Now Is the Time to Rethink UPL Regulations


Guest post by Dan Lear, Director of Industry Relations at Avvo.

The sanctity of lawyer-provided legal services was central to my law school experience. I left law school believing the provision of legal services by non-lawyers was unthinkable. Restrictions on non-lawyers practicing law seemed as fundamental to our legal system as the hallowed doctrine of judicial review.

Today, it’s clear that unauthorized practice of law (UPL) regulations are doing lawyers more harm than good. Rethinking UPL regulations will help lawyers adapt to the realities of the modern legal marketplace but, before jumping into that in detail, let’s step back and understand the historical reasons for the development of the current UPL regime.

The Origins of UPL

Interestingly UPL regulations, the laws that effectively prohibit non-lawyers from practicing law, are relatively recent developments. The first century of the United States’ legal system was characterized by a loosening of the UPL infrastructure as many state legislatures passed measures permitting non-lawyers to appear in court.1 Even by 1908, the first Canons of Ethics by the American Bar Association (ABA) made no mention of the UPL.2

In the late nineteenth century, bar associations’ power grew and these entities sought to limit infringement on their services by those outside of the profession.3 Less than 30 years after it was first published, the ABA’s Canon of Professional Ethics in 1937 added a clear denunciation of UPL, stating “No lawyer shall permit his professional services, or his name, to be used in aid of, or to make possible the [UPL] by any agency, personal or corporate.”

Since that time, for a variety of reasons, including a Supreme Court decision that found certain ABA efforts to limit UPL to be anti-competitive, UPL prosecutions have declined.4 Still, every state but one has an unauthorized practice of law statute that makes it illegal for anyone who doesn’t meet the requirements set by state bars or lawyer regulators to practice law.

Influence of UPL on the Business of Law

Functionally these rules prohibit individuals who are not lawyers from doing things that have been reserved to lawyers, also known as practicing law. However, as the rules have developed, they’ve also been expanded to include other activities that don’t necessarily involve people who aren’t lawyers practicing law (such as fee-splitting). Further, in a rule-interpretation only a lawyer could truly love, fee-splitting rules also extend to non-lawyers owning law firms because owners share in the profits of an entity and all law firm profits come from legal services.

These regulations—or more broadly—this paradigm which emerged and gained hold most firmly in the last century, have generally been good to lawyers. Between 1910 and 2000 the proportion of total employment of lawyers and judges compared to that of the general employment population more than doubled. In the first decade of this century, the nominal size of the legal sector grew from just under $150B to more than $200B by 2009.

Yet, the legal sector has some significant problems. Let’s start with the fact that pro se bankruptcy filings are increasing twice as fast as overall filings. Or that more than 4 out of 5 low-income litigants go it alone because they feel priced out of the legal market. Finally, roughly half of medium- to high-income consumers in the U.S. are avoiding lawyers. Access problems in our country are well-documented but when even medium-to-high income people are avoiding lawyers the problem is clearly larger than legal services for those who can’t pay for them.

Some have argued that the legal services delivery system in our country is fundamentally broken. I won’t go that far, but I will suggest that the legal industry has some significant problems and that we must look outside of law—and beyond lawyers—to try and fix them.

Bringing In Outside Talent

A logical solution to solve access to justice and lawyer affordability would be to bring in big business and economic minds to help. We’ve seen other professions revolutionized for the good by this type of reexamination: in accounting there are not only companies such as H&R Block, but massive, helpful, and efficient systems like TurboTax. While healthcare and medicine remain a hot-button political issue and very much a work-in-progress, few can argue that those who need urgent, immediate medical help in this country can’t get it.

I’m not sure that the same can be said of law.

But even if lawyers did reach out for help, why would those outside law who possess the type of business and strategic knowledge respond? What is their incentive? Unfortunately, due to UPL restrictions, whatever goodness they unlock, their maximum upside is a consulting fee rather than any sort of profit sharing.

Using UPL regulations, today’s lawyers have excluded non-lawyers from participating in delivering legal services. To make matters worse, lawyers are known to bully out of existence threats to their monopoly on legal services. By using UPL regulation, lawyers have eliminated any incentive for non-lawyers to either deliver legal services or own any stake in entities that do.

