Regulating Legal Tech to Increase Access to Justice

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Scholar proposes a national regulatory system to ensure the equitable use of legal technology.

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Whether you are a driver disputing a parking ticket, a fiancé drafting a prenuptial agreement, or an entrepreneur starting a new business, legal technology can assist you.

Yet, in the United States, few regulations address tech-driven legal services.

In an article in the Fordham Law Review, Drew Simshaw, a law professor, identifies the potential of legal tech to connect underserved Americans to affordable legal services and proposes a national regulatory system to ensure that legal tech achieves this goal.

The legal services industry stands on the brink of a technological revolution, with an abundance of innovation in legal tech. Legal tech is technology that facilitates user interaction with the legal system, including tools that harness generative artificial intelligence.

Among popular legal tech, self-help options, such as HelloPrenup, LegalZoom, and DoNotPay, allow users to explore specific legal questions without hiring an attorney. Legal professionals so too benefit from these tools, which assist with tasks, including client intake, e-discovery, and document drafting.

Simshaw highlights the potential of legal tech to simplify problem-solving, improve consumer access to information, and allow users to resolve their legal issues in a manner that yields better outcomes than acting alone.

This technology also promises to bridge the access to justice gap by providing much-needed legal assistance to low- and middle-income Americans who might otherwise be unable to afford an attorney, Simshaw explains. Indeed, low-income Americans do not receive legal help for most of their civil legal issues due to the exorbitant cost of legal services.

But Simshaw cautions that the use of legal tech raises crucial considerations, including whether the use of self-help tools constitutes the unauthorized practice of law, how service providers account for the accuracy of their advice, and what protections apply to confidential user data, among other concerns.

Simshaw argues that the failure to regulate and address these issues undermines legal tech’s potential to aid under-resourced communities. He emphasizes that for legal tech to close the access to justice gap, legal tech needs to be “calibrated” to this purpose.

Without regulation, Simshaw warns of a possible outcome: one where tech tools become the primary source of legal assistance for low-income people, even when human help is appropriate. Simshaw envisions intake processes that redirect low-income individuals from professional legal services toward tech-driven assistance that, while better than nothing, remain inadequate.

In another undesirable outcome, legal tech becomes available only to the wealthy. Simshaw hypothesizes a scenario where only large law firms and their affluent clients can afford legal tech, thereby increasing the “gap between the have and have-nots.”

In a final scenario, Simshaw suggests that if the roll-out of legal tech is too slow or inaccessible, legal tech will fail to live up to its promise and have no impact on the current state of inequality. Indeed, limited access to the internet and computers also complicates the use of legal tech as a way to increase access to justice, especially in rural areas.

To avoid these adverse effects, Simshaw recommends that legal tech entrepreneurs and regulators consider consumer needs and the specific legal tasks these technologies aim to address.

The current regulatory response to legal tech innovations is limited to local regulations, such as Utah’s “regulatory sandbox” launched in 2020, whereby regulators relaxed the enforcement of their rules to allow tech companies to innovate and test new products and services.

Simshaw submits that Utah’s framework could serve as a model for a national scheme but notes the reluctance of other jurisdictions to adopt such a model because of a lack of information about the usage of legal tech services.

To move to a national regulatory response, Simshaw emphasizes the need for a national oversight body, such as the American Bar Association. A national oversight body for legal technology would not have enforcement authority but would instead administer rules that state supreme courts would accept.

Simshaws envisions that a national oversight body would serve four functions: screening prospective tech company participants, recommending safe harbors, monitoring participants by collecting data, and advising whether the tech company should receive a license to continue to have access to the public market.

Simshaw also encourages regulators to reduce “regulatory uncertainty” by defining the practice of law and providing more flexibility in investment in law practices beyond traditional conceptions, as did California’s Task Force on Access Through Innovation of Legal Services.

Those in favor of state regulation of legal tech argue that only the state should be responsible for monitoring legal services without federal standards or oversight. Simshaw, however, responds that other legal services—such as law school accreditation—are already monitored at the national level and states still retain control.

Challengers also contend that a shift to national regulation is inappropriate for unique services, such as those provided in the legal industry, even if they are provided through technology. But Simshaw maintains that the advantages of regulating legal tech at the national level outweigh any disadvantages due to the greater availability of expertise, data, and efficiencies.

Finally, Simshaw contests the argument that a national regulatory scheme would disrupt traditional local regulation of legal service providers by noting that innovations in technology have and will continue to be a disruptive force in regulation of legal services.

Simshaw concludes that, under his proposal, states would still maintain ultimate control over the regulation of legal services but emphasizes that a system of national standards would maximize the potential of legal tech and best serve the interests of those communities in the access to justice gap.