programmatic expression of legal knowledge. We should be free to write code, run code, and let others run our code. If concerned citizens, law students, and entrepreneurs want to create tools that help people access and interact with the legal system, the government should not get in the way. Are citizens at liberty to create and share software that helps others understand and interact with the legal system? Are we free to code the law? We certainly should be.”
Professor Catherine J. Lanctot. from Villanova Law School concludes in an article on the same subject [ "Does LegalZoom Have First Amendment Rights: Some Thoughts about Freedom of Speech and the Unauthorized Practice of Law" Temple Political & Civil Rights Law Review 20 (2011): 255. ], that even if one assumes that the practice of preparing routine legal documents for consumers runs afoul of many unauthorized practice statutes, however, there remains an open question of whether these statutes may themselves interfere with First Amendment guarantees.
“To the the extent that these statutes broadly sweep vast amounts of law-related speech within their scope, they may infringe on free speech rights. The article concludes with a “caution about aggressive pursuit of these online document preparers without careful consideration of the possible risks involved. A successful First Amendment challenge to an unauthorized practice statute could have repercussions far beyond the world of LegalZoom.”
Conclusion: 10 reasons the North Carolina Bar should support this amendment to the definition of the practice of law:
- The legal profession will be viewed more favorably as on the side of the consumer, rather than on then in the side of their pocket books;
- A challenge to a publisher that legal software is the unauthorized practice of law is likely to fail on 1st Amendment grounds;
- There is a difference between legal software (a “publication” ) and a lawyer providing legal advice. (‘conduct”);
- Technology innovation will be encouraged for the benefit of both consumers and lawyers;
- It will be clear that the publication of consumer facing web-enabled interactive legal forms by legal aid agencies in North Carolina, and other public agencies, is not the unauthorized practice of law;
- The U.S Department of Justice and the U.S. Federal Trade Commission will have less reason to accuse the North Carolina Bar of anti-competitive behavior; [ See letter to Massachusetts Bar Association from the FTC on this subject ];
- Bar leadership can demonstrate that they understand that the legal profession is changing and can help prepare their members for 21st century law practice;
- With disclaimers, a consumer will understand the difference between using an interactive software application and receiving advice from a “live” person;
- The North Carolina Bar can avoid the charge it restricts access to the legal system;
- The North Carolina Bar can avoid the charge it is out of step with contemporary technological developments.