The Benefits of Dismantling UPL

The consequences of irrationally excluding outside experts from full participation in law is pretty clear. Where is the legal industry’s Bill Gates, Jeff Bezos or even Mark Zuckerberg? When is the last time a non-lawyer focused on launching the “next big thing” in legal?

While UPL may have served to better organize the legal profession and, maybe, help consumers to find competent representation 50 years ago, now it is only hurting it. UPL is preventing lawyers from adapting to the swift changes around them because, to do so, lawyers must fully embrace, not exclude, professionals from other fields who can partner with them.

In addition to letting lawyers focus on practicing law, business people can help lawyers develop and market legal services that are responsive to consumer demand and that can compete with those provided by online legal service providers. They can also help lawyers raise money, manage finances, and streamline their operations.

Beyond business operations and growth, business acumen will also help lawyers run more ethical and less risky practices. Misappropriation and mismanagement of client funds is a cause of some of the most severe lawyer discipline and significant malpractice claims. Business leaders can help lawyers put together plans and systems that avoid operational oversight or cash flow problems.

But it’s not just business people. Lawyers need to partner with economists, statisticians, technologists, designers, content developers, and others. These professionals bring an array of differing skill sets to the table that can help lawyers connect with prospective clients and the general public in new and important ways.  Every other industry does this. Why are lawyers any different?

Finally, I’m not just talking about hiring law firm consultants who specialize in any of these disciplines. Consultants can help, but they will never bring the passion and innovation of a business owner. To create the proper incentives, non-lawyers need to be invited into legal services businesses as true partners. Under the current UPL framework, this kind of true partnership is prohibited.

It’s time for lawyers to rethink UPL. We are facing a drastically changed, and rapidly changing, landscape. Lawyers need outside expertise to respond to the demands of the increasingly savvy clients and consumers of low-to-moderate means.

Although, ultimately, restrictions on having non-lawyers do lawyerly things are without much justification, we don’t have to start there. Instead, let’s re-evaluate the specific prohibitions on sharing fees with non-lawyers that prohibit us from bringing in outside help as a partner and owner, not simply as a consultant. If we challenge the previously sacrosanct exclusivity of lawyer-delivered legal services, even a little, we will discover that the extensions of those prohibitions are, ultimately and immediately, doing us more harm than good.

Featured image: “ conceptual, businessman tethered and strained” from Shutterstock.

  1. See Barlow F. Christensen, The Unauthorized Practice of Law: Do Good Fences Really Make Good Neighbors-Or Even Good Sense?, American Bar Foundation Research Journal Vol. 5, No. 2 (Spring, 1980), pp. 159, 169-75. 

  2. Derek A. Denckla, Nonlawyers and the Unauthorized Practice of Law: An Overview of the Legal and Ethical Parameters, 67 Fordham L. Rev. 2581 (1999), pp 2583. 

  3. James W. Hurst, The Growth of American Law: The Law Makers, p. 323 (1950). 

  4. Denckla, pp 2585. 


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  • Matthew Kreitzer Esq

    Laudable goals, but I have some minor concerns about whether or not the specific reformations you propose would have a net-positive effect. Being knee deep in the small law firm trenches grants a unique perspective on the State of the Law. Business minded people are already trying to break into the legal arena; Avvo Legal Services, Rocket Lawyer, Hire an Esquire, Local Appearance Services, etc.

    We are seeing a great “uber-ization”, or at least the attempts at such, by business minded people when they enter the legal profession. How do we safely guide the development of the legal practice when we remove the restrictions that are keeping the status-quo? I would posit that, if business people were to get their way, that would result in a net-negative impact on consumers; the real reason we have these restrictions on Unauthorized Practice of Law and fee-splitting.

    For a great example; one need look no further than the state of Business Law. Any good business attorney will tell you that incorporation is a loss leader among their firms. Why? Because websites (unnamed) are peddling the quick and easy LLC. Consumers are prone to taking the cheap and easy way out, and not necessarily doing market research. What does this result in? Too many people opting for incorporation and asset protection strategies that do not fully protect their business estate. There is a cultural zeit geist amongst small business owners that “LLCs are the way to go!” because certain legal websites write thousands of articles about a “quick and easy LLC”. Uber-ization of legal services, led by business minded individuals, is having a net-negative impact on that particular practice area.

