Unbundling Legal Services Could Open the Door to Innovation

Stairs leading to sky

Non-lawyer legal service providers have become an increasingly hot topic in recent years. With the potential to increase access to legal services for those in need and offer an alternative path to legal practice that mitigates the burden of law school, proponents continue to push for broader acceptance. A recent paper from the Brookings Institution suggests that non-lawyer legal services would benefit the economy, too.

Brookings Institution senior fellow Clifford Winston and Quentin Karpilow of Yale Law School argue that barriers to entry limit competition and raise prices, which will compound those inefficiencies by impeding operations, innovation, and technological advances in the long run. The theory is that opening the market to alternative legal services models would force the participants to be more responsive and be a catalyst for competition leading to innovation.

The authors draw parallels between barriers to entry in the legal industry with the drive for deregulation in networked industries, such as transportation, communications, and energy.  A key distinction, however, is that regulating these industries was motivated by competitive concerns rather than ethical considerations. Still, Winston and Karpilow conclude that following a similar path to deregulation in the legal field would incentivize competition to produce innovations that meet the needs of consumers and benefit the broader economy.

Some of the deregulation concepts that Winston and Karpilow advocate have already started gaining traction.  In particular, the legal profession has made great strides towards alternative legal services that allow for the “unbundling” of services which can be provided by individuals without law degrees rather than lawyers themselves.

In February, the ABA House of Delegates passed a resolution laying out guiding principles for the regulation and credentialing of non-lawyer legal service providers—something many states have already begun exploring.

In 2012, Washington became the first state to adopt a rule that authorizes Limited License Legal Technicians or LLLTs that are authorized and regulated by the state Supreme Court to deliver specific legal services without the direct supervision of a lawyer.  The state’s first LLLT began practicing last year and number of other states have also begun exploring similar programs.

Eleven states have Voluntary Paralegal Certification programs through a bar association or paralegal association and three have an exam connected to that program. These programs have the capacity to lower barriers to entry into the legal industry while increasing the accessibility of services and the assured quality of non-lawyer legal professionals.

Many clients already fail to receive adequate legal services despite licensing requirements. According to Winston and Karpilow, part of the problem is that state bar associations focus on prosecuting unauthorized practice of law rather than incompetent practice of law—even when the latter holds a more tangible potential to harm clients.

Non-lawyers remain barred from ownership of a firm in every state with the exception of Washington, D.C. This too has become the topic of much dispute as bar associations address changes to the blanket prohibition. Earlier this year, the ABA solicited comments on an issues paper about non-lawyer partners. Although some bar associations voiced their displeasure and consideration of the paper was tabled for the remainder of this year, the issue of non-lawyer ownership remains ripe for discussion, especially as non-lawyer legal service providers continue to establish themselves and move up the ranks in the legal industry.

Whether the rise of non-lawyer legal service providers is an initial step towards deregulation of the legal profession or just another thing for bar associations to regulate has yet to be seen. Nevertheless, legal service providers are an emerging part of the legal industry and increasingly a force to be reckoned with.


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  • Matthew Kreitzer Esq

    At a bare minimum: Non-lawyer legal service providers will receive some kind of testing for competency then, right? If the focus is providing competent legal services, there needs to be some checks and balances on the non-lawyer legal services. Aside from the dangers of consumers opting for options they don’t fully understand because these non-lawyer legal services providers don’t provide a full picture analysis (I’m thinking uncontested divorces that fail to incorporate adequate ERISA protections, estate planning that fails to incorporate special needs provisions, and incorporation strategies that fail to inform clients of compliance issues); there are issues of forms provided in such services being woefully inadequate if the cases ever make it to litigation. I’m surprised these dangers have not been noticed by the FTC in, for example, their proposals before North Carolina.

    • flashwins

      As soon as there is competency testing in place for attorneys then sure. Until then, no.

      • Matthew Kreitzer Esq

        There kind of already are checks and balances for attorneys. We have bare minimum competency standards such as the Bar Examination which, while not an accurate indicator of the quality of an attorney, is certainly an indicator of the bare minimum requirements an attorney should be expected to meet to practice. Primarily because of the interconnected nature of the law.

        Not to mention we have malpractice, insurance, and uninsured funds for clients as well.

        I do not see any corollary being proposed for these “non-lawyer” legal services. There needs to be more checks and balances in place, especially if it is being touted as an alternative to “poor lawyers”. Why should we replace “poor lawyers” with “even poorer non-lawyers”?

        • flashwins

          Clients tend to choose Certified Paralegals as non lawyer legal professionals, so your point about the bar is mute, although many would argue it was never a valid check for attorney competence. And I would agree with them.

          “Not to mention we have malpractice, insurance, and uninsured funds for clients as well.” Very confusing sentence, for a number of reasons.

          Did you mean “malpractice insurance” or did you purposely separate “malpractice, insurance” as if they are distinct?

          I’m confused by that. I was thinking it was a typo, but you used the Oxford comma after insurance so you are just throwing me off there. Either way, it’s one thing. “Malpractice insurance”.

          And what are these “uninsured funds for clients” that you claim all attorneys have?

          Anyway, that may not be a bad idea. Require them to have malpractice insurance, but let’s be careful not to purposely try to price them out of the market but requiring exorbitant amounts. And maybe some fairly clear guidelines on what does and does not constitute UPL. So I don’t entirely disagree with you, but it should not be a barrier to entry.

          And about “poor lawyers” … the goal here is access to justice. Not attorney pocketbooks. That being said,. Limited Scope Representation will help “poor lawyers” be anything but. They will be able to engage clients that historically have not been able to engage an attorney.