When considering the impact of technology on the practice of law, one of the most important developments in recent years is the growth of the online document provider industry (OLPs). These for-profit entities - some, like LegalZoom, international in scope, and others much smaller - provide members of the public with legal documents they can use to handle their own legal problems, without having to hire a lawyer. These forms cover a vast number of legal subjects, from wills to corporate formation, from litigation to real estate. Moreover, OLPs provide their services in a variety of formats, from those that provide plain blank forms the consumer can print out and complete on their own, to those consisting of computer algorithms that complete forms for the consumer, to those featuring a clerical employee who guides the consumer on-line to choose the correct form and properly fill it out, and all manner of iterations in between. One recent study reported online legal forms generate approximately $4.1 billion in annual revenues with forms sold to consumers throughout the United States and many other countries.1
OLPs pose both a major opportunity for, and an existential threat to, our profession. On the one hand, they provide technology solutions that may make it easier and cheaper for lawyers to service their clients, particularly clients of limited means. On the other, these cheaper products threaten the livelihoods of many practitioners, who simply cannot compete with OLPs on price.
How to address this problem has puzzled the Bar, both locally and nationally, for years. Recently, NYSBA and the New York County Lawyers' Association (NYCLA) have taken the lead. Following a three-year study, and working in conjunction with the American Bar Association (ABA), consumer groups and industry representatives, NYSBA and NYCLA proposed Best Practices Guidelines for On-Line Document Providers for consideration by the ABA at its Annual Meeting in San Francisco in August 2019, where they were approved by the ABA House of Delegates. The very existence of the Best Practice Guidelines and the process by which they were created represents a major triumph for the organized Bar of our state, making us a national leader in this important area.
Before we discuss the Best Practice Guidelines, let's take a step back. The legal form industry did not start online; at least as far back as the 1700s, books were written on "do-it-yourself" law and the concept of a scrivener service pre-dates the internet.2 An 1859 book entitled Everybody's Lawyer and Counsellor in Business contains 400 pages of legal forms and information.3 Many court systems and governmental agencies make legal forms available to the public.4 And of course, many older New York practitioners remember Blumberg Forms, blank legal forms on almost every conceivable subject that could be purchased at legal stationery stores and were a staple of New York practice for decades.
Computer technology, however, has taken legal forms to a new level, out of the hands of lawyers and into the hands of consumers. Faced with the choice of paying for a lawyer to guide them or handling the problem on their own with a much-cheaper legal form, many consumers have chosen the latter. As a result, the OLP business continues to grow. LegalZoom estimates that it has served four million customers, that its forms may have created one million corporations, and that someone uses its forms to write a will every three minutes in the United States.5 Indeed, "as computers grow more powerful and ubiquitous, legal work will continue to drift online in different and evolving formats."6 As Arthur Norman Field, past president of the New York County Lawyers Association, put it, "the public has voted that it wants online legal providers and they are here to stay."7
The organized Bar's response to all this has often been confrontational. Bar regulators in Texas, North Carolina, Missouri and other states have sued OLPs (mainly LegalZoom), accusing them of engaging in the unauthorized practice of law (UPL). This approach has generally failed, with either outright dismissal or settlements calling for minor restrictions on the OLPs. In 2016, the Justice Department and FTC jointly recommended, in the wake of a recent settlement of a suit against LegalZoom by the North Carolina Bar, that the North Carolina General Assembly revise the definition of UPL to avoid undue burdens on "self-help products that may generate legal forms."8 They stated that these self-help products and other interactive software programs for generating legal documents would promote competition by enabling non-lawyers "to provide many services that historically were provided exclusively by lawyers."9 In short, they told the North Carolina legislature - and others who sought to regulate OLPs - to get off the OLPs' backs, and let the industry compete more freely with lawyers in providing legal services.
The Justice Department and FTC were doing more than just embracing free market principles. They were reacting to a very real need: the inability or unwillingness of a vast majority of Americans to hire lawyers when they need them. It has been posited that the overwhelming majority of low-income individuals and families, and roughly half of those of moderate income, face their legal problems without a lawyer.10 This "justice gap" is huge and is not closing.11 According to some estimates, "about four-fifths of the civil legal needs of the poor and two to three-fifths of middle income individuals remain unmet."12 Low cost internet legal providers can present the promise of affordable legal services for underserved populations of low and middle income consumers who cannot afford lawyers.
With all of this in mind, NYSBA and NYCLA held separate public forums in 2016 to discuss the role of OLPs and whether and how to regulate them. NYCLA issued a report in 2017 which concluded that OLPs should be regulated, either by the courts or the legislature. This regulation should include such areas as warranties of merchantability, enforceability, dispute resolution, data security, confidentiality of customer information, and many others. The report nevertheless recognized that because such regulation would take time to implement, the OLP industry should in the interim adopt certain best practices similar to the proposed regulations. The NYCLA report was endorsed by the NYSBA House of Delegates in November 2017.13
NYSBA submitted the report to the ABA House of Delegates for the 2018 Annual Meeting. That's when things began to get interesting. Many ABA groups reacted negatively to the report, stating, among other things, that regulation would stifle the OLP industry and exacerbate the "justice gap." The proposal was withdrawn and re-submitted at the ABA mid-year meeting in Las Vegas in January 2019. NYSBA and NYCLA agreed to take a different approach - suggesting only "best practices guidelines" - and the revised proposal began to gain support, even among those who had previously opposed it.
This process led to the creation of the ABA Working Group on On-Line Document Providers, which consisted of NYSBA and NYCLA representatives, as well as representatives of approximately 20 ABA Groups, including the Center for Innovation, the Business Law Section, the Committee on the Delivery of Legal Services, the Intellectual Property Section, the Dispute Resolution Section and many others. Industry representatives, including from LegalZoom and Lexis/Nexis, participated, as well as academics and consumer advocates. For three intense months this past spring, the working group revised the original NYSBA/NYCLA proposal and created a set of 15 Best Practices Guidelines that has garnered broad support within the ABA and was approved by the ABA House of Delegates at its August 2019 meeting is San Francisco with support from the ABA Business Law Section, International Section and Center for Innovation, among others.
The Best Practices Guidelines call on OLPs to adopt voluntary standards that will promote access to justice while protecting the public. In summary, the Guidelines suggest that OLPs provide:
•Plain language instructions and notifications for their customers;
•Agreements that are valid in each customer's jurisdiction;
•Forms that are up-to-date and take into account recent changes in the law;
•A system by which each customer affirmatively manifests consent to the OLP's terms and conditions;
•Notification as to how the customer's information will be used or shared with third-parties;
•Notification that the customer's information is not covered by the attorney-client privilege or work product protection;
•Reasonable data security; and
•Cheap and convenient dispute resolution mechanisms.
Why go with best practices rather than a regulatory model? Because, as shown above, attempts to regulate the OLP industry across the country have by and large failed, and the federal government has made clear that undue regulation of this industry raises serious antitrust and consumer protection concerns. Moreover, attempts to regulate technology companies tend to become outdated as soon as - and sometimes even before - they are implemented. Perhaps most importantly, NYSBA and NYCLA's goal is to spur innovation in this field, as that will eventually help the public by providing consumers and lawyers with better tools to deliver legal services cheaply and efficiently.
In short, the Best Practice Guidelines show NYSBA and NYCLA at the forefront of a nationwide effort to use technological changes developed by OLPs to improve the delivery of legal services and access to justice generally. We can no longer resist these changes, or seek to criminalize an entire industry. Instead, in the best tradition of our profession, we must work with the OLP industry to find new ways to help our clients and close the justice gap.