    I think there is potential that such a similar thing could happen in other practices such as Family Law and Estate Planning. Consumers, in their completely natural and understandable tendency, would opt for options that do not necessarily protect their needs. In Family Law, I see “quick and easy uncontested divorces” being advertised all across craigslist. I would fear, as a Family Law practitioner, that the growth of business involvement in the legal profession would lead to even more people pursuing the uncontested route, horribly undermining certain equitable interests a person may have in pursuing a contested divorce.

    A similar thing may be said for estate planning, where every “mah and pah” consumer would pursue a simple will, never knowing the importance of Medicaid planning or adequate estate protection.

    I am not arguing completely against your proposal of changing fee-splitting. I am advocating caution. There are clear examples right now of businessmen attempting to enter the legal profession to the detriment of consumers, and these efforts are having very real net-negative results.

    So, I question; how do we control for this and still allow for better access to justice? Are more people getting access to justice? Yes. Is it “good” access to justice? I say no.

    • Paul Spitz

      I practice business law, and I see the very encroachment that you mention in your example. And invariably, the people that form companies using those low-cost, web-based services get cookie cutter documents that may or may not fit their unique needs, and they walk away with zero understanding of what’s in those documents. I’m not saying the documents are poor quality for what they are, but a high quality document that is the wrong document for a particular person is worthless. Or worse, will cause that person more money to fix. I provide the added value of giving the client what the client actually needs, and making sure that the client understands what he or she has.

  • Paul Spitz

    I’m continually amazed when non-lawyers try to pitch me on allowing them to encroach on my business, as if that’s a good thing for me. I’m all for relaxing UPL rules to better facilitate licensed attorneys having a multi-state practice, without requiring them to take a dozen different bar exams. But relaxing UPL to allow non-lawyers to steal my livelihood? Screw that. It takes chutzpah to ask me to support that.

    • Interesting position, and understandable from a protectionism standpoint. It is clear what interests the UPL rules protect from the POV of lawyers, but are they really serving the interests of the people? And if you say yes, can you support that position with data? Because the stats on A2J and A2LS are pretty compelling in showing that the status quo is failing a majority of the population.

      • Paul Spitz

        “protectionism standpoint” minimizes the investment in education and experience that I have made. Unlike an app, I went to law school for three years, graduated near the top of my class, passed two bar exams and was admitted by motion to a third, and worked for several years to develop the knowledge, experience, and judgement that I can provide to clients. So I think that I am far better equipped to serve my clients than an app, or someone who hasn’t made the investment in education and experience that I have. If you want data, here are some numbers:

        3 years of law school ($60,000+ in tuition)
        10+ years of work experience as a lawyer
        3 bar admissions, including California, which had a 42% pass rate on my exam

        A2J and A2LS are red herring arguments, because there is a wide variety of legal services. The stats that apply to criminal defense or landlord-tenant law don’t have much meaning in the context of other areas of practice.

        • How should we factor in the deal we made in order to get the protection of UPL? In other words, one of the reasons you/we are allowed to practice under the protection of UPL is that we promise to serve the public interest in, among other things, access to justice. I think it’s pretty fair to say that, as a profession, we’ve reneged on that promise.

          • Paul Spitz

            Well, that implies that every lawyer should be out there representing the indigent and downtrodden. I don’t do criminal defense work, I’m a business lawyer. I expect my clients to have adequate budgets for operating their companies, which includes paying legal fees. If we follow your comment to its logical conclusion, are we even allowed to charge clients for our services?

            • Well, that implies that every lawyer should be out there representing the indigent and downtrodden.

              Why yes, yes it does. From Rule 6.1:

              Every lawyer has a professional responsibility to provide legal services to those unable to pay.

              • Paul Spitz

                And what percentage of the profession actually does this? 20%? In any case, that’s a model rule, which means that unless your state has adopted it, it has no effect. I’m in Ohio, and the Supreme Court of Ohio has deferred consideration of Model Rule 6.1. Even if adopted, it’s an absurd rule, based on an 18th century understanding of the profession. It directly conflicts with the more important requirement that lawyers provide competent representation. A lawyer that specializes in telecommunications regulation has no business doing public defender work, or representing a disabled veteran in a VA appeals process.

