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Delivery of Legal Services

Advances in technology and legal informatics have led to new models for the delivery of legal services. Legal services have traditionally been a “bespoke” product created by a professional attorney on an individual basis for each client. However, to work more efficiently, parts of these services will move sequentially from (1) bespoke to (2) standardized, (3) systematized, (4) packaged, and (5) commoditized. Moving from one stage to the next will require embracing different technologies and knowledge systems.

Cloud Computing and Legal Services

The widespread introduction of cloud computing provides several benefits in delivering legal services. Legal service providers can use the Software as a Service model to earn a profit by charging customers a per-use or subscription fee. This model has several benefits over traditional bespoke services.

• Software as a Service is much more scalable. Traditional bespoke models require an attorney to spend more of a limited resource (their time) on each additional client. Using Software as a Service, a legal service provider can put in effort once to develop the product and then use a much less limited resource (cloud computing power) to provide service to each additional customer.

• Software as a Service can be used to complement traditional bespoke services by handling routine tasks, leaving an attorney free to concentrate on bespoke work.

• Software as a Service can be delivered more conveniently because it does not require the legal service provider to be available at the same time as the customer.

Software as a Service also complicates the attorney-client relationship in a way that may have implications for attorney-client privilege. The traditional delivery model makes it easy to create delineations of when attorney-client privilege attaches and when it does not. But in more complex models of legal service delivery other actors or automated processes may moderate the relationship between a client and their attorney making it difficult to tell which communications should be legally privileged.

Latent Markets

Because the traditional model for delivery services demanded all legal work to be done in a bespoke manner the supply of legal services is generally inelastic. Households that are ineligible for legal aid but are not able to easily afford bespoke legal services are effectively underserved by the traditional model. A report by the American Bar Association Standing Committee on the Delivery of Legal Services found that “among moderate-income households, 39% used the legal system to attempt resolution of their legal problems, 23% attempted resolution without legal help, and 26% took no action.” New organizations seek to access this underserved latent market by using technology to reduce prices and make services more available.

Regulatory Barriers to Delivery of Legal Services

Currently available legal technologies and processes cannot be implemented due to various regulations on the practice of law put into place by state bar associations and state statutes. There is controversy over whether these regulations remain in place due to economic wagon-circling by attorneys or out of genuine concern for potential harms to customers. Regulations which pose obstacles to widespread adoption of new legal technologies and processes include unauthorized practice of law statutes, ethical rules restricting alternative business structures for law firms, and professional rules which make practicing law in multiple jurisdictions difficult.

Unauthorized Practice of Law

Main article: Unauthorized_practice_of_law § Unauthorized_practice_of_law

Layperson organizations seeking to provide legal services must be careful to avoid committing unauthorized practice of law or face exposure to litigation from consumers and regulators. The definition of what constitutes unauthorized practice of law is nebulous and has been criticized as a potentially unconstitutional restriction on free speech.

Alternative Business Structures

Main article: Law_firm § Restrictions_on_ownership_interests

In the United States a complete bar to nonlawyer ownership has been adopted by the American Bar Association as paragraph (d) of Rule 5.4 of the Model Rules of Professional Conduct and has been codified in one form or another in all U.S. jurisdictions, except the District of Columbia. Because of these rules, law firms face additional difficulties in raising equity capital to finance development of their own legal technologies and additional regulatory requirements compared to layperson organizations. Outside of the United States there are several countries which have allowed nonlawyer ownership of law firms ranging from limitations on percentage ownership combined with a “fit to own” test (as in the United Kingdom) to allowing passive equity investment in law firms (as in Australia).

Multijurisdictional Practice Rule 5.5 of the Model Rules of Professional Conduct requires that attorneys who maintain a "systematic and continuous practice" in a jurisdiction be admitted to practice in that jurisdiction. For law firms that wish to provide legal services over online delivery platforms, this phrase is unclear as to what types of activities within a state require licensing in that state. This difficulty is especially acute for virtual law firms.