When public policies collide: legal "self-help" software and the unauthorized practice of law.

INTRODUCTION

As computer technology advances at an astonishing rate, the law often struggles to keep pace with the corresponding development of new issues of law or, at the very least, new twists to existing law. Such is the case with the unauthorized practice of law, a creature of both state constitutional and statutory construction. Throughout the years, defining and regulating the practice of law has been the focus of many attempts by state legislatures and courts alike, with the result being that there is no one universally accepted definition.(1) Legal "self-help" books and instructional "kits," facilitating the production of legal documents, have often been scrutinized for potential unauthorized practice violations.(2) It is no surprise, then, that publishers of software used for the creation of legal documents have also been examined for possibly engaging in the unauthorized practice of law.(3) For instance, in 1999 a federal district court judge held that Quicken Family Lawyer 8.0 ("QFL 8.0") and Quicken Family Lawyer 99 ("QFL 99") violated Texas's unauthorized practice statute.(4) An injunction was granted banning the further sale of the software in Texas,(5) but subsequent legislation effectively nullified the injunction and authorized the sale of the product.(6)

This note examines the unauthorized practice of law as it relates to legal "self-help" computer software ("legal software").(7) Part I discusses the unauthorized practice of law, its history, definitions and underlying policies, as well as the various methods of state regulation and enforcement. Part II examines the unauthorized practice of law in the context of legal "self-help" books and "do-it-yourself" kits, the logical predecessors of today's legal software. The two approaches used to analyze these products for possible unauthorized practice violations (the "majority state" approach and the "minority state" approach) are identified and discussed. Part III summarizes and discusses the Texas Quicken Family Lawyer case, since it is particularly instructive as to the issues raised by legal software.

In Part IV, legal software, specifically the most updated Quicken product, Quicken Family Lawyer 2000 ("QFL 2000"), is examined and discussed in relation to the various definitions of the practice of law. The conclusion is drawn that legal software can and has been found to constitute the unauthorized practice of law in minority states, and might very well be found to constitute the unauthorized practice of law in majority states as well. Part V discusses whether legal software should be banned or regulated. This evaluation is conducted in the context of reconciling and honoring the two important public policies involved with legal software: (1) providing greater public access to legal information and assistance, and (2) protecting the public from products that may be inaccurate, harmful, and which may foster misplaced consumer reliance. It is argued that the three-pronged test suggested by the American Bar Association's Commission on NonLawyer Practice should be applied in making this evaluation.(8) That test involves (1) assessing the risk of harm to the consumer; (2) assessing the ability of the recipient to evaluate the provider's qualifications; and (3) determining whether regulation would produce a net public benefit.(9) Employing this analysis, it is contended that with appropriate regulatory requirements, mostly in the area of comprehensive disclosure language, legal software should be allowed for sale in every state, since sale under such conditions would honor the two aforementioned public policies. Finally, there is a brief discussion about how state bar associations can move to the forefront of the legal software phenomenon and, in the process, further both public policies, as well as increase the business opportunities of many of their members.

  1. WHAT IS THE UNAUTHORIZED PRACTICE OF LAW?

    Historically, under the separation of powers doctrine, state judiciaries have been responsible for defining and regulating the practice of law.(10) Judicial power to regulate the practice of law is "inherent," with its rationale rooted in enabling courts to "effectively perform their judicial functions and to protect their dignity, independence and integrity."(11) State legislatures may use their police power to protect the public interest; however, in doing so they may only act in aid of the judiciary and do not "supercede or detract from the power of the courts" to regulate the practice of law.(12)

    Since defining and regulating the practice of law is a state function, there is no universal definition of actions that can be said to constitute the practice of law.(13) The practice of law, however, is commonly accepted to include activities other than "conducting litigation," such as "preparing instruments and contracts by which legal rights are secured."(14) Beyond that declaration, other activities may or may not constitute the practice of law, depending on the particular state and the method of analysis employed. For example, some states when conducting unauthorized practice of law analysis focus on the degree of legal skill and knowledge required for the activity in question.(15) Other states concentrate on whether the activity involves or affects the binding legal rights of the recipient.(16) Still others limit the inquiry to whether "the activity is one customarily performed, or commonly understood to be performed, by lawyers."(17) In 1995, the American Bar Association's Commission on NonLawyer Practice recommended that a more flexible, balancing inquiry be used to determine whether an activity might constitute the unauthorized practice of law.(18) The proposed inquiry evaluates the challenged activity by analyzing (1) the risk of harm to the consumer; (2) the ability of the service's recipient to evaluate the provider's qualifications; and (3) whether regulation would produce a net public benefit.(19)

    The principal justification offered for unauthorized practice of law prohibitions is "to protect the public from the consequences of inexpert legal services."(20) Requiring practitioners to first complete a course of study and training, as well as maintain a standard of character and moral fitness, protects the public from "the inexperienced and unlearned" and ensures the "efficient administration of justice."(21) The goal of protecting the public from unqualified practitioners has existed since the earliest days of the legal system. In 1292, King Edward I was forced to limit the number of practitioners because of the "increasing number of unskilled persons practicing around the king's courts."(22) In the post-colonial United States, however, regulation of the practice of law was initially thought to be neither necessary nor desirable, and, therefore, regulation was a much more gradual process.(23) As one historical review of the practice of law notes, "[t]he first 100 years of the new American nation were marked by an unregulated legal profession ... [and saw] virtually all colonial era restrictions on admission to practice ... removed."(24)

    The regulation of the legal profession in America began with the formation of bar associations, the most influential being the Association of the Bar of the City of New York.(25) An objective of that bar association was "to condition bar membership upon various educational requirements;"(26) other states establishing such associations shared this goal as well.(27) Bar associations often assumed the mantle of public protectors by forming unauthorized practice of law committees.(28) The New York County Lawyers appointed the first unauthorized practice of law committee in 1914, and the American Bar Association appointed its Committee on Unauthorized Practice in 1931.(29) These committees proved very popular, and many local and state bar associations followed suit; by 1938 over 400 such committees had been established.(30) Early on, committees often negotiated agreements with other occupations and disciplines, called "Statements of Principles," and defined the parameters within which they could operate in relation to services affecting legal rights.(31)

    Today, most states, to varying degrees, establish and empower unauthorized practice of law committees to investigate complaints and, if warranted, take appropriate action.(32) In many states, an unauthorized practice of law committee is established and supervised by the state supreme court.(33) In other states, local bar associations handle the task, but are still subject to supreme court authority.(34) In some states where the supreme court appoints committees, appointment of a designated number of laymen to the committee is also required.(35) Investigation and adjudication procedures for unauthorized practice also vary from state to state. Once a violation has been found to exist, enforcement mechanisms and remedies "include injunctions, striking pleadings, restitution and monetary sanctions."(36) In many states, the unauthorized practice of law is also a crime and prosecution can result.(37)

    The exclusive defining and monitoring of the practice of law by attorneys has, not surprisingly, generated much criticism. Charges of promoting and maintaining a monopoly have been raised,(38) along with concerns that overly stringent regulation thwarts the public policy of facilitating broad public access to legal assistance and information.(39) Others have objected to what they consider due process violations, arguing that the definition of what exactly constitutes the unauthorized practice of law is vague and fails to provide adequate notice to potential wrongdoers.(40) First Amendment freedom of speech and press concerns have also been raised when unauthorized practice of law prohibitions have been applied to self-help books,(41) do-it-yourself legal kits,(42) and even legal software.(43)

    Certainly, it is impossible for any definition to encompass all...

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