        • I don’t doubt your chops or your bona fides, but shouldn’t they serve to position you within the market rather than wall you off from it?

          Also, on the corporate law side: if lawyers are doing such a good job, why have realization rates plummeted (even in the face of increased discounting) while 76% of corporate law departments surveyed by Altman Weil plan to move even more work in-house in the next year?

          And speaking of the in-housing of legal work, one of the reasons it is so attractive is that it allows businesses to freely (without UPL restrictions) utilize the business talents of the various non-lawyer roles Dan mentions in the article. In that way we are already seeing significant encroachment on “legal work” from non-lawyers, but in a manner that law firms are powerless to stop and hamstrung to compete against.

          As to your personal numbers, you may be falling victim to the cognitive bias of equating cost with marketplace value (a common affliction in our industry), and also possibly bumping up against the sunk cost fallacy. Again, I don’t doubt that you have significant value to offer your clients, but the fact that you spent $60k on law school and a ton of time on exam prep doesn’t difinitively establish that value.

          • Paul Spitz

            Again, the legal profession is diverse. The problems that face BigLaw don’t challenge me in the same way, as I’m a solo. I don’t have the bloated overhead and unethical billable hours practices that have driven so much corporate work in-house over the past 20 years. And I haven’t lost any Fortune 100 clients to in-house work, because Fortune 100 clients probably wouldn’t use a solo even if they didn’t have an in-house department.

            In addition, all of those in-house departments are run by licensed general counsels, and staffed by licensed attorneys, who either do the work or supervise paralegals doing the work. It’s not like the marketing department is running a complex international acquisition, or the shipping department is handling regulatory compliance.

            As for what I spent in terms of time and money on law school and exam prep, if you put me next to the auto mechanic, and ask “did you go to law school, did you pass a bar exam,” I can pretty much guarantee that my yes answer and his no answer will establish that I bring value to the table.

        • Your qualifications and experience speak for themselves which is why lawyers should practice at the top of your profession focusing on complicated legal dilemmas. If you were in the fashion industry you are the equivalent to Armani or Tom Ford providing the finest customized clothes on the market.

          The challenge is that for too long working class families and small businesses have either had one option lawyers at the top of their profession or nothing. There are many people that would prefer less qualifications which why in fashion there are brands such as Banana Republic and old Navy but nothing in the legal profession exists as the equivalent.

          How many people would walk around naked if Armani was the only player in fashion and charged high fees? That is precisely what is happening in the minefield we call the legal industry. High fees for great service that very few can afford. Consumers are comfortable with Ok service for a low fee.

          • Paul Spitz

            It isn’t always just a matter of being at the top of the profession. Believe me, I’ve seen plenty of shoddy lawyering coming from “top” law firms. There are so-called “startup lawyers” at one of the biggest law firms in town – hundreds of lawyers with offices all over the country – who persist in routinely setting up tech startups as LLCs, despite a consensus in the legal and investment community that c-corporations are the way to go.

            The bigger issue is how the lawyer is set up to deliver services. It’s my opinion that the bloated overhead and billable hour requirements of mid-size and large law firms are the major impediment to providing cost-effective legal services to small business clients. The client doesn’t want crappy services at cheap prices; he wants quality legal services at affordable prices.

  • Landon Ascheman

    I for one welcome closing down my practice to join the Wal-mart Legal services clinic. On the plus side, my boss won’t really care if I keep my bar license as long as I keep working to increase my hours.

    I don’t think the “harm” from ULPs is as clear as you claim.

    • Perhaps, but can you quantify the benefits?

      • Landon Ascheman

        I think the ethical requirements for attorneys, the vetting and ideally the assurance of at least a minimum level of competency is what the general population receives from restricting the practice of law. And increases the risk and accountability for those that violate the rules.

        I’m not saying that a business people can’t or shouldn’t run/manage/coordinate law firms or attorneys, however, they should be trained to do so, and held accountable in the same way. Perhaps they can go get a J.D., take the bar and swear the oath.

        At the same time, I’m not sure I’m bound to quantify the benefits as the burden is on those seeking change.

