DOJ and FTC Weigh In on Exempting Websites from the Practice of Law

On June 16 of this year, North Carolina passed a law creating a limited carve-out from the definition of the practice of law for websites that met certain requirements.  The bill is here.  There has been robust critique of the requirements.

However, the purpose of this post is to draw attention to the staff  letter submitted by the US Department of Justice and the Federal Trade Commission, addressing some of the general issues raised by this topic.  Their comments should be cited regularly by those advocating flexibility in the system.  Specifically (underlining added in italicized and quoted text below is by me ):

Definition of Practice of Law. 

The Division and FTC staff believe that “the practice of law” should mean activities for which specialized legal knowledge and training is demonstrably necessary to protect consumers and an attorney-client relationship is present. Overbroad scope-of-practice and unauthorized-practice-of-law policies can restrict competition between licensed attorneys and non-attorney providers of legal services, increasing the prices consumers must pay for legal services, and reducing consumers’ choices.

.  . .

The Agencies believe the definition of the practice of law should be limited to activities where: (1) specialized legal skills are required, such that there is an implicit representation of authority or competence to practice law, and (2) a client relationship of trust or reliance exists.11 The Agencies have recognized District of Columbia Court of Appeals Rule 49 Commentary as instructive.  (Link added)


Value of Software.

Interactive software programs for generating legal documents appear to be responsive to consumer demands for more cost-effective and efficient ways to address their legal issues. These software products may expand consumer access to legal services, facilitate the unbundling of legal services, promote a more efficient allocation of resources (e.g., among licensed attorneys, non-attorney providers, and self-help efforts), reduce transaction costs, increase convenience, and help some consumers more effectively to address their legal situations. For example, a consumer who may be unable to afford to retain a licensed attorney both to draft and review a legal document may be able to use interactive software to generate a draft document, and pay an attorney only to review the document, if desired. At the same time, such programs may raise consumer protection issues regarding consumers’ understanding both of the generated forms, and whether or when it may be desirable for a consumer to seek the services of an attorney.


Value of Competition Between Lawyers and Non-Lawyers.

The Agencies believe that consumers generally benefit from competition between lawyers and non-lawyers in the provision of legal-related services. Consumer demand should determine the range of choices in the marketplace, unless it is clear that specialized legal training is required to perform a legal-related service. Overbroad scope-of- practice and unauthorized-practice-of-law policies can increase prices, impede innovation, and otherwise harm competition and consumers.

Harm Comparison — Here for Software.

Th[e] analysis should also examine whether any harm from these products is materially greater than comparable harms posed by traditional attorney-client relationships or government provision of legal services or information, such as legal forms or other information available at the website of a government court or agency. As a matter of sound competition policy, a regulatory framework should not in purpose or effect favor one type of similarly situated competitor over others in addressing any identical or similar harms from these products.

Consumer Protection.

Regulation of interactive software for generating legal documents should
therefore focus primarily on deterring unfair or deceptive advertising and
marketing practices relating to the content of forms, their validity, liability, other
terms of use, and any related filing fees, and addressing any other consumer protection issues.
The letter contains extremely helpful footnotes detailing the history of the Agencies views and actions with respect to these issues, which may well be of even greater help in particular contexts.  Yet another example of the value of ATJ attention in these agencies.
Sorry for the delay in giving this the attention it deserves.

About richardzorza

I am deeply involved in access to justice and the patient voice movement.
This entry was posted in Alternative Business Structures, Anti-Trust, Bar Associations, De-Regulation, Dept. of Justice, Document Assembly, Federal Agencies, Forms, Non-Lawyer Practice, Plain Language, Rules Reform, Technology. Bookmark the permalink.