To reach their goal of improving access to justice, many justice tech firms are finding that they need to navigate the sometimes-confusing maze of regulatory rules and legal restrictions on non-lawyers performing legal work
This article is part of an ongoing series titled Scaling Justice, by Maya Markovich and others in consultation with the Thomson Reuters Institute. This series aims to not only explore how justice technology fits within the modern legal system, but how technology companies themselves can scale as businesses while maintaining their access to justice mission.
Despite the historic domination of business law in the field of legal tech, the industry has begun to include mention of access to justice in discussions of tech application, entrepreneurship, and investment in solutions that aim to narrow the justice gap through technology. The opportunity is vast, with a total addressable market of 5 billion people worldwide.
Like any nascent sector, startups on the crest of this breaking wave of justice tech must work through this lack of market awareness and stakeholder inertia toward new models. Further, they also face a gauntlet of regulatory obstacles in an antiquated profession that is reluctant to release its monopoly on the market. These restrictions hamper progress toward universal access to justice. With the advent of widely available AI tools, however, technology can and should be part of the solution, and clearing roadblocks to scale innovation in access to justice is essential.
Legal advice and services in the US and the UK
Regulations differ across regions of course but often have the same effect of hampering progress and market growth. In the United States for example, the American Bar Association’s Model Rules of Professional Conduct 5.4 prohibits unauthorized practice of law, precluding non-licensed attorneys from delivering legal services. Each of the 50 states have adopted some form of Rule 5.4, but there is no bright line between providing legal information and legal advice, leaving those who help pro se litigants just making their best guess.
Given the scale of the access to justice gap, lawyers alone cannot narrow it. Not only will there never be enough lawyers in the US to represent everyone who needs help with their legal issue, it does not make economic sense for them to take on clients in certain types of matters. Pro bono and legal aid organizations are doing incredible work, but they are under-resourced and overwhelmed. As tech tools reach true viability in the legal sector, the profession needs clarity on what constitutes unauthorized practice of law and where and how technology can fit in to address the access issue.
In the United Kingdom, legal advice and services are similarly regulated. Legal advice is defined as guidance on legal rights and obligations, while reserved legal services include activities such as litigation and conveyancing (property transfer), which can only be performed by authorized professionals. This regulatory framework, while designed to ensure quality of legal services, also limits their accessibility to those who can afford them.
Clients often face overwhelming legal jargon and documentation, with no support for implementation or follow-up once a case concludes. This lack of transparency and continuity further alienates individuals seeking resolution to their legal problems. Moreover, costs can spiral without a clear ceiling, often leaving clients worse off than they were before they engaged legal services.
The UK and US have thriving legal tech communities, yet their impact on access to justice has been limited. Current first touchpoints for legal advice, such as UK.gov and Citizens Advice in the UK and local bar associations in the US, simply direct users to lawyers rather than offering self-serve solutions. Collaboration is essential: government bodies, courts, legal aid organizations, and lawyers should work with justice tech companies to harness the potential of generative AI (GenAI) to promote access to justice.
Exploratory frameworks like Utah’s legal regulatory sandbox go beyond just providing innovators with access to regulators for Q&As and instead can provide a platform for joint learning, user testing, and feedback-gathering that will enable evidence-based policy changes. This approach not only fosters trust and understanding but also paves the way for AI-driven legal services to gain the recognition needed to transform the sector.
The knotty state of current regulations
Without regulatory change, direct to consumer justice tech companies cannot help the millions of Americans who need it — because they are stuck. Indeed, some of the challenges that justice tech companies face are very well laid out in Upsolve’s recent complaint in New York, especially around outdated rules of professional responsibility, which includes hurdles such as:
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- vagueness of unauthorized practice of law statutes and revenue-sharing restrictions;
- the inability to hire lawyers directly to provide legal advice;
- the fact that, with very limited exception, only law firms can collect fees directly from clients seeking legal advice, otherwise it is “fee splitting” or revenue sharing, which is prohibited;
- also, companies cannot hire paralegals with decades of experience to give any sort of public-facing advice to consumers unless they are supervised by a lawyer in a firm. What is allowed, however, is a lawyer with zero years of experience in an area of law supervising a paralegal within a firm structure to deliver the same advice; and
- justice tech companies live under the constant threat of looming lawsuits for the unauthorized practice of law, which are threatened monthly and can easily bankrupt a startup.
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These outmoded regulations governing unauthorized practice of law and revenue-sharing are standing in the way of ameliorating the access to justice crisis. And while their principles are incredibly important, there are no clear standards. Often unauthorized practice of law situations are subjective and oversee by legal bar groups that are often set up to protect lawyers’ market share, not the consumer.
The potential of GenAI
There is hope, however, in advanced technology. GenAI, particularly large language models (LLMs), holds much promise for the legal sector. By 2026, it is anticipated that 80% of legal cases will involve GenAI, significantly reducing time and resources. Further, GenAI has the potential to democratize access to justice by making legal advice affordable, accessible, and equitable. This scalability could provide exceptional value, far surpassing any incremental increases in the legal aid budget.
The UK and US stand at a similar crossroads, with the opportunity to lead the integration of GenAI into legal services and create a more accessible, affordable, and equitable legal system. The advent of Generative AI presents a chance to build upon alternative business models, transforming legal services in a way that benefits billions of consumers rather than merely increasing margins for law firms.
To effectively promote adoption and impact, however, regulators should transition from merely facilitating advocacy to instead establishing regulatory sandboxes. These sandboxes would allow consumers to safely experiment with new technologies, while innovators would gain visibility and a platform to build trust. Meanwhile, regulators could collect feedback and evidence from real users to guide their policy changes.
With the demand for legal access outstripping the supply of professionals, GenAI has the potential to transform justice tech by ensuring its applications are affordable, available at all hours, and equitable for every user. It is also critical to the future of the legal profession, which is desperately in need of new and creative ways to adapt to and survive in our changing world.
You can find out more about the impact of Justice Tech here