        • If we place all of the burden on those who would change the status quo, we turn a blind eye to the costs of stagnation. And I completely agree that non-lawyer participants in legal businesses should be accountable to clients and to the justice system, and possibly held to a qualification standard as well (I’ll have to think more on that piece). But I don’t think that accountability and regulation should automatically include exclusion and protectionism.

          • Landon Ascheman

            If you agree with accountability and qualification standards, why is it then to much to ask that they obtain a J.D. and become licensed attorneys? We had several business owners in my law school class. And many who have since become business owners.

            Perhaps the issue is that a J.D. shouldn’t be required to become a licensed attorney, or that the current licensing isn’t an efficient or accurate way of ensuring accountability or qualification standards. Either way I think UPLs are important to protect the community, but perhaps there are better ways to obtain or conduct the licensing to ensure those same goals

            • Surely there must be some way to ensure accountability short of requiring a $100,000, 3-year investment? Especially where only a fraction of that investment goes toward accountability topics anyway.

              And I’ll believe that UPLs are the best way to protect the community when I hear that argument voiced by those needing protection, not just from the self-appointed protectors who have substantial financial interests in maintaining the current scheme.

              • Ruth Tick

                I am one of those nonlawyers. I’m the statewide Director of the Florida Association of Legal Document Preparers. The sheer number of pro se litigants speak for themselves. In Florida family court, for example, up to 70% of litigants are pro se in some circuits. Likewise the high number of consumers filing bankruptcy petitions without an attorney were stated elsewhere in this thread. Some consumers cannot possibly afford an attorney; and some don’t want to use an attorney for other reasons. We, myself and all association members, are well aware of the UPL rules in Florida. Members are accountable to the marketplace in general, must abide by our code of ethics – the FALDP Pledge; and must meet educational and experience standards to join. Consumers can complain about a document preparer through our site, contact the association to find out more about a member, and also give praise.

                Our members are educated and experienced. Many are former paralegals with years of law firm experience, others are attorneys from other states or countries who chose not to sit for the Florida Bar Exam. I’m educated. My undergrad is in Legal Studies from UCF; and I also earned an MS in Criminal Justice also from UCF. According to Florida UPL rules, document preparers are not allowed to advertise their years of experience or level of education; offer “free consultations”; refer to themselves as “paralegals” or “legal assistants” or do anything that an attorney might do as that “might be practicing law”. Florida has never actually defined the practice of law, and I am constantly wondering, then, how can they define the unauthorized practice of law?

                We are not allowed to share fees with attorneys. However, if I’m not mistaken Avvo is not attorney owned and does share fees with attorneys. Please correct me if I’m wrong. I would be happy to refer more customers to attorneys if I could receive a referral fee. As it is, I have a few attorneys that I refer to and receive no compensation, and hope that they may return the favor. All other consumers who need advice or representation are sent to the Florida Bar’s website.

              • Matthew Kreitzer Esq

                See, there is a major flaw with that line of reasoning. Namely the people who need protecting do not know they need protecting. I would refer to my prior post, in that it isn’t a matter of non-lawyers preparing documents that are completely devoid of legal sufficiency. It is a matter of non-lawyers preparing documents that are not a maximization of legal equity.

                I assure you, if you told these same people you were claiming to protect that these non-lawyers may very well be depriving them of hundreds of thousands of dollars, they would be rightfully angry.

                However, the people that the UPL rules are designed to protect do not realize the situation they find themselves in, and often lose significant amounts of legal protection or legal maximization by relying on the assurances of people who, while not entirely wrong, are not maximally right.

                And this isn’t something non-lawyers will realize *without* an accurate legal training. I would hate for these people to realize what they’ve done when the evil collections attorney comes running around the corner and tears their fancy little “irrevocable trust” to ribbons because the non-lawyer who prepared it didn’t know how to adequately protect from claims of fraudulent conveyance or badges of fraud. (Let alone the thousands of other common law doctrines that could cause them absolute nightmares.)

                That is most assuredly a net-negative result or a serious harm to consumers. The road to ruin is paved with?

  • This is a pretty big topic in Virginia, where the state bar president recently declared the DIY Legal industry to be “the” threat to our profession. I disagree and my letter to the editor of Virginia Lawyers Weekly was recently published. Here it is